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Iris Energy (IREN)
NASDAQ:IREN
US Market

Iris Energy (IREN) AI Stock Analysis

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Iris Energy

(NASDAQ:IREN)

Rating:59Neutral
Price Target:
$11.00
▲(8.16%Upside)
Iris Energy's strong revenue growth and technical momentum are the most significant factors, contributing to a moderate score. However, profitability challenges and an unattractive valuation weigh down the overall score. Positive earnings call sentiment offers some optimism for future performance.
Positive Factors
Financial Performance
IREN reported record quarterly revenue and adjusted EBITDA for F3Q25, and provided important updates on its BTC mining expansion plans and HPC/AI verticals.
Operational Efficiency
IREN is one of the strongest miners with low power costs and the most efficient mining fleet, resulting in impressive EBITDA margins.
Valuation
IREN is trading at a lower multiple compared to the consensus EBITDA estimate for FY2026, indicating potential undervaluation.
Negative Factors
Business Strategy
IREN is pausing further expansion of the BTC mining business beyond 50 EH/s to free up capital and resources to focus on AI data center development.
Partnerships
There is no signed commercial partner contract yet for the Horizon 1 AI data center, which affects forecasted HPC revenues.
Revenue Forecast
Revenue estimates for FY2025 and FY2026 have been adjusted downwards due to changes in estimated utilization and forecasts for BTC and global hash rates.

Iris Energy (IREN) vs. SPDR S&P 500 ETF (SPY)

Iris Energy Business Overview & Revenue Model

Company DescriptionIris Energy Limited (IREN) is a sustainable Bitcoin mining company that focuses on utilizing renewable energy sources to power its operations. The company is dedicated to minimizing its carbon footprint while engaging in the energy-intensive process of cryptocurrency mining. Iris Energy is involved in the technology and financial sectors, leveraging cutting-edge infrastructure to efficiently mine Bitcoin, which is its core product.
How the Company Makes MoneyIris Energy makes money primarily through the mining of Bitcoin, which involves solving complex mathematical problems to validate transactions on the Bitcoin network. The company earns revenue by receiving Bitcoin as a reward for successfully mining new blocks, as well as transaction fees associated with the validated transactions. A key factor in its revenue model is the cost-efficiency of its operations, achieved by using renewable energy sources, which helps reduce electricity costs, a major expense in Bitcoin mining. Additionally, Iris Energy may engage in partnerships with energy providers or technology firms to enhance its operational efficiency and sustainability. The value of the mined Bitcoin directly influences the company's earnings, as market conditions and Bitcoin prices fluctuate.

Iris Energy Earnings Call Summary

Earnings Call Date:May 14, 2025
(Q3-2025)
|
% Change Since: 27.60%|
Next Earnings Date:Sep 10, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong operational and financial performance with record-breaking revenue and significant growth in Bitcoin mining and AI Cloud services. Despite increased electricity costs and a high net funding requirement, the company shows disciplined capital allocation and strategic focus on AI infrastructure, suggesting a positive outlook.
Q3-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Q3 FY2025 revenue reached a record $148 million, driven by growth in Bitcoin mining and AI Cloud segments. Net profit was $24 million, reflecting a 28% growth quarter-on-quarter.
Significant Bitcoin Mining Capacity Expansion
Achieved an average of 29.4 exahash of operating mining capacity, representing nearly a 5x uplift year-on-year. Plan to reach 50 exahash by June 30, marking a 4x increase from June last year.
Strong AI Cloud Performance
AI Cloud services saw 33% quarter-on-quarter revenue growth with 97% hardware profit margins. The GPU fleet is running at or near full utilization.
Efficient Capital Allocation and Strategic Pause
Decision to pause further Bitcoin mining expansion beyond 50 exahash to focus on AI infrastructure, reflecting disciplined capital allocation.
Advancement in AI Data Centers
Development of Horizon 1, a 50 megawatt liquid-cooled data center, targeting Q4 2025 delivery, designed for next-generation AI workloads.
Negative Updates
Increased Electricity Costs
Total net electricity cost increased by 30% from $28.9 million to $36.5 million due to increased megawatt usage at Childress.
Dependence on Market Conditions for Growth
Future growth in revenue and profitability is highly dependent on Bitcoin prices and network difficulty adjustments.
High Net Funding Requirement
Estimates of a net funding requirement of up to $250 million over the remainder of 2025, primarily for expansion projects.
Company Guidance
In the Q3 FY2025 results conference call, IREN reported significant financial and operational growth metrics, marking their second consecutive quarter of profitability with a net profit of $24 million, reflecting a 28% quarter-on-quarter growth. Revenue reached a record $148 million, driven by both Bitcoin mining and AI Cloud segments, while EBITDA was nearly $83 million, also a record. The company achieved an average operating mining capacity of 29.4 exahash, a nearly fivefold increase year-on-year. IREN anticipates reaching 50 exahash of installed capacity by June 30, representing a fourfold increase from June last year. The AI Cloud segment saw 33% quarter-on-quarter revenue growth, with hardware margins exceeding 95%. Additionally, IREN plans significant AI infrastructure expansions, including the development of a 50-megawatt liquid-cooled data center by Q4 2025 and a 2-gigawatt data center hub in Texas by April 2026.

