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Applied Digital (APLD) - 2025 Q4 - Earnings Call Transcript
2025-07-30 22:00
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 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] - Cash, cash equivalents, and restricted cash at the end of the quarter totaled $120.9 million, with total debt at $688.2 million [16] Business Line Data and Key Metrics Changes - The data center hosting segment operates 286 megawatts of fully contracted capacity for cryptocurrency customers [12] - The cloud services business is under review for strategic alternatives, with no updates provided [12] 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] - CoreWeave has also exercised an option for an additional 150 megawatts, indicating strong demand for AI infrastructure [6] Company Strategy and Development Direction - The company aims to position itself as a leader in AI and HPC infrastructure, with a focus on scalable data center solutions [6][10] - Strategic decisions include reducing the number of SKUs by 50% and consolidating suppliers to enhance efficiency [8] - The company is actively marketing its multi-gigawatt pipeline to a diverse customer base, leveraging its competitive advantages [10][19] 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 growth 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 through its ATM and Series G preferred stock since the end of the quarter [13] - The first 100-megawatt facility is expected to be operational in Q4 2025, with subsequent facilities planned for 2026 and 2027 [7][39] 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: Gating items for financing - 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][31] Question: Fit-out status for the Ellendale facility - The fit-out is underway, with expectations for customer gear to be on-site by Q4 of the calendar year [32] Question: Terms for project financing related to CoreWeave - Financing terms are largely as expected, with costs in the high twos to low fours for investment-grade tenants [38] 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 [45][49] Question: Hyperscalers' interest in owning infrastructure - The company is focused on full-stack ownership of campuses rather than powered shell agreements, which are less favorable as a public company [55] Question: Progress on sales tax in South Dakota - No progress has been made on sales tax issues, with focus currently on a large campus in North Dakota [56]
Applied Digital (APLD) - 2025 Q3 - Earnings Call Transcript
2025-04-15 00:11
Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $52.9 million, up 22% compared to the prior year [21] - Cost of revenues increased by $2.1 million to $49.1 million from the prior comparable period [23] - Net loss attributable to common stockholders was $36.1 million or $0.16 per share [24] - Adjusted net loss was $17.8 million or $0.08 per diluted share, with adjusted EBITDA increasing 878% to $10 million [25] Business Line Data and Key Metrics Changes - Data center hosting segment generated $35.2 million in revenue, while cloud services segment contributed $17.8 million [21] - Cloud services revenue declined sequentially due to a shift to an on-demand model, but technical issues have been resolved [22] Market Data and Key Metrics Changes - The company operates 286 megawatts of fully contracted data center hosting capacity, running at full capacity [9] - Bitcoin prices remain strong, positively impacting customer sentiment and business prospects [9] Company Strategy and Development Direction - The company is exploring strategic options for its cloud services business, driven by competitive dynamics and potential transition to a data center REIT structure [15][16] - Significant investments have been made, including a $5 billion potential investment from Macquarie Asset Management and a $375 million financing arrangement with Sumitomo Mitsubishi Bank [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business and its future prospects, particularly in the high-performance computing industry [9] - The company is focused on completing construction on schedule and within budget, with plans for future expansions [28] Other Important Information - The company ended Q3 with $261.2 million in cash and $689.1 million in debt [27] - Construction for the first building is expected to generate revenue in Q4 2025, with subsequent buildings planned for 2026 and 2027 [13] Q&A Session Summary Question: Update on the split between on-demand and contracted cloud services - Currently, four of six clusters are in reserve contracts, while two have moved to on-demand, generating some revenue [33] Question: Long-term fit of the BTC hosting business - BTC assets are expected to align with HPC data center capacity, allowing for dynamic load adjustments [34] Question: Impact of Macquarie and SMBC on leasing momentum - Increased interest has been noted, with improved comfort levels among potential customers due to world-class financing partners [42] Question: Expected capital needs over the next 12 to 18 