APLD earnings analysis
What we found in APLD's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Applied Digital’s FY2026 results demonstrate the transition from crypto-focused hosting to an AI/HPC data-center developer and operator: revenue rose to $611.3 million as the first Polaris Forge HPC facility commenced operations, and HPC segment profit turned positive. The contracted lease portfolio and planned 1.4 GW customer capacity provide substantial long-term growth visibility, but current earnings and cash flow remain heavily burdened by construction spending, stock-based compensation and financing needs. The investment case is therefore execution-dependent, with concentrated customers, multi-billion-dollar debt obligations and project-delivery timing the principal constraints.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- HPC ramp drives a step-change in revenue
- FY2026 revenue increased 167% to $611.3 million from $228.6 million in FY2025, led by the new HPC Hosting business, which generated $385.3 million after Polaris Forge 1’s first 100 MW facility became operational. GAAP operating loss widened to $236.5 million from $72.2 million, but adjusted operating income improved to $57.8 million from $2.4 million.
- AI data-center platform expands toward 1.4 GW
- The company’s strategy is to design, construct and operate high-density, AI-focused/HPC data centers. It had entered leases for approximately 1.4 GW of combined customer capacity as of the filing date, including 400 MW contracted at Polaris Forge 1, 200 MW at Polaris Forge 2, 300 MW at Delta Forge 1, and 300 MW at Polaris Forge 3.
- HPC segment reaches positive contribution
- HPC Hosting moved from a $12.1 million segment loss in FY2025 to $39.1 million segment profit in FY2026. Its first-year revenue included $270.6 million of tenant fit-out services and $114.7 million of data-center rental and other revenue; HPC base-rent net operating income was $90.4 million, a 91% NOI margin.
- Crypto hosting revenue rises despite lower segment profit
- The legacy Data Center Hosting business remained a cash-generating bridge: FY2026 revenue rose to $154.4 million from $144.2 million, although segment profit declined to $48.3 million from $63.9 million because FY2025 included a $25.0 million Garden City escrow-release gain. Jamestown’s 106 MW and Ellendale’s 180 MW crypto facilities operated at full capacity at year-end.
- Long-term lease base supports backlog visibility
- Contracted minimum lease payments totaled $35.8 billion as of May 31, 2026, including $451.1 million in FY2027, $1.45 billion in FY2028 and $27.1 billion thereafter. Subsequent to year-end, a 15-year, 210 MW Delta Forge 2 lease added approximately $5.2 billion of base-term contracted revenue.
- Capital allocation prioritizes campus construction
- Capital deployment accelerated to build the contracted HPC footprint: property-and-equipment purchases were $2.87 billion in FY2026, versus $681.6 million in FY2025. Funding included $2.35 billion of 9.25% secured notes, $2.15 billion of 6.75% secured notes and $1.8 billion of Macquarie affiliate capital into TopCo 2; the company also repurchased 7.17 million shares at an average $7.36 and does not expect to pay common dividends.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Revenue is highly concentrated in two customers
- Customer concentration increased materially with the HPC ramp: one HPC customer represented 59% of FY2026 continuing-operations revenue, while one Data Center Hosting customer represented 25%. The HPC customer is CoreWeave-related, and the crypto-hosting segment has only one customer with approximately 1.5 years remaining on its contract.
- New ChronoScale consolidation and reporting risk
- The newly formed ChronoScale subsidiary remains consolidated because Applied Digital held about 97% at closing (approximately 96% as of the filing date). The company warns that if ChronoScale’s final audited results differ materially from preliminary information consolidated by APLD, it could require a revision or restatement; ChronoScale contributed a $37.0 million operating loss and $71.6 million revenue in FY2026.
- Debt service and construction funding remain substantial
- Construction funding requirements and leverage rose sharply: long-term debt was $4.96 billion at May 31, 2026, scheduled debt principal totals $5.31 billion, and estimated future interest payments total $1.78 billion. FY2026 free cash flow was negative about $2.78 billion, calculated from $89.7 million operating cash flow less $2.87 billion of property-and-equipment purchases; the filing says substantial additional capital will be needed for expansion.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-0.91
- Gross margin
- 25.8%
- Operating margin
- -38.7%
- Segment
- Data Center Hosting Business revenue: $154.4 million (FY2025: $144.2 million; FY2024: $136.6 million)
- Segment
- HPC Hosting Business revenue: $385.3 million (FY2025: $0; FY2024: $0)
- Segment
- ChronoScale / other revenue: $71.6 million (FY2025: $84.4 million; FY2024: $29.0 million)
What they said about what is next.
The 10-K provides no quantitative revenue or EPS outlook. It states Polaris Forge 2’s initial 200 MW is expected to begin coming online in calendar 2026, while Delta Forge 1 and Polaris Forge 3 are anticipated to begin initial operations in calendar 2027; Delta Forge 2’s 210 MW delivery is expected in the first half of calendar 2028.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 8, 2026
- Applied Digital reported quarter revenue of $126,637 (in thousands) versus $52,921 in the prior-year quarter, with gross margin expanding to 42.5% from 7.1%. Reported operating loss was $85,667 (including a $59,650…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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