IREN Ltd. (NASDAQ: IREN) reported Q1 FY26 earnings after market close on Nov. 6, delivering record profitability but missing revenue expectations. The stock closed at $67.83 ahead of the report, reflecting investor optimism around the company’s landmark $9.7 billion Microsoft AI Cloud contract announced earlier this week.
A Dramatic Turnaround in Motion
IREN swung from a $51.7 million loss in Q1 FY25 to net income of $384.6 million this quarter. Adjusted EBITDA reached $91.7 million, up 3,568% year over year. This transformation marks the continuation of a multi-year recovery. The company generated $0.25 in annual EPS for FY25 after posting losses of $3.21 per share in FY23. The profitability story is real, but the revenue miss signals execution challenges even as the business scales.
The Revenue Gap and Segment Reality
Revenue came in at $240.3 million, missing the $245.79 million consensus estimate by $5.49 million. The shortfall reflects a business still heavily dependent on Bitcoin mining. Bitcoin Mining Revenue totaled $232.9 million of the quarter’s total. AI Cloud Services, the growth engine management is banking on, generated just $7.3 million. This gap matters because it shows how early IREN remains in its transition. The company is targeting a $3.4 billion annualized run-rate for AI Cloud by the end of 2026, but current revenue tells a different story about near-term execution.
Key Figures
Revenue: $240.3M (vs. $245.79M estimated); missed by $5.49M
Net Income: $384.6M (vs. $51.7M loss in Q1 FY25)
Adjusted EBITDA: $91.7M; up 3,568% year over year
Bitcoin Mining Revenue: $232.9M of total revenue
AI Cloud Services Revenue: $7.3M of total revenue
Cash Position: $1.8B as of October 31, 2025
The company is deploying 140,000 GPUs as part of its AI Cloud expansion. With $1.8 billion in cash and several multi-year contracts already secured, IREN has the balance sheet to fund this buildout. The real question is whether AI Cloud revenue growth can accelerate fast enough to justify current valuations.
What Management Said
CEO Daniel Roberts emphasized execution and strategic positioning. “IREN continues to execute with discipline, delivering record results this quarter and meaningful progress in our AI Cloud expansion,” Roberts said in the earnings release. He highlighted the Microsoft partnership specifically: “We secured several new multi-year contracts, including a landmark partnership with Microsoft, which solidifies IREN’s position as a leading AI Cloud Service Provider and expands our reach into new hyperscale customer segments.”
The tone was confident, but the revenue miss tempers the narrative. Management also secured contracts with Together AI, Fluidstack, and Fireworks AI during the quarter, showing deal momentum. However, the lag between contract wins and revenue recognition remains a key risk to monitor.
What Happens Next
Retail investors initially celebrated the Microsoft deal with strong sentiment on social media, but that enthusiasm tempered as earnings approached. Analyst consensus targets $72.17 on the stock, suggesting limited upside from current levels. The company faces a critical inflection point: proving that AI Cloud Services can scale profitably while maintaining Bitcoin mining cash generation. The next two quarters will be essential for validating whether the $3.4 billion AI Cloud revenue target is achievable by end of 2026. Watch for AI Cloud revenue acceleration and gross margins on that segment during future earnings calls.
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