Applied Digital Reports Fiscal First Quarter 2027 Results

Contracted revenue would reach approximately $86 billion if all lease renewal options are exercised.

Rhea-AI Summary

Applied Digital (Nasdaq: APLD) reported fiscal first-quarter 2027 revenue of $341.9 million, up 322% from the prior-year comparable period.

For the quarter ended August 31, 2026, continuing-operations net loss attributable to common stockholders widened to $221.0 million, or $0.76 per share, from $18.5 million, or $0.07. Adjusted EBITDA rose to $64.4 million from $0.5 million; non-GAAP measures exclude majority-owned ChronoScale. Leases covered approximately 1.41 GW and approximately $36 billion of base-term contracted revenue. Polaris Forge 1 reached 250 MW of live capacity on October 1. Applied Digital expects delivered North Dakota capacity to reach 300 MW by year-end 2026.

The company closed $1.59 billion of 7.000% secured notes due 2031 to fund construction and repay a $300 million bridge facility. Quarter-end cash, cash equivalents and restricted cash totaled $3.7 billion, alongside $6.4 billion in debt.

17 points · 3 major

PositiveiHow this balance works

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1 major · 15 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major pointApproximately $36 billion in base-term contracted revenue covers approximately 1.41 GW across five campuses. 4.7× market cap
• Major pointDelta Forge 2 lease adds 210 MW over 15 years and approximately $5.2 billion in base-term contracted revenue. 69% of market cap
• Major point$1.59 billion financing funds Polaris Forge 1’s third 150 MW building and repayment of a $300 million bridge facility. 21% of market cap
• Moderate pointRevenue of $341.9 million increased 322% year over year in fiscal first-quarter 2027.
• Moderate pointPolaris Forge 1 live capacity reached 250 MW after the second 75 MW phase entered service October 1.
• Moderate point. Forward-looking: it has not happened yet and may not happen.300 MW delivered North Dakota capacity is expected by year-end 2026, including initial Polaris Forge 2 operations.
• Moderate pointUp to approximately 1 GW of potential power capacity secured through an agreement in Finland.
• Moderate pointBase Electron power purchase agreement covers capacity and energy from an approximately 1,200 MW planned North Dakota facility.
• Moderate point. Forward-looking: it has not happened yet and may not happen.ChronoScale’s planned 50 MW deployment with Microsoft expands plans for Applied Digital’s majority-owned compute platform.
• Moderate pointHPC Hosting segment operating profit totaled $33.4 million in the quarter ended August 31, 2026.
• Moderate pointData Center Hosting segment operating profit totaled $13.3 million in the quarter ended August 31, 2026.
• Moderate pointAdjusted net loss narrowed to $4.1 million, or $0.01 per diluted share, from $7.6 million, or $0.03.
• Moderate pointAdjusted EBITDA rose to $64.4 million from $0.5 million year over year, excluding ChronoScale.
• Moderate pointCash, cash equivalents and restricted cash totaled $3.7 billion at August 31, 2026.

3 minor points

• Minor pointAdjusted revenue increased to $300.4 million from $64.2 million year over year, excluding ChronoScale.
• Minor pointNet Operating Income totaled $58.8 million, a non-GAAP measure excluding ChronoScale.
• Minor pointInterest income increased to $35.8 million from $0.9 million in the prior-year quarter.

Negative

• Major pointNew senior secured notes add $1.59 billion of debt at 7.000%, due 2031, issued at par. 21% of market cap
• Moderate pointContinuing-operations common-stockholder net loss widened to $221.0 million, or $0.76 per share, from $18.5 million, or $0.07.
• Moderate pointDebt totaled $6.4 billion at August 31, 2026.
• Moderate pointServices cost of revenues rose 318% year over year to $245.7 million from $58.8 million.
• Moderate pointSelling, general and administrative expenses increased 289% year over year to $114.7 million from $29.5 million.
• Moderate pointInterest expense increased 866% year over year to $77.4 million from $8.0 million.

9 minor points

• Minor pointData center rental and other cost of revenues totaled $43.9 million for fiscal first-quarter 2027.
• Minor pointDerivative fair-value loss totaled $49.5 million in the quarter ended August 31, 2026.
• Minor pointBabcock & Wilcox common-stock investment generated an $11.4 million fair-value loss in the quarter.
• Minor pointChronoScale’s discontinued Ekso business recorded a $16.1 million net loss and is classified as held for sale.
• Minor pointData Center Hosting revenue slipped to $37.8 million from $37.9 million in the prior-year quarter.
• Minor point. Forward-looking: it has not happened yet and may not happen.Approximately $86 billion lease revenue depends on exercise of all renewal options.
• Minor pointFinland power capacity remains potential, rather than operational capacity.
• Minor pointBase Electron power supply depends on development of its approximately 1,200 MW natural gas-fired generation facility.
• Minor pointConstruction remains underway at Polaris Forge 1’s third building and four other leased campuses.

News Explained

The North Dakota purchase agreement ties future supply to a still-developing plant; Finland’s up-to-one-gigawatt figure remains potential.

Applied Digital entered into a power purchase agreement with Base Electron for capacity and energy from an approximately 1,200 MW natural-gas facility that Base Electron is developing. This establishes a future power-supply arrangement, rather than current supply from a completed plant.

Separately, Applied Digital signed an agreement for up to approximately 1 GW of potential power capacity in Finland, its stated first step outside the United States.

