IREN Targets Over $4 Billion ARR as AI Cloud Business Replaces Bitcoin Mining

IREN Limited shares fell in pre-market trading Thursday after the company reported weaker-than-expected fiscal 2026 fourth-quarter results.

Results Snapshot

The company reported an adjusted loss of 74 cents per share, missing the analyst consensus estimate of a 49-cent loss per share. Revenue came in at $137.2 million, below the market consensus estimate of $142.32 million.

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Due to IREN retiring mining hardware before installing GPUs, revenue declined by $7.6 million quarter-over-quarter.

The company reported a net loss of $684 million, primarily reflecting a $450.4 million non-cash impairment and a $102.1 million decline in the fair value of mining hardware held for sale.

Landmark Cloud Deals

The company signed multi-year cloud agreements with Cohere, Prometheus, Perplexity, Figure AI, Higgsfield AI, and an undisclosed leading frontier AI lab. IREN has delivered Horizon 1 to Microsoft, its first 50-megawatt deployment, with Horizons 2–4 expected to be delivered in the December quarter.

IREN expects its mining operations to be largely retired by the end of December 2026.

The company's annualized recurring revenue at the end of the fourth quarter was approximately $500 million, increasing to $1 billion after Microsoft takes delivery of Horizon 1. This excludes 2027 revenue ramp-ups, such as the $700 million in ARR related to NVIDIA cloud contract deliveries.

The company expects ARR to exceed $4 billion by the end of the December quarter after Horizons 2–4 are delivered. This $4 billion in contracted ARR represents less than 10% of IREN's over 5-gigawatt grid-secured connection portfolio.

The company secured $6.5 billion in GPU financing within three months, which, combined with customer prepayments, covered over 100% of related GPU capital expenditures. Of this, $2.8 billion required no investment-grade offtaker and carried single-digit interest rates.

Three-year contract pricing has risen approximately 125% since last November, while five-year pricing is up about 70%. Recent three-year agreements have been priced at over $20 million per megawatt of IT load, implying a payback period of about two years, while current customer discussions are pricing around $25 million per megawatt.

IREN targets approximately 300 megawatts of IT load in 2026, with an additional 500 megawatts in 2027, bringing total platform capacity to roughly 1.2–1.25 gigawatts.

Key Developments

Horizon 1 has achieved NVIDIA Exemplar Cloud certification on the GB300 NVL72, showcasing IREN's ability to integrate and operate hardware, networking, and software stacks.

IREN has announced over 5 gigawatts of capacity, backed by a multi-gigawatt development pipeline.

The company plans to fully convert its Canal Flats facility to liquid cooling to accommodate GB300, thereby maximizing the value of existing power capacity. Its entire data center portfolio, including Horizons 1–4, remains 100% unencumbered, providing opportunities for asset-backed financing.

GPU Financing Surges Rapidly

GPUs account for approximately two-thirds of the cost of a fully loaded data center and GPU, meaning customer prepayments covering about 50% of GPU capital expenditures can effectively cover 100% of data center costs.

Management stated that GPU financing has rapidly evolved from private credit products offering mid-teens returns to investment-grade financing at interest rates around 6%, with participants now spanning private and public markets as well as investment-grade and sub-investment-grade capital.

For Microsoft, IREN raised $3.6 billion in investment-grade GPU financing at a weighted average interest rate of approximately 6%, with customer prepayments covering about 96% of related GPU capital expenditures. The company also secured $2.8 billion in equipment financing for non-investment-grade deployments, including a $2.4 billion fixed-rate facility for Mackenzie at a 9% interest rate, covering approximately 90% of its GPU capital expenditures.

IREN share price movement: In Friday pre-market trading, Iren shares fell 5.90% to $38.14.