IREN results: US$4bn goal slips to 2027 on Microsoft change

At a glance

• IREN now expects to reach more than US$4 billion a year in revenue in January 2027, possibly February, instead of by the end of 2026.

• Microsoft asked the Sydney-headquartered company to rework the network at its Texas campus, delaying three buildings due for Microsoft; late supplier equipment added to the wait.

• IREN's filing with US regulators says it owes Microsoft no late penalties for delays the change causes; new dates, fees and penalty credits are still being negotiated.

• Revenue rose 66 per cent in the September quarter to US$228 million, beating forecasts, as AI cloud sales nearly tripled.

• First-quarter spending plus IREN's remaining plan comes to about US$20 billion this financial year, below August guidance; US$6 billion is still to be funded.

IREN, the Sydney-headquartered AI cloud company and one of the neocloud providers in Australia, will reach its goal of more than US$4 billion a year in revenue a month or two later than it promised. Its quarterly results, released in New York on 5 November 2026, put the date at January 2027, possibly the end of February, instead of the end of 2026.

The delay follows reports linking IREN to a shortfall in Microsoft's data centre spending. The company blamed a change Microsoft asked for at its Texas campus, plus late equipment from suppliers. Its US$9.7 billion contract with Microsoft normally makes IREN pay a daily penalty for late delivery, but IREN's filing with the US Securities and Exchange Commission says it pays no penalty for the extra time Microsoft's change takes. The new delivery dates, fees and penalty credits are still being negotiated.

The rest of the quarter was strong on sales and weaker on cash. Revenue beat analysts' forecasts and customers are paying more on new contracts, but IREN is spending less than it planned in August and still has US$6 billion of its building program to fund. Texas is also reviewing new grid connections for large data centres, including IREN's planned hub there.

Reports tied IREN to Microsoft's spending shortfall

Microsoft chief financial officer Amy Hood said on 28 October 2026 that capital spending in the September quarter was US$45.2 billion, "as some third-party capacity deliveries we expected in Q1 were delayed". In July, the company had guided to more than US$50 billion.

The Information reported on 4 November 2026 that IREN was one of those suppliers. On 5 November, Bloomberg reported that Microsoft had sent people to IREN's projects in Texas and agreed a revised timeline that may push completion back by weeks or months. Microsoft's review of its AI cloud suppliers is covered here.

Shares in IREN closed 11.2 per cent lower on 4 November and about 17 per cent lower on 5 November, then rose 7.7 per cent in early after-hours trading once the results were out.

Microsoft asked for a network change at Childress

Microsoft rents GPU capacity in four buildings at IREN's Childress campus in Texas, which IREN calls Horizons 1 to 4. The first was handed over in August 2026. The other three are in "late-stage construction", according to IREN's results release.

Co-chief executive Daniel Roberts said on the results call that a customer had asked for a design change "which we agreed to, and it sits outside the original scope". He named Microsoft as that customer, CNBC reported, saying it wanted some of the network infrastructure reconfigured and upgraded.

IREN's quarterly filing sets out what that means under the contract: "Under the Microsoft Agreement, delivery dates are extended, without delay credits, for delays resulting from a Microsoft-requested change." Delay credits are the daily late-delivery penalties set out in the contract terms IREN filed in February 2026. The filing adds that "delivery dates and the application and payment of fees, credits and cost reimbursements" are still under discussion. Reuters reported IREN's position that the delay would not result in financial penalties.

The contract also allows grace periods for late delivery. These run from mid-Q4 2026 "to the beginning of Q2 of calendar 2027", according to IREN's annual report. The new January target, and the end-of-February outer date, both fall before the last of them ends.

AI cloud revenue nearly tripled

AI cloud supplied US$200 million of IREN's US$228 million revenue in the quarter, and bitcoin mining US$28 million. Revenue was ahead of the US$221.3 million analysts expected, according to Reuters.

Source: IREN Q1 FY27 results release, 5 November 2026. Q4 FY26 segments sum to US$138m due to IREN's rounding.

Signed contracts not yet billed rose 22 per cent to US$20.3 billion, about two-thirds of it owed by customers with investment-grade credit ratings. Prices on new contracts rose 11 per cent for three-year deals and 12 per cent for five-year deals, the company said. After the quarter it expanded a contract with an unnamed frontier AI lab, and signed a five-year deal in which the customer prepays 90 per cent of the GPU cost.

IREN is spending less than it planned

IREN paid about US$4.8 billion for buildings and computer hardware in the quarter and plans to spend another US$15 billion by June 2027. Together that comes to about US$20 billion for the financial year, against the US$25 billion to US$30 billion it guided in August. On the call, the company said it was pacing its spending, and Roberts said capital markets had "become more selective in the last few weeks".

Net debt rose to US$4.43 billion at 30 September 2026 from US$216 million at 30 June. Of the US$15 billion still to spend, IREN says US$9 billion is covered by cash, committed loans and customer prepayments, and the other US$6 billion depends on new financing "subject to market conditions".

In Texas, IREN's planned 2GW Sweetwater hub is provisionally in the queue for new large grid connections, and the state grid operator ERCOT is due to file its review of that queue by 10 December 2026. Governor-elect Gina Hinojosa, who takes office on 19 January 2027, campaigned for a pause on new data centres, and the Texas Tribune reported that approvals could stay frozen under her.

Growth beyond US$4 billion a year, including the 0.8GW of capacity IREN targets by the end of 2027, is likely to depend on how quickly it raises that US$6 billion and how Texas rules on new connections.

Bundey campus in South Australia targets power from 2028

In Australia, the results list early development work at Bundey in South Australia, where it signed a grid connection agreement in June 2026 for up to 800MW, with power targeted from 2028. Energy publication PeakLoad reported on 6 November 2026 that IREN is tendering for 800MW of power for Bundey, with load to come online in 75MW steps, according to tender documents. On the call, Roberts also cited the 900MW Redbank proposal near Wagga Wagga.

IREN was one of the operators asked to bid in Anthropic's tender for at least 1.4GW of Australian capacity, the Australian Financial Review reported on 5 July 2026.

What to watch

• 10 December 2026: ERCOT's review of the Texas grid connection queue, which includes IREN's Sweetwater hub.

• January 2027: IREN's new date for reaching more than US$4 billion a year in revenue; the end of February is the outer limit.

• Microsoft's December-quarter results, expected in January 2027: whether Hood reports the delayed capacity as delivered.

• IREN's next results, expected in February 2027: handover of the three remaining Microsoft buildings, the outcome of the cost talks, and any update on Bundey and Redbank.