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Key Figures

Revenue: $341.9 million; up 322% Net loss attributable to common stockholders: $221.0 million Net loss per share: $0.76 per basic and diluted share +5 more

Revenue

$341.9 million; up 322%

Fiscal first quarter 2027, year over year

Net loss attributable to common stockholders

$221.0 million

Fiscal first quarter 2027

Net loss per share

$0.76 per basic and diluted share

Fiscal first quarter 2027

Adjusted revenue

$300.4 million vs. $64.2 million

Fiscal first quarter 2027 vs. fiscal first quarter 2026

Adjusted net loss

$4.1 million vs. $7.6 million

Fiscal first quarter 2027 vs. fiscal first quarter 2026

Adjusted net loss per diluted share

$0.01 vs. $0.03

Fiscal first quarter 2027 vs. fiscal first quarter 2026

Adjusted EBITDA

$64.4 million vs. $0.5 million

Fiscal first quarter 2027 vs. fiscal first quarter 2026

Cash and debt

$3.7 billion cash, cash equivalents, and restricted cash; $6.4 billion debt

As of August 31, 2026

Previous Earnings Reports

1 past event · Latest: Oct 09

Same Type 1 event

1. Oct 09

   Earnings report

   24h Move

   +16.1%

   Reported fiscal first-quarter revenue and net loss, with Polaris Forge 1 fully leased to CoreWeave.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gaap, non-gaap, power purchase agreement

3 terms

gaap financial

"A reconciliation of each of these Non-GAAP Measures"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

non-gaap financial

"Adjusted EBITDA, and Net Operating Income are non-GAAP measures."

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

power purchase agreement financial

"Entered into a Power Purchase Agreement with Base Electron"

A power purchase agreement (PPA) is a long-term contract in which a buyer agrees to purchase electricity from a generator at an agreed price and schedule, similar to a multi-year subscription for power or a long-term lease of an energy source. Investors care because PPAs provide predictable revenue and cash flow for the generator, reduce market-price exposure, and shift credit and performance risk to the buyer, all of which affect valuation, financing and perceived investment stability.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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DALLAS, Oct. 07, 2026 (GLOBE NEWSWIRE) -- Applied Digital Corporation (Nasdaq: APLD) ("Applied Digital" or the “Company"), a U.S. based designer, developer, owner, and operator of large-scale, purpose-built data centers engineered to support high-performance computing (“HPC”) workloads, including artificial intelligence (“AI”), machine learning, and other accelerated-compute applications, reported financial results for the fiscal first quarter ended August 31, 2026.

ChronoScale Holdings Corporation ("ChronoScale"), the Company’s majority-owned accelerated-compute platform, is a public company which owns and operates our historic cloud services business and its results are consolidated into our financial statements, but excluded in the non-GAAP financial measures set forth below. Unless otherwise specified, disclosures in this earnings release, including the below, reflect continuing operations only.

Fiscal First Quarter 2027 Financial Highlights

• Revenues: $341.9 million, up 322% from the prior year comparable period
• Net loss attributable to common stockholders: $221.0 million
• Net loss attributable to common stockholders per basic and diluted share: $0.76
• Adjusted revenue: $300.4 million
• Adjusted net loss: $4.1 million
• Adjusted net loss per diluted share: $0.01
• Adjusted EBITDA: $64.4 million
• Net Operating Income: $58.8 million
  
  

Adjusted revenue, Adjusted net income (loss), Adjusted net income (loss) per diluted share, Adjusted EBITDA, and Net Operating Income are non-GAAP measures. A reconciliation of each of these Non-GAAP Measures to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States (“GAAP”) is set forth below. These non-GAAP measures exclude the results of ChronoScale. See “Reconciliation of GAAP to Non-GAAP Measures.”

Recent Highlights

• As previously announced on June 8, 2026, signed a 210 MW, 15-year lease at Delta Forge 2 with the Company’s tier-one investment grade hyperscaler customer, representing approximately $5.2 billion of base-term contracted revenue.
• Delivered Phase 1 of Building 2 (75 MW) at Polaris Forge 1 Ready for Service on July 1, 2026, bringing total live capacity at the campus to 175 MW.
• Closed $1.59 billion of 7.000% Senior Secured Notes due 2031, issued at par through subsidiary APLD ComputeCo 3 LLC, to fund construction of the third HPC building (150 MW) at Polaris Forge 1 and to repay the $300 million bridge facility.
• ChronoScale announced plans with Microsoft for a 50 MW AI compute deployment in North America featuring NVIDIA GB300 NVL72 systems and liquid cooling.
  
  

Subsequent to the Quarter

• Delivered the second 75 MW phase of Building 2 at Polaris Forge 1 Ready for Service, bringing total live capacity at the campus to 250 MW.
• Secured up to approximately 1 GW of potential power capacity in Finland, establishing a strategic foothold in an emerging European AI market.
• Entered into a Power Purchase Agreement with Base Electron, for the purchase of capacity and energy from an approximately 1,200 MW natural gas-fired generation facility to be developed by Base Electron in North Dakota.
• Polaris Forge 1 was named Project of the Year by the Mid-America Economic Development Council, recognizing its economic impact, community investment, partnerships, and technological innovation.
• Through Applied Digital Cares, committed $350,000 in grants across five organizations in Oliver County, North Dakota, home to Polaris Forge 3, supporting first responders, schools, and community facilities.
  
