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Applied Digital's Q3 Earnings & Revenues Miss Estimates, Stock Down
APLDApplied Digital (APLD) ZACKS·2025-04-15 17:30

Financial Performance - Applied Digital (APLD) reported a third-quarter fiscal 2025 loss of 16 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 11 cents, compared to earnings of 52 cents per share in the same quarter last year [1] - The company generated revenues of 52.9millionforthethirdquarter,reflectinga22.152.9 million for the third quarter, reflecting a 22.1% year-over-year increase, although it missed the Zacks Consensus Estimate by 16.75% [2] - The Cloud Services business revenues increased by 220% year over year to 17.8 million, but saw a sequential decline of 35.7% due to a shift in contract models [3] Business Segments - The Data Center Hosting segment generated 35.2millioninrevenues,representinga735.2 million in revenues, representing a 7% year-over-year decline [3] - The High-Performance Computing (HPC) Data Center Hosting business is negotiating with multiple U.S.-based hyperscalers to lease up to 400 MW of capacity, including ongoing construction at the Ellendale HPC data center [4] Cost Management - Selling, general and administrative expenses decreased by 24.3% year over year to 22.7 million [6] - Adjusted EBITDA for the quarter was 10million,asignificantimprovementfromalossof10 million, a significant improvement from a loss of 1.3 million year over year [6] - Adjusted operating loss narrowed to 8.8millionfromalossof8.8 million from a loss of 23.4 million in the previous year [6] Strategic Initiatives - The board of directors approved a plan to divest the Cloud Services Business to focus on core data center operations [7] - APLD secured a 375millionfinancingarrangementwithSumitomoMitsuiBankingCorporationtorepayoutstandingdebtsandfundthedevelopmentofnewdatacenterbuildings[8]−ThecompanymaintainsastrategicpartnershipwithMacquarieAssetManagement,whichhastherighttoinvestupto375 million financing arrangement with Sumitomo Mitsui Banking Corporation to repay outstanding debts and fund the development of new data center buildings [8] - The company maintains a strategic partnership with Macquarie Asset Management, which has the right to invest up to 5 billion for the expansion of next-generation data centers [9] Balance Sheet - As of February 28, 2025, APLD had cash, cash equivalents, and restricted cash totaling 261.2millionagainstadebtof261.2 million against a debt of 689.1 million [10]