Will IREN's Bitcoin mining revenue fall below $100M in any quarter of FY26?

Q2 FY26 mining revenue was approximately $174M, already down 23% QoQ. The decline drivers are dual: (1) deliberate hashrate reduction as capacity shifts to AI (management-controlled), and (2) Bitcoin price fluctuations and network difficulty (market-driven). For mining revenue to drop below $100M, it needs a ~43% decline from Q2 FY26 levels. At the current 23% QoQ decline rate, mining revenue would reach ~$134M in Q3 FY26 and ~$103M in Q4 FY26 — staying just above $100M. However, the decline rate may accelerate as more mining capacity is converted to AI (especially if Sweetwater draws mining resources), and Bitcoin price could decline from tariff/macro pressure. The probability is around coin-flip, slightly below because management can pace the conversion to preserve mining cash flows.

The question asks about ANY quarter of FY26, meaning Q3 (Jan-Mar) or Q4 (Apr-Jun). Two chances for mining to drop below $100M. The compound probability is higher than either quarter alone. Q3 FY26 is less likely (would need a sharp drop from $174M), but Q4 FY26 is more plausible as the ongoing transition continues. Key swing factor is Bitcoin price: BTC was under pressure from tariff uncertainty, and further macro deterioration could push mining revenue below threshold. Additionally, mining hardware impairments ($31.8M in Q2 FY26) signal accelerating capacity reduction. The dual-shot nature (either quarter) pushes probability toward 45%.

Bitcoin price is the dominant swing factor and is inherently unpredictable. If BTC recovers to $80K+, mining revenue may stabilize above $100M even with reduced hashrate. If BTC drops to $50K or below, mining revenue could breach $100M in Q3 FY26 alone. The deliberate hashrate reduction for AI adds a steady downward pressure independent of BTC price. Management has a competing incentive: they need mining cash flows to bridge the transition valley, so they may slow conversion if mining revenue drops too fast. This creates a natural floor that may keep revenue above $100M. Probability around 38% reflecting genuine uncertainty with BTC as the wild card.

The trajectory is clearly downward: Q1 FY26 was higher, Q2 FY26 was $174M (-23% QoQ). If the decline rate persists or accelerates due to AI conversion, Q4 FY26 could approach or breach $100M. The April 2024 Bitcoin halving continues to pressure mining economics industry-wide. IREN's deliberate capacity reduction for AI transition adds company-specific decline on top of market forces. The 2-quarter window and compounding decline drivers make sub-$100M achievable. Probability around 42%.

IREN retains ~810MW of mining capacity, and management can choose how quickly to convert. If mining revenue approaches $100M, management may slow conversion to maintain cash flows. This creates a natural floor that makes sub-$100M less likely unless driven by BTC price collapse (external factor). The $100M threshold is 57% of Q2 FY26 levels — a significant decline. At 23% QoQ decline rate, revenue would be ~$103M in Q4 FY26 (just above threshold). A slightly slower decline (20% QoQ) keeps it at ~$111M. Only an accelerated decline or BTC price crash breaches $100M. Below 40% but above 30%.

The math suggests Q4 FY26 is the swing quarter. At 23% QoQ decline: Q3 FY26 = ~$134M, Q4 FY26 = ~$103M. The threshold is very close to the natural trajectory — minor acceleration (from increased AI conversion or BTC price decline) would push it below $100M, while minor deceleration (management slowing conversion or BTC recovery) would keep it above. This is genuinely uncertain, making the probability close to 40%. The macro environment (tariffs, potential recession fears) adds downward pressure on BTC.

Mining revenue declining at 23% QoQ from $174M. Q3 FY26: ~$134M, Q4 FY26: ~$103M. Just above $100M threshold. BTC price crash or accelerated conversion could push below. Management can slow conversion as floor protection. Two-quarter window adds probability. Around 38%.

Q4 FY26 is the critical quarter. At current trajectory, mining revenue is ~$103M — just above threshold. Management incentive to maintain mining floor limits downside. BTC price is the wild card. Given the multiple forces (halving, conversion, macro pressure) vs management floor protection, probability is around 35%. More likely to stay just above $100M than breach it.

The two-quarter window, downward trajectory, and multiple decline drivers (halving, conversion, potential BTC weakness) create meaningful probability. But management's ability to pace conversion and the $100M threshold being close to natural trajectory (not far below) limit certainty. Around 40% — this is a genuine toss-up weighted slightly toward NO.