TLDR
- IREN stock fell around 6% in premarket trading after adjusted EBITDA of $19.2M missed the $34.9M Wall Street estimate
- Total Q4 revenue came in at $137.2M, below the $157.14M forecast, but AI cloud revenue jumped 110% sequentially to $70.5M
- The company’s $4 billion ARR target for fiscal 2026 is now fully contracted, up from $3.4B as of July
- IREN signed a new multi-year AI cloud deal with an undisclosed frontier AI lab and raised $6.5B in GPU financing over three months
- H.C. Wainwright kept its Buy rating and $90 price target, calling the post-earnings dip a buying opportunity
IREN stock dropped around 6% to $38.20 in premarket trading on Friday after the company’s fiscal Q4 results showed an adjusted EBITDA miss. The stock was trading at $40.53 at Thursday’s close, down 47% from its 52-week high of $76.87, though still up 76% over the past year.
The company posted Q4 revenue of $137.2 million, missing Wall Street’s $157.14M estimate. Adjusted EBITDA came in at $19.2 million, well below the Street’s $34.9 million expectation.
Not everything was a miss, though.
AI cloud services revenue hit $70.5 million for the quarter, up 110% from the $33.6 million posted in the prior quarter. That kind of sequential growth is hard to ignore.
IREN also ended the quarter with roughly $500 million in ARR, which jumped to $1 billion after Microsoft accepted Horizon 1.
ARR Target Now Fully Contracted
The company confirmed its $4 billion ARR target for fiscal 2026 is fully contracted, a step up from the $3.4 billion figure reported in its July update.
That increase was driven by a new multi-year agreement with an unnamed frontier AI lab, additional customer signings, and renewals and expansions from existing customers.
Worth noting: the $4B figure excludes around $700 million in ARR from a NVIDIA contract that is expected to ramp in 2027.
IREN is guiding for more than $4 billion in ARR by the December quarter and analysts project 117% revenue growth for fiscal 2027.
Analysts See a Buying Opportunity
H.C. Wainwright reiterated its Buy rating and kept a $90 price target on IREN after earnings, framing the selloff as a chance to get in.
That $90 target represents about 122% upside from Thursday’s close.
B. Riley analyst Nick Giles described the quarter as “a commercial and financing validation” ahead of the near-term revenue ramp to $4 billion ARR and further contracting for 2027 and 2028 capacity.
Citizens also kept a Market Outperform rating with an $80 price target, pointing to momentum in AI cloud services.
On the financing side, IREN raised $6.5 billion in GPU financing over the past three months. That funding, combined with customer prepayments, covers more than 100% of the GPU capital expenditure tied to the $4B ARR target.
Capital expenditure guidance for fiscal 2027 is set at $25 billion to $30 billion.
Three-year pricing has climbed about 125% since November. Recent contracts exceed $20 million of annual revenue per IT megawatt, and current negotiations are running around $25 million per IT megawatt.
The company posted 41% revenue growth over the last twelve months.
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