IREN Q4 2025: Bitcoin Mining Capacity to Double, AI Cloud Revenue Hits $3.1M as Expansion Accelerates
IREN delivered a year of operational hypergrowth, with Bitcoin mining capacity scaling rapidly and AI cloud services gaining early commercial traction. The company’s move to real-time spot power pricing and lower build costs sharpened its cost edge, while a robust balance sheet provides ample flexibility for further expansion. With 30 exahash and 510 megawatts targeted by year-end, IREN is positioning itself as a power and land aggregator in a market facing real-world infrastructure constraints.
Summary
- Bitcoin Mining Scale-Up: Installed hash rate is set to double by year-end, reinforcing cost leadership.
- AI Cloud Momentum: GPU cloud services show strong uptake, but capital discipline tempers expansion pace.
- Balance Sheet Strength: Zero debt and $405M cash support continued site acquisition and infrastructure buildout.
Performance Analysis
IREN’s FY24 results reflect a business in aggressive expansion mode. Adjusted EBITDA reached $54.7 million, up sharply year-over-year, driven by a surge in Bitcoin mining revenue as average operating hash rate climbed from 5.6 to 9.4 exahash. The company mined 4,191 Bitcoin at an average realized price of $44,000, with the halving event and global hash rate growth pushing electricity costs per Bitcoin up to $18,100. The AI cloud segment, launched in February, contributed $3.1 million in revenue, validating early customer demand for GPU-as-a-service, a model where clients rent high-performance compute by the hour.
Operating leverage was evident as OPEX rose to $56 million, reflecting scale-up in both Bitcoin and AI businesses. Key cost drivers included employee expansion, renewable energy credits, insurance, and audit provisions. Depreciation increased due to asset commissioning and accelerated write-downs for older mining hardware. Cash flow generation was robust, with net cash rising $336 million to $405 million on the back of daily Bitcoin liquidation and equity issuance under the ATM program. The company remains debt-free, with total assets of $1.2 billion and $223 million of ATM firepower still available.
- Bitcoin Mining Revenue Surge: Mining revenue more than doubled as capacity and pricing improved, now the dominant contributor.
- AI Cloud Service Ramp: Early GPU cloud revenue validates addressable demand, with annualized run-rate at $15 million.
- Cost Structure Evolution: Shift to spot power and lower build costs ($650k/MW) improve margins and flexibility.
IREN’s business model is now anchored by two growth engines: self-mined Bitcoin and AI cloud services, both underpinned by a unique portfolio of grid-connected power and land assets.
Executive Commentary
"We're pleased to announce that we have increased our installed capacity Bitcoin mining to 15 exahash... and we reiterate our original unchanged guidance that we will hit 20 exahash by the end of next month and 30 exahash by the end of this year."
Dan Roberts, Co-Founder and Co-CEO
"Adjusted EBITDA is 54.7 million, being a significant year on year increase of 53.3 million and the highest recorded EBITDA for the company... We continue to have no external debt, so no debt facilities. And we have strong operating cash flows."
Belinda Nusifora, CFO
Strategic Positioning
1. Bitcoin Mining Scale and Efficiency
IREN’s core strategy is rapid scaling of Bitcoin mining capacity, targeting 30 exahash by December and 50 exahash in 2025. The company has locked in 10 exahash of new Bitmain S21XP miners for immediate deployment, with options for an additional 20 exahash. Fleet efficiency is set to improve to 15 joules per terahash, supporting a low-cost position. The move to spot power pricing in Texas, enabled by proven curtailment systems, dropped August power costs to 3.1 cents per kilowatt-hour, materially improving mining economics and providing real-time flexibility to optimize between mining and power sales.
2. AI Cloud Services: Measured Expansion
The AI cloud segment is in early but promising stages, with month-on-month revenue and customer growth. The initial fleet of 816 Nvidia H100 GPUs is fully utilized, and the upcoming Childress GPU pilot will test operational flexibility across climates. Management is cautious about capital intensity, emphasizing customer creditworthiness, prepayments, and contract tenor. The company is open to both on-demand and long-term contracts, with flexibility to redeploy capacity as large customers like Poolside roll off. Payback periods on GPUs are targeted at 24 to 30 months, but technology obsolescence and demand volatility remain key risks.
3. Power and Land as Strategic Moat
IREN’s real-world asset base is a critical differentiator. With 2.3 gigawatts of grid-connected power and a 1 gigawatt global development pipeline, the company is positioned to capitalize on the growing scarcity of suitable sites for digital infrastructure. The Childress campus alone offers 750 megawatts of expansion potential, of which only 350 megawatts will be built out by year-end. The ongoing Morgan Stanley-led process to monetize the 1.4 gigawatt West Texas site could unlock value or catalyze partnerships with hyperscalers or AI players. Management views land and power aggregation as a long-term optionality play, requiring minimal upfront CapEx but significant future strategic leverage.