  

Management Commentary

“Our goal is to establish Applied Digital as the category leader in the design, construction, deployment, and operation of purpose-built AI factories,” said Wes Cummins, Chairman and Chief Executive Officer of Applied Digital. “We are building for the long term, with a clear focus on developing large-scale, sustainable AI factory campuses and securing durable, high-quality, long-term contracts with proven, tier-one, investment grade hyperscalers that are leaders in the AI industry.”

On October 1, 2026, the Company achieved Ready for Service for the second 75 MW phase of Building 2 at Polaris Forge 1, bringing fully operational critical IT load at the campus to 250 MW across two buildings and 10 data halls. The Company expects initial operations at Polaris Forge 2 in Harwood to increase delivered critical IT load across our North Dakota campuses to 300 MW by the end of calendar 2026, further demonstrating the Company's ability to execute against its development pipeline.

The Company also took its first step outside the United States, signing an agreement for up to approximately 1 GW of potential power capacity in Finland. Finland shares many of the characteristics that made North Dakota a compelling location for the Company's AI factories: a cool climate that supports efficient operations, access to abundant and reliable power, and room to scale. Management believes this agreement offers meaningful long-term potential while limiting the Company's initial exposure. While Applied Digital's near-term development strategy and execution priorities remain firmly centered on its growing U.S. portfolio, Finland presented itself to us as a measured, opportunistic step into a market that offers attractive long-term potential.

North Dakota remains central to the Company’s strategy. The Company believes the state’s low-cost power, abundant energy resources, low population density, and climate make it one of the most compelling locations in North America for AI factory development, and management expects additional hyperscalers to enter the Dakotas over time. As coastal and metro markets become increasingly constrained and more expensive, Applied Digital believes campuses in low-cost, power-rich regions can support stronger long-term terminal values and become more difficult to replicate.

Power remains the gating factor for AI infrastructure, and the Dakotas are among the few regions where meaningful new capacity can be added at scale. Base Electron Corp., an independent power producer in which Applied Digital holds an approximately 10% equity interest, is developing front-of-the-meter generation that could add multiple gigawatts of new power in the Dakotas over time. Although Base Electron operates independently, the Company believes this new supply source strengthens its ability to expand its Polaris Forge campuses on its own timeline and provides greater visibility into the power available to support future growth in the region.

“As new data center development becomes more difficult in certain markets, we believe the scarcity value of established, powered, and community-supported campuses increases,” Cummins said. “Put simply, we view every new restriction elsewhere as making what we already own harder to replicate. Our approach has always been simple: do it the right way. We don’t just build in communities. We build with them.”

Our community commitment is not abstract. Polaris Forge 1 in Ellendale, North Dakota, was recently named Project of the Year by the Mid-America Economic Development Council for its economic impact, community investment, partnerships, and technological innovation. At the campus, the Company’s use of excess regional grid capacity has returned more than $45 million in electricity credits to local ratepayers. In Center, North Dakota, home to Polaris Forge 3, Applied Digital Cares grants are funding a new sheriff’s deputy, school devices, ambulance and fire equipment, and community facilities. The Company believes this model of local partnership is increasingly important as permitting, power access, and community support become more critical to large-scale AI infrastructure development.

HPC Hosting Update

Applied Digital’s HPC Hosting Business designs, builds, and operates purpose-built AI Factory data centers. As of August 31, 2026, the Company has leases for approximately 1.41 GW of critical IT load across five campuses: Polaris Forge 1, 2, and 3 in North Dakota; Delta Forge 1 in Louisiana; and Delta Forge 2 in Alabama. Those leases represent approximately $36 billion of contracted revenue over their initial base terms, or approximately $86 billion if all renewal options are exercised. Polaris Forge 1 is leased to CoreWeave, Polaris Forge 2 to an investment-grade hyperscaler, and Delta Forge 1, Polaris Forge 3, and Delta Forge 2 to a tier-one investment-grade hyperscaler.

The first 100 MW building at Polaris Forge 1 became operational in October 2025. Building 2 (150 MW) was delivered in two 75 MW phases, the first on July 1, 2026 and the second on October 1 subsequent to quarter end, bringing live capacity at the campus to 250 MW. The third HPC building at Polaris Forge 1 (150 MW), along with Polaris Forge 2, Polaris Forge 3, Delta Forge 1, and Delta Forge 2, are in various stages of construction.

Revenue from our HPC Hosting business totaled $262.6 million for the quarter, including $65.8 million related to base rent, $183.5 million related to tenant fit-out services, and $13.3 million related to tenant recoveries. This resulted in $33.4 million of segment operating profit for the quarter ended August 31, 2026.

Data Center Hosting Update

Applied Digital’s Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. As of August 31, 2026, the Company’s 106 MW facility in Jamestown, ND, and 180 MW facility in Ellendale, ND, were operating at full capacity.

During the three months ended August 31, 2026, the Company generated $37.8 million in revenue from the Data Center Hosting Business segment, compared to $37.9 million during the three months ended August 31, 2025. The results were materially consistent year over year due to stable operating conditions across the Company’s data center hosting facilities.

We are very pleased with our Data Center Hosting Business, which generated $13.3 million in segment operating profit for the three months ended August 31, 2026 on $111.9 million in reported assets at the end of the period.

