IREN’s profitability came under pressure as the company accelerated its shift from Bitcoin mining to AI cloud infrastructure, overshadowing a major milestone in that transition.

IREN shares dropped 8% in Friday’s premarket trading after its fiscal fourth-quarter results showed the near-term financial impact of expanding its AI operations.

Revenue declined 5% from the previous quarter to $137.2 million, while adjusted EBITDA plunged 68% to $19.2 million. Increased employee expenses and spending tied to the AI cloud rollout weighed heavily on the quarter. Compared with a year earlier, revenue was down 85%, while adjusted EBITDA fell 93%.

The company also posted a $684 million net loss. That included a $450.4 million non-cash impairment charge, largely tied to the decommissioning of Bitcoin mining equipment as IREN converts its existing facilities for AI use.

IREN said it has $4 billion in contracted annualized run-rate revenue associated with its 2026 capacity. However, only about $1 billion of that capacity is currently operational, highlighting the gap between its contracted pipeline and revenue-generating infrastructure.

Despite the earnings pressure, the quarter marked a significant change in IREN’s revenue mix. AI cloud revenue more than doubled from the previous quarter to $70.5 million, surpassing Bitcoin mining revenue of $66.7 million for the first time.

AI cloud operations now account for 51.4% of quarterly revenue, compared with 48.6% from Bitcoin mining. Mining revenue fell 40% sequentially as IREN continued reallocating electricity and infrastructure toward its rapidly expanding AI business.