IREN Wrote Off $638.8M to Turn Mining Halls Into AI Data Centers

On August 27, 2026 IREN Limited (NASDAQ: IREN) filed its Form 10-K for the fiscal year ended June 30, 2026 and, the same day, furnished its FY26 results as Exhibit 99.1 to a Form 8-K. Total revenue was $707.0 million against $501.0 million in FY25. Net income (loss) was $(702.6) million against net income of $86.9 million a year earlier. Adjusted EBITDA, a non-GAAP measure the company reconciles in the release, was $245.7 million against $269.7 million, so profitability fell while revenue rose by more than $200 million. AI Cloud Services revenue was $128.8 million against $16.4 million, growth the company describes as approximately 8x and which computes to 7.9x. Bitcoin mining revenue was $578.2 million against $484.6 million. Those are IREN’s figures as filed, not PSV findings.

One line explains most of the distance between the revenue and the loss. Impairment of assets was $638.8 million in FY26 against $7.2 million in FY25, an increase of $631.6 million, and it accounts for roughly 91 percent of the year’s net loss. The quarter tells the same story more plainly. Q4 FY26 total revenue was $137.2 million, down from $144.8 million in Q3, even though AI Cloud Services revenue more than doubled inside the quarter from $33.6 million to $70.5 million, because Bitcoin mining revenue fell from $111.2 million to $66.7 million. That computes to $36.9 million added on one side against $44.5 million lost on the other. Q4 carried $(450.4) million of the year’s impairment and a $(684.0) million net loss, and adjusted EBITDA fell to $19.2 million from $59.5 million, which the company attributes to increased employee related costs and broader platform investment ahead of the AI Cloud Services revenue ramp.

The 10-K states the reason for the impairment directly, and the wording is what makes this a property story rather than a hardware story. The charges relate primarily to Bitcoin mining hardware as well as certain IT and electrical equipment and data center infrastructure impaired as part of the group’s plan to retrofit its air-cooled data centers in Childress and British Columbia, and to develop additional direct-to-chip liquid and air cooling data centers at the Childress campus, identified in the filing as Horizons 5 and 6. The company describes these as assets displaced from its data centers as part of its strategic focus on expanding AI Cloud Services. Read plainly, that is the cost of a change of use. An air-cooled hall purpose-built for one workload does not become a liquid-cooled hall for another without stranding the mechanical and electrical fit-out inside it, and the write-off is where that shows up. Any operator who has repositioned a building will recognize the shape: the demolition line arrives before the new rent does.

The second half of the filing is the one PSV would carry into an unrelated underwrite. IREN reports $3.6 billion of investment grade GPU financing for the Microsoft contract at 6.0 percent, which its footnote defines as a weighted average across a U.S. private placement and a delayed draw term loan, excluding fees, and which together with customer prepayments funds 96 percent of the associated GPU capital expenditure. Separately it reports $2.8 billion of new GPU financings supporting non-investment-grade customer deployments, including $2.4 billion led by Blue Owl and Pacific Investment Management Company LLC, as adviser to certain investors, at a 9.0 percent fixed rate for the Mackenzie air-cooled expansion, funding 90 percent of the associated GPU capital expenditure. Comparable equipment, 300 basis points apart, and the variable that moves is who signed the contract. That is credit tenancy priced out loud, which is exactly the mechanism behind a net lease cap rate, and it is the most portable fact in the filing for anyone underwriting a single-tenant build-to-suit in any asset class.

The artifact worth building from this filing is not a summary of IREN, it is a conversion ledger kept per building for any asset changing use, whether that is mining to AI, office to residential, or big-box to last-mile. The inputs are documents an owner already holds: the fixed asset register with in-service dates and remaining book value by component, the mechanical and electrical drawings for the existing fit-out, the design basis for the intended use, the construction budget separated into demolition, base building and new fit-out, the power interconnect capacity and any utility agreement, and the contracts or leases that will carry the new use with their counterparty and term. Add two things most ledgers omit: which specific components the retrofit strands rather than reuses, and the financing quote or indicative term sheet behind each counterparty.

The output is one row per building with four columns: book value at risk of write-off, retrofit cost to reach the new use, contracted revenue supporting it, and the cost of capital that the named counterparty actually attracts. That last column is the discipline the IREN filing supplies, because a 300 basis point difference on the same equipment is large enough to change a decision on its own. An assistant can assemble and maintain this ledger, cite the drawing, invoice, filing or term sheet behind every cell, and flag when a component moves between the reuse and strand columns. It should never estimate an impairment: that is an accounting determination made under the applicable standard. The reviewer is the asset manager together with the controller and the project engineer, and the approval gate is that no impairment is booked and no retrofit budget is released on a machine-assembled number. PSV takes no position on IREN as a security and has not audited any figure in its filings.