New turn in IREN Microsoft deal as $4 billion revenue moves

IREN is a neocloud, a firm that rents AI computing capacity. It had said that more than $4 billion in yearly recurring revenue was to start in 2026.

IREN, a neocloud, said on Thursday that more than $4 billion in yearly recurring revenue starts in January or after, not in 2026. Payment can move to February, and Co-CEO Daniel Roberts said that the customer is Microsoft. Microsoft asked to upgrade some of its network equipment for 200 megawatts of capacity for new frontier models.

How it works

IREN says the move comes from “a customer-requested change and supplier timing”. Roberts said Microsoft wants to reconfigure and upgrade some of the network equipment.

The numbers

Quarter revenue rose 66% to $228 million. AI cloud revenue more than doubled to $200 million. The net loss fell to $263 million. The backlog of contracted work grew 22% to $20.3 billion. IREN says about two thirds is with investment grade customers.

What is not known

IREN plans $15 billion of capital spending this fiscal year. Of this, $6 billion is “target” financing that depends on market conditions. Roberts says the market and the customers do not agree. IREN gave no proof for this.

Insight: One buyer change moves the supplier revenue

One Microsoft change moved more than $4 billion of IREN revenue by one month or more. Microsoft is also the only large cloud firm with positive free cash flow. Gartner says more than 80% of neoclouds will stop operation. This reads as a standoff where the large buyer sets the timing and the small supplier carries the financing risk. Buyers of AI cloud have the strong position.