The Business Model (How They Make Money)

IREN Limited is a company that essentially turns renewable energy into computing power, which they then sell. Think of them as a specialized landlord for super-powerful computers. They started out mainly "mining" Bitcoin, which involves using a lot of computing power to solve complex puzzles and earn new Bitcoin.

However, IREN is rapidly shifting its focus. They are becoming a major provider of "AI Cloud Services." This means they build and operate large data centers, powered by cheap, renewable electricity, and then lease out access to powerful graphics processing units (GPUs) within these data centers. These GPUs are essential for training and running artificial intelligence (AI) programs.

So, their core business is about finding affordable, green energy, building the necessary infrastructure (data centers), and then monetizing that infrastructure by either mining Bitcoin or, increasingly, by providing high-performance computing (HPC) services for AI. They own and manage their entire setup, from the power connections to the data centers themselves, which helps them control costs and operate efficiently.

In terms of where their money comes from, they have two main buckets:

• Bitcoin Mining Revenue: This is the money they earn from creating new Bitcoin. In the first quarter of their fiscal year 2026 (ended September 30, 2025), this accounted for $232.9 million of their total revenue. By the third quarter of fiscal year 2026 (ended March 31, 2026), this decreased to $111.2 million as they shifted focus.
• AI Cloud Services Revenue: This is the money they make from leasing out their powerful GPUs for AI and other high-performance computing tasks. This segment is growing rapidly, reaching $7.3 million in the first quarter of fiscal year 2026 and then significantly increasing to $33.6 million by the third quarter of fiscal year 2026. They have secured large contracts, including a $9.7 billion, five-year AI cloud contract with Microsoft and a $3.4 billion AI Cloud contract with NVIDIA, which are expected to drive substantial future revenue.

Overall, while Bitcoin mining was historically their primary revenue source, IREN is actively transitioning, and AI Cloud Services are expected to become their main driver of income. For the full fiscal year 2025 (ended June 30, 2025), IREN reported total revenue of $501.0 million.

The Metrics That Matter Most

For IREN Limited, given its business model of building and operating large-scale computing infrastructure and its ongoing transition, these are the most important numbers to watch:

1. Revenue: This number tells you the total amount of money the company brings in from selling its services. For IREN, it's crucial because it shows how well they are growing their overall business, especially as they pivot from Bitcoin mining to AI Cloud Services. A rising revenue figure indicates that their strategy to secure large AI contracts and expand their data center capacity is working and that there's strong demand for their computing power. For the trailing twelve months ending March 31, 2026, IREN's revenue was $757 million.

2. Net Income (or Net Loss): This is the company's profit after all expenses, including taxes, have been paid. Since IREN is investing heavily in building new data centers and buying expensive GPUs, they might show a "net loss" in the short term, meaning they spent more than they earned. However, tracking this helps you understand if their investments are eventually leading to profitability. For example, IREN reported a net income of $86.9 million for fiscal year 2025, but a net loss of $247.8 million in the third quarter of fiscal year 2026 due to ongoing investments.

3. CapEx (Capital Expenditures): This refers to the money a company spends to buy, maintain, or improve its physical assets, like buildings, machinery, and equipment. For IREN, CapEx is extremely important because it represents their investment in new data centers and the powerful GPUs needed for AI. High CapEx shows they are actively building out their infrastructure for future growth. Monitoring this helps you see how aggressively they are expanding their capacity to meet the demand for AI computing.

4. Operating Cash Flow: This metric shows how much cash the company's core business activities generate before accounting for investments or financing. For a company like IREN that is building a lot of infrastructure, having strong operating cash flow is vital. It indicates that their day-to-day operations are generating enough cash to potentially fund some of their expansion plans, reducing their reliance on borrowing or selling new shares.

5. Total Assets: This represents everything the company owns that has value, such as cash, property, equipment, and their data centers and GPUs. For IREN, a growing total assets figure reflects the expansion of their physical infrastructure, which is the foundation of their business. It shows the scale of their operations and their capacity to generate future revenue from their computing power.

How to Value This Company

For IREN Limited, the EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization) ratio is the most relevant way to figure out if the stock is cheap or expensive.

Here's why and how to think about it simply:

• What it is: Enterprise Value (EV) is like the total price tag of the entire company, including its stock market value, plus its debt, minus any cash it has. EBITDA is a measure of the company's operating profit before taking into account things like interest payments, taxes, and the cost of equipment wearing out (depreciation and amortization).
• Why it's good for IREN: IREN is a "capital-intensive" business, meaning it spends a lot of money building data centers and buying expensive GPUs. These big investments lead to significant depreciation expenses, which can make their "net income" (profit) look low or even negative, especially during growth phases. EBITDA, by ignoring depreciation, gives a clearer picture of the cash flow generated from their actual operations. Also, because IREN takes on debt to fund its expansion, including debt in the Enterprise Value gives a more complete picture of the company's total value than just looking at its stock price.
• How to use it: To use EV/EBITDA, you would compare IREN's ratio to similar companies in the data center or AI infrastructure space, or to IREN's own historical average. If IREN's EV/EBITDA ratio is significantly lower than its peers or its own past, it might suggest the stock is "cheap." If it's much higher, it could mean the stock is "expensive." It helps you understand how much you're paying for each dollar of the company's operating earnings, taking into account its entire financial structure. For example, IREN reported adjusted EBITDA of $91.7 million in Q1 FY26 and $59.5 million in Q3 FY26.