IREN Limited

Business Model: Renewable Energy-Driven Dual-Wheel Strategy

1. Bitcoin Mining: Deep Integration with Scale and Clean Energy

IREN operates Bitcoin mining using ASIC miners powered by 100% renewable energy (such as hydropower and solar energy) through self-built or leased data centers, forming a closed loop of "energy procurement - computing power deployment - output exchange." Its core advantages include: Geographic Location Optimization: The site selection for data centers prioritizes areas with low costs and high stability of renewable energy. For example, the Prince George base in Canada relies on hydropower resources, while the Sweetwater project in Texas, USA integrates wind and solar energy, ensuring electricity costs as low as $0.037/kWh (the industry average is about $0.06-$0.08/kWh). Scaling of computing power: By June 2025, IREN's computing power will reach 50 EH/s (accounting for approximately 5% of the global Bitcoin network's computing power), and it plans to further increase this to 75 EH/s by adding new mining machines (such as the Bitmain S21 Pro). This scaling allows it to remain competitive during the mining difficulty adjustment cycles. Hardware iteration and efficiency improvement: Regularly eliminate old mining machines and deploy equipment with a higher energy efficiency ratio. For example, the power efficiency of the new generation of mining machines can be reduced to 16 J/TH (the industry average is about 25 J/TH), significantly reducing the energy cost per unit of computing power.

2. AI Cloud Services: Secondary Value Mining of Computing Resources

IREN has reconfigured part of its data center computing power into a high-performance computing (HPC) platform, providing customized solutions for AI companies, forming a business chain of "mining infrastructure reuse - computing power leasing - technical services": Hardware upgrades and scenario adaptation: Procurement of 4,300 NVIDIA GPUs (including 1,800 Hopper H100 and 2,500 Blackwell B200/B300) to support AI model training, inference, and other intensive tasks. For example, its Horizon 1 data center focuses on liquid-cooled GPU clusters, aiming to serve generative AI and autonomous driving enterprises. Customer cooperation and order locking: A long-term computing power leasing agreement has been signed with global AI native enterprises (such as a large language model company), with a contract amount reaching tens of millions of dollars. In addition, IREN provides customers with "turnkey" solutions, covering data center design, power supply, and operational support. Technical collaboration and ecological construction: By partnering with NVIDIA, IREN integrates its AI Enterprise software stack, providing full-stack services from hardware to algorithms, enhancing customer stickiness.

3. Data Center Infrastructure: Strategic Layout of Long-term Assets

IREN builds a sustainable infrastructure network through vertical integration to support the long-term development of its dual-wheel business: Grid access and expansion: In the Sweetwater area of Texas, IREN has signed a contract for 2.75 GW of grid capacity, with the Sweetwater 2 project (600 MW) scheduled to go into operation in 2027, reserving space for computational power expansion in the next 5-10 years. Modular Design and Flexible Scheduling: The data center adopts a "scalable unit" design, allowing for dynamic adjustment of computing power allocation based on market demand (for example, shifting more resources to AI when Bitcoin prices are low). For instance, in Q2 2025, due to short-term fluctuations in Bitcoin, IREN will temporarily allocate 10% of its computing power to AI cloud services.

Profit model: low cost, high leverage composite return structure

1. Bitcoin Mining: Short-term Cash Flow and Long-term Asset Appreciation

Block rewards and transaction fees: Bitcoin rewards are obtained through competitive accounting every 10 minutes (currently about 6.25 coins per block), along with on-chain transaction fees. In February 2025, IREN generated 3,459 bitcoins through mining, with revenue reaching 43.9 million dollars based on the price at that time, and hardware profit margins as high as 70%. Instant exchange and price hedging: The mined Bitcoin is usually exchanged for USD or CAD within 72 hours to avoid price fluctuation risks. For example, when the price of Bitcoin fell below $100,000 in June 2025, IREN locked in profits through hedging tools, reducing losses by about 12%. Computing power services and hosting: Providing computing power rental services to small and medium-sized miners, charging based on the duration of computing power (e.g., $0.05 / TH / day), further expanding revenue sources.

2. AI Cloud Services: High Growth, High Margin Second Curve

Compute power leasing and subscription model: Enterprise customers pay based on GPU usage duration or peak computing power (for example, NVIDIA H100 cluster charges about $0.8 per hour per card). By Q3 2025, the revenue share from AI cloud services has increased to 35%, with a gross profit margin of 85% (higher than the 70% of mining business). Customized solution premium: Providing exclusive computing power optimization services for specific industries (such as biomedicine and financial quantification), with charges 20-30% higher than standard leasing. For example, a gene sequencing company experienced a 4-fold increase in model training speed after using IREN's GPU cluster and paid the premium fee. Long-term agreements and customer stickiness: Signing 3-5 year framework agreements with leading AI companies to ensure revenue stability. For example, a certain autonomous driving company has prepaid $50 million for computing power reservation for the next two years.

