Iren secures cloud contract with 'leading frontier lab,' targets full exit from crypto by end of 2026

Iren, the company formerly known as Iris Energy, has signed a cloud services agreement with an unnamed "leading frontier lab," marking another milestone in its transition from a Bitcoin mining operation to a dedicated AI cloud infrastructure provider. The announcement came as the company released its full-year results for fiscal year 2026, which ended June 30.

Speaking during the company's earnings call, co-founder and co-CEO Daniel Roberts said Iren now holds annual recurring revenue (ARR) of $4 billion, backed by contracts with prominent AI players including Cohere, Prometheus, Perplexity, Figure AI, Fal.ai, and Higgsfield AI. Of that total, approximately $1 billion is currently operational and expected to scale up through 2027, including an additional $700 million tied to Iren's five-year agreement with Nvidia, signed in May 2026, which carries a total contract value of $3.4 billion.

According to Iren's annual report filed with the U.S. Securities and Exchange Commission, the Nvidia deal, together with the $9.7 billion cloud contract signed with Microsoft in November 2025, represents a substantial majority of the company's contracted revenue. The first phase of capacity for the Microsoft agreement was delivered in August 2026. The filing also cautioned that the loss of any significant customer or a material reduction in committed capacity could have a material adverse effect on the company's operations and cash flows.

Iren's remaining performance obligations are valued at $16.6 billion, while the aggregate contracted value of its lease arrangements stands at approximately $11.4 billion. The company, publicly listed since 2021, has now completed its first full fiscal year with AI cloud services at the center of its strategy. As part of that pivot, Iren said its Bitcoin mining business is set to be "effectively decommissioned" by the end of December 2026.

Despite that goal, Bitcoin mining still accounts for the vast majority of Iren's revenue. The company's mining capacity currently sits at around 380MW, while its AI cloud capacity was just 40MW as of the end of June 2026. For the full fiscal year, AI cloud revenue reached $128.8 million, up from $16.4 million in 2025, while Bitcoin mining generated $578.2 million, compared with $501 million the prior year. Iren typically liquidates its Bitcoin daily, converting proceeds into fiat currency to fund operating and capital expenditures.

Combined, Iren's total operating capacity stands at 420MW, with a development pipeline of 5GW planned across sites in British Columbia, Canada; Texas and Oklahoma in the U.S.; Bundey, Australia; and Badajoz, Spain. The company acknowledged the risks inherent in its strategic shift, noting in its filing that any further expansion of AI cloud services or entry into additional markets will take time to implement, and there can be no assurance of success in the near term or at all.

Although revenue grew year-over-year across both Bitcoin mining and AI cloud segments, Iren posted a net loss of $702.6 million for fiscal 2026, a sharp reversal from a net profit of $86.9 million a year earlier. The loss was largely driven by a surge in operating expenses, which climbed to $1.534 billion from $324.7 million in 2025. The most significant increases came from asset impairments, depreciation, and selling, general, and administrative costs.

Asset impairment charges rose by $631.6 million year-over-year, tied to the company's efforts to retrofit its air-cooled data centers in British Columbia and Childress, Texas, and to develop direct-to-chip liquid cooling for the Childress facilities in support of its AI cloud services. Depreciation increased by roughly $236 million, reflecting higher operating capacity at Childress and the deployment of additional GPUs. Selling, general, and administrative costs grew by approximately $313 million, with more than half attributed to stock-based compensation expense.

The company explained that the increase in stock-based compensation was primarily related to the vesting of certain market-based restricted stock units and stock options in September 2025, October 2025, and May 2026, along with the accelerated recognition of remaining compensation costs and the amortization of awards modified and granted in the fourth quarter of fiscal 2025. In July 2026, both co-CEOs were awarded 9,099,328 restricted stock units each.

Power costs accounted for approximately 27 percent of Iren's total revenue during the fiscal year. The company ended the period with $5.89 billion in cash and cash equivalents, as well as $1.7 billion in restricted cash, most of which is earmarked for capital expenditures related to the Microsoft contract's GPU requirements.

CFO Anthony Lewis said Iren has secured roughly $19 billion in funding this year through prepayments, GPU financing, convertible notes, and equity. He added that the company expects capital expenditures for 2027 to range between $25 million and $30 million, covering the remaining capex for the Microsoft deal and ongoing retrofitting work. Lewis also noted that Iren is targeting an additional $8 billion in GPU financing and prepayments to support GPU capex requirements, citing healthy prepayment activity in recent contracts and a growing market for GPU financing.

At the time of writing, Iren shares were trading at $37.68.