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Iris Energy (IREN) - 2024 Q4 - Earnings Call Transcript
IRENIris Energy (IREN)2024-08-29 01:30
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Financial Data and Key Metrics Changes - The adjusted EBITDA for the fiscal year ended June 30, 2024, is reported at 54.7million,asignificantyear−on−yearincreaseof54.7 million, a significant year-on-year increase of 53.3 million, marking the highest recorded EBITDA for the company [24] - Bitcoin mining revenue increased from 75millionto75 million to 184 million, with an average operating hash rate rising from 5.6 exahash to 9.4 exahash, resulting in 4,191 Bitcoin mined and an average realized price of 44,000,an8944,000, an 89% increase year-on-year [24][25] - Average net electricity costs per Bitcoin mined increased from 11,000 to 18,100,primarilyduetotheincreaseinglobalhashrateandtheimpactofthehalvingeventinApril2024[25]BusinessLineDataandKeyMetricsChanges−TheAICloudServicesbusinessrecordedrevenueof18,100, primarily due to the increase in global hash rate and the impact of the halving event in April 2024 [25] Business Line Data and Key Metrics Changes - The AI Cloud Services business recorded revenue of 3.1 million during the financial year, indicating a new revenue stream for the company [25] - The company has increased its installed capacity for Bitcoin mining to 15 exahash, with a target of reaching 20 exahash by the end of next month and 30 exahash by the end of the year [3][6] Market Data and Key Metrics Changes - The company has secured 2,310 megawatts of grid-connected capacity and has over 1 gigawatt of additional development sites worldwide [5][20] - The average monthly power price at the Childress site for August was reported at 3.1 cents, equating to approximately 23,000perBitcoinmined[14]CompanyStrategyandDevelopmentDirection−ThecompanyaimstocontinueexpandingitsBitcoinminingcapacitywhilealsoleveragingitsinfrastructureforAIcloudservices,indicatingadualfocusonbothsectors[3][16]−Themanagementemphasizestheimportanceofsecuringadditionalpowerandlandtosupportfuturegrowth,reflectingalong−termvisionforscalabilityinbothBitcoinminingandAIservices[20][34]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthecompany′sabilitytocontrolitsgrowthtrajectoryinBitcoinmining,citingthesignificantpowercapacityavailableforfutureexpansion[31]−ThemanagementacknowledgedthecomplexitiesinvolvedinAIcloudservicesbutremainsoptimisticaboutthepotentialforgrowthinthisareaasthecompanybuildsitsreputationandcustomerbase[38]OtherImportantInformation−Thecompanyreportedastrongcashpositionof23,000 per Bitcoin mined [14] Company Strategy and Development Direction - The company aims to continue expanding its Bitcoin mining capacity while also leveraging its infrastructure for AI cloud services, indicating a dual focus on both sectors [3][16] - The management emphasizes the importance of securing additional power and land to support future growth, reflecting a long-term vision for scalability in both Bitcoin mining and AI services [20][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to control its growth trajectory in Bitcoin mining, citing the significant power capacity available for future expansion [31] - The management acknowledged the complexities involved in AI cloud services but remains optimistic about the potential for growth in this area as the company builds its reputation and customer base [38] Other Important Information - The company reported a strong cash position of 404.6 million with no external debt, providing flexibility for future growth initiatives [28] - The company has appointed Morgan Stanley to evaluate AI data center opportunities for its 1.4 gigawatt West Texas site, indicating ongoing strategic evaluations for asset monetization [21] Q&A Session Summary Question: Any material updates since the New York analyst update? - Management indicated that while there are no materially different decisions, ongoing learning continues to refine their strategies, particularly in Bitcoin mining where they feel in control of their destiny [30][31] Question: Thoughts on further site acquisition versus CapEx for site build-out? - Management emphasized the importance of acquiring more power and land, believing in the long-term scarcity of these resources as demand continues to grow [33][34] Question: Focus of recent key hires related to HPC? - Management noted that while there is potential for GPU purchases, they are cautious about diluting shareholder value and are focused on ensuring the right risk-return structure in contracts [36][38] Question: How to decide between long-term contracts versus on-demand customers for Poolside capacity? - Management aims to pursue both strategies while retaining flexibility, indicating a balanced approach to market opportunities [42] Question: Outlook for hash prices and market dynamics? - Management highlighted that Bitcoin prices are the key driver for hash prices, and while they cannot predict short-term movements, they believe in a long-term upward trend for Bitcoin [47] Question: Issues with T21 miners and replacement timeline? - Management acknowledged manufacturing defects with T21 miners but praised Bitmain's response and indicated that approximately 1.5 exahash of capacity is being replaced [48]