Key Highlights
- Shares of IREN declined approximately 6% in premarket hours following adjusted EBITDA of $19.2M that fell short of the $34.9M consensus estimate
- Fourth quarter revenue totaled $137.2M, missing the $157.14M projection, while AI cloud revenue surged 110% quarter-over-quarter to reach $70.5M
- The firm’s fiscal 2026 annual recurring revenue goal of $4 billion has been fully contracted, representing an increase from the $3.4B reported in July
- IREN announced a fresh multi-year AI cloud partnership with an undisclosed frontier AI laboratory and secured $6.5B in GPU financing within three months
- H.C. Wainwright maintained its Buy recommendation and $90 price objective, describing the post-earnings weakness as an attractive entry point
Shares of IREN fell approximately 6% to $38.20 during premarket hours on Friday following the release of fiscal fourth quarter results that revealed an adjusted EBITDA shortfall. The stock closed Thursday’s session at $40.53, marking a 47% decline from its 52-week peak of $76.87, while maintaining a 76% gain year-over-year.
The enterprise reported fourth quarter revenue of $137.2 million, falling short of the Street’s $157.14M consensus. Adjusted EBITDA registered at $19.2 million, significantly below analyst expectations of $34.9 million.
However, the report wasn’t entirely disappointing.
Revenue from AI cloud services reached $70.5 million during the quarter, representing a 110% increase compared to the previous quarter’s $33.6 million. Such sequential expansion demands attention.
IREN concluded the period with approximately $500 million in ARR, which subsequently doubled to $1 billion following Microsoft’s acceptance of Horizon 1.
Full Contracting Achieved for ARR Goal
The enterprise verified that its $4 billion ARR objective for fiscal 2026 has been completely contracted, advancing from the $3.4 billion figure disclosed in its July communication.
This expansion resulted from a fresh multi-year arrangement with an unidentified frontier AI laboratory, supplementary customer acquisitions, and both renewals and expansions from current clientele.
Importantly: the $4B calculation doesn’t include approximately $700 million in ARR stemming from an NVIDIA agreement anticipated to scale up during 2027.
IREN projects exceeding $4 billion in ARR by the December quarter, with Wall Street forecasting 117% revenue expansion for fiscal 2027.
Wall Street Views Weakness as Entry Opportunity
H.C. Wainwright reaffirmed its Buy recommendation and maintained a $90 price objective on IREN following the earnings release, positioning the decline as an advantageous buying window.
That $90 objective implies approximately 122% potential appreciation from Thursday’s closing price.
B. Riley analyst Nick Giles characterized the period as “a commercial and financing validation” preceding the imminent revenue acceleration toward $4 billion ARR and additional contracting for 2027 and 2028 infrastructure.
Citizens likewise maintained a Market Outperform recommendation with an $80 price objective, emphasizing strength in AI cloud offerings.
Regarding capital, IREN obtained $6.5 billion in GPU financing during the preceding three months. This funding, when combined with advance payments from customers, provides more than 100% coverage of the GPU capital expenditure associated with the $4B ARR objective.
Capital expenditure projections for fiscal 2027 stand between $25 billion and $30 billion.
Three-year contract pricing has increased approximately 125% since November. Recent agreements surpass $20 million in annual revenue per IT megawatt, while ongoing negotiations are trending around $25 million per IT megawatt.
The company delivered 41% revenue growth across the trailing twelve-month period.
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