AI cloud revenue surge cannot hide the pains of transformation IREN (IREN.US) Q4 loss unexpectedly widened, stock price fell over 8% after hours

After hours on Thursday, the stock price of AI cloud infrastructure service provider IREN (IREN.US) fell over 8%, following the companys announcement that its losses for the fourth fiscal quarter unexpectedly widened, and its revenue also fell short of market expectations. According to the earnings report, IREN's fourth fiscal quarter revenue dropped to $137.2 million, below the market expectation of $153.2 million. By business segment, AI cloud service revenue increased from $33.6 million in the previous quarter to $70.5 million; however, Bitcoin mining revenue decreased from $111.2 million to $66.7 million, while the market had anticipated $65.6 million. Net losses for the fourth fiscal quarter widened from $247.8 million in the previous quarter to $684 million, while analysts had expected a loss of $204.3 million. This reflects the impact of phasing out Bitcoin mining hardware as the company undertakes renovations of its mining facilities to support the growth of its AI cloud business. Adjusted EBITDA for the fourth fiscal quarter decreased from $59.5 million to $19.2 million, below the market expectation of $57.1 million, attributed to increased employee-related costs and broader platform investments made prior to the growth in AI cloud service revenue. In the fiscal year 2026, AI cloud service revenue is expected to grow approximately sevenfold year-over-year, reaching $128.8 million. Our founding principle for IREN was simple: the digital world can scale almost instantaneously, while the physical world cannot, said co-CEO Daniel Roberts. This year, that founding principle has become a reality. The exponential growth of AI consumption has created a demand for computing power that far exceeds the supply of existing infrastructure. Roberts also stated, Our capacity for 2026 is essentially sold out. This includes Horizon 1, which is the first of four cutting-edge liquid-cooled GPU deployment projects that we successfully delivered to Microsoft Corporation this month.