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01 Mar, 2022
Iris Energy: An ESG-Friendly Bitcoin Miner On A Clear Expansion Path

Iris Energy (IREN), a company engaged in building, owning, and operating data centers for the mining of Bitcoin (BTC-USD), recently reported earnings in line with expectations despite Bitcoin price weakness through the quarter, reinforcing the benefits of its low-cost, renewable energy mining model. Backed by a strong team with institutional expertise in energy and infrastructure, IREN continues to run its miners efficiently as well, with sites well ahead of schedule.

With tailwinds from monetary inflation and the continued development of the global cryptocurrency industry also set to boost demand for Bitcoin, I am bullish on the fundamentals. Yet, the current valuation gives IREN little credit for the planned expansion ahead, creating a unique and attractive risk/reward profile for investors seeking Bitcoin exposure.

Strong Earnings Underpinned by Impressive Hash Rate Growth

For its latest quarter, IREN delivered revenue of $20 million, up nearly 50% from the previous quarter, with adj. EBITDA also growing 156% Q/Q to $14.3 million (implying a 72% margin). This growth came despite a dip in Bitcoin price towards the end of the quarter, as an increase in the operating hash rate to 685 PH/s (almost doubling sequentially) more than offset any price headwinds. As a result, IREN mined 364 bitcoins during the quarter and continues to maintain its policy of strategically selling down its Bitcoin holdings for reinvestment into mining hardware and infrastructure.