IREN stock fell almost 17% after Bitcoin mining saw its revenue drop by 58% to $28 million.

Table of contents

  • IREN shares closed at $18.03 on Nov. 5, down 16.95%
  • Bitcoin mining revenue fell 58% from the previous quarter to $28 million
  • Total revenue rose 66% to $228 million, beating analysts' expectations

Shares of IREN, a data center and AI cloud company that also mines Bitcoin, fell 16.95%% on Thursday after the company reported a drop in mining revenue for the quarter ending September.

Bitcoin mining revenue drops as IREN removes equipment

IREN released its third-quarter results on Thursday, reporting a total revenue of $228 million, up 66% from $137 million in the previous quarter and beating analysts' estimate of $221 million. The net loss narrowed to $263 million, or 66 cents per share, from $684 million in the prior quarter. Adjusted EBITDA rose to $66 million from $19 million.

Bitcoin mining revenue, on the other hand, fell to $28 million from $67 million in Q2, also down from $233 million a year earlier. IREN said the drop was due to the low Bitcoin production and the average price of the coin.

The company mined 402 BTC in the quarter, compared with 2,039 BTC a year earlier. Its average operating hashrate also fell to 8.8 exahashes per second (EH/s) from 45.3 EH/s.

IREN announced that it will be removing its mining equipment to make room for AI computing, expected to be completed by Dec. 31, 2026. The firm added that "immaterial" mining operations may continue through 2027. The company sells the Bitcoin it mines daily and held none on its balance sheet at the end of September.

Many publicly listed Bitcoin miners are making a similar move toward AI and high-performance computing.

AI cloud revenue nearly triples to $200M

AI cloud revenue rose to $200 million from $71 million in the previous quarter, making up nearly 88% of quarterly revenue, up from about 52%. This included $135 million in revenue from AI cloud services and $65 million from cloud leasing. Gross margin for this segment came in at  86%, unchanged from the last quarter.

Operating IT capacity also rose 127% to 93 megawatts. This came after Microsoft accepted IREN's first 50-megawatt AI cloud deployment, called Horizon 1, in August. Revenue backlog also increased 22% to $20.3 billion.

The firm had initially projected more than $4 billion in annualized recurring revenue by the end of 2026. However, the company set a new timeline for January 2027, with a possible delay to the end of February amid a customer-requested design change and supplier timing.

IREN plans $15B in spending

The company spent about $5 billion on capital expenditure in Q2 and plans to spend about $15 billion over the rest of fiscal 2027, down from its earlier estimate. $9 billion will be covered by cash, committed GPU financing, and customer prepayments. The rest of the $6 billion is expected to come from data center and GPU financing, subject to market conditions.

IREN identified $12 billion to $15 billion in possible funding sources. Equity and convertible notes were also named as options.

The company also reported total assets of $20.6 billion, with cash and restricted cash totaling $5.8 billion. Total debt stood at $10.2 billion, largely consisting of low-coupon convertible notes maturing in 2032 or later, while net debt came in at $4.43 billion

For Q4, IREN projected cash operating expenses to rise by $50 million to $60 million from the prior quarter.

Michael Adeleke is a crypto journalist at CoinCodex with more than three years of experience in crypto journalism. He provides crypto news and market analysis in the easiest way possible to help readers know the latest updates in financial markets. With a background in engineering, he brings strong research and analytical skills to his work.