IREN Stock Drops 8% as Rising AI Costs Pressure Earnings

Weak profitability overshadowed a major step forward in IREN’s shift from Bitcoin mining toward becoming an AI cloud infrastructure provider.

IREN shares dropped 8% in Friday’s premarket trading after the company reported fiscal fourth-quarter results that highlighted the significant short-term expenses associated with its AI transition.

Quarterly revenue declined 5% from the previous quarter to $137.2 million, while adjusted EBITDA plunged 68% to $19.2 million. Higher staffing expenses and increased spending ahead of the AI cloud expansion weighed on the results. Compared with the same quarter last year, revenue and adjusted EBITDA were down 85% and 93%, respectively.

The company also posted a $684 million net loss, including a $450.4 million non-cash impairment charge largely linked to the retirement of Bitcoin mining equipment. IREN is repurposing its mining facilities for AI infrastructure, resulting in significant upfront costs before the new cloud business generates its full revenue potential.

IREN said it has secured $4 billion in contracted annualized run-rate revenue associated with its 2026 capacity. However, only about $1 billion of that capacity is currently operational.

Despite the weak financial results, the quarter represented a major milestone in IREN’s business transformation. Revenue from its AI cloud operations more than doubled from the previous quarter to $70.5 million, surpassing Bitcoin mining revenue of $66.7 million for the first time.

AI cloud services accounted for 51.4% of total quarterly revenue, compared with 48.6% from Bitcoin mining. Mining revenue fell 40% from the previous quarter as IREN shifted more power and infrastructure toward its rapidly expanding AI operations.