Applied Digital APLD Q1 2025 Earnings Transcript

Core Insights - Applied Digital reported a significant revenue growth of 67% to $60.7 million for the fiscal first quarter 2025, driven by cloud services and data center hosting segments [9][10] - The company is in advanced discussions for a lease with a US-based hyperscaler for its Ellendale HPC campus, which is expected to start with an initial capacity of 100 megawatts, with plans for future expansion [5][19] - The balance sheet has improved significantly due to strategic investments, with cash and equivalents totaling $86.6 million and shareholders' equity nearly doubling to $241.8 million [10][11] Business Developments - Construction of the Ellendale HPC campus is on schedule, with plans to expand capacity to 400 megawatts [5][12] - The data center hosting business currently operates at full capacity with 286 megawatts dedicated to cryptocurrency clients [6] - The cloud services segment is experiencing growth, with six clusters online and plans to deploy additional clusters in the second half of fiscal year 2025 [6][7] Financial Performance - The adjusted EBITDA for the quarter increased to $20 million, while the adjusted net loss was $21.6 million, or $0.15 per share [10] - Depreciation and amortization expenses rose significantly to $34.4 million, impacting overall costs [9] - The company incurred $4.1 million in expenses for facilities not yet generating revenue, which are expected to offset costs in the future [10] Market Position and Strategy - The company aims to become a leading platform for building and operating multiple HPC data centers at scale, capitalizing on rising demand from hyperscalers [14][15] - Recent investments and strategic partnerships are expected to enhance market visibility and support growth initiatives [5][15] - The company is exploring opportunities for heat recirculation in its facilities, potentially collaborating with agricultural sectors to utilize waste heat [48]