4. Cost Discipline and Build Optimization
Continuous iteration in data center design has reduced build costs from $750,000 to $650,000 per megawatt, while increasing each new building’s capacity from 20 to 25 megawatts. This operational discipline supports faster scaling and improved capital efficiency, with two new 25MW centers targeted each month. Supplier relationships, in-house IP, and modular construction techniques are driving both speed and cost savings, supporting the company’s ambition to outpace industry growth rates.
5. Capital Allocation and Flexibility
Management remains highly disciplined in capital deployment, favoring projects with clear risk-adjusted returns and maintaining a conservative stance on debt. Shareholder dilution is carefully weighed, and the company’s ATM and ELOC facilities provide ample liquidity. The balance sheet’s strength enables opportunistic site acquisition and expansion, while the lack of external debt reduces risk in volatile market cycles.
Key Considerations
IREN’s quarter was defined by operational execution, strategic asset accumulation, and prudent capital management amid rapid industry change. The company is balancing the need for speed in scaling with risk controls in both Bitcoin and AI businesses.
Key Considerations:
- Spot Power Shift: The move to spot pricing in Texas unlocks lower costs and dynamic profit optimization, but exposes IREN to real-time market volatility.
- AI Customer Transition: As Poolside’s contract ends, the ability to swiftly reallocate GPU capacity will test IREN’s go-to-market agility and pricing power.
- Asset Monetization Optionality: The Morgan Stanley process for West Texas could yield partnerships, asset sales, or new build-to-suit models, impacting capital intensity and future revenue mix.
- Technology Obsolescence Risk: The pace of GPU innovation (H100, H200, Blackwell) could compress payback periods and require ongoing capital refresh.
- Regulatory and Compliance Costs: Expanded NASDAQ obligations and Canadian tax audits increased OPEX, a trend likely to persist as the business scales.
Risks
IREN faces several material risks: Bitcoin price volatility directly impacts mining profitability, while global hash rate growth and the halving event have raised per-coin costs. The AI cloud business is exposed to rapid technology cycles and uncertain long-term demand. Power market volatility, regulatory audits, and potential delays in data center buildout or site energization could also disrupt growth plans. Management’s refusal to overextend on capex or take on debt mitigates some risk, but the scale and speed of expansion increase operational complexity and execution risk.
Forward Outlook
For Q1 2026, IREN guided to:
- Installed Bitcoin mining capacity reaching 20 exahash by September and 30 exahash by December.
- 510 megawatts of energized data center capacity by year-end.
For full-year 2026, management reiterated:
- Pathway to 50 exahash mining capacity, subject to option exercise and market conditions.
Management highlighted several factors that will shape the outlook:
- AI cloud growth will be paced by customer quality, prepayments, and contract duration.
- Site acquisition and development will continue, with power and land scarcity expected to intensify.
Takeaways
IREN’s results and commentary reinforce its position as a scale-driven infrastructure operator with unique optionality in Bitcoin and AI compute markets.
- Bitcoin Mining Execution: Rapid capacity scaling, improved fleet efficiency, and spot power adoption drive cost leadership and margin resilience.
- AI Cloud Upside and Caution: Early revenue traction is promising, but management’s measured approach to capex and contracting signals a focus on sustainable growth over headline expansion.
- Asset Leverage for Future Growth: The aggregation of grid-connected power and land provides a strategic moat, enabling flexible responses to digital infrastructure demand spikes and new business models.
Conclusion
IREN exits FY24 as a capitalized, asset-rich operator with dual growth engines in Bitcoin mining and AI cloud services. The company’s operational discipline, balance sheet strength, and strategic asset positioning leave it well-placed to navigate volatility and capture upside as digital infrastructure demand accelerates.
Industry Read-Through
IREN’s results highlight the intensifying scarcity of grid-connected power and land as critical bottlenecks for both Bitcoin mining and AI compute infrastructure. The company’s move to spot power pricing and modular data center construction sets a new operational standard, while its capital discipline in AI cloud signals a maturing approach to GPU-as-a-service business models. For the sector, the ability to secure and monetize real-world infrastructure will increasingly separate winners from also-rans, as digital demand outpaces the slow, capital-intensive buildout of physical assets. Investors should monitor how other miners and AI infrastructure providers respond to rising cost barriers, power market volatility, and the need for flexible, multi-tenant data center models.