Applied Digital (US:APLD)2025-07-30 20:10Financial Performance - Total revenue for the fiscal year ended May 31, 2025, was $144.2 million, a 5% increase from $136.6 million in the previous year [332]. - Revenue from continuing operations increased by $20.4 million, or 17%, from $121.9 million for the fiscal year ended May 31, 2024, primarily due to the full capacity operation of the 180 MW Data Center Hosting Facility in Ellendale, ND [334]. - Related party revenue decreased by $12.8 million, or 87%, from $14.8 million for the fiscal year ended May 31, 2024, to $1.9 million for the fiscal year ended May 31, 2025 [336]. - Total costs and expenses for the fiscal year ended May 31, 2025, were $161.0 million, a decrease from $169.5 million in the previous year [332]. - Operating loss for the fiscal year ended May 31, 2025, was $16.8 million, an improvement from a loss of $32.9 million in the prior year [332]. - Net loss attributable to common stockholders for the fiscal year ended May 31, 2025, was $233.7 million, compared to a loss of $149.3 million in the previous year [332]. - Basic and diluted net loss per share attributable to common stockholders for continuing operations was $(0.80) for the fiscal year ended May 31, 2025, compared to $(0.65) in the previous year [333]. - Adjusted EBITDA for the fiscal year ended May 31, 2025, was $19.6 million, representing 14% of revenues [333]. - Adjusted operating income for the fiscal year ended May 31, 2025, was $2.4 million, compared to $4.8 million for the fiscal year ended May 31, 2024 [367]. - Adjusted net loss from continuing operations attributable to common stockholders for the fiscal year ended May 31, 2025, was $160.9 million, compared to $74.0 million for the fiscal year ended May 31, 2024 [367]. Cash Flow and Liquidity - As of May 31, 2025, the company had unrestricted cash and cash equivalents of $41.6 million and restricted funds for construction expenditures of $41.0 million [372]. - Net cash used in operating activities decreased by $129.2 million, or 937%, from $13.8 million in FY 2024 to $(115.4) million in FY 2025 [395]. - Net cash used in investing activities increased by $495.2 million, from $172.4 million in FY 2024 to $667.7 million in FY 2025, primarily due to a $539.8 million increase in investments in property and equipment [398]. - Net cash provided by financing activities increased by $727.9 million, or 496%, from $146.8 million in FY 2024 to $874.7 million in FY 2025, driven by $450.0 million from Convertible Notes and $235.1 million from stock offerings [399]. - Cash, cash equivalents, and restricted cash at the end of FY 2025 totaled $123.3 million, up from $31.7 million at the end of FY 2024 [394]. - The company anticipates sufficient liquidity to meet its working capital needs for at least the next 12 months [370]. Debt and Financing - The company sold approximately 3.1 million shares under the May 2024 Sales Agreement for net proceeds of approximately $14.6 million during the fiscal year ended May 31, 2025 [282]. - Under the July 2024 Sales Agreement, the company issued approximately 3.0 million shares for proceeds of $16.4 million net of issuance costs [287]. - The Series F Convertible Preferred Stock offering raised total proceeds of $50.0 million, with all shares converted into approximately 7.6 million shares of common stock by May 31, 2025 [291][297]. - The company entered into a Private Placement agreement for 49,382,720 shares at a price of $3.24 per share, resulting in gross proceeds of approximately $160 million [298]. - APLD completed a private offering of 2.75% Convertible Senior Notes due 2030, raising $450 million, with net proceeds of approximately $435.2 million after expenses [317]. - APLD entered into a credit agreement with SMBC for $375 million of term loans, maturing 18 months after the closing date [322]. - Proceeds from the SMBC Loans were allocated to prepay the Macquarie Promissory Note and fund data center project development costs at Polaris Forge 1 [323]. - APLD ELN-02 Holdings LLC entered into a Macquarie Promissory Note for a loan of $150 million, issuing warrants to purchase up to 1,035,197 shares of common stock at an exercise price of $9.66 per share [300]. - The company repaid the Macquarie Promissory Note in full on February 11, 2025, with the Macquarie Warrants remaining