IREN shares fell nearly 17% to close at $18.03 on November 5 after the company said its target of more than $4 billion in annual recurring revenue would be reached later than previously planned. The delay followed a design change requested by Microsoft, IREN’s largest AI cloud customer.

The Nasdaq-listed company also reported a 58% decline in Bitcoin mining revenue for the quarter ended September 30. IREN expects to mostly complete its exit from Bitcoin mining by the end of 2026, although it said small-scale mining operations will continue through 2027.

Microsoft Design Change Delays Revenue Target

In July, IREN announced $2.8 billion in new contracts and raised its annual recurring revenue target to more than $4 billion. The company had expected to reach that level by December 2026.

IREN now expects to reach the target in January 2027, with a possible extension into February. Co-CEO Daniel Roberts said the more than $4 billion in contracted revenue is funded and remains targeted for January. Because the target rests on contracted revenue, the shift moves the milestone’s timing rather than the contracted amount, pushing the date roughly a month past the original December 2026 mark.

IREN summarized its Q1 FY27 results in an X post:

New multi-year contracts. Disciplined capital allocation. Flexibility to set our own pace of growth. Value at every layer of the platform. Last quarter, AI Cloud revenue nearly tripled to $200 million. Other highlights from our Q1 FY27 results: – Total quarterly revenue… pic.twitter.com/DPDkvgMhX4 — IREN (@IREN_Ltd) November 5, 2026

Roberts attributed the timing change to a customer-requested design modification and supplier timing. During the earnings call, he identified Microsoft as the customer that requested network infrastructure changes for its 200-megawatt deployment.

IREN shares closed at $18.03 on November 5, down from $21.71 in the previous session. The decline occurred during a broader sell-off in AI and technology stocks, and the shares recovered some ground in extended trading.

The company expects approximately $15 billion in remaining capital spending during fiscal 2027. Management said $9 billion would come from cash, committed financing and customer prepayments, while the remaining $6 billion depends on financing that is still being sought. Securing that outstanding $6 billion is the most immediate dependency in the spending plan, and a checkpoint readers can track as fiscal 2027 progresses.

IREN’s official announcement is available in its Q1 FY27 results release.

AI Cloud Growth Offsets Mining Decline

AI cloud revenue increased 182% to $200 million in the quarter, compared with $71 million in the June quarter. Total revenue rose 66% to $228 million, with AI cloud accounting for nearly 88% of the total.

Cloud services generated $135 million of AI cloud revenue, while cloud leasing contributed $65 million. The leasing revenue followed Microsoft’s acceptance of the first Horizon data center deployment in August.

IREN reported a net loss of $263 million, narrower than the $684 million loss in the previous quarter. Adjusted EBITDA increased to $66 million from $19 million, while the AI cloud segment’s gross margin remained 86%.

Financial Index reported the results in an X post:

IREN $IREN JUST REPORTED Q1 FY27 EARNINGS Revenue: $228M vs. $228.3M expected 🟡; +66% QoQ AI Cloud Revenue: $200M, +182% QoQ Bitcoin Mining Revenue: $28M vs. $67M last quarter Adj EBITDA: $66M vs. $19M last quarter Net Loss: $263M vs. $684M last quarter AI Cloud Segment Gross… pic.twitter.com/Vb853ZebwY — Financial Index (@financial_index) November 5, 2026

Bitcoin mining revenue fell to $28 million from $67 million in June and was down approximately 88% from $233 million a year earlier. IREN mined 402 BTC, compared with 2,039 BTC in the same quarter of 2025.

Average operating hashrate declined to 8.8 EH/s from 45.3 EH/s a year earlier as the company removed miners to make room for AI hardware. IREN said its smaller mining operations would continue through 2027.

The company sells its mined Bitcoin daily and held no BTC at the end of September. Other miners, including MARA and CleanSpark, have also expanded into AI infrastructure. IREN’s plan to exit mining altogether would take that sector-wide shift a step beyond diversification, converting the power capacity behind its mining fleet into AI data center space, and its daily-sale approach means weaker production flows straight into reported revenue with no bitcoin holdings to cushion the quarter.

IREN’s revenue backlog increased 22% to $20.3 billion, with approximately two-thirds linked to investment-grade customers. Total assets reached $20.6 billion, including $6 billion in data center assets.

Following the quarter, IREN expanded an agreement with an AI research company through a five-year contract valued at approximately $22 million in annual revenue per megawatt. Roberts said the customer agreed to prepay 90% of the related GPU spending.

IREN also signed a shorter-term agreement valued at $40 million in annual revenue per megawatt. Its Horizon 2 through Horizon 4 projects are in late-stage construction, with work continuing at the Mackenzie and Sweetwater sites. Between that construction pipeline, the January revenue target and the final phase of the mining exit, IREN’s near-term calendar offers several concrete checkpoints for whether the AI transition stays on schedule.

On Friday, Bernstein analysts rated IREN Outperform and raised their price target to $55. They cited the company’s “self-owned, unencumbered” power assets and its control over the pace of development.

Source: CoinCentral.