NEW YORK, August 28, 2026, 23:10 (EDT). IREN (IREN) shares dropped 12.5% after reporting $4 billion in annual recurring revenue from AI, which was accompanied by a 68% decrease in EBITDA.
- IREN finished at $35.45, falling 12.5%, with 88.6 million shares traded.
- Revenue from AI Cloud Services surged twofold from the previous quarter, reaching $70.5 million.
- Adjusted EBITDA for the quarter dropped 68%, reaching $19.2 million.
- Management reports that $4 billion of 2026 capacity ARR has been secured through contracts.
IREN Limited (NASDAQ: IREN) stock dropped 12.5% on Friday as quarterly adjusted EBITDA posted a steep decrease. This slide occurred even as AI-cloud revenue more than doubled.
The stock ended the session at $35.45, with 88.6 million shares changing hands—nearly double its three-month average. The drop wiped about $1.8 billion off its market value, according to Yahoo Finance’s closing market capitalization Yahoo Most Active.
The quarter represented a pivotal moment, as AI Cloud Services generated 51% of overall revenue, surpassing Bitcoin mining as the primary contributor for the first time in the reporting period.
| US$ million | Q4 FY26 | Q3 FY26 | Sequential change |
|---|---|---|---|
| AI Cloud Services revenue | 70.5 | 33.6 | up 110% |
| Bitcoin mining revenue | 66.7 | 111.2 | down 40% |
| Total revenue | 137.2 | 144.8 | down 5% |
| Adjusted EBITDA | 19.2 | 59.5 | down 68% |
| Net loss | (684.0) | (247.8) | Loss increased |
Cloud revenue increased by 110% compared to the March quarter. Revenue from mining dropped 40% as the company shut down machines and repurposed locations for higher-value GPU tasks IREN FY26 results.
Adjusted EBITDA margin dropped to 14.0%, down from 41.1%. Increased employee expenses and platform investment were recorded ahead of related cloud revenue, and this timing mismatch influenced market reaction.
IREN disclosed $4 billion in contracted annualized run-rate revenue tied to its 2026 capacity, with just $1 billion of that operational as of August 26. Chief Executive Daniel Roberts stated, “Our 2026 capacity is largely sold out.”
The difference is significant. As of Friday’s market close, IREN was valued at roughly 3.2 times its contracted ARR target and close to 17.9 times its projected fiscal 2026 GAAP revenue of $707 million.
ARR does not represent GAAP revenue. The calculation is based on the assumption that commissioned GPUs operate for 8,760 hours at ongoing contract rates. IREN cautions that recognized revenue could be significantly less.
The figures for the fiscal year reflect the expense of transitioning. AI-cloud revenue rose nearly eightfold to $128.8 million. However, adjusted EBITDA declined by 9% to $245.7 million.
The annual net loss of $702.6 million factored in $638.8 million in non-cash impairment charges. The majority of these charges related to Bitcoin-mining equipment replaced by GPU installations.
Financing eases an immediate limitation. IREN reported that its current cash, secured GPU financing, and customer prepayments amount to $14 billion. The latest agreements also feature customer prepayments accounting for 45% to 55% of GPU capital expenditures.
Microsoft received Horizon 1, a 50-megawatt liquid-cooled installation at Childress. Delivery for three more Horizon sites is planned for the fourth quarter of 2026.
Analysts are split over the timing, not the demand. B. Riley noted the quarter supported both the commercial strategy and financing trajectory. Following the results, H.C. Wainwright maintained a Buy rating with a $90 price target Barron’s.
The performance among peers slipped, though not as sharply. CoreWeave (NASDAQ: CRWV) dropped 2.9%, while Nebius Group (NASDAQ: NBIS) retreated 4.3%. IREN’s drop was over twice as large as either.
Risks: Delays in commissioning, limited GPU availability, reliance on a small number of customers, and decreasing rental prices could postpone revenue. Cash flow may also face strain from debt payments, outdated equipment, and potential additional impairments.
The next challenge is underway. Investors are looking for operating ARR of $1 billion to move closer to the $4 billion contracted mark, without experiencing another quarterly margin drop.
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