Applied Digital Corporation (APLD) Q3 2025 Earnings Conference Call April 14, 2025 05:00 PM ET Company Participants Operator - Conference Call OperatorMatt Glover - Representative, Gateway GroupWes Cummings - Chairman and CEO, Applied DigitalSaidal Mohamed - CFO, Applied Digital Conference Call Participants Nick Giles - Analyst, B. Riley SecuritiesThomas Shunsky - Analyst (on behalf of Brett Knobloch, Cantor Fitzgerald)Rob Brown - Analyst, Lake Street Capital MarketsDarren Astahi - Analyst, Broad Capital Pa ...

Business Operations - As of February 28, 2025, the Data Center Hosting Business operates at full capacity with a 106 MW facility in Jamestown and a 180 MW facility in Ellendale, North Dakota[170]. - The HPC Hosting Business is constructing a 369,000-square-foot facility in Ellendale, expected to provide ultra-low cost and efficient liquid-cooled infrastructure for HPC applications[173]. - The company is negotiating leases for up to 400 MW capacity with multiple US-based hyperscalers, including the Ellendale HPC Facility under construction[175]. Financial Performance - The Cloud Services Business generated $17.8 million and $71.3 million in revenue during the three and nine months ended February 28, 2025, respectively, accounting for 34% of total revenue for the fiscal quarter[171]. - Total revenue for the three months ended February 28, 2025, was $52.9 million, a 31% increase from $40.3 million for the same period in 2024[221]. - Revenue increased by $64.6 million, or 58%, from $111.0 million for the nine months ended February 29, 2024 to $175.6 million for the nine months ended February 28, 2025[233]. Expenses and Losses - Cost of revenues increased by $2.1 million, or 4%, from $47.1 million to $49.1 million for the same comparative periods[223]. - Selling, general and administrative expenses decreased by $7.3 million, or 24%, from $30.0 million to $22.7 million for the three months ended February 28, 2025[224]. - Net loss attributable to common stockholders for the three months ended February 28, 2025, was $36.1 million, compared to a net loss of $62.8 million for the same period in 2024[219]. Adjusted Metrics - Adjusted EBITDA for the nine months ended February 28, 2025, was $51.4 million, representing 29% of revenues, compared to $19.7 million, or 16% of revenues, for the same period in 2024[220]. - Adjusted operating loss for the three months ended February 28, 2025, was $8.764 million, compared to $23.448 million for the same period in 2024, reflecting a significant improvement[263]. - Adjusted net loss attributable to common stockholders for the nine months ended February 28, 2025, was $51.976 million, compared to $33.301 million for the same period in 2024, indicating an increase in losses[263]. Debt and Financing - The company entered into a promissory note for an initial borrowing of $15 million, with subsequent borrowings of up to $110 million, and an accordion feature allowing for an additional $75 million[178]. - The company completed a private offering of 2.75% Senior Unsecured Convertible Notes due 2030, raising $450 million, with net proceeds of approximately $435.2 million after expenses[186][187]. - As of February 28, 2025, total debt obligations are projected at $871.9 million, with significant payments due in FY 2027 and beyond[286]. Regulatory and Compliance - The company is committed to maintaining compliance with evolving regulatory frameworks affecting HPC, cloud, and blockchain hosting services[167]. - The regulatory landscape for digital assets remains complex, with ongoing discussions in Congress regarding comprehensive legislation to regulate digital assets[166]. Leadership Changes - The company welcomed a new Chief Operating Officer and experienced a transition in its executive team, with significant changes in leadership roles[176][177]. Cash Flow and Liquidity - As of February 28, 2025, the company had unrestricted cash and cash equivalents of $68.7 million and a working capital deficit of $119.3 million[265]. - The company expects to have sufficient liquidity for at least the next 12 months, but may face challenges in raising additional funds[288]. Shareholder Activities - The company increased the number of authorized shares of common stock to 400 million and preferred stock to 10 million[193]. - The company has the option to sell up to $250 million of common stock to YA Fund under the Standby Equity Purchase Agreement[197]. - A private placement of 53,191 shares of Series F Convertible Preferred Stock raised $50 million, with all shares converted into approximately 7.6 million common stock shares by February 28, 2025[277].

