QS Research · Michael Burry's Scion Capital analyst template · 2006
IREN Ltd (IREN)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -100% · upside +245%
The base is TTM to Sep 30 2026 revenue of $900.0M (N8) at today's 16.73x EV/Sales (S1): EV $15.06B less $7.33B net debt (N17,N16) leaves $7.73B equity, or $21.64/share, so the base case is 0%. Downside at CLSK's 4.12x EV/Sales gives EV $3.71B and zero common equity (-100%), while upside at WULF's 37.82x gives EV $34.04B, $26.71B equity and $74.73/share (+245%). The market is not missing a proven earnings stream: TTM EBIT is -$1.16B, EBITDA -$676.0M and FCF -$2.46B (N9,N11,N15), so this is a binary AI-build financing bet rather than a value capitalization. The $20.3B backlog and 86% AI Cloud gross margin are real operating positives, but the $6B funding gap and slipped ARR target keep it a watch, not a long or short.
Key numbers
- Share price: $21.64
- Market cap: $7.73B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $900.0M
- Price / book: 1.51x
The 15 boxes
- ✓ 1. Long-form business notes
IREN has converted from a pure Bitcoin miner into a vertically integrated AI Cloud Services platform: it owns the data center, compute and software layers, with roughly 40MW of AI Cloud capacity operating at June 30, 2026 against ~5GW of executed grid-connection agreements and a project pipeline reaching 1,600MW at a single site (Kiowa). Revenue compounded across the FY2023-FY2026 window ($75.5M, $187.2M, $501.0M, $707.0M), but FY2026 was a loss year (operating income -$1.05B, net income -$702.6M) as capex hit $3.00B and operating cash flow was $2.10B. The business is now funded by customer prepayments, equity, convertibles and ~$3.6B of investment-grade rated GPU financing raised in May 2026, and it is decommissioning Bitcoin mining capacity in favour of AI workloads, targeting substantial completion by December 31, 2026.
- ✓ 2. Competitive advantage
IREN's claimed edge is vertical integration — it says it owns all three layers of the AI Cloud Services stack (data center, compute, software) and holds roughly 5GW of grid connection agreements against only ~40MW of AI Cloud capacity actually operating at June 30, 2026 — so the moat, if any, is contracted power and sites, not brand, network or switching costs. The 10-K describes the market as highly competitive and capital-intensive against hyperscalers with greater resources and lower-cost capital, and the return record shows no durable advantage yet: operating income of -$157.2M (FY2023), -$27.2M (FY2024), +$17.3M (FY2025) and -$1.05B (FY2026) on revenue growing from $75.5M to $707.0M. The clearest repeatable asset is a supplier relationship — NVIDIA Preferred Partner status in FY2026 and Exemplar Cloud status for B300/GB300 — which is not a customer switching cost, and the AI Cloud business carries disclosed customer concentration.
- ✓ 3. 10-Q takeaways
The Q1 FY27 10-Q (quarter ended 2026-09-30) shows the revenue base fully rotating to AI Cloud: total revenue of $228 million fell below the prior-year quarter's $240 million, but AI Cloud contributed $200 million ($135 million Services plus $65 million Lease) against $7 million a year earlier while Bitcoin Mining collapsed to $28 million from $233 million. The quarter was a GAAP loss of $(263) million with an operating loss of $(186) million, while the prior-year $385 million profit was carried by a $665 million unrealized gain on financial instruments; Adjusted EBITDA fell to $66 million (29% margin) from $92 million. Cash fell to $3,522 million from $5,896 million at June 30, 2026 despite $529 million of quarterly operating cash inflow, with the gap funded by ATM share issuance and new GPU and equipment commitments. The numeric outlook is operating-metric based: $20.3 billion backlog, a more than $4 billion ARR target pushed to January 2027, and $15 billion of remaining FY27 capex.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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