TenQ

The IREN story

IREN owns data centers, compute and software for AI while winding down bitcoin mining, with its transition depending on turning Microsoft and other cloud contracts into operating capacity and recognized revenue.

Written from IREN's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $41.72share price, last close
  • $16.4Bmarket value
  • 10/36TenQ Score checks passed

The story in brief

  • Microsoft anchors the transition. Microsoft accepted Horizon 1 in August 2026 under a five-year, $9.7 billion cloud services contract, with further deployments scheduled for 2026.
  • Contracts are not revenue. IREN reported $4 billion of contracted annualized run-rate revenue for 2026 capacity against $1 billion operating as of August 26, 2026, but recognized revenue depends on commissioning, testing and customer acceptance.
  • Expansion consumes cash. Over the last twelve months, revenue grew 41.1% to $707 million while free cash flow was -$898 million.

What drives the business

  • IREN controls its land, power infrastructure, data centers, compute and software, and aims to substantially complete the conversion of bitcoin mining capacity to AI Cloud Services by December 31, 2026.
  • Its Microsoft agreement covers four 50MW liquid-cooled deployments at Childress, Texas, with Horizon 1 delivered and accepted in August 2026.
  • Beyond Microsoft, IREN signed a new contract with an unnamed frontier AI lab and reported recent customer signings including Cohere, Prometheus, Perplexity, Figure AI, Fal AI and Higgsfield AI.
  • AI Cloud Services revenue reached $128.8 million in the fiscal year ended June 2026 versus $16.4 million in the fiscal year ended June 2025, while the Mirantis acquisition added software for managing AI workloads and enterprise support.
  • The Microsoft deployment is supported by $3.6 billion of GPU financing at 6.0%, which together with customer prepayments funds 96% of the associated GPU capital spending.

What the price assumes

The reverse DCF cannot measure the growth assumption embedded in the $41.72 share price because free cash flow and operating earnings are both negative, leaving the valuation dependent on future profits.

The price represents 23.3x sales, compared with TenQ's sales multiple bar of under 2.5x, and IREN passes 0 of 6 Value checks.

Revenue growth of 41.1% over the last twelve months exceeded its sector comparison but slowed from the 110.8% annual pace over the last three years, while the operating margin was -148.0%.

What could change the story

  • Construction, equipment or customer acceptance delays could postpone revenue from contracted capacity, and annualized run-rate revenue is not a substitute for recognized revenue.
  • Total debt of $7.6 billion exceeds cash and short-term investments of $5.9 billion, and IREN fails TenQ's interest coverage check despite passing its near-term liquidity check.
  • Customer prepayments help finance construction but create delivery obligations, while financing for deployments serving customers without investment grade credit includes a 9.0% fixed rate.
  • The share count rose 477.1% over the last three years, and stock-based pay of $205 million over the last twelve months adds to the dilution associated with funding expansion.
  • Expanding cloud operations bring privacy and information security obligations, while Texas grid requirements and interconnection reviews could affect development timing and costs.

What to watch next

  • The next releases will show progress toward IREN's planned cumulative delivery of approximately 0.3GW (IT) in 2026 and 0.8GW (IT) in 2027, including the remaining Microsoft deployments planned for the final quarter of 2026.
  • Recognized AI Cloud Services revenue, customer acceptance milestones and operating annualized run-rate revenue will show how much of the $4 billion contracted run rate has become operational.
  • Updates on late-stage discussions for 2027 capacity and planned liquid-cooled deployments at Mackenzie, Canal Flats and Prince George will distinguish contracted expansion from development plans.
  • Capital spending, customer prepayments, financing terms and free cash flow will show how the next phase is funded as IREN works toward substantially completing its mining transition by December 31, 2026.

Sources

Back to the IREN report