ChronoScale Update

ChronoScale Holdings Corporation (Nasdaq: CHRN) is a publicly traded accelerated-compute platform in which Applied Digital owns approximately 96%. During the quarter, ChronoScale announced plans with Microsoft for a 50 MW AI compute deployment in North America featuring NVIDIA GB300 NVL72 systems and advanced liquid cooling.

The Company considers its Data Center Hosting Business and the HPC Hosting Business to represent its core operations for long-term strategic and performance evaluation purposes. Accordingly, although we consolidate ChronoScale’s financial results as our majority owned subsidiary, we excluded the results of ChronoScale, including its cloud services business, in our Non-GAAP results presented herein. See “Reconciliation of GAAP to Non-GAAP Measures.”

Financial Results from Operations for Fiscal First Quarter 2027

Operating Results

Services revenue in the fiscal first quarter 2027 was $262.8 million compared to $80.9 million, up 225% from the fiscal first quarter 2026. The increase was primarily due to an increase in tenant fit-out services of approximately $157.2 million, as well as $23.0 million in GPU hardware sales related to ChronoScale.

Data center rental and other revenue was $79.1 million for the three months ended August 31, 2026 compared to no revenue for the three months ended August 31, 2025, as our HPC Hosting Business commenced rental operations in the second quarter of fiscal year 2026. This quarter, we recognized $65.8 million in base rental revenue and $13.3 million related to tenant recoveries.

Services cost of revenues increased $186.9 million, or 318%, from $58.8 million for the three months ended August 31, 2025 to $245.7 million for the three months ended August 31, 2026. The increase in services cost of revenues was primarily due to an increase ofapproximately $151.1 million in expenses associated with tenant fit-out services for our HPC Hosting Business, as well as approximately $22.4 million associated with GPU hardware sales related to ChronoScale.

Data center rental and other cost of revenues for the three months ended August 31, 2026 were $43.9 million. The primary components included $22.4 million in depreciation and amortization expense on our operational AI Factories at our Polaris Forge 1 campus, $13.3 million in expenses which are reimbursable as tenant recoveries, and $7.8 million in personnel and other operating costs supporting our facilities.

Selling, general and administrative expenses in the fiscal first quarter 2027 were $114.7 million compared to $29.5 million, up 289% from the fiscal first quarter of 2026 driven by the Company’s overall business growth. This increase was primarily due to increases of $51.7 million in stock based compensation due to performance awards and the increase in headcount, $9.9 million in personnel expenses related to the increase in headcount, and $12.1 million in professional service expense primarily related to legal services provided on discrete transactions and projects, as well as general support of the business.

Interest expense increased $69.4 million, or 866%, from $8.0 million for the three months ended August 31, 2025, to $77.4 million for the three months ended August 31, 2026 due to an increase in debt arrangements between the periods.

Interest income increased $35.0 million, or 4,080%, from $0.9 million for the three months ended August 31, 2025 to $35.8 million for the three months ended August 31, 2026 due to an increase in funds held in interest-bearing accounts.

Loss on the change in fair value of derivatives was $49.5 million for the three months ended August 31, 2026, due to a decrease of $56.1 million in the fair value of our Babcock & Wilcox Enterprises, Inc. (“B&W”) common stock warrant and an increase of $6.6 million in the fair value of the derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2’s redeemable noncontrolling interest.

Loss on change in fair value of investment was $11.4 million for the three months ended August 31, 2026, due to a decrease in fair value of our investment in B&W common stock.

Net loss from discontinued operations was $16.1 million for the three months ended August 31, 2026 and represents the income statement activity related to the Ekso business at ChronoScale which is classified as held for sale and discontinued operations.

Net loss from continuing operations attributable to common stockholders for the fiscal first quarter 2027 was $221.0 million, or $0.76 per basic and diluted share. This compares to a net loss attributable to common stockholders from continuing operations of $18.5 million, or $0.07 per basic and diluted share for the fiscal first quarter of 2026.

Adjusted revenue, a non-GAAP financial measure, was $300.4 million for the fiscal first quarter 2027 compared to $64.2 million for the fiscal first quarter of 2026.

Adjusted net loss, a non-GAAP financial measure, was $4.1 million, or $0.01 per diluted share for the fiscal first quarter 2027. This compares to an adjusted net loss, a non-GAAP financial measure, of $7.6 million, or $0.03 per diluted share, for the fiscal first quarter of 2026.

Adjusted EBITDA, a non-GAAP financial measure, was $64.4 million for the fiscal first quarter 2027 compared to an Adjusted EBITDA of $0.5 million for the fiscal first quarter 2026.

Net Operating Income, a non-GAAP financial measure, was $58.8 million for the fiscal first quarter 2027.

For the details of how the Company defines these non-GAAP financial measures and the reconciliation thereof, please see "Reconciliation of GAAP to Non-GAAP Measures" below.

Balance Sheet

As of August 31, 2026, the Company had $3.7 billion in cash, cash equivalents, and restricted cash, along with $6.4 billion in debt.

Conference Call

As previously announced, Applied Digital will host a conference call today, October 7, 2026, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss these results. A question-and-answer session will follow the management’s presentation.

Date: Wednesday, October 7, 2026

Time: 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)

North America Dial-In: 1-833-461-5787

International Dial-In: +1 (585) 542-9983

Conference ID: 153 131 451

The conference call will be broadcast live and available for replay for one year here.