3. Cost Control and Scale Effect

Cost advantages of renewable energy: Electricity costs account for 60-70% of the total mining costs. IREN locks in low-priced hydropower through long-term agreements (such as $0.02/kWh at the Canadian base), which is 30-40% lower than the industry average cost. Bargaining power in hardware procurement: Bulk purchasing of mining machines and GPUs (such as a one-time order of 2,400 Blackwell GPUs) can achieve a 15- 20%** ** discount, reducing capital expenditure pressure. The synergistic effects of shared infrastructure: AI cloud services reuse the power, cooling, and network resources of mining data centers, with marginal costs approaching zero. For example, the Sweetwater 1 base seamlessly switches remaining power capacity to AI computing after Bitcoin computing power saturation, increasing utilization to 95%.

The core role of the profit model

1. Risk Diversification and Yield Complementarity: A Dual Insurance Mechanism to Hedge Market Volatility

Short-term cash flow protection for Bitcoin mining: Ensuring stable cash flow through instant conversion of Bitcoin (usually completed within 72 hours) and price hedging tools (such as reducing losses by 12% through hedging in June 2025). For example, mining revenue in February 2025 reached $43.9 million, with hardware profit margins as high as 70%, providing foundational income support for the company. The long-term growth engine of AI cloud services: When Bitcoin prices are sluggish (such as a 20% drop in Q1 2025), AI cloud service revenue surged 180% year-on-year, accounting for 35% of the total, with a gross margin of 85%, effectively offsetting the revenue decline from mining operations and achieving a net profit of 19 million dollars. This "static and dynamic" combination allows the company to maintain profitability resilience during the cryptocurrency cycle.

2. Cost Control and Scale Effect: Building a Moat That is Difficult to Replicate

Cost advantages of renewable energy: By locking in low-priced hydropower through long-term agreements (such as $0.02/kWh from Canadian bases) and wind power (Texas at $0.033/kWh), electricity costs are 30-40% lower than the industry average. This not only enhances the profit margins of mining operations but also provides low-cost infrastructure for AI cloud services, forming a cost closed loop of "energy - computing power - services." Hardware Reuse and Synergy Effects: AI cloud services reuse the power, cooling, and network resources of mining data centers, with marginal costs approaching zero. For example, the Sweetwater 1 base seamlessly switches remaining power to AI computing after Bitcoin hash rate saturation, increasing utilization to 95%. This "dual business shared infrastructure" model reduces the initial investment for AI cloud services, resulting in a gross profit margin higher than that of mining operations.

3. Technological Iteration and Asset Appreciation: Dynamically Optimizing Core Competitiveness

Hardware Rapid Iteration Strategy: Regularly eliminate old mining machines (such as replacing with Bitmain S21 Pro), reducing power efficiency from the industry average of 25 J/TH to 16 J/TH, significantly lowering the energy cost per unit of computing power. At the same time, procure 4,300 NVIDIA GPUs (including Hopper H100 and Blackwell B200) to support AI model training, with technological leadership attracting top clients to sign multi-million dollar orders. The long-term value of infrastructure: By securing 2.75 GW of grid capacity (such as the 600 MW Sweetwater 2 project) and modular data center design, IREN's infrastructure not only supports current operations but also reserves space for computing power expansion in the next 5-10 years. This "proactive layout" allows it to take the initiative during rising energy prices or surges in computing power demand.

2. Strategic Significance of the Profit Model

1. Industry Paradigm Innovation: Redefining the Integration of Clean Energy and the Digital Economy

The practical benchmark for carbon neutrality goals: IREN's 100% renewable energy mining model (such as Canadian hydropower and Texas wind power) brings its carbon emissions close to zero, aligning with the global carbon neutrality trend. This not only avoids policy risks such as the EU's Markets in Crypto-Assets Regulation (MiCA), but also attracts ESG investors, driving the stock price up 94% by 2025 due to rising demand for renewable energy. Cross-domain integration of computing power resources: transforming excess mining computing power into AI cloud services breaks the dilemma of traditional mining companies' "single business dependence." This "mining + AI" model has been evaluated by JPMorgan as "the most capable of leveraging HPC/AI opportunities," becoming a template for industry transformation.

