Following a significant 26% drop in its stock price post-election, IREN's earnings report revealed that over $4 billion in annual recurring revenue expected by 2026 has been postponed to at least January, potentially extending to February. This delay is attributed to a request from Microsoft for reconfiguration and upgrades to network infrastructure to support new AI models.
Despite this setback, IREN's shares rose in after-hours trading, although they have fallen 55% over the past month. The company reported a 66% increase in revenue from the previous quarter, reaching $228 million, surpassing analyst expectations. AI Cloud revenue more than doubled to $200 million, while the net loss narrowed to $263 million from $684 million in the prior period.
Investors are closely monitoring IREN as the AI sector faces challenges, particularly after the recent Democratic election results, which have heightened concerns about cash-burning companies struggling with debt amid rising interest rates. IREN's revenue backlog increased by 22% to $20.3 billion, with a significant portion backed by investment-grade counterparties.
The company plans to invest $15 billion in capital expenditures this fiscal year, although $6 billion of this is contingent on market conditions. IREN maintains contracts with major players like Nvidia and Microsoft, indicating ongoing demand despite market volatility