Iris Energy (IREN) - 2025 Q3 - Quarterly Report

Business Update and Strategic Outlook This section covers IREN's strategic shift from Bitcoin mining expansion to AI/HPC, outlining capital reallocation and financing priorities Executive Summary IREN announced a strategic shift, pausing Bitcoin mining expansion at 52 EH/s to reallocate capital and focus on AI/HPC segments. The company is progressing debt financing workstreams and leveraging existing Bitcoin mining cashflows for AI growth - Bitcoin Mining expansion paused at 52 EH/s[1][4] - Strategic focus shifting to AI/HPC segments (AI Cloud Services and AI Data Centers)[2][3][5] - Capital strategy prioritizes customer prepayments and debt financing, with ATM facility providing a strategic backstop[4] Strategic Shift: Bitcoin Mining Expansion Pause IREN will halt further Bitcoin mining expansion after reaching 52 EH/s, redirecting capital and management focus towards AI data centers and cloud infrastructure, while utilizing strong cashflows from existing mining operations - All further Bitcoin Mining expansion will pause upon completion of its 52 EH/s buildout[4] - Capital and management focus reallocated toward AI data centers and cloud infrastructure[5] - Existing Bitcoin mining business cashflows will be leveraged to support growth of AI Cloud Services and AI Data Center businesses[5] Core Business Overview This section details IREN's Bitcoin mining capacity, AI Cloud Services operations, and AI Data Center development, including financial metrics and expansion plans Bitcoin Mining IREN's Bitcoin mining capacity increased to 35 EH/s and is on track to reach 50 EH/s soon, with a target of 52 EH/s. The company expects significant annualized net cashflow from this segment and plans to reinvest these cashflows into its AI businesses Bitcoin Mining Capacity Expansion | Metric | Current (as of report) | Target | | :----- | :--------------------- | :----- | | Installed Capacity | 35 EH/s (from 31 EH/s) | 50 EH/s (in coming months), 52 EH/s (final buildout) | Expected Annualized Illustrative Net Cashflow | Metric | Amount | | :----- | :----- | | Annualized Illustrative Net Cashflow | $528 million | - Intends to reinvest mining cashflows to support growth of its AI Cloud Services and AI Data Center businesses[8] AI Cloud Services IREN operates 1,896 NVIDIA H100 and H200 GPUs, generating an annualized run-rate revenue of $26 million. The company is seeing increased engagement for large-scale AI cloud infrastructure, particularly for Blackwell B200 GPU clusters, and is pursuing GPU financing to support expansion AI Cloud Services Key Metrics (as of March 31, 2025) | Metric | Value | | :----- | :---- | | GPUs Operating | 1,896 (NVIDIA H100 and H200 hardware) | | Annualized Run-Rate Revenue (utilized GPUs) | $26 million | - Seeing increased engagement around large-scale AI cloud infrastructure opportunities, particularly for multi-thousand air-cooled Blackwell B200 GPU clusters[8] - Progressing GPU financing workstreams to support potential expansion, optimize capital efficiency, and deliver attractive risk-adjusted returns[8] AI Data Centers IREN is developing AI Data Centers, with Horizon 1 targeting 50MW IT load, expected to be funded by customer prepayments and debt. Discussions have expanded beyond 50MW, and the company has started placing long-lead equipment deposits. The Sweetwater Data Center Hub has 2GW power capacity, with early-stage infrastructure investment to secure time-to-power advantage Horizon 1 AI Data Center Project | Metric | Details | | :----- | :------ | | IT Load Target | 50MW (initial discussions, now evolving to larger volumes) | | Estimated Capex | $300-$350 million | | Funding Sources | Primarily colocation customer prepayments and debt financing | - Commenced placing long-lead equipment deposits for capacity beyond the initial 50MW to preserve execution speed and maintain time-to-market advantage[11] - Sweetwater Data Center Hub has 2GW power capacity, with investment in substations and early-stage infrastructure to preserve time-to-power advantage[11] Financing Strategy This section outlines IREN's capital allocation priorities, emphasizing customer prepayments and diverse debt financing solutions, supported by its ATM facility and institutional appetite for credit Capital Allocation Priorities IREN's capital strategy prioritizes customer prepayments and various debt financing solutions. The existing ATM facility provides a strategic backstop, having raised $111 million to date at an