2. Building a Technical Ecosystem: From Hardware Suppliers to Solution Service Providers

Building Full-Stack Service Capabilities: By integrating the NVIDIA AI Enterprise software stack, IREN provides full-stack services from hardware (GPU clusters) to algorithms, such as optimizing gene sequencing model training speed for biopharmaceutical companies, charging 20-30% higher than standard rentals. This "turnkey" model enhances customer stickiness and creates differentiated competition. The implicit dominance of industry standards: IREN participates in the formulation of industry standards such as the "Zero Carbon Park Evaluation Technical Specification" and promotes the improvement of data center energy efficiency standards through liquid cooling technology (which reduces energy consumption by 30%) and immersion cooling patents. This technological discourse power allows it to occupy a commanding position in industry competition.

3. Capital Operations and Shareholder Value: The Underlying Logic of Sustainable Growth

Cash flow-driven expansion strategy: The cash flow generated by the mining business (such as the adjusted EBITDA of $83.3 million in Q3 2025) directly supports the capital expenditures of AI cloud services, forming a virtuous cycle of "self-sustaining." At the same time, through equity financing (such as the $413.4 million stock issuance) and debt optimization (no long-term liabilities), IREN's financial structure is superior to that of most peers. Long-term potential for shareholder returns: Despite a short-term net loss due to expanded investment in growth (a cumulative net loss of $8.6 million by 2025), the market highly recognizes its long-term value. For example, users on Xueqiu predict that its market value could increase tenfold, with some institutions setting a target price of $24 (current stock price is about $12), reflecting investors' confidence in its "clean energy + AI" dual engine.

4. Geopolitics and Energy Security: Seizing Future Strategic Resources

The strategic value of energy independence: IREN's energy layout in Texas and Canada gives it bargaining power in the North American energy market. For example, by signing PPAs (Power Purchase Agreements) with wind and solar farms, locking in electricity prices below $0.035/kWh until 2026, this "energy sovereignty" highlights its value in the global energy crisis. The national strategic position of digital infrastructure: With the surge in demand for AI computing power, IREN's high-performance computing center (such as the Horizon 1 liquid-cooled cluster) is regarded as "the infrastructure of the digital economy." Its ability to collaborate with the government (such as participating in U.S. Department of Energy projects) and attract foreign investment (such as orders from European AI companies) makes it a key player in the multinational energy and technology competition.

Bitcoin ( BTC ): Direct mining output and selling pressure

1. Hashrate Expansion and Market Supply Increase

IREN directly increases the market circulation of Bitcoin through large-scale mining. By June 2025, its computing power will reach 50 EH/s (accounting for about 5% of the global Bitcoin network's computing power), and it plans to further increase this to 75 EH/s by adding new mining machines (such as the Bitmain S21 Pro). Every 10 minutes, Bitcoin rewards are obtained through competitive accounting (currently about 6.25 coins per block). In February 2025, the monthly mining output reached 3,459 Bitcoins, with revenue calculated at that time amounting to 43.9 million dollars. This continuous mining activity directly increases the supply of Bitcoin, and if market demand does not grow simultaneously, it may create short-term selling pressure on the BTC price.

2. Instant Exchange and Price Hedging Mechanism

IREN adopts a rapid fiat conversion strategy, with mined Bitcoin typically exchanged for USD or CAD through exchanges like Kraken within 72 hours. For example, when the Bitcoin price fell below $100,000 in June 2025, IREN locked in profits using hedging tools, reducing losses by about 12%. This high-frequency selling behavior may exacerbate market volatility, especially during Bitcoin price downturns, as concentrated selling amplifies downward price pressure. Additionally, IREN's mining cost advantage (with electricity costs as low as $0.037/kWh) allows it to remain profitable even during price slumps, potentially choosing to expand its mining scale against the trend, further increasing market supply.

3. Industry Benchmark Effect and Market Sentiment

As a publicly listed company, IREN's mining efficiency and financial performance have become a benchmark in the industry. For example, its electricity costs are 30-40% lower than the industry average, and its hardware profit margin reaches as high as 70%, attracting investors' attention to the long-term value of Bitcoin mining. If IREN reduces its dependence on Bitcoin prices due to growth in AI cloud service revenue (which accounted for 35% in Q3 2025), it could send positive signals and boost market confidence in Bitcoin as "digital gold." Conversely, if mining business losses widen, it may raise concerns in the market about the fundamentals of the industry.

2. Tokens related to artificial intelligence (such as ETH, FET, RLC): Cross-domain allocation of computing power resources

1. Demand for Computing Power Leasing in AI Cloud Services

IREN has reconfigured part of its data center computing power into a high-performance computing (HPC) platform, providing GPU cluster leasing services for AI companies. As of Q3 2025, it has deployed 4,300 NVIDIA GPUs (including 1,800 Hopper H100 and 2,500 Blackwell B200/B300), aiming to serve generative AI and autonomous driving companies. Although IREN does not directly accept cryptocurrency payments, its clients may settle computing power fees using stablecoins (such as USDC) or platform tokens (such as ETH). For example, an autonomous driving company prepaid $50 million for computing power reservations over the next two years, and such large orders may indirectly increase the demand for stablecoins.

