Applied Digital (US:APLD)2024-04-11 23:28Financial Data and Key Metrics Changes - Revenues for Q3 2024 were $43.3 million, up from $14.1 million in Q3 2023, driven by increased capacity in data center hosting and cloud services contracts [16] - Adjusted EBITDA loss was approximately $2.3 million, compared to an adjusted EBITDA of $0.9 million in Q3 2023 [19] - Net loss for Q3 2024 was $62.8 million, or $0.52 per share, compared to a net loss of $7 million, or $0.07 per share, in Q3 2023 [17][18] Business Line Data and Key Metrics Changes - Data center hosting segment generated $37.7 million in revenue, while cloud services segment generated $5.6 million [16] - The cloud services business reported a 21.6% operating loss, including $16.5 million in depreciation and amortization expenses [18] Market Data and Key Metrics Changes - The Ellendale facility was reenergized to approximately 14% of its full capacity, with expectations to reach 65% to 75% by the end of May 2024 [10] - The company maintained 280 megawatts of data center hosting capacity across two fully contracted locations in North Dakota [10] Company Strategy and Development Direction - The company is focusing on high-performance computing (HPC) and cloud services, with a strategic decision to divest the Garden City facility to optimize asset portfolio [10][11] - A letter of intent was executed with a US-based hyperscaler for 400 megawatts of capacity at the Ellendale campus, which includes the current 100-megawatt facility [7][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges due to power outages at the Ellendale facility but expressed confidence in growth initiatives and positive trends across the business [6][13] - The company is pursuing remedies to recoup lost revenues and additional costs incurred due to outages [15] Other Important Information - The company ended Q3 2024 with $41 million in cash and $61.8 million in debt, with plans to improve cash position through asset sales and financing transactions [19][20] - The company is in the process of securing a large debt facility for cloud services to fund GPU purchases, with a potential size in the multi-hundred million range [21][31] Q&A Session Summary Question: Are the Ellendale and Jamestown assets strategic and will they be sold? - Management confirmed that these assets are strategic and have no immediate plans to sell them [26] Question: What is the status of the 600 megawatts of future capacity? - The 600 megawatts includes the current B2C business, with 535 megawatts secured at the site [28] Question: Can you provide details on the 400 megawatt hyperscaler contract? - The 400 megawatts is inclusive of the previously announced 100 megawatts, and the original customer did not proceed [34] Question: What is the timeline for the new transformers at Ellendale? - All transformers have been procured and will be on-site within weeks, with ramp-up expected to proceed smoothly [44] Question: How many GPUs are generating revenue currently? - As of the end of February, 4,000 GPUs were generating revenue, with an additional 2,000 expected to be operational by the end of May [49][60] Question: What is the expected run rate for GPUs exiting May? - The expected run rate could be between 6,000 and 8,000 GPUs generating revenue [60] Question: What is the status of financing for the Ellendale facility? - Financing is expected to be secured with the execution of the lease on the current 100-megawatt building [23][64]