Applied Digital (US:APLD)2026-01-08 21:43Revenue Generation - The Data Center Hosting Business generated $41.6 million and $79.5 million in revenue for the three and six months ended November 30, 2025, respectively [217]. - The HPC Hosting Business recognized $85.0 million and $111.3 million in revenue during the three and six months ended November 30, 2025, respectively [223]. - The Cloud Services Business reported revenues of $18.4 million and $35.1 million for the three and six months ended November 30, 2025, respectively, compared to $27.7 million and $53.6 million for the same periods in 2024 [225]. - Total revenue for the three months ended November 30, 2025, was $126.6 million, a 250% increase from $36.2 million for the same period in 2024 [268]. - Revenue from the HPC Hosting Business contributed approximately $85.0 million to the increase, with $73.0 million from tenant fit-out services and $12.0 million from rental revenues [271]. - Revenue increased by $121.7 million, or 176%, from $69.1 million for the six months ended November 30, 2024, to $190.8 million for the six months ended November 30, 2025, primarily driven by the HPC Hosting Business [279]. Operational Developments - The company operates a 106 MW facility in Jamestown, North Dakota, and a 180 MW facility in Ellendale, North Dakota, both at full capacity as of November 30, 2025 [216]. - The company has commenced operations at its first HPC data center at the Polaris Forge 1 campus with a capacity of 100 MW and is constructing a second HPC data center with an additional 150 MW capacity [219]. - A lease agreement was signed with CoreWeave for a total of 250 MW of infrastructure at Polaris Forge 1, with the first lease covering the full capacity of the 100 MW data center [220]. - The company plans to break ground on the Polaris Forge 2 campus, which will have an initial capacity of 200 MW, expected to reach full capacity in early 2027 [222]. - The company is in discussions for a proposed business combination of the Cloud Services Business with EKSO Bionics Holdings, which will operate as ChronoScale Corporation [226]. Financial Obligations and Capital Structure - The Company entered into a Sales Agreement allowing for the issuance of up to $200 million in common stock, having sold approximately 15.3 million shares for gross proceeds of about $196.4 million as of the report date [230]. - The aggregate commitment amount for Series G Preferred Stock was increased from $150 million to $300 million, enhancing capital access by removing previous limitations [231]. - The aggregate commitment for Series G Preferred Stock was further increased to $450 million, supporting the construction of the Polaris Forge 1 data center [233]. - The Floor Price for the Series G Preferred Stock was raised to $22.00 from $12.50, establishing a new minimum conversion price [234]. - The Company repaid a Promissory Note in full on November 28, 2025, including all outstanding principal and accrued interest [247]. - The Initial Closing of the Amended and Restated Unit Purchase Agreement resulted in the sale of 112,500 Preferred Units for an aggregate price of $112.5 million, with proceeds allocated for construction costs [249]. - The Company issued warrants to purchase 2.4 million shares of common stock, which will become exercisable upon full funding of $450 million for Polaris Forge 1 [250]. - The company closed a $2.35 billion offering of 9.250% senior secured notes due 2030, with an issue price of 97.000% [257]. - The company entered into a revolving credit facility with First National Bank of Omaha for an aggregate principal amount of $65 million, with no draws as of November 30, 2025 [256]. - The company repaid the full principal balance under a previous credit agreement with Sumitomo Mitsui Banking Corporation concurrent with the closing of the notes offering [258]. - The company issued an additional 337,500 Preferred Units for an aggregate purchase price of $337.5 million, bringing the total amount funded under the Amended and Restated Unit Purchase Agreement to $900 million [259]. Profitability and Losses - The company reported a net loss attributable to common stockholders of $19.1 million for the three months ended November 30, 2025, compared to a net loss of $139.4 million for the same period in 2024 [268]. - The company reported a decrease in depreciation and amortization due to the Cloud Services Business being classified as held for sale during the six months ended November 30, 2025 [316]. - The net loss from continuing operations for the three months ended November 30, 2025, was $26.6 million, a significant improvement from a loss of $128.4 million in the same period last year [298]. - The company experienced net losses through the period ended November 30, 2025, and its transition to profitability depends on successful business operations [312]. Cash Flow and Liquidity - The company had unrestricted cash and cash equivalents of $1.9 billion and restricted cash of $382.3 million as of November 30, 2025 [300]. - The company has sufficient liquidity to meet its debt obligations and working capital needs for at least the next twelve months [301]. - The net cash used in operating activities increased by $30.3 million, or 24%, from $128.2 million for the six months ended November 30, 2024, to $97.9 million for the six months ended November 30, 2025 [316]. - The net cash used in investing activities increased by $611.0 million, or 294%, from $207.5 million for the six months ended November 30, 2024, to $818.5 million for the six months ended November 30, 2025 [317]. - The net cash provided by financing activities increased by $2.5 billion, or 399%, from $618.6 million for the six months ended November 30, 2024, to $3.1 billion for the six months ended November 30, 2025 [318]. - The increase in financing activities was primarily due to an increase in net borrowings of long-term debt of $1.8 billion and net proceeds from stock offerings of approximately $526.1 million during the six months ended November 30, 2025 [319]. - The company expects sufficient liquidity to support ongoing operations and meet working capital needs for at least the next 12 months [313]. Expenses and Costs - Cost of revenues increased by $110.8 million, or 244%, from $45.4 million for the six months ended November 30, 2024, to $156.2 million for the six months ended November 30, 2025, mainly due to increased tenant fit-out services [280]. - Selling, general and administrative expenses rose by $49.2 million, or 133%, from $37.0 million for the six months ended November 30, 2024, to $86.1 million for the six months ended November 30, 2025, largely due to business growth [281]. - Interest expense, net increased by $9.5 million, or 162%, from $5.9 million for the six months ended November 30, 2024, to $15.4 million for the six months ended November 30, 2025, primarily due to increased loan interest [283]. - Approximately $40.4 million increase in stock-based compensation was noted due to an increase in shares awarded related to headcount growth [281].