Financial Data and Key Metrics Changes - Revenues for Q1 fiscal 2026 were $64.2 million, an increase of 84% from $34.8 million in Q1 fiscal 2025, primarily due to $26.3 million from tenant fit-out services [18][19] - Adjusted net loss was $7.6 million or $0.03 per share, while adjusted EBITDA was $0.5 million compared to $6.3 million the prior year [20] - The company ended the quarter with $114.1 million in cash and $687.3 million in debt, excluding $362.5 million in proceeds from financing that occurred after the quarter [20][21] Business Line Data and Key Metrics Changes - The HPC data center hosting segment expanded its lease agreements with CoreWeave, increasing contracted revenue from approximately $7 billion to $11 billion over 15 years [4][5] - The blockchain hosting business operates 286 megawatts of fully contracted capacity across two North Dakota locations, with strong Bitcoin prices positively impacting customer sentiment [13][14] - The cloud services business is under strategic review and classified as held for sale, with no further updates provided until a definitive plan is established [14] Market Data and Key Metrics Changes - Publicly traded hyperscalers are projected to invest over $350 billion in AI data centers in 2025, highlighting unprecedented investment levels in AI infrastructure [8] - The industry recognizes that the limiting factor in AI infrastructure deployment is the availability of suitable data centers, referred to as AI factories [9] Company Strategy and Development Direction - The company aims to scale its operations significantly, with a goal of reaching $1 billion in net operating income (NOI) run rate within five years [22] - The company is focused on securing capital at the lowest possible cost and building repeatable financing structures to support data center development across the U.S. [16] - The company is actively evaluating new sites across additional states and regions to meet accelerating demand for data center infrastructure [23] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of speed, reliability, and readiness in meeting the surge in demand for AI infrastructure [8] - The company believes it is uniquely positioned to meet the challenges of the market, having secured early construction crews and built strong relationships with local communities [10] - Management anticipates a potential shakeout in the market as new entrants may struggle to meet construction timelines, favoring proven vendors and developers [64] Other Important Information - The company has secured an initial $112.5 million draw from a $5 billion preferred equity facility with Macquarie Asset Management to advance construction of Polaris Forge 1 [15] - The initial development cost for Polaris Forge 2 is projected to be approximately $3 billion, with potential for future expansion [7] Q&A Session Summary Question: What are the largest remaining factors for project financing? - Management indicated that project financing will encompass both buildings at Polaris Forge, aiming for a facility that is competitive with market offerings [31] Question: What is the current status of power infrastructure at Polaris Forge 2? - Management confirmed that 280 megawatts of initial utility power is in place, with infrastructure being built to meet timelines for 2026 and 2027 [32] Question: Can you discuss the Macquarie Asset Management financing? - The financing allows the company to scale significantly, unlocking $20 to $25 billion of total capital for future projects while minimizing dilution for shareholders [40] Question: How does the company define its active pipeline? - The active pipeline includes projects that are expected to move into construction within the next six to twelve months, with ongoing work on permitting and power agreements [45] Question: What are the expectations for power availability in South Dakota? - Power is expected to be available in South Dakota in 2026, with the main gating item being a sales tax exemption for IT equipment [60]

