IREN delays $4bn revenue target after Microsoft network request

IREN said the delay could extend payment into February 2027 and was due to a customer-requested change and supplier timing. Co-CEO Daniel Roberts named Microsoft as the customer on the earnings call.

Microsoft asked IREN to reconfigure and upgrade network infrastructure so that 200 megawatts of capacity could serve the latest frontier models, Roberts said. IREN said the $4bn target is fully contracted and funded.

Microsoft reviews cloud deals

Bloomberg reported on 6 November that Microsoft will let an AI compute agreement with Oracle expire as part of a broader review of cloud partnerships. The report said Microsoft is tightening control over some data center projects run by neoclouds including IREN, Nebius and Nscale, citing delays and rising costs, according to Handelsblatt, which relayed it.

An Oracle spokesperson told Reuters that demand for its AI infrastructure remains strong, including for older generations of GPUs. Microsoft was not available for comment. I/O Fund estimated Microsoft had struck about $60bn of commitments across neocloud providers including CoreWeave, Nebius and Nscale.

IREN backlog and earnings

IREN said its revenue backlog rose 22% from the prior period to $20.3bn, with about two-thirds with investment-grade counterparties. Revenue rose 66% from the prior quarter to $228m, beating the $221m LSEG consensus, while AI cloud revenue more than doubled to $200m and the net loss narrowed to $263m from $684m. IREN gets the rest of its revenue from bitcoin mining, which was its primary business before it pivoted to AI.

The shares rose in extended trading after a 55% drop over the past month. IREN said prices for its compute continue to rise. It lists Nvidia, Microsoft and 13 other customers, and said it expanded an existing contract with a leading frontier AI lab.

Capex and financing

Roberts said capital markets have become more selective in recent weeks, and the questions have moved from how big the contract is to whether it can be delivered, financed and run at a profit. He said there is a disconnect between the public market and what IREN sees at the customer level.

IREN plans $15bn of capex over the rest of its fiscal year: $9bn in cash and committed financing, and $6bn in target financing subject to market conditions. Roberts said some construction is backed by Nvidia and Microsoft, and about a third by customers willing to prepay for capacity. He said one customer agreed to fund 90% of the GPU capex. IREN said it deliberately had not yet bought all of the GPUs it needs for next year to reduce risk.