Earnings Weighed Down by $219M in Hedging Losses
IREN Limited reported a significant net loss of $155.4 million for its second fiscal quarter ending December 31, 2025, a stark reversal from the $384.6 million net income in the prior quarter. The loss of 44 cents per share was substantially wider than the consensus estimate of a 9-cent loss. Total revenues for the quarter fell 23.1% sequentially to $184.7 million, missing analyst expectations of $224 million. The company's financials were heavily impacted by non-cash charges, including $219 million in unrealized losses on financial instruments and a $31.8 million impairment charge on mining hardware as it transitions from ASICs to GPUs.
Stock Price Collapses 24.5% as Bitcoin Falters
The market reacted harshly to the financial results, which were released as Bitcoin's price dropped below $64,000. IREN's stock closed down 11.5% and slid another 13% in after-hours trading, marking a combined 24.5% decline. The dual pressures of weak internal performance and a challenging crypto market created a perfect storm for the company and its peers. CleanSpark, another firm undergoing a similar transition, also saw its shares plummet, underscoring sector-wide financial strain from the diversification into AI infrastructure.
AI Cloud Services Grow 137% in Strategic Shift
Despite the headline losses, IREN's strategic pivot toward artificial intelligence shows signs of traction. Revenue from its AI Cloud Services segment increased 137% sequentially to $17.3 million, contrasting with a 28.2% drop in its traditional Bitcoin mining revenue, which stood at $167.4 million. The company is actively investing in this new direction, with plans for a 140,000-GPU expansion and a new 1.6 GW data center in Oklahoma. Bolstered by $3.26 billion in cash and $9.2 billion in year-to-date funding, IREN aims to scale its AI platform to generate an anticipated $3.4 billion in annual recurring revenue by the end of 2026.