Core Insights - Applied Digital (APLD) reported a fiscal fourth-quarter loss of 12 cents per share, consistent with expectations, compared to a loss of 52 cents per share in the same quarter last year [1][9] - The company achieved revenues of $38 million, reflecting a year-over-year increase of 41.3%, driven by enhanced capacity in its Data Center Hosting facilities [2][9] - APLD shares rose by 23.93% in pre-market trading following the earnings announcement [2][9] Financial Performance - Selling, general and administrative expenses surged by 114.8% year over year to $28.1 million [3] - Adjusted EBITDA for the quarter was $1 million, a significant improvement from a loss of $0.2 million in the previous year [3] - The adjusted operating loss narrowed to $3.1 million from $3.7 million year over year [3] Operational Developments - APLD's High-Performance Computing (HPC) Data Center Hosting business focuses on advanced data centers for high-performance computing and AI applications [4] - The company secured 15-year lease agreements with CoreWeave for 250 megawatts of capacity, projected to generate around $7 billion in revenue over the lease term [5] - Following the quarter's end, CoreWeave expanded its lease to 400 megawatts, with anticipated revenue reaching approximately $11 billion [5] Capacity and Infrastructure - As of May 31, 2025, APLD's Jamestown and Ellendale facilities were operating at full capacity, providing a total of 286 megawatts for crypto mining operations [6][9] - APLD has made progress in securing project financing for its Polaris Forge1 campus, raising approximately $268.9 million through various offerings [7] - The company has reduced projected build times for new facilities from 24 months to 12-14 months through process improvements [8] Financial Position - As of May 31, 2025, APLD had cash and cash equivalents totaling $120.9 million against a debt of $688.2 million [10]

Financial Data and Key Metrics Changes - Revenues for fiscal year 2025 were $38 million, up 41% year over year, driven by increased capacity in the data center hosting business [14] - Cost of revenues increased by $7.5 million to $30.2 million, also due to increased capacity [14] - SG&A expenses rose by $15 million to $28.1 million, influenced by business growth and increased stock-based compensation [15] - Net loss attributable to common stockholders was $26.6 million, or $0.12 per share, while adjusted net loss was $7.6 million, or $0.03 per diluted share [15] - Adjusted EBITDA for the quarter was $1 million [16] - The company ended the quarter with $120.9 million in cash and $688.2 million in debt [16] Business Line Data and Key Metrics Changes - The data center hosting segment operates 286 megawatts of fully contracted capacity for cryptocurrency customers [11] - The cloud services business is under review for strategic alternatives, with no updates provided [11] Market Data and Key Metrics Changes - The company signed a transformative 15-year lease with CoreWeave for 250 megawatts at the Polaris Forge One campus, expected to generate approximately $7 billion in contracted revenue [6] - The first 100-megawatt facility is scheduled to be operational in Q4 2025, with additional facilities planned for mid-2026 and 2027 [7][39] Company Strategy and Development Direction - The company aims to position itself as a leader in AI and HPC infrastructure, focusing on scalable solutions and efficient designs [6][9] - Strategic decisions include reducing the number of SKUs by approximately 50% and consolidating suppliers to enhance efficiency [7] - The company is actively marketing its multi-gigawatt pipeline to a diverse group of customers [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong relationships with hyperscalers and a robust pipeline of projects [19] - The company anticipates significant revenue increases in the upcoming quarters due to the technical fit-out of the Polaris Forge One building [17] Other Important Information - The company has raised approximately $270 million post-quarter through ATM and Series G preferred stock offerings [13] - Management highlighted the advantages of building in the Dakotas, including low-cost energy and efficient cooling systems [8] Q&A Session Summary Question: Development cadence for 2026 and potential groundbreaking for a second campus - Management expects to break ground on one additional campus and potentially two before the end of the year [22] Question: Additional color on financing timeline and gating items - The biggest gating item is the general slowdown in August, with reliance on professional service providers for construction reports and documentation [23][24] Question: Status of advanced negotiations with a customer - Management confirmed advanced negotiations with an investment-grade North American hyperscaler, with ongoing discussions with several others [30] Question: Fit-out status for the Ellendale facility - The fit-out is underway, with expectations for customer gear to be brought on-site in Q4 of this year [31] Question: Terms of project financing for CoreWeave - Financing terms are largely as expected, with costs in the high twos to low fours for investment-grade tenants [37] Question: Timeline for Building 2 and penalties for delays - Building 2 is progressing well, with a timeline of approximately twelve months, and standard lease penalties apply for late delivery [44][48] Question: Focus on owning infrastructure versus powered shells - The company is focused on full-stack ownership of buildings rather than powered shells, which are less appealing as a public company model [52] Question: Progress on sales tax in South Dakota - No progress has been made on sales tax, with focus currently on a large campus in North Dakota [54]

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].

