Iris Energy is making big moves in the Bitcoin mining world. They’re aiming for a target of 50 exahashes per second (EH/s) by 2025. This goal puts them in the same league as major U.S. miners like CleanSpark, Marathon Digital, and Riot Platforms.
According to JPMorgan analyst Reginald L. Smith, Iris Energy is shifting gears. They’ve decided to exit proprietary power trading after taking a significant hit from a hedge loss in July. This change lets them focus more on expanding their mining operations.
The company plans to keep its power costs competitive, aiming for three to four cents per kilowatt-hour. Right now, they’re operating at 15 EH/s and want to double that to 30 EH/s by the end of 2024. The new goal of 50 EH/s, up from a previous target of 40 EH/s, would place Iris Energy among the top miners in the U.S.
Smith points out that Iris Energy has added 4.5 EH/s since the end of July. This achievement makes them the fifth-largest publicly-listed miner by installed hashrate. To support this growth, Iris Energy is working on improving its operational efficiency. They’re targeting a blended fleet efficiency of 15 joules per terahash (J/TH) when they reach 50 EH/s, which is a significant improvement from their current 19 J/TH.
While the funding for reaching 30 EH/s is secured, Smith cautions that hitting the 50 EH/s target will depend on successfully executing ASIC purchase options.
On another note, Iris Energy’s Cloud Services segment is thriving. Their revenue jumped to $2.5 million in the fourth quarter, more than doubling from the previous quarter. However, not all news is positive. Poolside, one of their original partners, has decided not to renew its contract, which surprised Smith.
Despite this setback, Iris Energy is actively looking for new partnerships. They’re also planning to launch a pilot GPU program at their Childress facility in the latter half of 2024.
Financially, Iris Energy is in a strong position. They ended June with $405 million in cash and no debt. However, rising operating expenses due to increased employee compensation and general costs have led to a $10 million decline in adjusted EBITDA, bringing it down to $12 million.
Smith believes that the path to 50 EH/s is ambitious but achievable. He cites the company's solid cash position and focused operational strategy as key factors for future growth.