Financial Performance - Revenues for the fiscal third quarter 2025 were $52.9 million, representing a 22% increase from the prior year comparable period[7]. - Net loss attributable to common stockholders was $36.1 million, up 43% from the prior year comparable period, with a loss per share of $0.16, an increase of 69%[7][21]. - Adjusted EBITDA for the fiscal third quarter 2025 was $10.0 million, compared to an Adjusted EBITDA loss of $1.3 million for the fiscal third quarter 2024[22]. - Total revenue for the three months ended February 28, 2025, was $52,921,000, an increase of 22.5% compared to $40,284,000 for the same period in 2024[38]. - Operating loss for the nine months ended February 28, 2025, was $28,074,000, a significant improvement from a loss of $70,734,000 for the same period in 2024[38]. - Net loss attributable to common stockholders for the three months ended February 28, 2025, was $36,095,000, compared to a net loss of $62,838,000 for the same period in 2024, reflecting a 42.8% reduction in losses[38]. - The adjusted net loss attributable to common stockholders for the nine months ended February 28, 2025, was $51,976,000, compared to $33,301,000 for the same period in 2024, indicating a 56% increase in losses[43]. - The company reported a net loss attributable to common stockholders of $179,741,000 for the nine months ended February 28, 2025, compared to $84,824,000 for the same period in 2024, indicating a 112% increase in losses[43]. Revenue Segments - The Company generated $17.8 million in revenues from the Cloud Services Business segment, a 220% increase compared to $5.6 million during the same period last year[13]. - The Data Center Hosting Business segment generated $35.2 million in revenue, a decrease of 7% compared to $37.8 million during the same period last year[15]. Cash and Debt Management - As of February 28, 2025, the Company had $261.2 million in cash and $689.1 million in debt[23]. - Cash and cash equivalents increased to $68,743,000 as of February 28, 2025, from $3,339,000 as of May 31, 2024[36]. - Total liabilities increased to $1,209,480,000 as of February 28, 2025, from $638,037,000 as of May 31, 2024, indicating a 89.5% rise[36]. - The company incurred interest paid of $54,855,000 for the nine months ended February 28, 2025, significantly higher than $9,121,000 for the same period in 2024[41]. Asset Management - Total assets grew to $1,707,347,000 as of February 28, 2025, up from $762,867,000 as of May 31, 2024, representing a 123.8% increase[36]. - The company reported a depreciation and amortization expense of $79,540,000 for the nine months ended February 28, 2025, compared to $47,664,000 for the same period in 2024[40]. Operational Developments - The first 100 MW HPC facility in Ellendale, North Dakota is on schedule to be ready for service in the second half of this calendar year[11]. - Applied Digital is negotiating with multiple US-based hyperscalers to lease up to 400 MW of capacity, including the Ellendale HPC data center under construction[12]. - The Company plans to sell its Cloud Services Business to better focus on its data center operations[10]. Stock and Equity - The company raised $191,590,000 from the issuance of common stock during the nine months ended February 28, 2025[40]. - The company reported stock-based compensation expenses of $9,405,000 for the nine months ended February 28, 2025, down from $13,511,000 in the same period in 2024, a reduction of 30%[43]. - The company recognized a loss on conversion of debt to common stock amounting to $104,945,000 for the nine months ended February 28, 2025, with no such loss reported in the previous year[41]. Adjusted Metrics - Adjusted EBITDA for the nine months ended February 28, 2025, was $51,369,000, compared to $19,665,000 for the same period in 2024, reflecting a 161% increase[45]. - The adjusted operating margin for the nine months ended February 28, 2025, was -16%, an improvement from -20% for the same period in 2024[43]. - The company incurred $12,228,000 in diligence, acquisition, disposition, and integration expenses for the nine months ended February 28, 2025, compared to $3,703,000 for the same period in 2024, a 229% increase[43].

DALLAS, April 14, 2025 (GLOBE NEWSWIRE) -- Applied Digital Corporation (Nasdaq: APLD) ("Applied Digital" or the "Company"), a designer, builder, and operator of next-generation digital infrastructure designed for high-performance computing (“HPC”) applications, cloud services (“Cloud Services”), and data center hosting (“Data Center Hosting”), reported financial results for the fiscal third quarter ended February 28, 2025. The Company also provided an operational update. Fiscal Third Quarter 2025 Financial ...