Core Insights - Applied Digital (APLD) achieved a 22% year-over-year revenue growth in Q3 of fiscal 2025, totaling $52.9 million, despite challenges in its Cloud Services segment [2][10] - The company is transitioning its business model, focusing on high-performance computing (HPC) hosting, particularly for AI infrastructure, while facing a decline in Cloud Services revenue [3][6] Financial Performance - Cloud Services segment revenues fell to $17.8 million due to a shift to on-demand capacity and technical issues, which have since been resolved [2][10] - Data Center Hosting segment revenues increased to $35.2 million, driven by full utilization of North Dakota facilities and favorable Bitcoin pricing [3][10] - APLD's aggressive capital expenditures range from $30 million to $50 million per month, with a total debt of $689 million [5][10] Strategic Developments - The construction of the Ellendale campus, a 400MW data center, is on schedule, with the first 100MW facility expected to launch in Q4 2025 [4] - APLD has secured significant funding, including $5 billion from Macquarie and $375 million from SMBC, to support its strategic pivot [4] - The company is experiencing strong leasing interest, with potential for a single anchor customer to occupy the entire initial build [4] Competitive Landscape - Digital Realty (DLR) is expanding its AI infrastructure with a $10 billion U.S. Hyperscale Data Center Fund, focusing on major metropolitan areas [7] - Equinix (EQIX) is also capitalizing on AI demand, with numerous projects underway and a strategy emphasizing high-density builds [8] Valuation and Estimates - APLD's shares have increased by 24.6% year-to-date, outperforming the industry growth of 4.5% [9] - The company trades at a forward price-to-sales ratio of 7.97X, significantly above the industry average and its five-year median of 1.47 [12] - The Zacks Consensus Estimate for APLD's fiscal 2026 earnings suggests a 67.7% year-over-year increase [14]

Core Insights - Applied Digital Corporation (APLD) shares have increased by 52% in June, outperforming the Financial - Miscellaneous Services industry's 9.3% rise, driven by growing demand for AI services and infrastructure progress [1][8] - APLD has entered into two 15-year lease agreements with CoreWeave, expected to generate $7 billion in total revenues, enhancing its AI and HPC infrastructure presence [7][8] Industry Trends - Major tech companies like Microsoft and Meta are signaling increased demand for hyperscale, colocation, and AI workloads, with Meta planning to invest $62.5 billion and Microsoft projecting $80 billion in capital expenditures by 2025 [2] - Other tech giants, including Amazon, Alphabet, and Oracle, are also expanding their AI data center capacities to support cloud services [2] Financial Performance - APLD reported a loss of $0.16 per share for Q3 FY2025, compared to earnings of $0.52 per share a year ago, despite robust sales growth [3] - The company is expected to see a small sales uptick in Q4, with earnings projected to improve by nearly 81% year over year [3] Growth Drivers - APLD has deployed nearly $1 billion in assets over the past year for data center construction, currently operating 286 megawatts of contracted hosting capacity, primarily for Bitcoin miners [9] - The company is building three new facilities expected to add 700 megawatts of capacity by 2027, significantly scaling its footprint for HPC and AI workloads [9] Capital and Funding - APLD secured a $150 million equity facility to raise capital for HPC infrastructure expansion, addressing significant cash burn from elevated capital expenditures [10] - The company ended Q3 with $100 million in cash, down from $308 million in the previous quarter, but the new facility is expected to provide necessary liquidity for growth [10] Sales and Earnings Estimates - Zacks Consensus Estimates project sales of $44.78 million for the current quarter and $46.83 million for the next quarter, with year-over-year growth estimates of 34.25% for the current year [11] - EPS estimates show a year-over-year growth of 80.77% for the current quarter, with expectations of improved profitability in the coming periods [12] Challenges - APLD faces rising costs due to increased depreciation of newly built facilities, which may pressure near-term profitability [13] - Seasonal fluctuations in power costs have impacted margins, and a significant drop in Cloud Services revenues was noted during the transition to a multi-tenant model [13][14] Valuation - APLD stock is currently trading at a premium, with a forward price-to-sales ratio of 9.24X compared to the industry average of 3.86X, indicating a lofty valuation [16] Conclusion - Despite near-term challenges, APLD is strategically positioned for long-term growth in the AI and HPC infrastructure market, with strong partnerships and expansion plans [19] - The outlook remains promising for APLD as it aims to convert investments into sustainable revenue streams [19]

