Applied Digital Corp. (APLD) Q1 2026 Earnings Summary

Executive Summary

• Q1 FY2026 revenue of $64.2M rose 84% YoY, driven by $26.3M tenant fit-out revenue in HPC Hosting and $37.9M Data Center Hosting revenue; SG&A spiked on accelerated stock comp, producing a GAAP net loss from continuing ops of $27.8M (-$0.11) and Adjusted EBITDA of $0.5M .
• Versus S&P Global consensus, Applied Digital delivered a material top-line beat ($64.2M actual vs $45.5M estimate*) and an EPS beat (-$0.03 actual vs -$0.13 estimate*), while EBITDA (as per S&P definitions) was below consensus (-$16.4M actual vs $2.0M estimate*)—company-reported Adjusted EBITDA was positive at $0.5M .
• Strategic contracts expanded: CoreWeave executed the third lease, fully contracting 400 MW at Polaris Forge 1 (~$11B total anticipated contracted lease revenue), and the company broke ground on Polaris Forge 2 (200 MW initial capacity targeted to start coming online in 2026, full in 2027) .
• Financing momentum accelerated post-quarter: initial $112.5M draw from the $5B Macquarie preferred equity facility and subsequent announcements of $2.35B senior secured notes pricing and an expected additional $787.5M Macquarie draws for PF1 and PF2—key catalysts to complete builds and scale the AI Factory platform .
• Management signaled a projected annualized NOI run-rate of ~$500M once PF1 is fully operational and reiterated a path toward ~$1B NOI within five years, framing a potential evolution into an AI-focused data center REIT as the business matures .

Note: Asterisks denote values retrieved from S&P Global consensus and actuals; see Estimates tables.

What Went Well and What Went Wrong

What Went Well

• Expanded CoreWeave relationship: third lease signed, fully contracting 400 MW at PF1 (~$11B total anticipated contracted lease revenue). “We feel this third lease validates our platform and execution, positioning Applied Digital as a trusted strategic partner…” — Wes Cummins .
• Execution milestones: First 100 MW facility at PF1 remains on track for calendar Q4 2025; PF2 broke ground with initial 200 MW expected to begin coming online in 2026 and reach full capacity in 2027 .
• Financing progress: Initial $112.5M draw from the $5B Macquarie preferred equity facility; management described repeatable structures enabling asset-level financing and reduced future equity requirements .

What Went Wrong

• Profitability pressure: SG&A surged to $29.2M (+165% YoY) largely from $16.6M stock-based compensation due to accelerated vesting; GAAP EBITDA was negative and Adjusted EBITDA compressed to $0.5M from $6.3M YoY .
• EBITDA vs consensus: S&P Global’s EBITDA actual (-$16.4M*) missed the $2.0M* estimate despite company-reported Adjusted EBITDA of $0.5M, highlighting difference in measure definitions and ongoing cost ramp ahead of lease revenue recognition .
• Continued net loss: Net loss attributable to common stockholders from continuing ops was $27.8M (-$0.11), reversing positive EPS in the prior-year quarter, reflecting build-out costs, fit-out low margins, and higher interest expense .

Financial Results

Actual vs S&P Global Consensus (Q1 FY2026)

Values marked with * retrieved from S&P Global.

Quarterly Trends (Continuing Operations)

Q1 FY2026 Revenue Composition (Continuing Operations)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “With hyperscalers expected to invest approximately $350 billion into AI deployment this year, we believe we are in a prime position to serve as the modern-day picks and shovels of the intelligence era.” — Wes Cummins, CEO .
• “This quarter, the CoreWeave fit-out revenue contributed around $26.3 million… While this is a one-time low-margin business, approximately mid-single digits, it is strategically important.” — Saidal Mohmand, CFO .
• “We believe we are on a projected annualized NOI run rate of approximately $500 million once Polaris Forge 1 is fully operational… on the path toward our $1 billion NOI target within the next five years.” — Company press release .

Q&A Highlights

• Project financing expected to encompass both PF1 buildings, with indicative 70% LTC structure; blended pricing around SOFR + 400–450 bps (mortgage tranche ~300–335 bps, mezzanine ~10%) .
• PF2 power and timelines: initial utility power ~280 MW; campus designed to scale to ~1 GW; initial 200 MW begins coming online in 2026, full by 2027; prospective ROFR over full 1 GW for an investment-grade hyperscaler .
• Supply chain resilience: long lead items secured ~two years ago; minimal pricing inflation observed due to pre-booked capacity .
• Macquarie preferred equity facility: enables scaling without recurring public-market dilution; unlocks $20–$25B total capital when combined with project finance .
• Pipeline definition: 700 MW under construction; “active pipeline” are projects likely to move into construction in 6–12 months; multi-state site evaluations ongoing .

Estimates Context

• Q1 FY2026 beats: Revenue beat ($64.2M actual vs $45.5M est*); EPS beat (-$0.03 actual vs -$0.13 est*). EBITDA (per S&P) missed (-$16.4M actual vs $2.0M est*), while company Adjusted EBITDA was $0.5M .
• Estimate recalibration: Given PF1 lease revenue recognition starting late CY2025 and 2026–2027 PF2 ramp, street models likely shift mix from low-margin fit-out in 2H CY2025 to high-visibility lease revenues in CY2026–2027, with margin expansion potential as SG&A normalizes and SBC accelerations fade .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Revenue momentum is real and largely driven by contracted hyperscaler demand; PF1 fully leased (~$11B anticipated contracted lease revenue) provides multi-year visibility .
• Near-term profitability is pressured by low-margin fit-out and elevated SBC/OpEx; monitor transition to lease revenue recognition in late CY2025 and scaling through CY2026–2027 .
• Financing de-risks execution: the Macquarie facility and project finance structures materially reduce equity needs and improve asset-level alignment—key catalysts to deliver PF1/PF2 on schedule .
• Structural growth drivers remain robust (power-constrained AI infrastructure); APLD’s design/cooling efficiencies and secured supply chain support parallel campus development and multi-GW pipeline .
• Watch upcoming milestones: project financing closing, PF1 first 100 MW RFS and lease revenue recognition, PF2 lease execution/ROFR formalization—each could move the narrative and stock .
• Valuation path: management’s ~$500M PF1 NOI run-rate and ~$1B five-year NOI target frame a REIT-like end-state; track delivery and capital structure to gauge discount/premium to data center peers .
• Trading lens: Near-term beats on revenue/EPS versus consensus* are supportive, but EBITDA misses (S&P definition*) and cost ramps may cap multiple until lease revenue monetization becomes visible in reported results .

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Appendix: Additional Relevant Press Releases (Post-Quarter)

• APLD Compute priced $2.35B 9.25% senior secured notes due 2030 to fund PF1 ELN-02/ELN-03, repay SMBC facility, and fund reserves; completion subject to conditions .
• Expected additional $787.5M draws from Macquarie: $450M for PF2 and $337.5M for PF1 (subject to notes closing); plus a $65M revolving facility with FNBO (SOFR + 2.75%) .

Values marked with * retrieved from S&P Global.