Shares of IREN fell about 6% in premarket trading on Friday after the company reported fiscal fourth-quarter results that missed Wall Street expectations on revenue and adjusted EBITDA.

IREN Limited

The stock closed Thursday at $40.53. That leaves it about 47% below its 52-week high of $76.87, while still showing a 76% gain over the past year.

For the quarter, IREN reported revenue of $137.2 million, below the Street’s estimate of $157.14 million. Adjusted EBITDA came in at $19.2 million, also short of analysts’ expectations of $34.9 million.

Even so, the quarter included a sharp increase in AI cloud revenue. That segment generated $70.5 million, up 110% from $33.6 million in the previous quarter.

The AI cloud business reflects how IREN, which began as a Bitcoin miner, has redirected its portfolio of powered data center sites toward GPU computing — a pivot several Bitcoin mining peers have also made as demand for AI infrastructure grows.

IREN said it ended the quarter with about $500 million in annual recurring revenue, which later rose to $1 billion after Microsoft accepted Horizon 1.

Fiscal 2026 ARR target fully contracted

Management said its $4 billion annual recurring revenue target for fiscal 2026 is now fully contracted, up from the $3.4 billion disclosed in July.

The increase reflects a newly signed multi-year agreement with an undisclosed frontier AI lab, along with new customer wins and renewals and extensions from existing partners.

IREN also said the $4 billion ARR figure does not include about $700 million in ARR from a NVIDIA agreement expected to begin in 2027.

The company expects ARR to exceed $4 billion by the December quarter. Wall Street is projecting fiscal 2027 revenue growth of 117%.

Because ARR captures the annualized value of signed contracts rather than revenue already recognized in a given quarter, the pace at which that contracted backlog converts into reported sales as the newly financed GPU capacity is deployed is a key marker for coming quarters.

Analysts stay constructive

Despite the post-earnings decline, H.C. Wainwright reiterated its Buy rating and $90 price target, calling the pullback an attractive entry point.

That target implies about 122% upside from Thursday’s closing price.

B. Riley analyst Nick Giles described the results as “a commercial and financing validation” ahead of the company’s expected revenue acceleration toward $4 billion in ARR and continued contracting for capacity in 2027 and 2028.

Citizens JMP Securities also kept its Market Outperform rating and $80 price target, citing strength in the AI cloud services business.

Financing and capital spending outlook

IREN said it secured $6.5 billion in GPU financing over the past three months. Combined with customer advance payments, the company said this covers more than 100% of the GPU capital expenditures tied to reaching the $4 billion ARR milestone.

Management’s fiscal 2027 capital expenditure outlook is $25 billion to $30 billion, a scale that underscores how capital-intensive the AI data center buildout has become.

The company said three-year contract pricing has risen about 125% since November. Recently signed agreements are generating more than $20 million in annual revenue per IT megawatt, while current negotiations are running around $25 million per IT megawatt. IT megawatts measure the power delivered to computing equipment, a standard yardstick for pricing data center capacity.

Over the trailing 12 months, IREN reported 41% revenue growth.