Applied Digital Corporation ((APLD)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Applied Digital Corporation was a mixed bag of optimism and caution. The company showcased its significant achievements in securing major lease agreements and boosting revenue, which are positive indicators of growth. However, these were tempered by increased expenses and net losses, presenting challenges that the company must navigate. Despite the complexities in lease negotiations, Applied Digital’s strategic efforts in expansion and financing position them favorably for future growth.
Transformative Lease Agreements
Applied Digital has made a significant stride by signing 15-year lease agreements with CoreWeave to deliver 250 megawatts of critical IT load. This move is expected to generate approximately $7 billion in contracted revenue, marking a transformative step in the company’s growth trajectory.
Increased Revenue
The company reported revenues of $38 million for the fiscal fourth quarter of 2025, marking a 41% increase year-over-year. This surge is attributed to an increase in capacity online in their Data Center Hosting Business, reflecting the company’s robust operational expansion.
Expansion Plans
CoreWeave’s decision to exercise their option for an additional 150 megawatts in a third building at Polaris Forge 1 underscores the scalability of Applied Digital’s projects. This expansion highlights the company’s commitment to growing its infrastructure to meet increasing demand.
Successful Financing
In a bid to bolster its financial position, Applied Digital raised approximately $270 million through their ATM and Series G preferred stock since the end of the quarter. This successful financing effort positions the company well for future projects and expansions.
Increased Expenses
The company experienced a significant increase in SG&A expenses, which rose by $15 million to $28.1 million. This rise was driven by stock-based compensation and personnel expenses, reflecting the costs associated with the company’s growth initiatives.
Net Loss
Despite reporting an adjusted EBITDA of $1 million, Applied Digital faced a net loss attributable to common stockholders of $26.6 million, or $0.12 per share. This highlights the financial challenges the company faces even as it pursues aggressive growth strategies.
Complex Lease Negotiations
The process of onboarding and contracting with hyperscalers has proven to be longer and more complex than anticipated. This complexity has affected timelines, presenting a challenge that the company is actively working to overcome.
Forward-Looking Guidance
Looking ahead, Applied Digital anticipates significant revenue increases due to developments at its Polaris Forge 1 campus, with the first 100-megawatt facility set to be operational in Q4 2025. The company aims to generate $1 billion in annual net operating income within 3 to 5 years, leveraging its strong relationships with hyperscalers and its competitive advantages in the AI and HPC infrastructure market.
In summary, the earnings call of Applied Digital Corporation paints a picture of a company on the cusp of significant growth, albeit with challenges to address. The positive sentiment from securing major lease agreements and increasing revenue is balanced by the reality of increased expenses and net losses. However, with strategic expansion and successful financing, Applied Digital is well-positioned to capitalize on future opportunities.