Applied Digital beats revenue estimates as AI data center demand surges, shares jump 7%

Applied Digital beats quarterly revenue estimates on AI data center demand, shares jump

Jan 7 (Reuters) - Applied Digital (APLD.O), opens new tab reported second-quarter revenue above Wall Street estimates on Wednesday, as the data center operator benefited from strong demand for its large-scale facilities for artificial intelligence workloads. Shares of the company rose about 7% in extended trading. Applied Digital is capitalizing on surging demand for AI infrastructure that is able to provide the massive compute capacity developers need to train and deploy artificial intelligence models. It reported revenue of $126.6 million for the fiscal second quarter, ended November 30, far exceeding analysts' estimates of $88 million, according to data compiled by LSEG. The company has secured billions in long-term leases, including a recent $5 billion agreement with a U.S.-based hyperscaler for 200 MW at its Polaris Forge 2 campus in North Dakota. Applied said it has now signed leases with two hyperscalers across two campuses in North Dakota. "The Dakotas represent a compelling region for hyperscalers due to their cool climate and abundant energy. We believe our first-mover advantage, combined with our proven ability to execute technically complex data center construction, positions Applied Digital with a strong competitive advantage," CEO Wes Cummins said. Last month, Applied Digital said it was spinning off its cloud business to merge with Ekso Bionics (EKSO.O), opens new tab, forming an AI-focused company called ChronoScale, with Applied Digital retaining 97% ownership as it looks to transition into a data center real estate investment trust. Reporting by Harshita Mary Varghese and Anhata Rooprai in Bengaluru; Editing by Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab

Applied digital shares jump as AI data center revenue beats estimates

Applied Digital saw strong growth as demand for AI data centers increased. The company earned more than expected and attracted big customers for long-term data center leases. Investors reacted positively after the results. Applied Digital is expanding its AI infrastructure business while strengthening its finances and planning changes to its cloud operations. Applied Digital reported second-quarter revenue that was higher than what Wall Street expected, helped by strong demand for data centers used for artificial intelligence work. The company said customers need very large computing power to train and run AI models, and Applied Digital is benefiting from this growing demand. Applied Digital posted revenue of $126.6 million for the fiscal second quarter that ended on November 30, much higher than analyst estimates of about $88 million, as reported by Reuters. After the earnings report, Applied Digital shares rose about 7% in extended trading. The company operates large-scale data centers and is focusing on infrastructure that can support AI workloads needing massive compute capacity. Applied Digital has signed billions of dollars in long-term lease agreements with major customers, showing strong future demand. This includes a $5 billion lease deal with a U.S.-based hyperscaler for 200 megawatts (MW) of capacity at its Polaris Forge 2 campus in North Dakota. The company said it has now signed leases with two hyperscalers across two campuses in North Dakota. CEO Wes Cummins said, "The Dakotas represent a compelling region for hyperscalers due to their cool climate and abundant energy", as cited by Reuters. Cummins added, "We believe our first-mover advantage, combined with our proven ability to execute technically complex data center construction, positions Applied Digital with a strong competitive advantage." Applied Digital also reported that its revenue was up 250% from the same quarter last year, showing very strong year-on-year growth, as stated by Investing.com. Analysts had expected revenue of around $86.67 million, but the company clearly beat that forecast. Adjusted earnings per share came in at $0.00, which was better than analyst expectations of a loss of $0.12 per share. Shares of the company jumped 4.8% in after-hours trading following the earnings announcement. The strong results were mainly driven by the High-Performance Computing (HPC) Hosting Business, which brought in $85 million in revenue for the quarter. This included $73 million from tenant fit-out services and $12 million from rental revenue, as the first building at Polaris Forge 1 became fully operational. The Data Center Hosting Business added $41.6 million in revenue, up 15% from last year. Applied Digital also has a 400 MW agreement with CoreWeave at Polaris Forge 1, which could generate about $11 billion in lease revenue over time, as per the report by Investing.com. The company ended the quarter with $2.3 billion in cash, cash equivalents, and restricted cash, strengthening its financial position. Applied Digital recently completed a $2.35 billion senior secured private notes offering and has drawn $900 million under a preferred equity deal with Macquarie Asset Management. Last month, the company announced it would spin off its cloud business and merge it with EKSO Bionics to form a new AI-focused company called ChronoScale, as stated by Reuters. Applied Digital is expected to retain more than 80% ownership of ChronoScale as it moves toward becoming a data center real estate investment trust. Q1. Why did Applied Digital revenue rise this quarter? Applied Digital earned more money because demand for AI data centers and high computing power increased. Q2. Why did Applied Digital shares go up after earnings? Shares rose because the company reported revenue that was much higher than market expectations.

Applied Digital Q2: Will CoreWeave Drive 40% Revenue Growth? - Applied Digital (NASDAQ:APLD)

Applied Digital Corp. (NASDAQ:APLD) is scheduled to report its fiscal second-quarter 2026 financial results on Wednesday after the closing bell. Here's a look at what investors will be watching in the report and commentary from executives. APLD stock is climbing. See the chart and price action here. Key Estimates & Financials Wall Street is looking for significant top-line growth as Dallas-based Applied Digital begins to recognize more revenue from its AI-focused data centers and tenant fit-out services. Analysts expect the company to report a loss of ten cents per share and quarterly revenue of $89.76 million, according to data from Benzinga Pro. Revenue Growth: Analysts expect a more than 40% year-over-year increase in revenue, driven by the ramp-up of the Polaris Forge 1 campus and services provided to CoreWeave Corp. (NASDAQ:CRWV). Path to Profitability: While a net loss is still expected, Applied Digital is benefiting from operating leverage as its massive fixed-cost infrastructure begins to generate recurring cash flow. 3 Key Themes to WatchCoreWeave Partnership & Lease Expansion A major highlight of 2025 was CoreWeave exercising its option to expand its lease at the Ellendale, ND campus to a full 400 MW. This increased the total contract value to approximately $11 billion over 15 years. Any updates on the timeline for when these megawatts go live and start generating lease revenue (expected late 2025/early 2026) will be critical. ChronoScale Cloud Spinoff Last week, Applied Digital announced it would spin off its cloud business and merge it with Ekso Bionics Holdings, Inc. (NASDAQ:EKSO) to form a new entity, ChronoScale. Investors will be looking for: Timeline for completion. How this strategic separation will help APLD focus strictly on its "AI Factory" data center business. Financing and Liquidity Applied Digital recently secured a development loan facility with Macquarie Group to support its new AI campuses. Given the capital-intensive nature of building hyperscale data centers, management's commentary on the cost of capital and future funding needs for Polaris Forge 2 will be a primary focus for analysts. Market Sentiment Applied Digital stock has climbed heading into the report, rising more than 25% in the first week of January. While the growth story is compelling, skeptics remain focused on the company's debt levels and the execution risks associated with such a large-scale construction pipeline. Photo: Shutterstock APLDApplied Digital Corp$30.290.10%OverviewCRWVCoreWeave Inc$78.660.92%EKSOEkso Bionics Holdings Inc$8.74-8.24%Market News and Data brought to you by Benzinga APIs