Iris Energy Financial Statement Overview

Summary
Iris Energy shows strong revenue growth and maintains a robust equity base with low leverage. However, challenges persist with negative profitability and cash flow, necessitating improved capital management and net income for sustainable growth.
Income Statement
45
Neutral
Iris Energy shows significant revenue growth from $2.17M in 2020 to $282.69M in TTM (Trailing-Twelve-Months) 2024, indicating strong top-line expansion. However, the company faces challenges with profitability, as evidenced by a negative EBIT and net income margins. The gross profit margin remains robust at 77.07% TTM, but high operating expenses are impacting net profitability.
Balance Sheet
60
Neutral
The company maintains a solid equity base, with a high equity ratio of 69.45% in TTM 2024, indicating financial stability. The debt-to-equity ratio of 0.25 suggests a conservative use of leverage. However, the company needs to address its net losses to improve return on equity, which currently is negative due to consistent net losses.
Cash Flow
50
Neutral
Iris Energy's free cash flow remains negative despite a positive operating cash flow of $31.65M TTM, due to substantial capital expenditures. The operating cash flow to net income ratio is positive, indicating cash from operations is better than accounting profits. However, the free cash flow to net income ratio remains negative, necessitating better capital management.
Breakdown
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
5.01M188.76M75.51M59.04M7.84M2.17M
Gross Profit
3.07M166.56M57.61M51.59M5.18M868.00K
EBIT
-26.33M-153.85M462.00K-1.69M
EBITDA
246.75K25.40M-122.26M-377.12M-43.38M-1.25M
Net Income Common Stockholders
-28.95M-171.87M-419.77M-2.13M
Balance SheetCash, Cash Equivalents and Short-Term Investments
15.09M411.13M68.89M109.97M39.08M1.96M
Total Assets
33.40M1.15B332.07M570.46M134.88M11.57M
Total Debt
24.07M1.66M1.45M108.21M84.03M1.96M
Net Debt
8.98M-402.95M-67.45M-1.76M44.95M5.00K
Total Liabilities
25.70M55.68M26.71M133.10M184.36M2.75M
Stockholders Equity
7.71M1.10B305.36M437.36M8.82M
Cash FlowFree Cash Flow
-427.19M-110.02M-272.69M-5.32M
Operating Cash Flow
121.56K52.72M6.04M21.56M1.64M-987.00K
Investing Cash Flow
-498.47M-71.47M-318.12M-4.49M
Financing Cash Flow
33.91M782.13M28.24M372.04M116.57M7.31M

Iris Energy Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.17
Price Trends
50DMA
7.42
Positive
100DMA
8.39
Positive
200DMA
9.19
Positive
Market Momentum
MACD
0.75
Negative
RSI
66.97
Neutral
STOCH
87.84
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IREN, the sentiment is Positive. The current price of 10.17 is above the 20-day moving average (MA) of 9.14, above the 50-day MA of 7.42, and above the 200-day MA of 9.19, indicating a bullish trend. The MACD of 0.75 indicates Negative momentum. The RSI at 66.97 is Neutral, neither overbought nor oversold. The STOCH value of 87.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IREN.

Iris Energy Risk Analysis

Iris Energy disclosed 99 risk factors in its most recent earnings report. Iris Energy reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
Disruptions at over-the-counter ("OTC") trading desks and potential consequences of an OTC trading desk's failure could adversely affect our business. We may be required to, or may otherwise determine it is appropriate to, switch to an alternative digital asset trading platform and/or custodian. Q2, 2023
2.
Investing in our Ordinary shares could be subject to greater volatility than investing directly in Bitcoin or other digital assets. Q2, 2023
3.
Future sales, or the possibility of future sales, of a substantial number of our Ordinary shares could adversely affect the price of our Ordinary shares. Q2, 2023

Iris Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
$12.93B9.817.84%78.03%12.20%-7.74%
63
Neutral
$558.93M8.82-23.29%53.68%-265.12%
59
Neutral
$2.53B-3.39%130.86%-22.83%
57
Neutral
$528.47M275.231.33%174.88%-97.01%
51
Neutral
$1.36B-18.49%-0.65%-808.88%
51
Neutral
$1.70B-56.12%31.85%-34.27%
37
Underperform
$27.97M242.25%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
IREN
Iris Energy
10.17
-3.05
-23.07%
WULF
TeraWulf Inc
4.26
0.34
8.67%
BTBT
Bit Digital
2.49
-0.18
-6.74%
CIFR
Cipher Mining
3.84
-1.11
-22.42%
ARBK
Argo Blockchain
0.38
-0.91
-70.54%
FUFU
BitFuFu
3.00
-0.84
-21.87%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.