IREN Delays $4 Billion in Annualized Revenue at Microsoft’s Request

IREN said on Thursday that more than $4 billion in annualized revenue will slip from 2026 into January or February, after Microsoft asked the data center operator to reconfigure and upgrade network infrastructure at one of its sites.

IREN disclosed the delay in its first-quarter fiscal 2027 earnings release, attributing it to a customer-requested change and supplier timing. On the analyst call, co-CEO Daniel Roberts identified the customer as Microsoft and said the reconfiguration was meant to enable 200 megawatts of capacity for the latest generation of frontier AI models. “They made a request to reconfigure and upgrade some of the network infrastructure and the purpose of that was really to enable the 200 megawatts of capacity to service these latest generation frontier models,” Roberts said.

The company said the delayed revenue is fully contracted and funded, and that payment could extend into February. IREN has contracts with Nvidia, Microsoft and 13 other customers.

The numbers behind the delay

The quarter itself was strong. Revenue climbed 66% from the prior quarter to $228 million, ahead of the $221 million average estimate of analysts polled by LSEG. AI Cloud revenue more than doubled to $200 million. Net loss narrowed to $263 million from $684 million in the prior period.

Revenue backlog grew 22% to $20.3 billion, roughly two-thirds of it with investment-grade counterparties, the earnings release states. Compute prices continue to rise and the company expanded an existing contract with a leading frontier AI lab, it said.

IREN still plans $15 billion in capital expenditures for the rest of the fiscal year: $9 billion in cash and committed financing, plus $6 billion in target financing that remains subject to market conditions. Roberts said scrutiny of the sector has intensified. “Capital markets have become more selective in the last few weeks, and the questions have undoubtedly moved from how big the contract is to whether it can be delivered, financed, and run at a profit,” he said on the call.

A brutal month for neoclouds

The disclosure lands amid a sharp selloff in AI infrastructure stocks. IREN shares rose in extended trading on Thursday but remain down 55% over the past month, including a 26% drop since Tuesday’s midterm elections. CoreWeave is down 60% over the same stretch ahead of its earnings report on Tuesday, and Nebius is down 48% ahead of its report the following Thursday. The Nasdaq posted its worst day since April 2025 on Thursday.

Roberts said there is a disconnect between what public markets are pricing and what the company sees at the customer level. The company did not say exactly when the $4 billion will begin recognizing, only that it lands in January at the earliest, possibly February.