average share price of $11.07 - Capital strategy prioritizes customer prepayments and a range of debt financing solutions[4] ATM Facility Utilization (as of March 28, 2025) | Metric | Value | | :----- | :---- | | Gross Proceeds Raised | $111 million | | Average Share Price | $11.07 | | Ordinary Shares Outstanding | 224,458,888 | - The existing ATM facility provides a strategic capital backstop to complement other financing sources[11] Debt Financing Workstreams IREN is focused on optimizing its capital structure, utilizing customer prepayments, project-level and corporate debt, convertible notes, asset-backed financing, and reinvestment of cashflows from Bitcoin Mining and AI Cloud Services. The company believes there is strong institutional appetite for credit and infrastructure lending, supported by its assets and track record - Financing sources include customer prepayments, project-level and corporate debt instruments, convertible notes, asset-backed financing and leasing, and reinvestment of Bitcoin Mining and AI Cloud Service cashflows[11] - IREN believes there is strong institutional appetite for credit and infrastructure lending, even ahead of contracted revenue, supported by its substantial real asset base, proven execution track record, and robust cashflows[11] Company Information This section provides an overview of IREN's business, its renewable energy focus, operational history in Bitcoin mining and AI, and key contact details About IREN IREN is a leading data center business utilizing 100% renewable energy to power Bitcoin, AI, and other high-performance computing. The company has been operating Bitcoin mining since 2019, AI Cloud Services since 2024, and manages 660MW of operating data centers, expanding to 910MW in 2025 - IREN is a leading data center business powering the future of Bitcoin, AI and beyond utilizing 100% renewable energy[21] IREN Business Operations Overview | Business Vertical | Operations Since | Key Metric | | :---------------- | :--------------- | :--------- | | Bitcoin Mining | 2019 | Expanding to 52 EH/s in 2025 | | AI Cloud Services | 2024 | 1,896 NVIDIA H100 & H200 GPUs | | Next-Generation Data Centers | N/A | 660MW operating, expanding to 910MW in 2025 | - Development portfolio includes 2,910MW of grid-connected power secured across North America, a >2,000 acre property portfolio, and a multi-gigawatt development pipeline[23] Contacts Provides contact information for media inquiries (Jon Snowball, Gillian Roberts) and investor relations (Lincoln Tan) - Media contacts: Jon Snowball (Sodali & Co, +61 477 946 068, +61 423 136 761) and Gillian Roberts (Aircover Communications, +1 818 395 2948, gillian.roberts@aircoverpr.com)[22] - Investor contact: Lincoln Tan (IREN, +61 407 423 395, lincoln.tanairen.com)[22] Important Disclosures This section presents critical assumptions for financial figures and a comprehensive disclaimer regarding forward-looking statements, outlining inherent risks and uncertainties Assumptions and Notes This section provides important disclaimers and assumptions for the illustrative net cashflow calculations and other financial figures presented in the report. It clarifies that illustrative net cashflow is not a projection and is based on specific assumptions that may differ in the future - Illustrative Net Cashflow is based on assumptions (e.g., 100% uptime, 815 EH/s global hashrate, $0.035/kWh electricity, $85k Bitcoin price) and should not be considered projections[13] - AI Cloud Services annualized run-rate revenue is for utilized GPUs as of March 31, 2025[13] - ATM facility figures ($111 million gross proceeds, $11.07 average share price, 224,458,888 ordinary shares outstanding) are as of March 28, 2025[13] Forward-Looking Statements This section contains a comprehensive disclaimer regarding forward-looking statements, highlighting that such statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from expectations. It lists numerous potential risks, including Bitcoin price fluctuations, capital access, execution of growth strategies, regulatory environment, and operational challenges - Forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied[15] - Key risks include Bitcoin price and foreign currency exchange rate fluctuations, ability to obtain additional capital, successful execution of growth strategies (including HPC solutions), and operating in an evolving regulatory environment[16] - IREN disclaims any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, except as required by law[19]