IREN: Revenue and Earnings Mismatch?

Investment Analysis Clubs Saul’s Investing Discussions
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From IREN’s PDF of the results:

• Total revenue increased to record $240.3m (+355% vs. Q1 FY25 $52.8m)
• Net income increased to record $384.6m* (vs. Q1 FY25 net loss $(51.7)m)
• Adj. EBITDA increased to $91.7m (+3,568% vs. Q1 FY25 $2.5m) 4
• EBITDA increased to record $662.7m* (vs. Q1 FY25 $(18.8)m)4

  • Includes unrealized gains, primarily on prepaid forwards and capped callsin connection with convertible notes

So, isn’t it odd that Net Income is greater than Total Revenue?

I couldn’t find a good explanation from IREN. AI says:

Unrealized Gains: The net income figure included substantial “unrealized fair value gain[s] on financial instruments” linked to the company’s convertible notes. These are accounting gains that reflect a change in the market value of certain financial items on the balance sheet but are not actual cash from sales of products or services.

Can someone explain that to me like I’m a 4th grader?

In particular, what are the “certain financial items” they’re talking about? Bitcoin that was mined, or something else?

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Smorgasboard,

Its kind of silly and why I don’t like GAAP and I perfer Non-GAAP. But its the gain in value in the Call options IREN bought in conjunction with their newest convertible notes. This is just value going up because the IREN stock went up. It is basically irrelevant to the companies performance.

Drew

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