10-K · July 29, 2026
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…
Earnings analysis · 10-Q
APLD earnings analysis
Filed October 7, 2026 · Our reading of the company's report
The latest report
Applied Digital delivered substantial year-over-year growth, with revenue rising to $341.875 million and both HPC and Data Center Hosting segment profit improving. However, GAAP operating loss was $62.379 million,…
Read full summary
Applied Digital delivered substantial year-over-year growth, with revenue rising to $341.875 million and both HPC and Data Center Hosting segment profit improving. However, GAAP operating loss was $62.379 million, common-stockholder loss was $237.082 million, and interest expense increased to $77.383 million. Positive operating cash flow and $2.9 billion of unrestricted cash support the expansion, but $2.083 billion of investing cash use, $6.722 billion of debt obligations and continued construction requirements keep the risk-reward profile balanced.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.82
What stood out
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Revenue more than quadrupled year over year
Total revenue increased to $341.875 million from $80.934 million in the prior-year quarter, a 322.5% increase. Adjusted revenue, excluding ChronoScale, rose to $300.393 million from $64.216 million, while adjusted operating income improved to $37.816 million from a $3.616 million loss.
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HPC Hosting became the growth engine
HPC Hosting revenue reached $262.6 million, driven by $157.2 million of tenant fit-out services and $79.1 million of data center rental revenue. HPC segment profit improved to $33.431 million from a $2.022 million loss.
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Data Center Hosting profitability improved
Data Center Hosting segment profit increased 121% to $13.327 million from $6.035 million, primarily due to a $6.4 million reduction in energy costs from more favorable power pricing.
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Operating cash flow turned positive
Operating cash flow turned positive at $63.921 million versus $81.531 million of cash used in the prior-year quarter. The improvement was supported by non-cash stock compensation, derivative and investment losses, and non-cash interest expense.
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Substantial liquidity supports expansion
The company reported $2.9 billion of unrestricted cash and cash equivalents plus $728.0 million of restricted cash as of August 31, 2026. Management stated that existing liquidity and financing access should cover requirements for at least the next 12 months.
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Long-term hyperscaler contract secured
The company signed an approximately 15-year Delta Forge 2 lease for a 210 MW building, representing approximately $5.2 billion of contracted revenue over the base term, with expected delivery in the first half of calendar 2028.
What to watch
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Large GAAP losses persist
GAAP profitability deteriorated despite adjusted improvement: operating loss was $62.379 million, net loss was $184.055 million, and net loss attributable to common stockholders was $237.082 million, or $0.82 per diluted share versus $0.07 in the prior-year quarter.
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Leverage and interest burden increased
Interest expense increased to $77.383 million from $8.013 million, an 866% increase. Contractual debt obligations totaled $6.722 billion and estimated interest payments totaled $2.156 billion as of August 31, 2026.
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Construction spending remains extreme
Investing cash use rose to $2.083 billion from $249.914 million, primarily reflecting approximately $1.8 billion of increased property and equipment investment across the Polaris Forge 1, 2 and 3 and Delta Forge 1 and 2 campuses.
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Fair-value losses add earnings volatility
The company recorded a $49.511 million loss on derivative fair values and an $11.352 million loss on its Babcock & Wilcox investment, with no comparable losses in the prior-year quarter, adding volatility to GAAP earnings.
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Execution and customer concentration risk
Management states that significant investments in property and equipment will continue throughout fiscal 2027. The company also identifies dependence on principal customers and the ability to execute key leases as material business risks.
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Power project and related-party exposure
The company entered into a 15-year power purchase agreement tied to an approximately 1,200 MW natural-gas facility for Polaris Forge 3, but Base Electron may terminate if financial close has not occurred by March 31, 2027. Applied Digital owned approximately 10% of Base Electron as of October 4, 2026.
Management's outlook
No quantitative revenue or EPS guidance was provided. Management expects Polaris Forge 2 to reach initial ready-for-service in the second half of calendar 2026 and full capacity in early calendar 2027; Polaris Forge 1 Building 3 is expected to reach full ready-for-service in calendar 2027. Management expects liquidity to support operations, debt obligations, working capital and planned capital expenditures for at least the next 12 months.
Earlier filings 2
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 itself. Analysis can contain errors; check the source document for full context.