Key Highlights

• Shares traded at $20.79 pre-market, up 15.31% from the $18.03 prior close.

• AI Cloud Revenue was $200 million, up 183% from the prior quarter.

• The $4 billion annual Recurring Revenue target moved from year-end to January.

• Revenue Backlog stands at over $20 billion, two-thirds Investment grade.

IREN (NASDAQ:IREN) shares were higher in pre-market trading on Friday, November 6, at $20.79, up 15.31%, after fiscal first-quarter 2027 results in which AI Cloud revenue reached $200 million and total revenue was $228 million. The company said its target of more than $4 billion in annual recurring revenue online has moved from year-end to January and could run to the end of February.

The Sydney-based company, formerly Iris Energy, owns and operates AI cloud services and data centers, including land, grid connections, GPU compute hardware and managed software services. Its sites are in Canada and Texas and run on renewable energy, and it has about 685 employees.

Customer Network Design Change at Horizon Sites Shifts the ARR Timeline

The company tied the slip to a network design change requested by Microsoft (NASDAQ:MSFT) at its Horizon sites and to supplier delivery timing. Microsoft delivery dates were extended without delay credits. IREN is not giving a specific ARR target beyond $4 billion.

Operating ARR doubled to $1 billion in the quarter. Revenue backlog is over $20 billion, with two-thirds investment grade, and rose 22% to $20.3 billion.

Quarter Results and New Contracts Signed After Quarter-End

Adjusted EBITDA was $66 million, a 29% Margin compared with 14% a year earlier, and AI Cloud gross margin before Depreciation and amortization was 86%. The net loss was $263 million, and adjusted EPS was negative $0.68, against an estimate of negative $0.49. Total revenue of $228 million compared with an estimate of $228.3 million.

Contracts signed after quarter-end include a five-year deal at about $22 million per MW, with the customer prepaying about 90% of GPU capital expenditure. A short-term deal is above $40 million per MW, there is an expansion with a frontier AI lab, and H100s were re-contracted at double the original price over a multi-year term. The company cited illustrative GPU paybacks of around 18 months.

Capital Expenditure Plans and Funding Targets Take Shape

December-quarter cash operating expenses are expected to rise about $50 million to $60 million sequentially. Remaining fiscal 2027 Capital Expenditure is planned at about $15 billion, down from the prior estimate, leaving about $6 billion to fund against roughly $9 billion of cash and undrawn commitments.

The Balance Sheet shows $20.6 billion in total assets, $5.8 billion in cash and $10.2 billion of mostly low-coupon convertible debt. Management targets 90% GPU financing through prepayments and sees $12 billion to $15 billion of potential funding sources. The company has 5 GW of secured power and 35 GW in development.

January Is the Reference Date for the $4 Billion ARR Milestone

Shares closed Thursday at $18.03, down 16.95%, near the 52-week low of $17.16, within a range of $17.16 to $75.79. Goldman Sachs holds a Neutral rating with a $30 target, and Bernstein cut its target to $55. Net Debt of $4.4 billion and Texas Data Center regulation are among the items investors are weighing, with the ARR timeline and funding progress the next checkpoints.