Core Insights - Applied Digital (APLD) reported a loss of 11 cents per share in Q2 of fiscal 2026, an improvement from a loss of 61 cents in the same quarter last year, but missed the Zacks Consensus Estimate by 22.22% [2] - Revenues surged 250% year over year to $126.6 million, driven by the ramp-up of HPC tenant fit-out services at Polaris Forge 1 and growth in the Data Center Hosting Business, exceeding Zacks consensus estimates by 66.67% [2] Segment Performance - The Data Center Hosting Business generated $41.6 million in revenues, a 15% increase year over year, with both Jamestown (106 MW) and Ellendale (180 MW) operating at full capacity [3] - The HPC Hosting Business contributed $85 million in revenues, including approximately $73 million from tenant fit-out services for CoreWeave at Polaris Forge 1 and $12 million in lease revenues [4] Operating Details - Cost of revenues increased 344% year over year to $100.6 million, primarily due to $69.5 million for tenant fit-out services and rising energy costs [5] - Selling, general and administrative expenses rose 119% year over year to $57 million, driven by stock-based compensation and professional services [6] - Interest expense increased 292% year over year to $11.5 million, attributed to higher borrowing activity [7] Balance Sheet and Cash Flows - As of Nov. 30, APLD held approximately $2.3 billion in cash and equivalents, up from $114.1 million at the end of August, while total debt rose to approximately $2.6 billion from $687.3 million [8] - The increase in cash and debt reflects the successful completion of a $2.35 billion senior secured notes offering [8] Future Outlook - APLD has 600 MW under contract with two hyperscalers, representing about $16 billion in prospective lease revenue over approximately 15 years [9][11] - Lease revenues are expected to ramp up significantly as new buildings at Polaris Forge 1 and Polaris Forge 2 come online [12] - The company is in advanced discussions with another investment-grade hyperscaler for approximately 900 MW across three sites [13] - APLD anticipates exceeding its long-term goal of $1 billion in NOI within five years and plans to spin out its Cloud Services Business [14]