IREN Still Heavily Dependent on Bitcoin Revenue Amid Microsoft AI Cloud Transition

Bitcoin miner IREN still generates most of its revenue from Bitcoin mining, despite transitioning to a Microsoft AI cloud partnership. In fiscal year 2026, IREN's $578.2 million in BTC revenue accounted for 81.8% of the company's total annual revenue of $707 million. Meanwhile, AI Cloud Services contributed $128.8 million.

The transition has been costly, with a non-cash impairment of $638.8 million due to decommissioning miners and converting data center sites for AI workloads. IREN reported a net loss of $702.6 million, influenced by the impairment and other factors. The charge was not a cash outflow but rather an accounting value assigned to retired assets before the replacement business was fully operational.

IREN's AI cloud revenue is still facing significant challenges, including a $3 billion operating gap between contracted and actual run-rate revenue. As of August 26, IREN had $1 billion in operating annualized run-rate revenue against $4 billion of contracted ARR for its 2026 capacity. The company aims to close this gap by the end of 2026.

Microsoft accepted Horizon 1 in August, with Horizons 2 through 4 targeted for phased delivery in calendar Q4 2026. Delays in physical infrastructure deployment and customer acceptance can postpone revenue while financing costs continue.