Applied Digital (US:APLD)2025-10-09 22:02Financial Data and Key Metrics Changes - Revenues for the first fiscal quarter of 2026 were $64.2 million, up 84% from $34.8 million in the fiscal first quarter of 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][21] - The company ended the first fiscal 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 end [21] Business Line Data and Key Metrics Changes - The HPC data center hosting segment expanded its long-term lease agreements with CoreWeave, increasing total contract value to approximately $11 billion [5][6] - The blockchain hosting business continues to operate 286 MW of fully contracted capacity across two North Dakota locations, with strong Bitcoin prices positively impacting customers [14] Market Data and Key Metrics Changes - Publicly traded hyperscalers are projected to invest over $350 billion in AI data centers this year, highlighting unprecedented investment in AI infrastructure [8] - The Department of Energy estimates a power shortfall for data centers in the range of 40 GW-50 GW, with some experts suggesting it could exceed 90 GW [23] Company Strategy and Development Direction - The company is focused on delivering purpose-built infrastructure for AI and high-performance computing sectors, with plans to scale beyond 1 GW starting in 2028 to 2030 [6][12] - The company aims to reach a goal of $1 billion in net operating income (NOI) run rate within five years, supported by long-term contracts with hyperscale tenants [22] Management's Comments on Operating Environment and Future Outlook - Management believes that the limiting factor in AI infrastructure deployment is the lack of suitable data centers, positioning the company to meet this challenge [9] - The company is actively evaluating new sites across additional states and regions to meet accelerating demand [23] 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][16] - The company has built and funded more than $1.6 billion in property and equipment, transitioning from a small Bitcoin hosting center to executing transactions with leading hyperscalers [16] Q&A Session Summary Question: What are the largest remaining factors for project financing? - Management indicated that project financing will entail both buildings coming online over the next year, with a focus on finalizing credit agreement documents [30] Question: What is the current status of power infrastructure at Polaris Forge 2? - Management confirmed that 280 MW of initial utility power is in place, with infrastructure being built to meet the timeline for coming online in 2026 and fully online in 2027 [32] Question: What is the timeline for new hyperscaler negotiations? - Management stated that negotiations are ongoing, with expectations for contracts to be in place in the near term as they continue to engage with new and existing customers [37] Question: What does the Macquarie Asset Management financing do for future growth? - The financing allows the company to scale larger, minimizing dilution at the public company level while unlocking significant capital for future projects [46] 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 [52] Question: What are the supply chain challenges faced by the company? - Management noted that while lead times have stretched in the industry, they secured necessary equipment two years ago, mitigating pricing inflation and supply chain issues [70]