Please call the conference telephone number approximately 10 minutes before the start time. An operator will register your name and organization. If you have difficulty connecting with the conference call, please get in touch with Applied Digital’s investor relations team at 1-949-574-3860.

About Applied Digital

Applied Digital Corporation (Nasdaq: APLD) named Best Data Center in the Americas 2025 by Datacloud – designs, develops, owns, and operates large-scale, purpose-built data centers engineered to support HPC workloads, including AI, machine learning, and other accelerated-compute applications. Headquartered in Dallas, TX, and founded in 2021, the Company combines hyperscale expertise, closed-loop cooling, and rapid deployment capabilities to deliver secure, scalable compute at industry-leading speed and efficiency, while creating economic opportunities in underserved communities through its award-winning Polaris Forge AI Factory model. Find more information at www.applieddigital.com. Follow us on X (formerly Twitter) at @APLDdigital.

Forward-Looking Statements

This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position, business strategy and objectives and future financing plans. These statements use words, and variations of words, such as "intend," “will,” “continue,” “build,” “future,” “increase,” “drive,” “believe,” “look,” “ahead,” “confident,” “deliver,” “outlook,” “expect,” “project” and “predict.” Other examples of forward-looking statements may include, but are not limited to, (i) statements that reflect perspectives and expectations regarding lease agreements and any current or prospective data center campus development; (ii) statements about the high-performance computing (HPC) industry; (iii) statements of Company plans and objectives, including the Company’s evolving business model, or estimates or predictions of actions by suppliers; (iv) statements of future economic performance; (v) statements of assumptions underlying other statements and statements about the Company or its business; (vi) statements regarding international markets and expansion and development internationally, (vii) statements regarding the Company’s plans to obtain future project financing; and (viii) statements regarding ChronoScale. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s expectations and projections. These risks, uncertainties, and other factors include, among others: our ability to complete construction of our data center campuses as planned, including internationally; the lead time of customer acquisition and leasing decisions and related internal approval processes; changes to artificial intelligence and HPC infrastructure needs and their impact on future plans; costs related to the HPC operations and strategy; our ability to timely deliver any services required in connection with completion of installation under the lease agreements; our ability to raise additional capital to fund the ongoing datacenter construction and operations; differences in sourcing materials and labor internationally; our ability to obtain financing of datacenter leases on acceptable financing terms, or at all; our dependence on principal customers, including our ability to execute and perform our obligations under our leases with key customers; our ability to timely and successfully build new HPC hosting facilities with the appropriate contractual margins and efficiencies; power or other supply disruptions and equipment failures; the inability to comply with regulations, developments and changes in regulations, including internationally; cash flow and access to capital; availability of financing to continue to grow our business; decline in demand for our products and services; maintenance of third party relationships; and conditions in the debt and equity capital markets. A further list and description of these risks, uncertainties and other factors can be found in the Company’s most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q, including in the sections captioned “Forward-Looking Statements” and “Risk Factors,” and in the Company’s subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov, on the Company’s website (www.applieddigital.com) under “Investors,” or on request from the Company. Information in this earnings release is as of the dates and time periods indicated herein, and the Company does not undertake to update any of the information contained in these materials, except as required by law.

Use and Reconciliation of Non-GAAP Financial Measures

To supplement our consolidated financial statements presented under GAAP, we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations by providing perspective on results absent one-time or significant non-cash items. We utilize these measures in the business planning process to understand expected operating performance and to evaluate results against those expectations. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our core business operating results regarding factors and trends affecting our business and provide a reasonable basis for comparing our ongoing results of operations. Management considers the Data Center Hosting Business and the HPC Hosting Business to be its core operations for long-run strategic and performance evaluation purposes. Accordingly, these non-GAAP financial measures exclude the results of our consolidated subsidiary, ChronoScale. ChronoScale is included in our consolidated financial statements and results of continuing operations. Due to its strategic role relative to the Company’s core business, management believes the ChronoScale results may obscure underlying trends in the performance of core operations when included in certain non-GAAP measures.

These non-GAAP financial measures are provided as supplemental measures to our performance measures calculated in accordance with GAAP and therefore, are not intended to be considered in isolation or as a substitute for comparable GAAP measures. Excluding the results of ChronoScale in our non-GAAP financial measures removes revenues and expenses that are part of the Company’s consolidated results and continuing operations and should not be viewed as measures or reflections of liquidity or profitability in accordance with GAAP. Further, these non-GAAP financial measures have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Because of the non-standardized definitions of non-GAAP financial measures, we caution investors that the non-GAAP financial measures as used by us in this earnings release have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Further, investors should be aware that when evaluating these non-GAAP financial measures, these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, from time to time in the future there may be items that we may exclude for purposes of our non-GAAP financial measures and we may in the future cease to exclude items that we have historically excluded for purposes of our non-GAAP financial measures. Likewise, we may determine to modify the nature of the adjustments to arrive at our non-GAAP financial measures. Investors should review the non-GAAP reconciliations provided below and not rely on any single financial measure to evaluate our business.

Adjusted Revenue

“Adjusted revenue” is a non-GAAP financial measure that represents total revenue excluding ChronoScale revenue.

