IREN (IREN.US) Q1 AI cloud revenue surged 182% quarter-on-quarter, with $20 billion order backlog in hand

Zhitong Finance APP reports that IREN Ltd (IREN.US) released its financial results for the first quarter of fiscal year 2027, ending September 30, 2026, after the US stock market closed on November 5. The company achieved revenue of $228 million for the quarter, up 66% quarter-on-quarter, surpassing the market expectation of $221 million. Net loss narrowed significantly to $263 million from $684 million in the previous quarter. Adjusted EBITDA was $66 million, a quarter-on-quarter increase of 247%, with an adjusted EBITDA margin of 29%. Loss per share was $0.66, while market expectations were for a loss of $0.48 per share.

AI Cloud Business: Revenue Almost Tripled Quarter-on-Quarter, Gross Margin at 86%

The AI cloud business was the clear standout this quarter. Quarterly AI cloud revenue reached $200 million, a 182% increase quarter-on-quarter (previously $71 million), including $135 million from AI cloud services and $65 million from AI cloud leasing; the AI cloud segment’s gross margin was 86%, unchanged from last quarter.

The core driver of the revenue jump was the delivery of the Horizon 1 data center. The company’s operational IT capacity (IT-MW) rose 127% quarter-on-quarter, from 41 MW to 93 MW (approximately 0.1 GW).

Forward-looking indicators also remained strong:

Operating ARR (annualized run-rate revenue) reached $1 billion, doubling quarter-on-quarter ($500 million as of the end of June);

Order backlog reached $20 billion, up 22% quarter-on-quarter, with $9.6 billion from Microsoft (47%), $3.4 billion from NVIDIA (17%), and $7.2 billion (36%) from AI developers/frontier labs/channel partners; about two-thirds ($13 billion) came from investment-grade counterparties.

In the first quarter of this fiscal year, the weighted average remaining contract term for new signings exceeded four years. Five-year contracts were priced at $22 million—$40 million per megawatt (IT), with new short-term contracts after the quarter priced as high as $40 million/MW.

It should be noted that the company has postponed its $4 billion ARR achievement target from the end of 2026 to January 2027. The company explained this was due to client-requested changes and vendor delivery schedules and indicated that the latest it could be pushed to is the end of February 2027.

The quarterly report also revealed that, after quarter-end, the company reached an expansion agreement with a frontier AI laboratory, and newly signed H100 contract pricing was 100% higher than that of the previous Prince George contract.

Data Centers and Electricity: 0.8 GW Under Construction, 5 GW Power Secured, 35 GW Development Pipeline

The company emphasized its three-layer vertical integration model: "AI Cloud—Data Center—Land & Power." Data center assets have a book value of approximately $6.6 billion, a design life of over 20 years, are funded with cash, and are unencumbered; more than 30,000 acres of land have already been secured.

Construction capacity is 0.8 GW across several campuses, including Prince George, Mackenzie, Childress, Sweetwater 1, and Canal Flats, with the initial 0.3 GW already in the final stage of development.

More than 5 GW of power has been secured, and there is an additional 35 GW in the development pipeline (as of November 5, 2026, at varying stages prior to grid-connection agreements, considered speculative projects).

Execution speed leads the industry: It took only 14 months from groundbreaking to commissioning the GB300 cluster at Horizon 1 (construction started in June 2025, completed in November 2026), while the industry benchmark (excluding civil works for GPU deployment) is 18 months.

The company has already placed orders for GPUs to support an additional 0.3 GW of AI cloud capacity, with full funding in place for this phase of expansion.

Additionally, at the end of the quarter, the company had $5.8 billion in cash and restricted cash, with net debt rising to $4.43 billion. Of the remaining $15 billion in capital expenditures for fiscal 2027, $6 billion in financing is still required. Bitcoin mining revenue fell to $28 million, with mining machines continuing to be retired from service.

At the close on Thursday, IREN’s share price fell 17%. After the earnings release, the stock rose more than 6% in after-hours trading.