OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-31968 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 31, 2025 APPLIED DIGITAL CORPORATION | Nevada | | | 95-4863690 | | | --- | --- | --- | --- | --- | | (State or other jurisdiction of incorpor ...

Core Insights - Applied Digital Corporation reported financial results for the fiscal fourth quarter and fiscal year ended May 31, 2025, highlighting significant developments in its operations and financial performance [1][2]. Financial Performance - Fiscal Fourth Quarter 2025: - Revenues reached $38.0 million, a 41% increase from the prior year [6]. - Net loss attributable to common stockholders was $26.6 million, down 25% from the previous year [6]. - Adjusted EBITDA was $1.0 million, compared to a loss of $0.2 million in the same quarter last year [22]. - Fiscal Year 2025: - Total revenues increased by 6% to $144.2 million, driven by the full capacity operation of the 180 MW Data Center Hosting Facility [23]. - Net loss attributable to common stockholders was $161.0 million, an increase of 118% from the previous year [30]. - Adjusted net loss attributable to common stockholders was $12.5 million, slightly down from $12.7 million in the prior year [31]. Operational Updates - The Company has signed two 15-year lease agreements with CoreWeave for 250 MW of critical IT load, expected to generate approximately $7 billion in contracted revenue [7][8]. - An additional 150 MW lease option has been exercised by CoreWeave, potentially increasing total contracted revenue to approximately $11 billion [7][8]. - The first 100 MW facility at the Polaris Forge 1 campus is scheduled to be operational in Q4 2025, with plans for further expansions [9][10]. Strategic Initiatives - The Company is focusing on enhancing its data center design and operational efficiency, reducing projected build times from 24 months to 12-14 months [9]. - The innovative design features a closed-loop, direct-to-chip cooling system, aiming for a Power Usage Effectiveness (PUE) of 1.18 and near-zero water consumption [9]. - The strategic location in the Dakotas is expected to provide significant cost savings for customers, estimated at $2.7 billion over 30 years compared to other regions [9]. Market Position - The Company is actively marketing its multi-gigawatt pipeline to a diverse group of customers, leveraging strong relationships with major hyperscalers [11]. - The HPC Data Center Hosting business is positioned to deliver massive computing power for AI applications, with facilities designed for ultra-low-cost and high efficiency [10][12].

Fiscal Fourth Quarter 2025 Financial Highlights Fiscal Year 2025 Financial Highlights Adjusted Net Loss Attributable to Common Stockholders, Adjusted Net Loss Attributable to Common Stockholders per Diluted Share, and Adjusted EBITDA are non-GAAP measures. A reconciliation of each of these Non-GAAP Measures to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States ("GAAP") is set forth below. See "Reconciliation of GAAP to No ...

Core Insights - Applied Digital (NASDAQ: APLD) stock is experiencing volatility ahead of its earnings call, with initial investor excitement following the announcement of the CoreWeave (CRWV) deal [1] Company Overview - The company has a focus on momentum in the technology landscape, particularly in navigating significant market events such as the dot com bubble, the credit default crisis of 2008, and the recent AI boom [1]

Core Insights - Applied Digital (APLD) has transitioned from a crypto-focused business model to an AI-centric infrastructure, supported by a significant 15-year, $7 billion lease agreement with CoreWeave, reinforcing its "AI factory" concept [1][11] - The company has established purpose-built data centers, particularly the 250MW+ Ellendale site, positioning itself as a unique physical asset in the cloud-native AI sector [1] - APLD's Cloud Services revenues increased by nearly 220% year-over-year in Q3 of fiscal 2025, although there was a sequential decline due to challenges in adopting a multi-tenant GPU model [2][11] - The use of low-cost energy and free cooling at the Polaris Forge campus could result in $2.7 billion in cost savings, which is crucial for a capital expenditure-heavy model [2] Financial Performance - Legacy crypto hosting generated nearly $35 million in revenues during Q3, providing a stable revenue stream as AI offerings develop [3] - APLD's operational efficiency is improving, with adjusted EBITDA becoming positive and net losses decreasing [3] - The company has strong institutional support, holding $261 million in cash and $689 million in debt, along with a $5 billion commitment from Macquarie for buildout [3] Risks and Challenges - APLD's reliance on CoreWeave introduces concentration risk, especially after CoreWeave exited its equity stake, although warrant-based agreements indicate ongoing strategic alignment [4] - Execution is critical for APLD to capitalize on its infrastructure investments and deliver expected returns [5] Market Position and Valuation - APLD's stock has increased by 38.5% year-to-date, outperforming the industry average gain of 8.1% [10] - The company trades at a forward price-to-sales ratio of 8.48X, significantly above the industry average and its three-year median of 1.71X, indicating a premium valuation [12] - The Zacks Consensus Estimate predicts a 67.2% year-over-year increase in APLD's fiscal 2026 earnings [13]

