IREN (IREN) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We have a history of operating losses, and we may incur net losses in the future
2. 02Our business has grown rapidly and we have an evolving business model and strategy
3. 03Our growth strategy may take significant time and expenditure to implement and our efforts may not be successful
4. 04geographic locations in which our operating facilities are located or desired to be located, or could otherwise adversely impact our business
5. 05Our increased focus on HPC and AI services may not be successful and may result in adverse consequences to our business, results of operations and financial condition
6. 06Expansion of our HPC and AI services could increase competitive, operational, legal and regulatory risks to our business in ways we cannot predict
7. 07and potential increases in civil claims against us and could adversely affect our business, financial condition and results of operations
8. 08Failure to effectively realize or manage our growth could place strains on our managerial, operational and financial resources and could adversely affect our business and operating results
9. 09imposition of tariffs, surcharges and other similar import or export duties, or trade restrictions including tariff rate quotas, as well as by uncertainty with respect to the potential for such changes
10. 10We may be unable to raise additional capital needed to fulfill our capital or liquidity needs or grow our business and achieve expansion plans
11. 11expand into new markets. In particular, constructing data center facilities for HPC and AI services requires significant capital expenditures when compared to capital expenditures for Bitcoin mining data center facilities
12. 12Our indebtedness and liabilities could limit the cash flow available for our operations and expose us to risks that could adversely affect our business, financial condition and results of operations
13. 13Our operating results have fluctuated significantly and may continue to fluctuate significantly as a result of several different factors
14. 14Our business is highly dependent on a small number of equipment suppliers, and any failure by us or our suppliers to perform under the relevant supply contracts could materially impact our operating results and financial condition
15. 15We expect to continue to incur substantial capital expenditures to maintain and upgrade our hardware over time and to grow our business
16. 16Supply chain and logistics issues for us, our contractors or our suppliers may frustrate or delay our expansion plans or increase the cost of constructing our infrastructure
17. 17Our hardware suppliers have previously had, and may continue to have, operations in China, and China’s economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material adverse effect on our business
18. 18Our primary input is electricity. We rely on third parties, including utility providers, for the reliable and sufficient supply of electricity to our infrastructure
19. 19We may be affected by price fluctuations in the wholesale and retail power markets
20. 20Bitcoin mining and HPC and AI services are energy-intensive, which may restrict the geographic locations of our operations, in particular, to locations with renewable sources of power
21. 21Government regulators and utilities may potentially restrict the ability of electricity suppliers to provide electricity to Bitcoin miners or HPC and AI service providers, including us, or Bitcoin mining or HPC and AI services generally
22. 22Any outage or limitation of the internet connection at our sites could materially impact our operations and financial performance
23. 23Any critical failure of key electrical or data center equipment may result in material impacts to our operations and financial performance
24. 24Serial defects in our ASICs, GPUs and other equipment may result in failure or underperformance relative to expectations and impact our operations and financial performance
25. 25Adoption of custom firmware for our mining fleet could lead to failures that result in a substantial decrease in our mining fleet’s hashrate
26. 26Cancellation or withdrawal of required operating and other permits and licenses could materially impact our operations and financial performance
27. 27Our business is subject to customary risks in developing infrastructure projects
28. 28We operate in a highly competitive industry and rapidly evolving sectors
29. 29If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, operating results and financial condition could be adversely affected
30. 30The loss of any of our management team or an inability to attract and retain qualified personnel on a timely basis or at all could adversely affect our operations, strategy and business
31. 31As part of our strategy, we may, from time to time, seek to acquire businesses, services or technologies or enter into joint ventures or other strategic transactions, that we believe could complement or expand our current business, enhance our technical capabilities or otherwise offer growth opportunities
32. 32Our properties may experience damages, including damages that are not covered by insurance
33. 33We may fail to anticipate or adapt to technology innovations in a timely manner, or at all

