IREN Limited (NASDAQ:IREN) disclosed $4 billion of contracted annualized run-rate revenue, or ARR, for calendar 2026 capacity, but only $1 billion was operating as of August 26. The remaining capacity is expected to ramp as deployments are delivered, commissioned, tested, and accepted by customers. Fiscal 2026 GAAP revenue totaled $707 million, including $128.8 million from AI Cloud Services.

IREN Limited (NASDAQ:IREN) defines operating ARR as GPU hourly pricing for commissioned GPUs under contract, multiplied by 8,760 hours, plus annualized storage and ancillary revenue. ARR is a company-defined operating metric rather than a U.S. GAAP measure, and recognized revenue may be materially lower. Although IREN Limited (NASDAQ:IREN) describes the $4 billion as contracted ARR, the amount targeted to be operational by December 31, 2026 is based on internal utilization and pricing assumptions.

Bull Case

AI Cloud Services at IREN Limited (NASDAQ:IREN) scaled quickly. Fiscal 2026 AI Cloud Services revenue increased nearly eightfold from $16.4 million to $128.8 million. Fourth-quarter AI Cloud Services revenue reached $70.5 million, more than double the preceding quarter's $33.6 million, while total fiscal 2026 revenue increased 41% to $707 million.

Calendar 2026 capacity at IREN Limited (NASDAQ:IREN) is largely sold out. Horizon 1, the first of four 50-megawatt IT-load liquid-cooled deployments, was delivered to Microsoft. Horizon 2 was undergoing commissioning, while Horizons 3 and 4 were in late-stage construction, targeting delivery in the fourth quarter of calendar 2026.

The funding structure reduces upfront capital pressure. Recent contracts include customer prepayments contractually payable before service delivery, equal to 45% to 55% of estimated GPU and ancillary capital expenditure. IREN Limited (NASDAQ:IREN) secured $3.6 billion of GPU financing for the Microsoft contract, which, together with prepayments, funds 96% of associated GPU capital expenditure.

Another $2.8 billion of financing supports non-investment-grade customer deployments. The largest component is a $2.4 billion facility funding 90% of associated GPU capital expenditure.

Bear Case

The $4 billion headline remains far removed from reported performance. Even the $1 billion of operating ARR at IREN Limited (NASDAQ:IREN) is an annualized operating metric rather than recognized revenue. Actual GAAP revenue depends on service commencement, utilization, pricing, and contract accounting.

IREN Limited (NASDAQ:IREN) reported a fiscal 2026 net loss of $702.6 million, reversing an $86.9 million profit a year earlier. The result included $638.8 million of non-cash impairments, primarily related to decommissioned Bitcoin mining hardware, while the GAAP operating loss reached $1.05 billion.