IREN Limited (NASDAQ: IREN) Q4 2025 Earnings Call | 08/28/2025

Financial Performance (FY24, Ended June 30, 2024)

• Adjusted EBITDA: $54.7 million, up $53.3 million YoY, the highest in company history.

• Bitcoin Mining Revenue: Increased from $75 million to $184 million, driven by a hash rate increase from 5.6 EH/s to 9.4 EH/s, mining 4,191 Bitcoins at an average realized price of $44,000 (+89% YoY).

• AI Cloud Services Revenue: $3.1 million, launched in February 2024, with month-on-month growth.

• Electricity Costs per Bitcoin Mined: Rose from $11,000 to $18,100 due to global hash rate growth and the April 2024 Bitcoin halving.

• Operating Expenses: Increased from $38 million to $56 million, reflecting business growth, including $22 million in employee benefits, $8.7 million in site expenses (including renewable energy credits), $7 million in insurance, $6 million in professional fees, and $6.3 million for a Canadian non-refundable sales tax provision.

• Depreciation: Rose from $30.9 million to $51 million due to Childress site commissioning and accelerated depreciation of S19J Pro miners for planned Q1 FY25 sale.

• Cash Flows: Net cash increase of $336 million, ending with $404.6 million in cash. Operating cash flows of $53 million (including $184 million from Bitcoin liquidation), investing cash outflows of $499 million (Childress expansion, Bitmain miners, 816 Nvidia H100 GPUs), and financing inflows of $782 million from 121 million shares sold via ATM ($108.1 million) and ELOC ($12.9 million).

• Balance Sheet: Total assets of $1.2 billion, equity at $1 billion, no external debt, and $223 million remaining on ATM facility.

Operational Highlights

• Bitcoin Mining Capacity: Increased to 15 EH/s from 10.5 EH/s, with guidance reiterated for 20 EH/s by October 2025 and 30 EH/s by December 2025. Purchased 10 EH/s of Bitmain S21XP miners (13.5 J/TH efficiency), reducing fleet efficiency to 15 J/TH at 30 EH/s. Retained 20 EH/s miner options for 2025, targeting 50 EH/s.

• Data Centers: Operating 300 MW, on track for 510 MW by December 2025. Shifted to 25 MW data center designs (from 20 MW), targeting 50 MW/month construction. Reduced build costs from $750,000/MW to $650,000/MW through optimized designs, supplier relationships, and internal IP (e.g., miner racking, filter banks).

• Power and Land Portfolio: Secured 2.31 GW of grid-connected power, with 750 MW at Childress (350 MW to be commissioned by December 2025). Additional 1 GW global development pipeline in progress. Morgan Stanley engaged to evaluate AI data center opportunities for 1.4 GW West Texas site, with active NDA discussions.

• Power Strategy (Childress): Transitioned to spot pricing from August 1, 2025, after a $7 million one-off hedge closeout cost. Achieved 3.1 cents/kWh in August (~$23,000/Bitcoin mined), down from 4.3 cents/kWh historical average, enhancing profitability through dynamic curtailment in ERCOT’s volatile market.

• AI Cloud Services: Operating 816 Nvidia H100 GPUs with full utilization and month-on-month revenue/customer growth. Poolside contract extended to August 2025 but will roll off as they consolidate clusters; capacity to be redeployed swiftly. Launched GPU pilot at Childress (16 GPUs, ~$1 million) to test flexibility across jurisdictions. Strong pipeline with focus on customer creditworthiness, prepayments, and contract tenor (targeting 12+ months).

• Sustainability: Committed to 100% renewable energy, supported by renewable energy credits (RECs).

Strategic and Market Insights

• Bitcoin Mining Outlook: Positioned as a low-cost miner with strong margins at current Bitcoin prices (~$23,000/coin cost at Childress). Hash price at all-time lows; growth depends on Bitcoin price rallies. Global hash rate growth limited by power/land scarcity, reinforcing IREN’s advantage with 2.3 GW secured.

• AI/HPC Opportunities: Flexible strategy to balance Bitcoin mining (controllable, accretive) with AI cloud/co-location. AI deals involve complex counterparty negotiations (e.g., technical specs, backup generation, liquid cooling). Childress and Canada sites offer low latency (sub-10ms in Texas, 20ms in Canada) and retrofit potential.

• Power/Land Scarcity: Thesis of digital-real world dislocation drives aggressive site acquisition (low CapEx, high optionality). Expects increasing scarcity over 5–20 years, enhancing portfolio value.

• Capital Allocation: Disciplined approach to GPU investments, prioritizing contracts with favorable risk-return (12–36 month paybacks, prepayments). Bitcoin mining funds growth, with AI/HPC expansion contingent on optimal deal structures.

Q&A Highlights

• Bitcoin vs. AI Strategy: Bitcoin mining offers control and accretive growth, while AI/HPC involves complex counterparty deals. IREN prioritizes flexibility, pursuing both on-demand and long-term AI contracts without speculative overinvestment.

• Site Acquisition: Continues to pursue gigawatts of power/land due to long-term scarcity, requiring minimal CapEx (e.g., $20,000–$30,000 land options) and leveraging internal team expertise.

• HPC Team Hires: Investments in network engineers, AI sales, and commercial expertise to support AI/HPC growth without heavy speculative CapEx. Focus on proving operational credentials and securing favorable contracts.

• GPU Pilot (Childress): Small-scale (16 GPUs) to test operational flexibility, with ~24–30 month payback expectations for H100s, adjusted for new tech (e.g., Blackwell GPUs).

• Poolside Capacity: Post-August, capacity redeployment balances on-demand and long-term contracts, leveraging Poolside’s referrals to attract new customers.

• Data Center Design: 25 MW designs are go-forward, not retroactive, optimizing density and cost. Larger designs under consideration but 25 MW sufficient for now.

• Hash Price Outlook: Tied to Bitcoin price; IREN’s low-cost structure (~$23,000/coin) ensures profitability. Global hash rate growth constrained by power/land availability, favoring IREN’s 2.3 GW portfolio.

• Bitmain T21 Issues: Manufacturing defects (heat sinks, assembly quality) affected ~1.5 EH/s, being replaced by Bitmain with resolution expected in months.

• West Texas Site: Greenfield site in design phase, with energization nearing. Morgan Stanley process explores co-location/AI opportunities, with dynamic valuations reflecting market evolution.