2. Technical Collaboration and Ecological Construction

IREN provides full-stack services from hardware to algorithms by partnering with NVIDIA to access its AI Enterprise software stack, enhancing customer stickiness. This technological integration may drive the use of AI development tool tokens (such as FET and RLC), as developers need to pay tokens to access algorithm libraries or computing resources. For example, if IREN optimizes gene sequencing models for a biopharmaceutical company, it may involve using the distributed computing network of Fetch.ai (FET).

3. Dynamic Scheduling of Computing Resources

IREN's data center adopts a "scalable unit" design, allowing for dynamic adjustment of computing power allocation based on market demand. For example, in Q2 2025, due to short-term fluctuations in Bitcoin, it will temporarily allocate 10% of its computing power to AI cloud services. This flexible scheduling may affect the mining difficulty of other cryptocurrencies; for instance, if a large number of miners switch from Bitcoin to Ethereum (ETH), it could lead to an increase in ETH mining difficulty, a decrease in block rewards, and subsequently impact its market supply and price.

3. Energy and Carbon Credit Tokens (such as IRENA, CRED): An Extension of Renewable Energy Strategies

1. Cost Advantages of Renewable Energy

IREN's Bitcoin mining and AI cloud services rely on 100% renewable energy (such as Canadian hydropower and Texas wind power), with electricity costs as low as $0.02 /kWh. This clean energy layout may drive the demand for green energy tokens (such as IRENA), as companies need to purchase tokens to prove their carbon footprint. For example, if IREN participates in carbon credit trading, it may use CRED tokens to offset the indirect emissions of its data centers.

2. Hydrogen Energy Storage and Carbon Credit Trading

IREN plans to expand into hydrogen energy storage and carbon credit trading, deepening its sustainable development strategy through integrated energy management. Hydrogen energy storage may involve trading using Hydrogen Token (H2), while carbon credit trading may adopt tokens such as CRED or MCO2. For example, if IREN reduces grid dependence through hydrogen energy storage at its Sweetwater base in Texas, its carbon credit allowances could be tokenized and circulated on-chain, attracting ESG investors.

3. Implicit Dominance of Industry Standards

IREN participates in the formulation of industry standards such as the "Zero Carbon Park Evaluation Technical Specification" and promotes the improvement of data center energy efficiency standards through liquid cooling technology (which reduces energy consumption by 30%) and immersion cooling patents. This technological discourse power may indirectly influence the pricing power of energy tokens; for example, if its liquid cooling technology becomes an industry benchmark, related patent tokens (such as CoolCoin) may gain a premium.

4. Other Potentially Impactful Cryptocurrencies

1. Stablecoins (USDC, USDT)

IREN's Bitcoin sell-off and AI cloud service revenue are primarily settled in US dollars, requiring short-term liquidity management through stablecoins. For example, its adjusted EBITDA for Q3 2025 reached $83.3 million, and it may convert some funds into USDC to hedge against exchange rate risks. Additionally, pre-paid computing power fees from clients (such as $50 million from an autonomous driving company) may be held in the form of USDC, increasing the market demand for stablecoins.

2. Data Center Infrastructure Tokens (such as FIL, STORJ)

IREN's modular data center design and grid access capabilities (such as the 2.75 GW capacity contracted in Texas) may drive the demand for distributed storage tokens (such as Filecoin and Storj), as AI cloud services require massive data storage. For example, if IREN collaborates with Filecoin to store customer training data, it may involve using FIL tokens to pay for storage fees.

V. Transmission Mechanism and Market Dynamics

1. The Direct Impact of Supply and Demand Relationships

Bitcoin: The mining output of IREN directly increases supply, and selling behavior affects the price; AI Tokens: The demand for computing power leasing drives the use of tokens, indirectly enhancing their valuation; Energy tokens: The layout of renewable energy stimulates the demand for green tokens.

2. Indirect Transmission of Capital Flow

IREN's financial performance (such as a net profit of $19 million in Q3 2025) may attract capital inflow into the cryptocurrency market, driving up the prices of related tokens. Conversely, if its AI cloud service revenue falls short of expectations, it may trigger a sell-off of AI tokens by investors.

3. Resonance of Policies and Industry Trends

The global carbon neutrality policies (such as the EU MiCA regulations) and the surge in demand for AI computing power have reinforced the rationale behind the IREN business model, potentially driving long-term investment in clean energy tokens and AI tokens. For example, JPMorgan has listed IREN as a company "most capable of leveraging HPC/AI opportunities," and this institutional endorsement may enhance market confidence in the related cryptocurrencies.