Adjusted Operating Income (Loss), Adjusted Net Loss from Continuing Operations, and Adjusted Net Loss from Continuing Operations per Diluted Share

“Adjusted operating income (loss)” and “Adjusted net loss from continuing operations” are non-GAAP financial measures that represent operating income and net income (loss) from operations excluding ChronoScale, respectively. Adjusted operating income (loss) is Operating loss excluding operating (loss) income from ChronoScale, stock-based compensation, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, non-cash amortization of customer lease incentives, loss on abandonment of assets, restructuring expenses and other non-recurring expenses that management believes are not representative of our expected ongoing costs. Adjusted net loss from continuing operations is Adjusted operating income (loss) further adjusted for interest expense directly attributable to ChronoScale, loss on change in fair value of derivatives, and loss on change in fair value of investment. We define “Adjusted net loss from continuing operations per diluted share” as Adjusted net loss from continuing operations divided by weighted average diluted share count.

EBITDA and Adjusted EBITDA

“EBITDA” is defined as earnings before interest expense, interest income, income tax expense, and depreciation and amortization and excluding results of ChronoScale. “Adjusted EBITDA” is defined as EBITDA adjusted for stock-based compensation, non-cash amortization of customer lease incentives, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, loss on abandonment of assets, loss on change in fair value of derivatives, loss on change in fair value of investments, restructuring expenses, and other non-recurring expenses that management believes are not representative of our expected ongoing costs.

Net Operating Income

"Net Operating Income" is a non-GAAP financial measure that represents base rental revenue from the HPC Hosting Business. Net Operating Income is HPC Hosting Business base rental revenue, excluding the non-cash amortization of one-time customer lease incentives provided at contract inception, less rental property operating expenses, property taxes, and property insurance expenses. "Net Operating Income Margin" is defined as Net Operating Income divided by HPC Hosting Business base rental revenue.

Investor Relations Contacts		Media Contact
Matt Glover or Ralf Esper		Buffy Harakidas, EVP
Gateway Group, Inc.		JSA (Jaymie Scotto & Associates)
(949) 574-3860		(856) 264-7827
APLD@gateway-grp.com		jsa_applied@jsa.net

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share and par value data)
		August 31, 2026				May 31, 2026
ASSETS
Current assets:
Cash and cash equivalents		$	2,949,909			$	1,591,988
Restricted cash			313,385				2,381,027
Accounts receivable			114,110				56,309
Prepaid expenses and other current assets (1)			685,638				613,692
Current assets held for sale			19,366				19,841
Total current assets			4,082,408				4,662,857
Property and equipment, net			6,330,411				4,236,300
Operating lease right of use assets, net			72,250				76,922
Finance lease right of use assets, net			109,887				122,523
Other assets			1,112,220				830,710
TOTAL ASSETS		$	11,707,176			$	9,929,312
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	336,865			$	395,474
Accrued liabilities			850,355				548,493
Current portion of operating lease liability			19,199				18,484
Current portion of finance lease liability			43,490				47,585
Current portion of debt			112,645				16,422
Customer deposits			16,752				16,752
Deferred revenue			39,217				4,666
Due to customer			11,448				10,065
Current liabilities held-for-sale			4,988				7,426
Other current liabilities			158,273				97,489
Total current liabilities			1,593,232				1,162,856
Long-term deferred revenue			107				—
Long-term portion of operating lease liability			41,670				47,178
Long-term portion of finance lease liability			2,457				10,731
Long-term debt			6,263,947				4,959,516
Other long-term liabilities			5,432				5,454
Total liabilities			7,906,845				6,185,735
Commitments and contingencies
Temporary equity
Series E preferred stock, $0.001 par value, 2,000,000 shares authorized, no shares issued and outstanding at August 31, 2026, and 276,673 shares issued and outstanding at May 31, 2026			—				6,306
Series E-1 preferred stock, $0.001 par value, 62,500 shares authorized, 61,831 shares issued and outstanding at August 31, 2026, and 61,909 shares issued and outstanding at May 31, 2026			56,373				56,460
Series G preferred stock, $0.001 par value, 1,030,000 shares authorized, 128,750 shares issued and outstanding at August 31, 2026, and no shares issued and outstanding at May 31, 2026			124,929				—
Redeemable noncontrolling interest			2,010,873				1,956,303
Stockholders' equity:
Common stock, $0.001 par value, 600,000,000 shares authorized, 304,232,295 shares issued and 297,066,995 shares outstanding at August 31, 2026, and 295,048,903 shares issued and 287,883,603 shares outstanding at May 31, 2026			305				296
Treasury stock, 7,165,300 shares at August 31, 2026 and 7,165,300 shares at May 31, 2026, at cost			(52,737	)			(52,737	)
Additional paid in capital			2,492,725				2,432,250
Accumulated deficit			(837,821	)			(662,333	)
Total stockholders’ equity attributable to Applied Digital Corporation			1,602,472				1,717,476
Noncontrolling interest		$	5,684			$	7,032
Total stockholders’ equity including noncontrolling interest		$	1,608,156			$	1,724,508
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY		$	11,707,176			$	9,929,312
(1) Includes a related party receivable of $59.3 million and $58.6 million as of August 31, 2026 and May 31, 2026, respectively.

