Applied Digital (NASDAQ:APLD) Issues Earnings Results

Applied Digital (NASDAQ:APLD) released its quarterly earnings results on Monday. The company reported ($0.39) earnings per share for the quarter, missing the consensus estimate of ($0.09) by ($0.30), Zacks reports. The business had revenue of $240.35 million during the quarter, compared to analysts’ expectations of $96.85 million. Applied Digital had a negative net margin of 37.78% and a negative return on equity of 17.53%. The business’s revenue was up 406.3% on a year-over-year basis. During the same period in the previous year, the business earned ($0.24) EPS.

Here are the key takeaways from Applied Digital’s conference call:

• Contracted lease value more than quintupled to approximately $36 billion, representing 1.41 gigawatts of contracted critical IT load across five campuses. More than 80% of the contracted capacity is leased to investment-grade customers, according to management.
• Management is negotiating roughly 250 megawatts of expansion leases with existing customers at materially higher rates and potentially longer terms, which could add more than $6 billion of contracted revenue based on current pricing.
• The company reported $258.7 million of fourth-quarter revenue, up 407% from the comparable prior quarter, while adjusted EBITDA increased to $42.4 million. Management expects a significant financial ramp as additional HPC capacity comes online and now anticipates reaching its $1 billion NOI run-rate goal next year, three years ahead of its prior target.
• Applied Digital secured financing for the full 400 megawatts at Polaris Forge 1 and 200 megawatts at Polaris Forge 2, including $1.59 billion of notes at 7%, substantially below its earlier financing cost. Management said Macquarie’s equity funding and improving project-level debt access should support a repeatable, lower-cost financing model.
• Despite strong operating growth, the company recorded a $111.6 million net loss, driven partly by $116.8 million of stock-based compensation, including one-time ChronoScale-related awards and performance stock units. Capital spending is expected to reach approximately $600 million in the upcoming quarter, while power availability and supply-chain capacity remain the primary constraints on expansion.

Applied Digital Stock Performance

Shares of NASDAQ APLD opened at $26.62 on Wednesday. The stock’s 50-day moving average is $38.34 and its 200 day moving average is $34.52. The stock has a market cap of $7.61 billion, a price-to-earnings ratio of -29.91 and a beta of 5.67. Applied Digital has a 1-year low of $9.79 and a 1-year high of $50.72. The company has a current ratio of 2.38, a quick ratio of 2.38 and a debt-to-equity ratio of 1.65.

Analyst Ratings Changes

A number of equities research analysts recently weighed in on the stock. Zacks Research raised shares of Applied Digital from a “strong sell” rating to a “hold” rating in a research note on Monday. Compass Point reissued a “buy” rating and issued a $70.00 price target on shares of Applied Digital in a research note on Friday, May 22nd. Weiss Ratings reissued a “sell (d-)” rating on shares of Applied Digital in a report on Tuesday, July 21st. Craig Hallum raised their price objective on shares of Applied Digital from $75.00 to $79.00 and gave the company a “buy” rating in a research report on Tuesday, June 9th. Finally, Morgan Stanley began coverage on shares of Applied Digital in a report on Thursday, July 23rd. They set a “buy” rating and a $36.50 price objective for the company. Three equities research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, Applied Digital currently has an average rating of “Buy” and an average target price of $67.15.

Insider Transactions at Applied Digital

In other Applied Digital news, Director Richard N. Nottenburg sold 12,500 shares of the stock in a transaction that occurred on Thursday, April 30th. The shares were sold at an average price of $34.59, for a total transaction of $432,375.00. Following the transaction, the director directly owned 208,378 shares in the company, valued at $7,207,795.02. This trade represents a 5.66% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. 9.50% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Applied Digital

Institutional investors have recently made changes to their positions in the business. McMillan Office Inc. bought a new position in shares of Applied Digital during the 4th quarter valued at $25,000. Ameriflex Group Inc. purchased a new stake in Applied Digital during the fourth quarter valued at about $25,000. Mcguire Capital Advisors Inc. bought a new position in shares of Applied Digital during the fourth quarter valued at about $27,000. Larson Financial Group LLC grew its stake in shares of Applied Digital by 56,450.0% during the third quarter. Larson Financial Group LLC now owns 1,131 shares of the company’s stock valued at $26,000 after buying an additional 1,129 shares during the last quarter. Finally, Strive Financial Group LLC purchased a new position in shares of Applied Digital in the fourth quarter worth about $31,000. Hedge funds and other institutional investors own 65.67% of the company’s stock.

Applied Digital News Summary

Here are the key news stories impacting Applied Digital this week:

• Positive Sentiment: Exceptional revenue growth and adjusted earnings beat: Fiscal fourth-quarter revenue reached approximately $258.7 million, up about 407% year over year and well above Wall Street expectations. Non-GAAP EPS was $0.04, compared with analysts’ anticipated loss, supported by HPC hosting and tenant fit-out services. Applied Digital revenue quadruples on AI data center demand
• Positive Sentiment: Large contracted backlog improves visibility: Management said contracted lease value reached $36 billion, up 125% year over year, with investment-grade hyperscalers among its customers. Contracted AI capacity totaled roughly 1.4 gigawatts across five campuses, supporting expectations for substantial future cash flow. Applied Digital expects $1B NOI run rate
• Positive Sentiment: Ambitious expansion targets and analyst support: Applied Digital is targeting a $1 billion annual net operating income run rate within one year and has secured financing for future campuses. Needham reaffirmed its Buy rating with an $83 price target, reflecting confidence in the company’s AI data center pipeline. Needham reiterates Buy rating
• Neutral Sentiment: Power availability is becoming the main constraint: Management is pursuing new natural-gas generation to secure electricity for additional AI campuses. Success could create a competitive advantage, but delays or shortages could limit growth.
• Negative Sentiment: GAAP profitability and balance-sheet concerns remain: The company reported a quarterly GAAP loss of $0.39 per share, missing the consensus loss estimate, while maintaining negative net margins and return on equity. Elevated debt and ongoing capital requirements for data center construction could pressure cash flow and increase financing risk. Applied Digital earnings report

About Applied Digital

Applied Digital (NASDAQ: APLD) is a technology company specializing in the development and operation of large-scale digital infrastructure and sustainable Bitcoin mining solutions. Through its integrated platform, the company designs, builds and manages turnkey data center facilities while also providing comprehensive hosting services for cloud, colocation and enterprise computing needs. Applied Digital’s modular approach to facility design enables rapid deployment of capacity and streamlined integration of power, cooling and network connectivity.

In addition to its data center business, Applied Digital operates a network of Bitcoin mining sites that leverage vertically integrated capabilities, including hardware procurement, mining farm engineering, energy management and real-time performance monitoring.