IREN says $4 billion in annual revenue delayed at Microsoft's request

IREN, the AI-focused "neocloud" operator, said in its earnings report on Thursday that more than $4 billion in annual recurring revenue expected to land in 2026 has been pushed out to at least January.

The company attributed the delay, which could extend payments into February, to "a customer-requested change and supplier timing." On the company's earnings call, co-CEO Daniel Roberts named the customer as Microsoft, saying it asked IREN to reconfigure and upgrade network infrastructure in order to enable 200 megawatts of capacity for "latest-generation frontier models."

The disclosure followed a 26% post-election plunge in IREN's stock and a 55% drop over the past month. Shares rose in extended trading.

Revenue beats estimates

Revenue climbed 66% from the prior quarter to $228 million, topping the $221 million average analyst estimate compiled by LSEG. AI Cloud revenue more than doubled to $200 million, with the rest coming from bitcoin mining — IREN's primary business before it pivoted to AI.

Net loss narrowed to $263 million from $684 million in the prior period. Year-ago figures were not included in the release.

IREN said its revenue backlog increased 22% from the prior period to $20.3 billion, with roughly two-thirds of that held by investment-grade counterparties, and that the $4 billion annual recurring revenue target is fully contracted and funded.

AI selloff pressures neoclouds

Investors are watching IREN closely as the AI trade shows signs of unwinding, particularly after the Democratic sweep in Tuesday's midterm elections. Concerns are mounting that cash-burning companies reliant on debt will struggle to meet their obligations as interest rates rise and lenders back out of the market. The Nasdaq had its worst day on Thursday since April 2025.

"Capital markets have become more selective in the last few weeks, and the questions have undoubtedly moved from how big the contract is to whether it can be delivered, financed, and run at a profit," Roberts said on the call.

Peer CoreWeave, due to report earnings on Tuesday, has plunged 60% in the past month. Nebius, which reports next Thursday, is down 48% over that stretch.

Roberts told CNBC's Seema Mody there is "a disconnect between what we're seeing in public market and what we're seeing at the customer level."

IREN said it planned to spend $15 billion in capital expenditures for the rest of this fiscal year — $9 billion in cash and committed financing and $6 billion in "target" financing that is subject to market conditions. It said prices for its compute continue to rise, that it expanded an existing contract with a leading frontier AI lab, and that it has contracts with Nvidia, Microsoft and 13 other customers.

Roberts said some data center construction in the coming year would be backed by Nvidia and Microsoft, while about a third would go to companies willing to offer large prepayments for capacity. "We just had a customer agree to fund 90% of the GPU capex," he said. IREN added that it has deliberately not yet bought all the GPUs it needs for next year, in order to reduce risk. Community opposition, the company said, can be addressed by tapping local suppliers, using water efficiently and creating jobs.

Source: CNBC.