Iris Energy (US:IREN)2025-11-06 21:08Financial Performance - Total revenue for the three months ended September 30, 2025, was $240.3 million, a significant increase from $52.8 million for the same period in 2024, representing a growth of approximately 354%[146] - Net income for the quarter was $384.6 million, compared to a net loss of $51.7 million in the prior year, indicating a turnaround in profitability[146] - The company generated EBITDA of $662.7 million for the quarter, compared to $(18.8) million in the same quarter of 2024[146] - Adjusted EBITDA for Q3 2025 was $91.7 million, with an adjusted EBITDA margin of 38%, compared to $2.5 million and 5% in Q3 2024[189] - Total revenue increased to $240.3 million in Q3 2025 from $52.8 million in Q3 2024, driven by a significant rise in Bitcoin mining revenue[202] - Bitcoin mining revenue rose to $232.9 million in Q3 2025, up from $49.6 million in Q3 2024, attributed to an increase in average Bitcoin price and operating hashrate[204] - Selling, general and administrative expenses surged to $138.4 million in Q3 2025 from $25.2 million in Q3 2024, largely due to increased stock-based compensation and payroll taxes[208] - Impairment of assets for Q3 2025 was $16.3 million, compared to $6.9 million in Q3 2024, indicating increased asset write-downs[191] - Depreciation expense for Q3 2025 was $85.2 million, up from $33.9 million in Q3 2024, primarily due to hardware expansion[209] - Income tax expense for Q3 2025 was $(190.7) million, significantly higher than $(1.3) million in Q3 2024, driven by deferred tax expenses[220] Operational Capacity - As of September 30, 2025, the company had approximately 2,100 GPUs operating in its data centers, contributing to its AI Cloud Services revenue[143] - The installed hashrate capacity for Bitcoin mining operations was approximately 50 EH/s as of September 30, 2025[144] - The company procured approximately 21,200 GPUs during the quarter, increasing its total GPU fleet to approximately 23,300 GPUs[156] - The company has three data center sites in Texas, with the Childress site having approximately 650MW of operating capacity and an installed hashrate capacity of approximately 40.1 EH/s[149] - Average operating hashrate increased to 45.3 EH/s in Q3 2025 from 12.1 EH/s in Q3 2024, enhancing mining efficiency[204] Contracts and Agreements - The company signed multi-year cloud services contracts for approximately 5,000 GPUs during the quarter, with additional contracts signed in October 2025 for 4,000 GPUs and 1,100 GPUs[154] - A significant agreement with Microsoft was established to provide dedicated GPU services valued at approximately $9.7 billion through 2031[155] - The company entered into GPU purchase agreements totaling approximately $1.1 billion for over 20,000 GPUs, expected to be delivered by early 2026[231][235] Cash and Liquidity - As of September 30, 2025, cash and cash equivalents were $1,032.3 million, providing a strong liquidity position for future investments[146] - Cash and cash equivalents as of September 30, 2025, totaled $1,032.3 million, with a net operating cash inflow of $142.4 million for the quarter[222] - Net cash from operating activities was $142.4 million for the three months ended September 30, 2025, compared to a net cash used of $(3.9) million for the same period in 2024[243] - Net cash from financing activities was $606.1 million for the three months ended September 30, 2025, compared to $84.7 million in 2024, mainly from the issuance of 23,041,102 shares[249] Market and Economic Factors - Bitcoin mining rewards are subject to "halving" adjustments, with the next halving expected to reduce the reward to 3.125 Bitcoins on April 20, 2024, and further reductions to 1.5625 Bitcoins in 2028 and 0.78125 Bitcoins in 2032[168] - The company faces potential disruptions in the global supply chain, which could lead to shortages of advanced mining machines, impacting operational efficiency[171] - Access to low-cost electricity, particularly renewable power, is critical for the company's Bitcoin mining and HPC services, as energy consumption is extensive[172] - Regulatory scrutiny on the energy and environmental impact of Bitcoin mining may lead to new measures that could restrict operations or increase power costs[173] - The company competes with various global Bitcoin miners and HPC service providers, which may increase competition and reduce its share of Bitcoin network rewards[175] - Inflation and macroeconomic risks have led to increased operating expenses, which could adversely affect the company's financial condition and results of operations[176] - Tariffs imposed by the United States on imported miners and equipment could result in higher costs and impact the company's operational timelines[182] Performance Metrics - Key performance indicators include EBITDA and Adjusted EBITDA, which are used to assess the company's financial condition and operational performance[183] - Net electricity costs per Bitcoin mined remained stable at $35.4 in Q3 2025, compared to $35.3 in Q3 2024, showing consistent operational efficiency[200] - Interest income rose to $7.1 million in Q3 2025 from $2.3 million in Q3 2024, attributed to an increase in cash balances[215] - Unrealized gain on financial instruments for Q3 2025 was $665.0 million, compared to nil in Q3 2024, related to changes in fair value of financial transactions[218] Investments and Future Plans - The company is focusing on power cost optimization initiatives at its Childress site to enhance profitability through energy trading[254] - Research and development efforts are ongoing to optimize operational environments and efficiencies in proprietary data centers[253] - The company has issued $1 billion in convertible notes, maturing in 2031, with an initial conversion price of approximately $85.63 per share[228]