IREN Q2 Earnings Miss

IREN Limited (NASDAQ: IREN) reported Q2 earnings on Feb. 5, 2026, missing revenue and EPS estimates as the company outlined a strategic shift from Bitcoin mining to AI cloud services. The announcement included major GPU financing and an ambitious AI cloud annual recurring revenue (ARR) target.

Quarterly Results and AI Pivot

IREN said total revenue for Q2 FY26, ended Dec. 31, 2025, was $184.7 million, down 23.0% sequentially from $240.3 million in Q1 but up from $119.6 million a year earlier. The figure missed the consensus estimate of $226.9 million. Net loss widened to $155.4 million, with earnings per share at $0.52, below the consensus of $0.18. Adjusted EBITDA was $75.3 million, while GAAP EBITDA was negative $243.9 million.

Management attributed the loss mainly to non-cash derivative losses of $219.2 million, mining hardware impairments of $31.8 million related to the transition from ASIC to GPU mining, and stock-based compensation of $58.2 million, partially offset by a $182.5 million income tax benefit. Bitcoin mining revenue fell to $167.4 million from $233.0 million the prior quarter.

The company secured $3.6 billion in GPU financing for a Microsoft contract at an interest rate below 6% per annum and received a $1.9 billion prepayment from Microsoft covering about 95% of GPU-related capital expenditure. Management targets $3.4 billion in AI cloud ARR by the end of calendar 2026, based on deploying 140,000 GPUs. This includes $1.94 billion expected from the Microsoft contract and an estimated $1.5 billion from British Columbia deployments, including $0.4 billion already under contract at Prince George and ongoing negotiations supporting more than $0.5 billion.

Year-to-date funding secured in FY26 exceeded $9.2 billion across customer prepayments, convertible notes, GPU leasing, and financing. The company reported $2.8 billion in cash and equivalents as of Jan. 31, 2026. AI cloud services revenue rose 137.0% sequentially to $17.3 million, representing about 9.4% of total revenue. Achieving the ARR target requires roughly a 68-fold increase in annualized AI revenue, contingent on on-time GPU delivery and commissioning.

Co-Founder and Co-CEO Daniel Roberts said, "We are seeing the strongest demand environment to date."

Power Infrastructure and Deployment Timeline

IREN has secured more than 4.5 gigawatts of grid-connected power, with Horizon 1–4 construction progressing on schedule. A new Oklahoma campus spans about 2,000 acres with 1.6 gigawatts of capacity; grid studies are complete, and power ramp is scheduled to begin in 2028. Sweetwater 1 and 2 in Texas target energization in April 2026. The Prince George site in British Columbia already supports a portion of contracted ARR, though management notes that ARR under contract is not revenue until GPUs are delivered and commissioned.