Core Insights - Applied Digital (APLD) is expected to report its fourth-quarter fiscal 2025 results on July 30, with revenues estimated at $42.99 million, reflecting a year-over-year decline of 3.09% [1] - The consensus estimate for loss is projected at 12 cents per share, which is a slight increase from previous estimates, compared to a loss of 52 cents in the same quarter last year [1] Financial Performance - APLD has missed the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of negative 113.42% [2] - The Data Center Hosting segment is gaining momentum despite a 7% year-over-year revenue decline in the fiscal third quarter, operating at full capacity across two locations in North Dakota [6] Market Dynamics - Increased spending by hyperscalers like Microsoft and Meta Platforms is a significant driver for APLD, with Meta planning to invest between $64 billion and $72 billion and Microsoft expected to reach $80 billion in capital expenditures in 2025 [5] - APLD's HPC and data center growth plans are further supported by a 250MW lease agreement with CoreWeave [10] Strategic Initiatives - APLD is building out its Ellendale campus with 400MW of critical IT load, backed by financing agreements totaling $5.375 billion, with the first 100MW facility expected to be operational in the fourth quarter of 2025 [15] - The company plans to divest its Cloud Services business to streamline operations and potentially convert to a REIT, which could lower capital costs and enhance valuation [17] Stock Performance - APLD shares have increased by 40.7% year to date, outperforming the Zacks Finance sector's return of 11% [8] - The stock is currently trading above its 50-day and 200-day moving averages, indicating a bullish trend [18]

Core Viewpoint - Applied Digital has entered into a $7 billion lease agreement with CoreWeave, indicating a strategic move into AI infrastructure [1] - The partnership is supported by Nvidia and major financial institutions, raising questions about the potential for significant growth versus the risk of being a speculative investment [1] Company Strategy - The deal with CoreWeave represents a major shift for Applied Digital towards focusing on artificial intelligence [1] - The involvement of Nvidia suggests a strong technological backing, which could enhance the company's market position in AI infrastructure [1] Financials - The $7 billion lease is a substantial financial commitment that could impact Applied Digital's future revenue streams and growth trajectory [1] - The financial backing from prominent institutions may provide stability and confidence in the company's strategic direction [1] Market Position - The collaboration with CoreWeave positions Applied Digital as a potential key player in the rapidly growing AI infrastructure market [1] - The market's response to this deal will be critical in determining whether Applied Digital can capitalize on this opportunity or if it will face challenges ahead [1]

Core Insights - Applied Digital (APLD) has secured a 250MW lease agreement with CoreWeave (CRWV) for its Ellendale campus, enhancing its position in the AI infrastructure market [1][9] - The new liquid-cooled facility at Ellendale is designed for AI workloads and is expected to commence operations in the fourth quarter of 2025 [2] - APLD's previous financial partnerships have unlocked up to $5.4 billion in financing, indicating strong confidence in its scalability [2][9] Infrastructure Development - The first 100MW facility at Ellendale is fully constructed, with an additional 150MW planned through 2026 [3] - APLD's early investments in power infrastructure and land banking provide a competitive edge in a market with high demand for AI data centers [3] Strategic Moves - APLD is considering a strategic sale of its Cloud Services business, which could streamline operations and facilitate a future conversion to a REIT [4] - This divestiture may lower the cost of capital and enhance the company's valuation [4] Market Position - APLD has a 1.4GW pipeline and is gaining credibility among top-tier AI clients, positioning itself as a key player in the AI compute sector [5] - The recent lease agreement with CoreWeave is expected to strengthen APLD's long-term cash flows and strategic relevance in the hyperscale AI market [5] Competitive Landscape - CoreWeave and Equinix (EQIX) are significant competitors, with both making substantial investments in hyperscale infrastructure [6] - Equinix has announced a joint venture to raise over $15 billion for expanding its xScale data centers, adding more than 1.5GW of capacity [7] Financial Performance - APLD's shares have increased by 43.3% year-to-date, outperforming the industry average gain of 6.6% [8] - The company trades at a forward price-to-earnings ratio of 8.94, above the industry average and its three-year median of 1.66 [11] - The Zacks Consensus Estimate for APLD's fiscal 2026 earnings suggests a 67.2% year-over-year increase [12]

The market expects Applied Digital Corporation (APLD) to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended May 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected t ...

Core Viewpoint - Applied Digital Corporation (NASDAQ: APLD) is viewed positively, with a strong buy rating initiated in December and reiterated in April, indicating a bullish sentiment towards the stock [1]. Company Analysis - The company is positioned as an undervalued investment opportunity, leveraging the analyst's extensive experience in financial markets and institutions to provide thorough research and analysis [1]. Market Trends - The analysis includes a focus on financial statements, market trends, and upcoming events that may impact Applied Digital Corporation and its industry [1].