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)
		Three Months Ended
		August 31, 2026				August 31, 2025
Revenue:
Services revenue		$	262,755			$	80,934
Data center rental and other revenue			79,120				—
Total revenue			341,875				80,934
Costs and expenses:
Services cost of revenue			245,709				58,831
Data center rental and other cost of revenue			43,862				140
Selling, general and administrative (1)			114,683				29,482
Loss on abandonment of assets			—				2,243
Total costs and expenses			404,254				90,696
Operating loss			(62,379	)			(9,762	)
Interest expense			77,383				8,013
Interest income (2)			(35,821	)			(857	)
Loss on change in fair value of derivatives			49,511				—
Loss on change in fair value of investment			11,352				—
Other expense, net			1,311				—
Net loss from continuing operations before income tax expense			(166,115	)			(16,918	)
Income tax expense (benefit)			1,886				8
Net loss from continuing operations			(168,001	)			(16,926	)
Net loss from discontinued operations			(16,054	)			—
Net loss			(184,055	)			(16,926	)
Net loss attributable to noncontrolling interest and redeemable noncontrolling interest			(51,484	)			—
Preferred dividends			(1,543	)			(1,576	)
Net loss attributable to common stockholders		$	(237,082	)		$	(18,502	)
Net loss attributable to common stockholders
Continuing operations		$	(221,028	)		$	(18,502	)
Discontinued operations			(16,054	)			—
Net loss attributable to common stockholders		$	(237,082	)		$	(18,502	)
Basic and diluted net loss per share attributable to common stockholders
Continuing operations		$	(0.76	)		$	(0.07	)
Discontinued operations			(0.06	)			—
Basic and diluted net loss per share attributable to common stockholders		$	(0.82	)		$	(0.07	)
Basic and diluted weighted average number of shares outstanding			291,557,618				255,892,902
(1) Includes related party selling, general and administrative expense of $49.7 thousand and $74.3 thousand for the three months ended August 31, 2026 and August 31, 2025, respectively. (2) Includes related party income of $0.7 million for the three months ended August 31, 2026.

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) (Unaudited)
		Three Months Ended
		August 31, 2026				August 31, 2025
CASH FLOW FROM OPERATING ACTIVITIES
Net loss		$	(184,055	)		$	(16,926	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			41,912				4,152
Stock-based compensation			66,499				15,465
Lease expense			6,517				5,381
Loss on change in fair value of derivatives			49,511				—
Loss on change in fair value of investment			11,352				—
Amortization of debt issuance costs			5,896				4,851
Loss on classification of held for sale			14,126				—
Loss on abandonment of assets			—				2,243
Gain on change in fair value of warrants			(22	)			—
Changes in operating assets and liabilities:
Accounts receivable			(56,977	)			(29,525	)
Prepaid expenses and other current assets			(47,786	)			(6,962	)
Customer deposits			107				627
Deferred revenue			34,480				(2,316	)
Accounts payable			(7,981	)			(77,784	)
Accrued liabilities			106,701				28,684
Due to customer			1,383				(1,753	)
Lease assets and liabilities			5,856				(9,598	)
Other current liabilities			1,886				—
Other assets			14,516				1,930
CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES			63,921				(81,531	)
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property and equipment and other assets			(2,074,698	)			(249,914	)
Investment in companies			(8,181	)			—
CASH FLOW USED IN INVESTING ACTIVITIES			(2,082,879	)			(249,914	)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of finance leases			(14,252	)			(29,932	)
Borrowings of long-term debt			1,648,500				65
Draw on revolver			82,390				—
Repayments of long-term debt			(315,932	)			(2,416	)
Payment of deferred financing costs			(28,879	)			(1	)
Tax payments for restricted stock upon vesting			(99,413	)			(4,497	)
Noncontrolling interest issuance contributions			1,349				—
Proceeds from issuance of common stock			—				196,366
Common stock issuance costs			—				(5,945	)
Proceeds from issuance of preferred stock			274,999				175,000
Preferred stock issuance costs			(149	)			(4,604	)
Redemption of preferred stock			(6,996	)			(225	)
Dividends issued on preferred stock			(1,543	)			(1,576	)
Exercise of warrants			—				1
Issuance of equity by subsidiary, net of costs			3,398				—
CASH FLOW PROVIDED BY FINANCING ACTIVITIES		$	1,543,472			$	322,236
		Three Months Ended
		August 31, 2026				August 31, 2025
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		$	(475,486	)		$	(9,209	)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD, INCLUDING CASH FROM DISCONTINUED OPERATIONS			4,153,431				123,318
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD, INCLUDING CASH FROM DISCONTINUED OPERATIONS			3,677,945				114,109
Less: CASH, CASH EQUIVALENTS, AND RESTRICTED CASH FROM DISCONTINUED OPERATIONS			2				—
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH FROM CONTINUED OPERATIONS		$	3,677,943			$	114,109
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid		$	242,852			$	9,039
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
Operating right-of-use assets obtained by lease obligation		$	5,497			$	—
Finance right-of-use assets obtained by lease obligation		$	—			$	3,966
Property and equipment in accounts payable and accrued liabilities		$	142,284			$	132,113
Conversion of preferred stock to common stock		$	149,921			$	242,480
Issuance of warrants, at fair value		$	—			$	121,204
Non-cash dividends paid in-kind		$	60,051			$	—