Risks Related to Bitcoin

1. 34Our future success will depend significantly on the price of Bitcoin, which is subject to risk and has historically been subject to significant price volatility, as well as a number of other factors
2. 35There is a risk of additional Bitcoin mining capacity from competing Bitcoin miners, which would increase the global hashrate and decrease our effective market share
3. 36Bitcoin is a form of technology which may become redundant or obsolete in the future
4. 37If a malicious actor or botnet obtains control of more than 50% of the processing power on the Bitcoin network, such actor or botnet could manipulate the Bitcoin network, which would adversely affect your investment in our securities or our ability to operate
5. 38attempt to create, either from scratch, via large-scale purchases or potentially seizure, a significant amount of mining processing power
6. 39Significant increases or decreases in transaction fees could lead to loss of confidence in the Bitcoin network, which could adversely impact our ability to mine Bitcoin and to monetize the Bitcoin we mine
7. 40We may not be able to realize the benefits of forks, and forks in the Bitcoin network may occur in the future that may affect our operations and financial performance
8. 41Digital asset trading platforms for Bitcoin may be subject to varying levels of regulation, which exposes our digital asset holdings to risks
9. 42Additionally, some of these non-U.S. digital asset trading platforms offer customers high leverage and/or a small insurance fund, which could result in potential losses being socialized to customers and a reduction in the value of our Bitcoins on digital asset trading platform
10. 43The impact of geopolitical and economic events on the supply and demand for digital assets is uncertain
11. 44Our operations, investment strategies and profitability may be adversely affected by competition from other methods of investing in digital assets or tracking digital asset markets
12. 45Our reliance on third-party mining pool service providers may have an adverse impact on our business
13. 46Bitcoin will be subject to block reward halving several times in the future and Bitcoin’s value may not adjust to compensate us for the reduction in the block rewards that we receive from our mining activities
14. 47Bitcoin’s utility may be perceived as a speculative asset, which can lead to price volatility
15. 48Our transactions in digital assets may expose us to countries, territories, regimes, entities, organizations and individuals that are subject to sanctions and other restrictive laws and regulations
16. 49Regulatory actions in one or more countries could severely affect the right to acquire, own, hold, sell or use Bitcoin or to exchange them for fiat currency
17. 50Digital asset trading platforms, wallets and the Bitcoin network may suffer from hacking and fraud risks, which may adversely erode user confidence in Bitcoin, which could adversely affect the price of Bitcoin and our revenues
18. 51ordinary course, which could disproportionately and adversely affect the Bitcoin market, result in a reduction in the price of Bitcoin and materially and adversely affect the price of our Ordinary shares
19. 52Incorrect or fraudulent Bitcoin transactions may be irreversible and may negatively impact the Company’s results of operation and financial condition
20. 53The open-source structure of the Bitcoin network protocol may result in inconsistent and perhaps even ineffective changes to the Bitcoin protocol. Failed upgrades or maintenance to the protocol could damage the Bitcoin network, which could adversely affect our business and the results of our operations
21. 54The nature of our business requires the application of complex financial accounting rules, and there is limited guidance from accounting standard setting bodies. If financial accounting standards undergo significant changes, our operating results could be adversely affected

Risks Related to Third Parties

1. 55There can be no assurance that we will succeed in establishing and maintaining a customer base for our HPC and AI services business, that we will be successful in generating a recurring stream of revenue from that business or whether we can provide the right combination of HPC and AI services
2. 56Our HPC and AI services have and may continue to have a significant customer concentration, and we are exposed to counterparty credit risk with respect to our customers
3. 57We may enter into contracts with customers for HPC and AI services that could subject us to significant liability
4. 58closing of a bank with which we have a financial relationship could subject us to adverse conditions and pose challenges in finding an alternative suitable bank to provide us with bank accounts and banking services
5. 59We may temporarily store our Bitcoin on digital asset trading platforms which could subject our Bitcoin to the risk of loss or access
6. 60Disruptions at over-the-counter (“OTC”) trading desks and potential consequences of an OTC trading desk’s failure could adversely affect our business. We may be required to, or may otherwise determine it is appropriate to, switch to an alternative digital asset trading platform and/or custodian

Risks Related to Regulations and Regulatory Frameworks

1. 61The regulatory environment regarding digital assets and digital asset mining is in flux, and we may become subject to changes to and/or additional laws and regulations that may limit our ability to operate
2. 62opportunities discussed in this Annual Report on Form 10-K may not reflect the markets and opportunities available to us in the future
3. 63Our business and financial condition may be materially adversely affected by changes to and/or increased regulation of energy sources
4. 64If we were deemed an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”), applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, results of operations and financial condition
5. 65compliance costs, which could be substantial or cost-prohibitive. If we become subject to these regulations, our costs in complying with them may have a material adverse effect on our business and the results of its operations
6. 66Failure to comply with anti-corruption and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences
7. 67offering, or promising a benefit or causing a benefit to be provided when the benefit is not legitimately due to the person with the intention of influencing a foreign public official in the exercise of their official duties to obtain or retain a business or business advantage
8. 68We are subject to governmental regulation and other legal obligations related to data privacy, data protection and information security. If we are unable to comply with these, we may be subject to governmental enforcement actions, litigation, fines and penalties or adverse publicity
9. 69certain circumstances to consumers whose personal information has been disclosed as a result of a data breach. The CCPA and other such similar laws may increase our compliance costs and potential liability, and many similar laws have been proposed and/or enacted in other states and at the federal level
10. 70We are subject to environmental, health and safety laws and regulations, including applicable zoning, building-code and energy-efficiency standards and worker health and safety laws and regulations, that may expose us to significant liabilities for penalties, damages or costs of remediation or compliance
11. 71claims for personal injury, property damage and nuisance allegedly caused by noise or the release of hazardous substances into the environment
12. 72The regulatory and legislative developments related to climate change may materially adversely affect our brand, reputation, business, results of operations and financial position
13. 73Failure to keep up with evolving trends, shareholder expectations and requirements relating to ESG issues or reporting could adversely impact our reputation, share price, demand for our securities and access to and cost of capital and expose us to liability
14. 74There are increased grid challenges associated with operating energy intensive infrastructure, which may result in new operational requirements being placed on our facilities, which could adversely affect our operating results and financial condition
15. 75Our compliance and risk management methods might not be effective and may result in outcomes that could adversely affect our reputation, operating results and financial condition

