IREN Delays $4B ARR Target to January 2027 After Customer Design Change

IREN said on Nov. 5 that its more than $4 billion annualized recurring revenue (ARR) target moves from the end of 2026 to January 2027, and may extend to February, after a customer-requested design change and supplier timing.

In the same results release, the company said Horizon 1 of its Childress, Texas campus went into service for Microsoft and Horizons 2 to 4 have progressed to late-stage construction; it gave no new date for each hall. IBTimes Australia reported on Nov. 5, citing an earlier report, that Microsoft and IREN officials had met and negotiated a revised timeline that could push completion back by several weeks or months.

The same day, Bloomberg News reported, according to Reuters, that Microsoft is tightening oversight of projects built by neocloud providers Nebius, IREN and Nscale and will not exercise an option to more than double its Nscale computing agreement at a Texas data center. A Microsoft spokesperson told Reuters its approach "is built on flexibility and optionality" and the company has not confirmed any individual change.

IREN shares fell $4.09, or 18.85%, to $17.62 in trading on Nov. 5, IBTimes Australia reported, and market summaries put the close at $18.03, down 16.95%. In Reuters' afternoon update that day, Nebius and IREN were down more than 16% and CoreWeave was down 12.29%.

Why the Childress delay matters for capacity

A neocloud, a GPU-cloud operator, usually finances a build against a long contract from one blue-chip tenant. At Childress, Microsoft is that tenant: a 5-year GB300 GPU services contract worth about $9.7 billion, delivered in four 50 MW liquid-cooled Horizons, or 200 MW in total, according to Yahoo Finance's summary of the contract terms. Until a hall is accepted, the revenue that backs its debt does not start.

The Information reported on Nov. 4 that Childress delays led Microsoft to spend about $5 billion less than planned on capital expenditure in the September quarter; it is unclear how much of that gap is IREN's. Microsoft chief financial officer Amy Hood said on the company's late-October earnings call that "some third-party capacity deliveries we expected in Q1 were delayed," as Voltgrid reported in its coverage of Microsoft's fiscal first quarter.

The Nscale Texas option: 500 MW or 700 MW

When Nscale announced the deal in October 2025, it described about 240 MW at a Ward County site owned by crypto miner Ionic Digital, with a Microsoft option on a 700 MW second phase. Nscale has since told the Financial Times the option was closer to 500 MW and covered capacity at its own adjacent site, Capacity reported on Nov. 5.

Ionic's filings point to a separate right. Nscale leases 234 MW at the Ionic site and is committed to a further 89 MW once it is energized, expected in the second half of 2027, according to Capacity's reading of the filings. Beyond that, Nscale holds a right of first refusal, and Capacity reports that Ionic's August investor update puts the Microsoft option on it at 377 MW. On its third-quarter call, Ionic said Nscale's right is a right of first refusal, "not a call option," and does not lock in a price. Ionic's third-quarter release lists 377 gross MW of 466 gross MW of provisional baseload capacity at Ward County as expected to energize in late 2027, subject to regulatory approvals and utility infrastructure work.

Nscale's delivery record was already under scrutiny. As background, Microsoft left Nscale's Loughton, Essex, site on Oct. 19 after grid power delays. Voltgrid also reported that NVIDIA's Jensen Huang told Nscale to work around the clock and that NVIDIA is reportedly in talks on credit support for an Nscale Anthropic site. In Texas, Governor-elect Gina Hinojosa has pledged a data-center moratorium until lawmakers write rules.

What is not confirmed yet

The Bloomberg report rests on unnamed sources, and Microsoft has confirmed only its general approach. The several-weeks-or-months slip comes from an unnamed-source report; IREN's own release states only the shift of its ARR target and does not name the customer. Accounts of the cause differ, and Voltgrid found no readable full report that confirms cabling problems at Childress. Whether the declined Nscale option was 500 MW or 700 MW rests on Nscale's statement to the FT, and the 377 MW Ionic figure is a different right. Watch for IREN's dates for Horizons 2 to 4 and any Nscale statement on who takes the capacity Microsoft passed on.