Key Takeaways:
IREN Ltd. reports fiscal Q4 2026 results Aug. 27, with consensus revenue of $138.9 million, down 25.8 percent year over year.
"IREN's fiscal 2026 results are likely to show a company between two business models," Zacks Investment Research said in a preview note, as AI cloud revenue grows while Bitcoin mining activity declines.
AI cloud revenue nearly doubled sequentially to $33.6 million in fiscal Q3, while mining revenue fell to $111.2 million from $167.4 million as the company decommissioned hardware ahead of GPU installations. IREN booked $140.4 million in noncash impairments last quarter, primarily tied to retired mining equipment, and guided for additional charges as operations shift toward AI cloud. The consensus loss of 42 cents per share compares with earnings of 8 cents a year earlier.
The company raised its annualized run-rate target to $4.4 billion after finalizing about $3.6 billion in financing for its Microsoft contract and closing a $3 billion convertible-note offering in May. Shares rose 5.8 percent to $42.11 on Tuesday, up 11.8 percent year to date but trailing Applied Digital and TeraWulf, which gained 17.7 percent and 42 percent, respectively.
Management guided that revenue from Microsoft and an additional 50,000 GPUs would begin ramping in the third calendar quarter of 2026, after the June fiscal year-end. The first of four 50-megawatt liquid-cooled units at Childress, Texas, was accepted Aug. 13 under a five-year, $9.7 billion agreement, with the site earning NVIDIA Exemplar Cloud status on the GB300-NVL72 platform. IREN also signed about $2.8 billion in additional AI cloud contracts in July with AI developers, lifting its fiscal-year run-rate target above $4 billion, with roughly 85 percent of that target contracted.
Institutional interest has built ahead of the report, with the California State Teachers Retirement System expanding its stake by 22.6 million shares in the second quarter to an estimated $1.03 billion position. IREN reported about $7.6 billion in cash and cash equivalents as of June 30, including $1.7 billion of restricted cash tied to Microsoft GPU financing, while customer prepayments covered roughly 45 percent of associated GPU capital expenditure.
The stock trades at 4.23 times forward 12-month price-to-sales, above the industry's 2.59 times but below Applied Digital's 8.01 times and TeraWulf's 12.26 times. Options markets price a 12.5 percent move after the report, implying about $1.96 billion in market value at stake against a roughly $15.7 billion market capitalization.
The improving AI setup and completed financing reduce near-term execution risk, but declining mining revenue and further impairment charges are likely to pressure reported results. Investors will watch the earnings call for updates on Horizons 2 through 4 at Childress and the pace of the 480-megawatt 2026 AI cloud capacity target.
This article is for informational purposes only and does not constitute investment advice.
