IREN plans US$15B in spending as AI revenue target slips into 2027
The cloud operator says US$6 billion of planned funding remains a target, while contracted run-rate revenue awaits commissioning.
Julian Okafor
An AI expansion budget of US$15 billion still depends on US$6 billion of targeted funding as a contracted revenue milestone slips into 2027. IREN NASDAQIREN, a vertically integrated provider of data centres and AI computing, outlined the remaining fiscal 2027 capital plan in its Nov. 5 results.
For the quarter ended Sept. 30, revenue reached US$228 million, up from US$137 million in the preceding quarter. That exceeded the US$221.28 million analyst estimate compiled by LSEG and reported by Reuters on Nov. 5. The net loss narrowed to US$263 million from US$684 million.
IREN shares NASDAQIREN closed lower at US$18.03 at 4:00 p.m. EST on Nov. 5. That close preceded the company's after-market release.
The company says capacity supporting more than US$4 billion in annualized run-rate revenue is contracted and funded, but the operational target has moved from year-end to Jan. 31, 2027. A customer-requested design change and supplier timing could push it to the end of February, with revenue still dependent on commissioning and customer acceptance.
Funding Covers One Program While More Capital Is Targeted
IREN's Nov. 5 spending plan pairs US$9 billion of cash, committed GPU financing and customer prepayments with the remaining capital budget. Another US$6 billion is targeted from equipment financing, prepayments, data-centre financing and other corporate sources, subject to market conditions.
The release's funding definitions show why the committed category cannot all be treated as cash in the bank. The Sept. 30 snapshot includes restricted cash, undrawn facilities and contracted customer prepayments that have yet to arrive.
The company's funded designation covers the remaining data-centre and GPU spending for a 0.3-gigawatt IT program supporting the contracted revenue target. Access to committed financing still depends on funding conditions, including the release of escrowed proceeds and applicable availability periods.
"The more than $4 billion of contracted ARR is funded and now targeted for January, after a customer-requested design change and supplier timing moved it from year-end; it may extend to the end of February," co-chief executive Daniel Roberts said.
After the September quarter, IREN signed a five-year contract with customer prepayments covering 90 per cent of associated GPU capital expenditure. Its notes define those prepayments as amounts contractually payable before service delivery, and caution that future contracts may lack similar terms.
AI Cloud Revenue Replaces Mining Sales
AI Cloud revenue rose to US$200 million in the September quarter from US$71 million in June. The September total comprised US$135 million of cloud services and US$65 million of lease revenue; the preceding quarter had no lease revenue.
Bitcoin mining revenue fell to US$28 million from US$67 million over the same period. IREN reported an AI Cloud segment gross margin of 86 per cent, but its definition excludes depreciation and amortization and precedes site-level costs.
Revenue backlog reached US$20.3 billion, up 22 per cent sequentially, in the Sept. 30 update. Approximately two-thirds was tied to investment-grade counterparties or guarantors, while recognition still requires delivery and service availability.
In its Nov. 5 release, IREN said operating annualized run-rate revenue had reached US$1 billion. That operating base is distinct from the larger contracted target awaiting commissioning.
The run-rate calculation multiplies hourly pricing for commissioned, contracted GPUs by 8,760 hours and adds storage and ancillary revenue. It uses company assumptions about utilization and pricing, while reported quarterly revenue follows accounting recognition.
The sector's conversion from mining to AI is also producing recognized revenue at Core Scientific, Inc. NASDAQCORZ, a U.S. operator of high-density colocation facilities. Its Nov. 5 release reported US$215.4 million of quarterly colocation revenue and 485 billing megawatts at Sept. 30.
Mugglehead's earlier account of Core Scientific's shift toward colocation tracked that delivery-to-billing transition. Core Scientific's Nov. 5 figures measure colocation revenue and billing capacity, while IREN's target measures annualized contracted GPU pricing, storage and ancillary services.
Read more: Core Scientific reports US$232.9M revenue as colocation dominates sales
Construction And Acceptance Set The Next Deadline
IREN's Nov. 5 update places Horizon 2 through Horizon 4 in late-stage construction, with liquid-cooled construction underway at Sweetwater 1. New liquid-cooled data centres have also started construction at the 100-megawatt Mackenzie site.
Its broader portfolio includes more than five gigawatts of secured power and a development pipeline exceeding 35 gigawatts. Those portfolio figures sit alongside, rather than measure delivery of, the smaller funded IT program.
The next test is commissioning and customer acceptance against the Jan. 31, 2027 operational target, with possible extension to February's end. IREN's notes warn that recognized revenue may be materially below its annualized run-rate measure.