Core Viewpoint - Applied Digital Corporation (APLD) has experienced a significant share price increase of 69.4% over the past month, driven by positive industry trends despite previous declines due to industry-specific challenges [1][2]. Company Performance - APLD reported a loss of 16 cents per share in the first quarter, a decline from earnings of 52 cents per share a year ago, attributed to higher depreciation and amortization expenses despite robust sales growth [3]. - The company's stock has outperformed the broader Finance sector, which grew by 2.6%, and the S&P 500 Index, which increased by 4.4% [2]. Industry Trends - Major hyperscalers like Microsoft and Meta are planning substantial investments in AI services, with Meta investing $62.5 billion and Microsoft potentially reaching $80 billion in capital expenditures by 2025, indicating strong demand for AI-focused data centers [6]. - APLD's Data Center Hosting sales declined by 7% year over year in the first quarter, but rising demand may lead to securing its first hyperscaler customer at the Ellendale facility, which could significantly boost future sales [6]. Expansion and Financial Position - APLD has invested nearly $1 billion in assets over the past year, primarily for data center construction, and currently operates 286 megawatts of fully contracted data center hosting capacity [7]. - The company secured a $150 million equity facility to support its HPC infrastructure expansion, addressing substantial cash burn from high capital expenditures [8]. Short-Term Challenges - Rising costs, particularly from higher depreciation expenses and seasonal power cost fluctuations, are expected to pressure APLD's bottom line in the near term [9]. - APLD experienced a 35.7% sequential decline in Cloud Services revenues due to technical challenges in transitioning to a multi-tenant on-demand model, although the issue has been resolved [9][10]. Valuation Concerns - APLD's stock is currently trading at a premium, with a forward 12-month price-to-earnings (P/S) ratio of 7.02X compared to the industry average of 3.48X, indicating a lofty valuation [11]. Conclusion - The recent surge in APLD's share price has led to a significant increase in its valuation, making it an expensive choice currently, with margins likely to remain under pressure [15].

Core Viewpoint - Cipher Mining Inc. intends to offer $150 million in convertible senior notes due 2030, with an option for underwriters to purchase an additional $22.5 million to cover over-allotments [1][2]. Group 1: Offering Details - The notes will be senior, unsecured obligations, accruing interest payable semiannually and maturing on May 15, 2030 [2]. - Noteholders can convert their notes under certain conditions, with settlement options including cash, common stock, or a combination of both [2][5]. - The notes are redeemable at Cipher's option starting May 22, 2028, if the stock price exceeds 130% of the conversion price for a specified period [3]. Group 2: Repurchase Rights - In the event of a "fundamental change," noteholders may require Cipher to repurchase their notes for cash at the principal amount plus accrued interest [4]. - Noteholders can also require repurchase on May 15, 2028, under similar terms [4]. Group 3: Use of Proceeds - The net proceeds from the offering will be used to complete Phase 1 of the Black Pearl data center project, including purchasing mining rigs, paying tariffs, and other capital expenditures [6]. - An amendment to the Future Sales and Purchase Agreement with Bitmain Technologies allows for an updated delivery schedule and a 10% cost reduction for early payment [6]. Group 4: Concurrent Offering - Morgan Stanley will conduct a concurrent delta offering of Cipher's common stock to facilitate hedging transactions for purchasers of the notes [7]. - The completion of both the notes offering and the concurrent delta offering is interdependent [7]. Group 5: Regulatory Compliance - The offerings are made under an effective shelf registration statement with the SEC, and detailed information will be provided in prospectus supplements [8]. Group 6: Company Overview - Cipher focuses on developing and operating industrial-scale data centers for bitcoin mining and high-performance computing (HPC) hosting, aiming to be a market leader in innovation [10].

