IREN · Forward model · Bitcoin mining · Bear case

Assumptions & reasoning

• The margin is a cash gross margin: ($66.700m - $24.100m) / $66.700m = 63.87%, on the segment cost of revenue disclosed in the release. It was 68.21% in the March quarter. The release does not break that $24.1m into electricity, employee benefits and other direct expenses the way the 10-Q did, so the component detail carried in the previous revision is gone; only the segment total is disclosed now. The $450.4m of impairment booked in the June quarter, the $638.8m booked for the year and the $102.1m fair-value write-down on mining hardware held for sale all sit below this line and are excluded from both revenue and margin, exactly as IREN's own adjusted EBITDA excludes them. They are transition charges, not a run rate.
• HASHRATE DISCLOSURE HAS BEEN WITHDRAWN. Installed EH/s, average operating EH/s, Bitcoin mined, fleet efficiency in J/TH and electricity cost per MWh are all absent from the 27 August release, and the FY2026 10-K carries annual durations only. Every one of those was disclosed through 2026-03-31. This vertical's driver is a capacity driver whose capacity and utilisation are now both unobservable: capacity is frozen at the last disclosed 38 EH/s and utilisation is a plug that reproduces reported revenue at a frozen price. That is defensible only because the line is being glided to zero on a dated schedule. If IREN were still growing this segment, the model would have to be re-cut on revenue growth alone.
• The run-off is dated for the first time. The CFO said on the 2026-08-27 call: 'We currently expect mining operations to be effectively decommissioned by the end of December 2026.' The previous revision glided at 20% of the gap a quarter and retired 79% of the March run rate only by 2027 Q4, on the explicit note that no dated path had ever been published. One has now, so the glide moves to 55%. This is the one driver level moved because the business changed in a way the model already anticipated.
• Sequential mining revenue: $232.9m, $167.4m, $111.2m, $66.7m over the last four quarters - -28%, -34%, -40%. The previous revision projected $88.9m for this quarter against $66.7m reported, so the old glide was 33% too slow. The new glide is faster than the trailing pace on purpose, because the trailing pace does not reach zero by December and the company says it will.
• ERCOT demand-response and ancillary-services receipts are recorded in other operating income ($1.2m in the June 2026 quarter, down from $4.8m in March), not in Bitcoin mining revenue, so grid curtailment never touches this top line. It is netted against corporate overhead instead.
• IREN sells its mined Bitcoin daily and holds none, so there is no treasury mark to model and no Bitcoin price exposure on the balance sheet - only inside the revenue per exahash, which this model holds flat.
• Capex is zero on this line by assumption: Bitcoin expansion is over and every dollar of capital is going to GPUs and data centres. The retrofit spending that empties these halls is capital for the AI Cloud line, and is carried there.
• The 2023 Q2 and 2024 Q2 points are derived by subtraction from disclosed annual and nine-month figures and are flagged estimated; the other eleven quarters are disclosed segment revenue. 2024 Q2 also crosses the IFRS-to-GAAP restatement boundary.