Applied Digital (APLD) Reports Strong Revenue Growth in Q1 2026

by MarketNewsData

Financial Highlights

  • Revenue: $64.2 million, up 84% YoY (vs. $34.8 million) and well above the ~$45 million Street estimate.
  • EPS: Net loss of ($0.11) per share, matching consensus.
    • Adjusted loss of ($0.03) per share vs. ($0.01) a year ago.
  • Adjusted EBITDA: $0.5 million vs. $6.3 million last year.
  • Net loss: $27.8 million vs. net income of $15.9 million a year ago.
  • Cash: $114 million as of Aug 31 (does not include $362 million raised post-quarter).
  • Debt: $687 million.

Operational & Strategic Highlights

  • CoreWeave Expansion:
    • Signed a new 150 MW lease at Polaris Forge 1 campus (Ellendale, ND), bringing the site to full 400 MW capacity.
    • Total anticipated lease revenue for Polaris Forge 1 now ≈ $11 billion, with $7 billion from the first two leases.
  • Construction Progress:
    • 100 MW building at Polaris Forge 1 on schedule and budget; tenant fit-out underway.
    • Began construction on the next 150 MW building.
  • New Funding:
    • Drew $112.5 million from Macquarie preferred equity facility ($5 billion total).
    • Secured $50 million in equipment financing for the 300 MW “AI Factory” campus (Polaris Forge 2).
    • Raised $200 million via expanded Series G Preferred Stock.
  • Polaris Forge 2:
    • Broke ground on a 300 MW AI Factory near Harwood, ND; initial 200 MW to come online in 2026, full capacity by 2027.
    • Advanced talks with a major investment-grade hyperscaler for long-term lease covering up to 1 GW.

Business Segment Updates

  • HPC Hosting:
    • Generated $26 million in fit-out revenue this quarter (temporary, low margin).
    • Expected to ramp lease revenues in late 2025 as installations finish.
  • Data Center Hosting:
    • Revenue $37.9 million (+9% YoY) from crypto/Bitcoin customers; facilities at full capacity (286 MW combined).
  • Cloud Services: Strategic review still ongoing.

Context and Outlook

  • APLD’s revenue beat reflects strong execution in its HPC build-outs, though profits remain pressured by heavy construction, equity, and stock-based comp.
  • Management projects $500 million annualized NOI once Polaris Forge 1 is fully operational and $1 billion within five years as both North Dakota campuses scale.
  • CEO Wes Cummins called the third CoreWeave lease a validation of APLD’s AI-infrastructure model, positioning it as a “modern-day picks and shovels provider” for the AI boom.

Peer and Market Takeaway

  • The quarter confirms APLD’s shift from crypto-centric hosting to AI data center leasing — similar to HIVE and Core Scientific pivoting toward HPC clients.
  • Despite a larger revenue base, margins compressed due to front-loaded fit-out costs and non-cash charges.
  • Investors will focus on execution timelines for Polaris Forge 2 and signing the next hyperscaler tenant.

Bottom Line:
Applied Digital delivered a top-line beat and rapid AI infrastructure expansion but remains unprofitable amid heavy build-out costs. Execution on long-term leases and funding discipline will determine whether its AI data-center pivot translates into sustainable returns.

Stock closed at 33.99  up +4.70 (16.05%) on Friday.

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