APPLIED DIGITAL CORPORATION AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (In thousands, except percentage data)
		Three Months Ended
		August 31, 2026				August 31, 2025
Adjusted Revenue
Total revenue (GAAP)		$	341,875			$	80,934
ChronoScale revenue			(41,482	)			(16,718	)
Adjusted revenue (Non-GAAP)		$	300,393			$	64,216
Adjusted operating income (loss)
Operating loss (GAAP)		$	(62,379	)		$	(9,762	)
Operating loss from ChronoScale			25,354				(12,531	)
Stock-based compensation (1)			59,391				14,446
Non-recurring repair expenses (2)			72				173
Diligence, acquisition, disposition and integration expenses (3)			11,911				1,196
Litigation expenses (4)			1,177				190
Non-cash amortization of customer lease incentives			854				—
Loss on abandonment of assets			—				1,751
Restructuring expenses (5)			129				431
Other non-recurring expenses (6)			1,307				490
Adjusted operating income (loss) (Non-GAAP)		$	37,816			$	(3,616	)
Adjusted operating margin			13	%			(6	)%
Adjusted net loss from continuing operations
Net loss from continuing operations (GAAP)		$	(168,001	)		$	(16,926	)
Operating loss from ChronoScale			25,354				(12,531	)
Net interest expense directly attributable to ChronoScale			1,557				3,210
Stock-based compensation (1)			59,391				14,446
Non-recurring repair expenses (2)			72				173
Diligence, acquisition, disposition and integration expenses (3)			11,911				1,196
Litigation expenses (4)			1,177				190
Non-cash amortization of customer lease incentives			854				—
Loss on abandonment of assets			—				1,751
Loss on change in fair value of derivatives			49,511				—
Loss on change in fair value of investment			11,352				—
Restructuring expenses (5)			129				431
Other non-recurring expenses (6)			2,640				490
Adjusted net loss from continuing operations (Non-GAAP)		$	(4,053	)		$	(7,570	)
Diluted weighted average number of shares outstanding (Non-GAAP)			291,557,618				255,892,902
Adjusted net loss from continuing operations per diluted share (Non-GAAP)		$	(0.01	)		$	(0.03	)
EBITDA and Adjusted EBITDA
Net loss from continuing operations (GAAP)		$	(168,001	)		$	(16,926	)
Operating loss from ChronoScale			25,354				(12,531	)
Interest expense			77,383				8,013
Interest income			(35,821	)			(857	)
Income tax (benefit) expense			1,886				8
Depreciation and amortization			26,574				4,153
EBITDA (Non-GAAP)		$	(72,625	)		$	(18,140	)
Stock-based compensation (1)			59,391				14,446
Non-recurring repair expenses (2)			72				173
Diligence, acquisition, disposition, and integration expenses (3)			11,911				1,196
Litigation expenses (4)			1,177				190
Non-cash amortization of customer lease incentives			854				—
Loss on change in fair value of derivatives			49,511				—
Loss on change in fair value of investment			11,352				—
Loss on abandonment of assets			—				1,751
Restructuring expenses (5)			129				431
Other non-recurring expenses (6)			2,640				490
Adjusted EBITDA (Non-GAAP)		$	64,412			$	537
Net Operating Income
HPC Hosting Business base rental revenue (GAAP)		$	65,800			$	—
Non-cash amortization of customer lease incentives			854				—
Rental property operating expenses			(5,726	)			—
Property taxes			(821	)			—
Property insurance expenses			(1,278	)			—
Net Operating Income (Non-GAAP)		$	58,829			$	—
Net Operating Income margin			89	%			—	%
(1) Represents stock-based compensation expense and employment taxes incurred in connection with the vesting of stock-based awards. (2) Represents costs incurred for the non-recurring repair and replacement of equipment at our data center facilities. (3) Represents legal, accounting and consulting costs incurred in association with certain discrete transactions and projects. (4) Represents non-recurring litigation expense associated with our defense of class action lawsuits and legal fees related to matters with certain former employees. We do not expect to incur these expenses on a regular basis. (5) Represents non-recurring expenses associated with employee separations. (6) Represents expenses that are not representative of our expected ongoing costs.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Applied Digital’s fiscal first-quarter 2027 earnings results?

Applied Digital reported $341.9 million in revenue and a continuing-operations net loss attributable to common stockholders of $221.0 million, or $0.76 per basic and diluted share. Revenue increased 322% from the prior-year comparable period, while the loss widened from $18.5 million, or $0.07 per share.

How much contracted revenue does Applied Digital have under its data center leases?

At August 31, 2026, Applied Digital’s leases represented approximately $36 billion of contracted revenue over their initial base terms. They covered approximately 1.41 GW of critical IT load across five campuses. Contracted revenue would be approximately $86 billion if all renewal options are exercised.

Why does Applied Digital exclude ChronoScale from its non-GAAP earnings measures?

Applied Digital excludes ChronoScale because it considers Data Center Hosting and HPC Hosting its core operations for long-term strategy and performance evaluation. Applied Digital owns approximately 96% of ChronoScale and consolidates its financial results under GAAP, but excludes those results from the non-GAAP measures presented.

What made up Applied Digital’s HPC Hosting revenue in fiscal first-quarter 2027?

HPC Hosting revenue totaled $262.6 million, comprising $65.8 million in base rent, $183.5 million in tenant fit-out services and $13.3 million in tenant recoveries. The segment generated $33.4 million in operating profit for the quarter ended August 31, 2026.

Who leases Applied Digital’s five HPC campuses?

CoreWeave leases Polaris Forge 1, and an investment-grade hyperscaler leases Polaris Forge 2. A tier-one investment-grade hyperscaler leases Delta Forge 1, Polaris Forge 3 and Delta Forge 2. The campuses are in North Dakota, Louisiana and Alabama.