Core Viewpoint - Applied Digital Corporation (APLD) is expected to report strong revenue growth in its third-quarter fiscal 2025 results, driven by its Cloud Services and data center hosting segments, despite facing challenges related to valuation and competition [2][4][19]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for APLD's third-quarter fiscal 2025 revenues is $63.57 million, reflecting a year-over-year growth of 46.63% [2]. - The consensus estimate for loss is 11 cents per share, unchanged over the past 30 days, compared to a loss of 52 cents per share in the same quarter last year [2]. - APLD has missed the Zacks Consensus Estimate in three of the last four quarters, with a negative average surprise of 185.39% [3]. Group 2: Business Segments and Growth Drivers - APLD's Cloud Services business is experiencing strong demand, particularly due to the deployment of additional GPU clusters, which is expected to significantly contribute to revenue growth [5]. - The Cloud Services segment generated revenues of $27.7 million in the second quarter of fiscal 2025, marking a 523% year-over-year increase [5]. - The data center hosting segment for cryptocurrency clients remains robust, with revenues of $36.2 million in the second quarter of fiscal 2025, supported by the recent rise in Bitcoin prices [6]. Group 3: Strategic Partnerships and Financial Support - APLD's partnership with Macquarie Asset Management, involving a $5 billion perpetual preferred equity financing facility, is anticipated to provide financial support for future expansion [7][8]. - Investments from CIM Group, NVIDIA, and Macquarie are expected to lower the cost of capital, enhancing APLD's financial flexibility and growth prospects [8]. Group 4: Stock Performance and Valuation - APLD shares have declined by 33.1% year-to-date, underperforming the broader Zacks Finance sector's decline of 16.3% and the Zacks Financial - Miscellaneous Services industry's decrease of 19.4% [9]. - The company's forward 12-month Price/Sales (P/S) ratio is 3.29, which is higher than the industry average of 2.93, indicating a stretched valuation [12]. Group 5: Competitive Landscape and Future Outlook - APLD's expanding data center capacity is viewed positively for its long-term growth prospects, although the company faces stiff competition from major data center providers like Equinix [19]. - The company has established partnerships with key players such as Super Micro Computer, Hewlett Packard Enterprise, and NVIDIA to enhance its operational capabilities [15][16][17].

As artificial intelligence and blockchain technologies continue to reshape the digital economy, investors are eyeing the infrastructure behind these trends. Applied Digital (APLD) and Core Scientific (CORZ) are two emerging players straddling both worlds — offering data center solutions that power AI workloads while maintaining strong ties to crypto mining, particularly Bitcoin.With demand surging for high-performance computing and decentralized infrastructure, both companies are angling for growth in a fas ...

DALLAS, March 31, 2025 (GLOBE NEWSWIRE) -- Applied Digital Corporation (Nasdaq: APLD) ("Applied Digital" or the "Company"), a designer, builder, and operator of next-generation digital infrastructure designed for High-Performance Computing (HPC) applications, will host a conference call on Monday, April 14, 2025, at 5:00 p.m. Eastern Time to discuss its operations and financial results for the fiscal third quarter ended February 28, 2025. A press release detailing these results will be issued after the mark ...

Applied Digital Corporation (APLD) shares have plunged 23.5% over the past three months, underperforming the broader Finance sector’s growth of 4%.This steep decline raises the question: Should investors cut their losses and exit, or is it worth holding on to? While the near-term headwinds are real, the long-term growth story for Applied Digital remains intact, making a strong case for holding the stock.APLD Three-Month Price PerformanceImage Source: Zacks Investment ResearchReason Behind Applied Digital’s ...

The first quarter of 2025 has brought significant challenges for technology investors. With the S&P 500 (^GSPC 1.08%) struggling amid renewed trade tensions and economic policy shifts under the Trump administration, many innovative companies have seen their market valuations compress dramatically -- regardless of their operational progress.These market conditions have created a rare buying opportunity across multiple emerging technology subsectors. From advanced computing to nuclear innovation, and from dru ...

Applied Digital (APLD 11.13%) stock recorded a day of strong gains in trading Wednesday. The data center specialist's share price closed out the daily session up 11.1%. Meanwhile, the S&P 500 index ended the day up 1.1%, and the Nasdaq Composite index ended the session up 1.4%.Applied Digital's valuation rose today amid news about Microsoft and Meta Platform's big pushes in agentic artificial intelligence (AI) solutions. The company's share price also got a boost from a significant adjustment to tariff poli ...