Bitcoin mining company IREN recently disclosed that as its mines continue to shift towards AI cloud services, the company incurred a net loss of $684 million for the fiscal quarter ending June 30. As a result, IREN's stock price fell by 8.2% after the market closed on Thursday, reaching $37.19.
AI Cloud revenue surpasses mining revenue for the first time
In this quarter, IREN AI's cloud service revenue amounted to 70.5 million US dollars, which is higher than the 33.6 million US dollars of the previous quarter and also surpassed the 66.7 million US dollars from Bitcoin mining operations for the first time. AI Cloud services accounted for 51.4% of the total revenue for the quarter.
During the same period, the company's total revenue was 137.2 million US dollars, a decrease of 5% compared to the previous quarter. Among this, mining revenue fell by 40% month-on-month, mainly due to some mining farms being converted for AI purposes.
Impairment and increased investment drag down profits
The company disclosed that, after adjustment, EBITDA decreased from $59.5 million in the previous quarter to $19.2 million, a decline of 68%. IREN attributed this downturn to rising employee costs, as well as increased upfront investments in the early stages of AI cloud expansion.
In this quarter's losses, there was an asset impairment of $450.4 million, mainly due to decommissioned mining machines; in addition, there were write-downs and losses related to equipment to be sold or already disposed of amounting to $127.2 million. On an annual basis, IREN's revenue increased by 41% to $707 million, but due to an impairment of $638.8 million, the company turned to a loss of $702.6 million for the year, compared to a profit of $86.9 million in the previous fiscal year.
The signed contract value has reached $4 billion.
IREN indicates that the company has signed contracts for an annualized recurring revenue of $4 billion, and plans to gradually put it into operation by the end of this year. As of August 26th, approximately $1 billion of this revenue has already started to be generated from the corresponding business operations.
- The company has secured $6.4 billion in GPU financing.
- The weighted average interest rate of $3.6 billion is approximately 6%.
- The relevant funds correspond to a five-year Microsoft agreement.
IREN indicates that the aforementioned financing, combined with Microsoft's advance payment, has covered 96% of the costs for the related projects. An additional $2.8 billion in financing will be used for deployments with other customers.
Microsoft and NVIDIA's partnership supports transformation
In addition to Microsoft, IREN also signed a five-year AI cloud contract worth $3.4 billion with NVIDIA in May of this year, which includes the hosting of GPU services. This agreement is also part of a collaboration between the two parties to deploy up to 5 gigawatts of AI infrastructure.
Additional information:Analysts predict that as mining machines are gradually replaced by GPU, IREN may essentially end its Bitcoin mining operations around the year 2030.
