IREN shares fall 17% as Bitcoin mining revenue drops 58%

What happened

IREN reported a sharp contraction in its Bitcoin mining business for the quarter ended September 30, with mining revenue falling 58% from the prior quarter to $28 million, according to Crypto.news and Bitcoin.com News. The figure was down roughly 88% from $233 million in the same quarter a year earlier.

The decline reflects the company's deliberate wind-down of mining. Bitcoin production fell to 402 BTC from 2,039 BTC a year earlier, and average operating hashrate dropped to 8.8 EH/s from 45.3 EH/s as equipment was removed to free space for AI infrastructure. IREN said the lower revenue stemmed from reduced output and weaker average Bitcoin prices.

The company's shares closed at $18.03 on November 5, a decline of 16.95% from the previous close of $21.71, per Crypto.news. The stock recovered some ground in extended trading after the earnings release, and Bitcoin.com News reported that analysts maintained a $55 price target.

IREN said it aims to substantially complete its transition away from Bitcoin mining by December 31, 2026, with minimal mining activity continuing through 2027. It held no Bitcoin on its balance sheet at the end of September, having sold mined coins daily.

Why it matters

The results illustrate how completely IREN's revenue base has shifted. AI cloud brought in $200 million, up 182% from $71 million in the June quarter, and accounted for nearly 88% of quarterly revenue versus about 52% previously. Total revenue rose 66% to $228 million, while the net loss narrowed to $263 million from $684 million and adjusted EBITDA climbed to $66 million from $19 million.

The pivot also carries new risks. IREN expects about $15 billion in remaining capital expenditure during fiscal 2027, with roughly $9 billion covered by cash, committed financing and customer prepayments and the remaining $6 billion dependent on targeted financing sources. The company's revenue backlog stood at $20.3 billion, up 22%, with about two-thirds tied to investment-grade counterparties.

IREN is not alone in making the move. Bitcoin.com News noted that Terawulf generated $76.2 million in third-quarter revenue, with $63 million from HPC leasing, even as its operating loss widened to $88.2 million. MARA has partnered with Starwood on AI data centers, and CleanSpark has expanded into AI computing alongside mining.

Background

IREN had already begun scaling back mining earlier in 2026 while building AI computing capacity, Crypto.news reported. In July it announced $2.8 billion in contracts and raised its projected annual recurring revenue target above $4 billion.

That target has now moved. Co-CEO Daniel Roberts said the more than $4 billion of contracted ARR is funded and now targeted for January, citing a customer-requested design change and supplier timing. On the earnings call he identified Microsoft as the customer seeking changes to network infrastructure for its 200-megawatt deployment.

The quarter included Microsoft's acceptance of the first Horizon data center deployment in August. Of the $200 million in AI cloud revenue, $135 million came from AI cloud services and $65 million from cloud leasing. IREN reported an 86% AI cloud gross margin, unchanged from the prior quarter, and about 93 megawatts of operating AI cloud capacity at September 30, with construction underway at Childress, Mackenzie and Sweetwater.

What to watch

Investors will be watching whether IREN delivers the $4 billion ARR target in January or slips into February, and how it funds the $6 billion portion of its capital plan that still depends on targeted financing, including additional GPU and data center funding. Also in focus: progress on the Horizon 2 through Horizon 4 projects, the 100-megawatt Mackenzie site and the Sweetwater 1 campus, and the pace of the final mining wind-down through 2027.

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