outstanding [301]. - APLDH entered into a Unit Purchase Agreement with MAM for up to $900 million to fund the construction costs for Polaris Forge 1, with an initial investment of $225 million [303]. Operational Developments - The Data Center Hosting Business operates two facilities in North Dakota with a total capacity of 286 MW, which accounted for all revenue from continuing operations for the fiscal year 2025 [270]. - The company is constructing two HPC-focused data centers in Ellendale, ND, with capacities of 100 MW and 150 MW, expected to begin generating meaningful revenues in calendar year 2025 [272][276]. - The company is undergoing an internal restructuring to segregate the HPC Hosting Business' assets and liabilities prior to closing a Unit Purchase Agreement with MIP VI HPC Holdings, LLC [273][274]. - CoreWeave exercised its option for an additional 150MW in the third building at Polaris Forge 1, with an anticipated ready for service date in 2027 [330]. - The company received $131.5 million in payments for future data center hosting services during the fiscal year ended May 31, 2025 [391]. - The company expects general and administrative expenses and operating expenditures to continue increasing as operations expand [371]. - The company has experienced net losses and its transition to profitability is dependent on successful business operations [369]. Management and Governance - Management changes include the appointment of Saidal Mohmand as CFO and Laura Laltrello as COO, with Michael Maniscalco resigning as CTO [279][280][281]. - The company has increased the number of authorized shares of common stock to 400 million as of November 20, 2024 [286]. Losses and Adjustments - Loss on conversion of debt was $33.6 million for the fiscal year ended May 31, 2025, with no such activity recorded in the prior year [345]. - Loss on change in fair value of debt increased by $78.0 million, or 1,054%, from $7.4 million for the fiscal year ended May 31, 2024, to $85.4 million for the fiscal year ended May 31, 2025 [346]. - HPC Hosting Business operating loss increased by $7.3 million, or 151%, from a loss of $4.8 million for the fiscal year ended May 31, 2024, to a loss of $12.1 million for the fiscal year ended May 31, 2025 [357]. - Net loss from discontinued operations decreased by $2.6 million, or 4%, from $75.3 million for the fiscal year ended May 31, 2024, to $72.7 million for the fiscal year ended May 31, 2025 [353]. - Income tax expense increased by $6.0 thousand, or 6%, from $96.0 thousand for the fiscal year ended May 31, 2024, to $102.0 thousand for the fiscal year ended May 31, 2025 [352]. - Loss on extinguishment of debt was $1.2 million for the fiscal year ended May 31, 2025, with no such losses recorded in the prior year [348]. - Loss on change in fair value of warrants was $6.4 million for the fiscal year ended May 31, 2025, with no such losses recorded in the prior year [350]. - Total segment profit for the fiscal year ended May 31, 2025, was $51.8 million, compared to a loss of $18.4 million for the fiscal year ended May 31, 2024 [355]. - Adjusted net loss from continuing operations attributable to common stockholders was $12.458 million, compared to $12.655 million in the previous period, and $7.421 million in the same period last year [368]. - Adjusted EBITDA for the period was $19.627 million, a decrease from $22.319 million in the previous period, and an increase from $1.175 million in the same period last year [368]. Other Financial Information - The company generated approximately $193.9 million from the sale of common stock under the June 2025 Sales Agreement and $75.0 million from the issuance of Series G Preferred Stock [373]. - Total debt obligations due by FY 2026 are projected to be $869.486 million, with interest obligations estimated at $102.692 million [392]. - The company made $42.4 million in debt financing costs and $104.5 million in cash used for capped call and prepaid forward related to the Convertible Notes offering in FY 2025 [399]. - The increase in lease prepayments for hosting equipment decreased by $43.9 million in FY 2025 compared to the previous year [398]. - The company does not currently employ forward contracts or other financial instruments to address commodity price risk, relying instead on fixed-price power contracts [412].