Core Viewpoint - Applied Digital Corporation (APLD) has experienced a significant decline in its stock price following disappointing third-quarter fiscal 2025 results, raising concerns about its near-term performance while maintaining a long-term growth potential in high-performance computing [1][2][17]. Financial Performance - APLD reported a loss of 16 cents per share, which was worse than the Zacks Consensus Estimate of a loss of 11 cents, and a revenue of $52.9 million, missing the estimate by 16.75% [1][2]. - The company had earnings of 52 cents per share in the same quarter last year, indicating a substantial year-over-year decline [2]. Revenue and Business Segments - The revenue miss was primarily due to a 35.7% sequential decline in the Cloud Services business, attributed to technical challenges in transitioning to a multi-tenant on-demand model [6]. - APLD has invested nearly $1 billion in assets over the past year, focusing on building infrastructure for its High-Performance Computing (HPC) Data Center Hosting business [7]. Future Growth Potential - APLD is constructing three new buildings expected to increase its data center hosting capacity by 700 megawatts by 2027, with the first building, a 400 megawatt campus, anticipated to be operational by 2025 [8]. - The global high-performance computing market is projected to grow from $48.51 billion in 2022 to $87.31 billion by 2030, with a CAGR of 7.5%, indicating a favorable environment for APLD's growth [13]. Strategic Moves - The company is planning to sell its Cloud Service business to focus on its HPC segment, which is expected to generate significant funds for further investment in data centers [14]. - APLD's partnerships with major companies like NVIDIA, which holds a significant stake in APLD, could provide additional support for its growth strategy [16]. Investment Outlook - Despite the current stock price decline, APLD is viewed as a speculative investment with potential for significant rewards in the HPC hosting sector, appealing to investors with a high risk tolerance [15]. - The recommendation is to hold APLD stock for now, as the company may recover from its current challenges, particularly in the Cloud Service business [17].

Core Insights - Applied Digital Inc. has shifted its focus from cryptocurrency mining hosting to artificial intelligence (AI) and high-performance computing (HPC) workloads, reflecting a strategic pivot in its business model [1][11] - The company is currently constructing its first AI data center in Ellendale, North Dakota, with plans for additional facilities, aiming to meet the growing demand for AI data center capacity [7][8] - Applied Digital's stock has experienced volatility, with a significant drop in value despite the hype surrounding AI data centers, raising questions about the company's execution and ability to secure major clients [2][11] Company Performance - For fiscal Q3 2025, Applied Digital reported an earnings per share (EPS) loss of $0.08, which was better than consensus estimates by $0.02, while revenues grew 22.1% year-over-year to $52.92 million, falling short of the expected $64.82 million [9][10] - The Data Center Hosting business generated $35.2 million, down 7% year-over-year, while the Cloud Services business saw a significant increase of 220% year-over-year to $17.8 million, although this segment is planned for sale [10] Industry Context - The demand for AI data centers is being driven by major hyperscalers like Meta, Microsoft, Amazon, Alphabet, and Oracle, all of which are investing heavily in expanding their AI data center capabilities [6][5] - AI data centers require specialized infrastructure to handle higher electrical capacities and advanced cooling solutions, differentiating them from traditional data centers [4][3] Future Outlook - Macquarie Asset Management plans to invest $5 billion to support Applied Digital's AI data center initiatives, which will help build up to 2 GW of capacity [4] - Analysts have set a 12-month stock price forecast for Applied Digital at $10.67, indicating a potential upside of 170.73% from the current price of $3.94 [9]