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].

Core Insights - Applied Digital Corporation reported financial results for the fiscal third quarter ended February 28, 2025, highlighting significant operational updates and financial metrics [1][2][4]. Financial Highlights - Total revenues reached $52.9 million, representing a 22% increase from the prior year [9][17]. - Net loss attributable to common stockholders was $36.1 million, up 43% from the previous year [9][21]. - Adjusted net loss attributable to common stockholders was $17.8 million, with an adjusted net loss per diluted share of $0.08 [9][22]. - Adjusted EBITDA for the quarter was $10.0 million, compared to an adjusted EBITDA loss of $1.3 million in the same quarter last year [9][22]. Operational Updates - The company achieved key milestones, including a $5 billion investment agreement with Macquarie Asset Management to support the development of next-generation data centers [5]. - A financing arrangement of $375 million was closed with Sumitomo Mitsui Banking Corporation, emphasizing the trust in the company's data center value [6]. - The Ellendale campus is viewed as a strategic asset, with ongoing discussions to lease capacity to multiple US-based hyperscalers [7][13]. Business Segments - The Cloud Services Business generated $17.8 million in revenue, a 220% increase year-over-year, although it saw a sequential decline of $9.9 million due to a shift in service model [14]. - The Data Center Hosting Business reported $35.2 million in revenue, a 7% decrease compared to the previous year [16]. Cost and Expenses - Cost of revenues increased to $49.1 million, up 4% from the prior year, driven by business growth [18]. - Selling, general, and administrative expenses decreased by 24% to $22.7 million, attributed to revenue-generating GPU cluster deployments [19]. Balance Sheet - As of February 28, 2025, the company had $261.2 million in cash and equivalents, with total debt amounting to $689.1 million [23].

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 ...

Core Viewpoint - Applied Digital Corporation will host a conference call on April 14, 2025, to discuss its operations and financial results for the fiscal third quarter ended February 28, 2025 [1][2]. Group 1: Conference Call Details - The conference call is scheduled for April 14, 2025, at 5:00 p.m. Eastern Time [2]. - Participants can join the call by dialing 1-800-549-8228 with Conference ID 19309 [2]. - A replay of the call will be available from April 14, 2025, at 8:00 p.m. Eastern Time until April 21, 2025, at 11:59 p.m. Eastern Time [3]. Group 2: Company Overview - Applied Digital develops, builds, and operates next-generation data centers and cloud infrastructure [4]. - The company focuses on high-performance computing (HPC) applications, providing secure, scalable, and sustainable digital hosting solutions [4]. - Applied Digital aims to support AI Factories and high-performance computing workloads, leveraging its expertise and available power [4].

Nvidia's position in Arm Holdings (ARM -4.16%) amounted to nearly $136 million at the end of Q4, or roughly 45% of Nvidia's stock portfolio. The position used to be even bigger, considering Nvidia sold over 850,000 shares in the quarter. Arm is a British semiconductor company that owns the intellectual property rights to the technology that powers many modern-day chips found in a range of technology devices made by some of the largest companies in the world. In 2020, Nvidia actually tried to buy Arm for $40 ...

Core Viewpoint - Applied Digital Corporation (APLD) has experienced a significant decline in stock price, dropping 23.5% over the past three months, contrasting with a 4% growth in the broader Finance sector. Despite this short-term struggle, the long-term growth potential for APLD remains strong, suggesting that holding the stock may be beneficial for investors [1][4][18]. Group 1: Reasons for Decline - The recent decline in APLD's stock price is attributed to broader market weaknesses rather than company-specific issues, particularly following the release of a competitive AI model by Chinese startup DeepSeek that requires less powerful hardware [4][5]. - A widespread sell-off in tech stocks in February, driven by fears of escalating trade tensions and slowing economic growth, has also impacted APLD, leading to valuation corrections for companies benefiting from the AI boom [6]. Group 2: Valuation and Financial Performance - APLD is currently trading at a premium, indicated by a Value Score of F, and maintains a high forward 12-month price-to-earnings (P/S) ratio compared to the industry, despite the recent stock price drop [7]. - The data center segment, which provides services primarily for crypto mining, accounted for 83% of APLD's total revenues in fiscal 2024. The company is benefiting from a surge in Bitcoin prices, which increased over 23% in the past year [9][10]. - The Zacks Consensus Estimate for APLD's fiscal 2025 revenues is projected at $526.57 million, reflecting a year-over-year growth of 111.2%, with earnings estimated at 64 cents per share, indicating a growth of 181% [12]. Group 3: Strategic Developments - APLD is nearing completion of a lease agreement for a 100 MW facility at the Ellendale HPC campus, which is designed for high-performance computing applications, including AI. The company is also expanding its capacity to 400 MW with additional buildings [11]. - APLD has established partnerships with major companies such as Super Micro Computer, Hewlett Packard Enterprise, and NVIDIA, enhancing its capabilities in high-performance server and storage solutions for AI applications [15][16][17].

Core Insights - The first quarter of 2025 has presented significant challenges for technology investors, with the S&P 500 facing struggles due to trade tensions and economic policy shifts, leading to dramatic market valuation compressions for innovative companies [1] - Current market conditions have created a rare buying opportunity across various emerging technology subsectors, with transformative companies trading at steep discounts to their potential future values [2] - For investors looking beyond current volatility, three diverse technology disruptors present compelling opportunities for portfolio positioning in the upcoming technological revolution [3] Company Insights Applied Digital - Applied Digital is at the forefront of a critical shift in artificial intelligence (AI) with a focus on power-efficient data infrastructure, despite an 8% year-to-date decline [4] - Morgan Stanley projects a potential 36GW power shortfall for U.S. data centers by 2028, positioning Applied Digital to capitalize on this emerging challenge [4] - The company has secured strategic investments from Nvidia and a $5 billion financing facility from Macquarie Asset Management, although it carries a substantial debt load of $479.6 million and ongoing net losses despite robust revenue growth [5] - The investment narrative for Applied Digital centers on infrastructure emerging as a strategic asset, potentially rivaling AI software in driving the next phase of computing innovation [6] Joby Aviation - Joby Aviation is emerging as a leader in electric urban air mobility, with its stock down 23% year to date, reflecting broader market struggles and industry volatility [8] - The company's air taxis can carry a pilot and four passengers at speeds up to 200 mph, significantly reducing travel times, and it is expanding its market presence through alliances with Virgin Atlantic and Delta Air Lines [9] - Joby plans to carry its first commercial passengers by late 2025 or early 2026, backed by over $933 million in cash reserves and a $500 million commitment from Toyota [10] - Success for Joby hinges on navigating complex FAA certification processes and establishing new regulatory frameworks for urban air mobility operations, which could impact commercialization timelines and costs [11] Poet Technologies - Poet Technologies has seen a 35% decline in shares year to date, presenting a compelling entry point for investors focused on optical infrastructure for AI networks [12] - The company's Optical Interposer platform integrates electronic and photonic components onto single chips, producing high-speed optical engines essential for next-generation data centers [12] - With AI development accelerating, TrendForce projects optical transceiver demand to grow at a 56.5% annual rate, positioning Poet to capitalize on this expansion through partnerships with industry leaders [13] - The company has strengthened its financial position with over $110 million in recent funding and is expanding manufacturing capabilities in Malaysia to meet anticipated demand [13] - Poet's future success depends on flawless manufacturing execution and widespread adoption among hyperscale data centers expanding their AI infrastructure [14]

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 ...