Risks Related to Intellectual Property

1. 76If we are unable to protect the confidentiality of our trade secrets or other intellectual property rights or otherwise obtain, maintain, protect and enforce our intellectual property rights, our business and competitive position could be harmed
2. 77Third parties may claim that we are infringing upon, misappropriating or otherwise violating their intellectual property rights, which may prevent or inhibit our operations and cause us to suffer significant litigation expense even if these claims have no merit

Risks Related to Ownership of Our Ordinary Shares

1. 78The market price of our Ordinary shares may be highly volatile
2. 79Investing in our Ordinary shares could be subject to greater volatility than investing directly in Bitcoin or other digital assets
3. 80If securities or industry analysts cease to publish research or reports about our business, or if they adversely change their recommendations regarding the Ordinary shares, our Ordinary share price and trading volume could decline
4. 81Future sales, or the possibility of future sales, of a substantial number of our Ordinary shares could adversely affect the price of our Ordinary shares
5. 82Because of their significant ownership of our Ordinary shares, and their ownership of all outstanding B Class shares, our Co-Founders and Co-Chief Executive Officers have substantial control over our business, and their interests may differ from our interests or those of our other shareholders
6. 83The multi-class structure of our shares may adversely affect the trading market for our Ordinary shares
7. 84We have never declared nor paid cash dividends on our Ordinary shares. We cannot assure you that we will declare and make dividends in the foreseeable future, nor can we provide any assurance as to the amount of any such dividend if declared
8. 85Ordinary shares issuable upon conversion of the Convertible Notes may dilute the ownership interest of our shareholders or may adversely affect the market price of our Ordinary shares
9. 86We may be unable to raise the funds necessary to repurchase the Convertible Notes for cash following a fundamental change or to pay any cash amounts due upon maturity or conversion of the Convertible Notes
10. 87Provisions in the indentures governing the Convertible Notes could delay or prevent an otherwise beneficial takeover of us
11. 88The Prepaid Forward Transactions may affect the value of our Ordinary shares and may result in unexpected market activity in our Ordinary shares
12. 89The Capped Call Transactions may affect the value of our Ordinary shares
13. 90excess of the principal amount of converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap
14. 91We are subject to counterparty risk with respect to the Capped Call Transactions and Prepaid Forward Transactions, and the Capped Call Transactions and Prepaid Forward Transactions may not operate as planned

Risks Related to Being Incorporated Outside the United States

1. 92Provisions in our organizational documents or Australian corporate law might delay or prevent acquisition bids for our company or other change of control transactions that might be considered favorable
2. 93Acquisitions of shares in the Company may be subject to review and approval by the Australian Federal Treasurer or their delegate under the Foreign Acquisitions and Takeovers Act 1975 (Cth)
3. 94Similar considerations may apply to other jurisdictions where we or the relevant director has assets which may raise similar difficulties in enforcing a U.S. judgment in those jurisdictions

Risks Related to Taxation

1. 95Future developments regarding the treatment of digital assets for U.S. federal income and foreign tax purposes could adversely impact our business
2. 96forward. See Note 16 to our audited financial statements for the year ended June 30, 2025 included in this Annual Report on Form 10-K
3. 97If a United States person is treated as owning at least 10% of our Ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences
4. 98Future changes to tax laws could materially adversely affect our Company and reduce net returns to our shareholders
5. 99Requirements associated with being a public company in the United States require significant company resources and management attention
6. 100We are the subject of a putative securities class action, and could become subject to future litigation, including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities