IREN Ltd. Q2 FY2025 earnings call

• Q2 FY '25 saw a record result with $18.9 million NPAT, underpinned by rapid growth in the last 12 months and low-cost Bitcoin production. - Horizon 1, a 75-megawatt liquid-cooled AI data center in Childress, set to be delivered in the second half of the year, designed for up to 200-kilowatt rack density. - Sweetwater 2, a 600-megawatt site in West Texas, with over 500 acres secured, close to finalizing a grid connection agreement, aiming for energization in 2028. - Transition to U.S. domestic issuer status and U.S. GAAP reporting commences from H2 2025. - Balance sheet remains robust with total assets reaching $1.9 billion as of December 31, 2024, and a $440 million convertible note issued in December 2024. - Accelerating investment into strategic initiatives, with investor distributions deferred to focus on growth.

In Q2 FY '25, IREN recorded a net profit after tax (NPAT) of $18.9 million. Bitcoin mining generated revenue of $113.5 million, with operating cash flows of $53.7 million. They mined 1,347 Bitcoins at an average realized price of $84.3k. Net electricity costs for the quarter were $28.9 million, and other costs amounted to $25.1 million. As of December 31, 2024, cash at bank closed at $427.3 million. Bitcoin mining operations saw an increase in average operating hashrate, and the company maintains best-in-class efficiency at 15 joules per terahash with actual power prices of $0.03 per kilowatt hour at Childress.

• On track to achieve the 50 exahash target within the next 5 months. - Horizon 1, the 75-megawatt liquid-cooled AI data center, expected to be delivered in the second half of the year. - Sweetwater 2 site targeted for energization in 2028. - Continued growth in Bitcoin mining with plans to expand to 52 exahash, adjusting from prior expansion plans due to Horizon 1 allocation.

• Uncertainty surrounding the Sweetwater 2 project as the grid connection agreement is not yet signed. - Dynamic market conditions pose risks to capital structure optimization. - Execution risk associated with bringing Sweetwater 2 from a hypothetical project to reality, including finalizing agreements and securing approvals.

Q: Joseph Vafi asked about CapEx and rack density for Horizon 1, and demand for Sweetwater.

A: Kent Draper responded that they can utilize existing data center architecture for cost-effective delivery, and Dan Roberts mentioned active conversations with customers regarding Sweetwater.

Q: Greg Lewis inquired about Sweetwater 2's energization timeline and tariffs.

A: Daniel Roberts and Kent Draper discussed the difficulty of grid connection agreements and the diversified supply base to handle potential tariffs.

Q: Darren Aftahi asked about the decision to build Horizon 1 and strategic benefit of announcing Sweetwater 2.

A: Daniel Roberts explained the strategic value beyond discrete economics and materiality to the market thematic, while Kent Draper noted demand coalescing for liquid-cooled data centers.

Q: Brett Knoblauch asked about Horizon 1 and customer interest post-DeepSeek.

A: Kent Draper mentioned increased demand for liquid-cooled capacity and internal capabilities demonstrating ability to deliver.

Q: Stephen Glagola asked about HPC monetization of Sweetwater 1 and ownership impact.

A: Daniel Roberts stated the world has moved past concerns about site suitability and partnering with Bitcoin miners.

Q: Joe Flynn asked about factors in building Childress AI HPC and financing.

A: Kent Draper discussed demand coalescing and multiple customer conversations, with Daniel Roberts mentioning multiple financing sources including project finance.