months - Capital expenditures are in line with past projections, running between $30 to $50 million per month for the first building [44] Question: Status of Bitcoin hosting contracts - Approximately two years remain on existing contracts, with some risk of non-renewal [46] Question: Remaining steps to complete the L&A facility - The facility is expected to be operational by Q4 2025, with remaining expenditures primarily for finishing touches and equipment deployment [51] Question: Plans for selling the cloud business - The process has just started, with various potential structures being evaluated [56] Question: Existing hyperscalers' disposition towards data center builds - Demand remains stable, with ongoing discussions with multiple hyperscalers [64] Question: Pricing trends for data center services - Pricing has been stable over the last 90 days but has increased year-over-year [69] Question: Sale process and potential lessors' requirements - There are no hard requirements for the sale process, but it is seen as the right time to separate the cloud business [83]
Applied Digital (APLD) - 2025 Q3 - Earnings Call Transcript
2025-04-14 21:00
Financial Data and Key Metrics Changes - Revenues for Q3 2025 were $52.9 million, up 22% compared to the prior year, driven by growth in the cloud services business due to additional GPU clusters [21] - Cost of revenues increased by $2.1 million to $49.1 million, primarily due to business growth and additional services provided [23] - Net loss attributable to common stockholders was $36.1 million, or $0.16 per share, while adjusted net loss was $17.8 million, or $0.08 per diluted share [24][25] - Adjusted EBITDA increased by 878% to $10 million [25] - The company ended the quarter with $261.2 million in cash and $689.1 million in debt [27] Business Line Data and Key Metrics Changes - Data center hosting segment generated $35.2 million in revenue, while cloud services contributed $17.8 million [21] - Cloud services revenue declined sequentially due to a shift to an on-demand model, which caused technical hurdles that have since been resolved [22] Market Data and Key Metrics Changes - The company operates 286 megawatts of fully contracted data center hosting capacity, running at full capacity [9] - The Ellendale campus is viewed as a strategic asset with significant expansion opportunities beyond the initial 400 megawatts of critical IT load [12] Company Strategy and Development Direction - The company is exploring strategic options for its cloud services business, driven by customer perceptions of competition and potential transition to a data center REIT structure [15][16] - The construction of the first building at the Ellendale campus is on schedule, expected to generate revenue in Q4 2025, with additional buildings planned for 2026 and 2027 [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business due to strong Bitcoin prices and ongoing discussions with financial institutions for leasing opportunities [9][11] - The company remains confident in its growth trajectory and the positive trends across its business [17] Other Important Information - The company has deployed nearly $1 billion in assets over the past year, focusing on data center construction [18] - The high cost of capital remains a challenge, but recent financing arrangements have strengthened the company's financial position [19][20] Q&A Session Summary Question: Update on the split between on-demand and contracted for cloud services - Four of the six clusters remain in reserve contracts, while two have moved to on-demand, generating small revenue [33] Question: Long-term fit of the BTC hosting business - BTC assets are expected to fit into a restructure, with a long-term match between HPC data center capacity and Bitcoin hosting capacity [34] Question: Impact of Macquarie and SMBC on leasing momentum - Increased interest has been noted, with improved comfort levels regarding construction and operational capabilities [42] Question: Expected capital needs over the next 12 to 18 months - Capital expenditures are in line with past projections, running between $30 to $50 million a month for the first building [44] Question: Status of Bitcoin hosting contracts - Approximately two years remain on the contracts, with some risk of non-renewal [46] Question: Remaining steps to complete the Ellendale facility - The facility is expected to be operational by Q4 2025, with remaining CapEx focused on finishing touches and backup power systems [51] Question: Plans for selling the cloud business - The process has just started, with no specific updates or expectations provided at this time [56] Question: Existing hyperscalers' disposition towards data center builds - Demand remains stable, with ongoing discussions with multiple hyperscalers [64] Question: Pricing trends for data center services - Pricing has been stable over the last 90 days but has increased year-over-year [69] Question: Sale process and potential lessors' views - There are no hard requirements from potential lessors regarding the sale process [83]