Applied Digital Corp. (APLD) Q4 2025 Earnings Summary

Executive Summary

Q4 FY25 revenue of $38.0M grew 41% YoY and modestly beat S&P Global consensus ($38.01M actual vs $37.12M estimate; +$0.9M) as hosting capacity ran at full utilization; Primary EPS (S&P methodology) was -$0.03 vs -$0.17 consensus, a significant beat driven by lower interest expense and improved operating leverage in hosting (consensus values marked with *; see S&P Global note below).
Strategic step-change: two 15-year CoreWeave leases (250MW) signed during the quarter (~$7B contracted revenue), and an additional 150MW option exercised post-quarter that would bring total to 400MW and ~$11B contracted revenue if finalized; first 100MW building targeted to be operational in calendar Q4’25 .
Directional guide: management expects a significant sequential revenue increase beginning in the quarter ending Aug 2025 from Polaris Forge 1 “technical fit-out” (customer-funded at a small margin) ahead of lease revenue commencement; project financing expected to close in ~4–10 weeks from the call date .
Balance sheet and funding: ended Q4 with $120.9M cash and $688.2M debt; subsequently raised ~$268.9M via ATM and Series G preferred, improving liquidity to support build-out .

What Went Well and What Went Wrong

What Went Well
- Signed two transformative 15-year leases with CoreWeave (250MW, ~$7B revenue) and noted post-quarter exercise of a 150MW option that would take capacity to 400MW and ~$11B total contracted revenue if finalized: “These long-term leases mark a defining moment for Polaris Forge 1” — CEO Wes Cummins .
- Operational progress and cost advantages: first 100MW liquid-cooled facility on track for 2H’25; design targeting PUE of 1.18 and near-zero water, with management estimating a 100MW customer could save ~$2.7B over 30 years vs other regions .
- Interest expense fell sharply YoY ($4.5M vs $13.8M), aiding EPS outperformance despite higher SG&A; Adjusted EBITDA turned positive to $1.0M .
What Went Wrong
- SG&A inflation: $28.1M (+115% YoY), driven by $9.4M higher stock-based comp (accelerated vesting and PSUs), +$3.4M personnel, and +$2.3M other expenses (insurance, software) .
- Core non-GAAP profitability remains thin in the quarter (Adjusted EBITDA $1.0M; Adjusted net loss -$7.6M), reflecting transition-stage cost structure and ramp timing .
- Cloud Services reclassified as discontinued operations; strategic alternatives remain under review (added uncertainty and reporting complexity) .

Financial Results

Q4 FY25 vs S&P Global Consensus

Metric	Consensus	Actual
Revenue ($M)	$37.12*	$38.01
EPS (Primary)	-$0.17*	-$0.03*

Notes: APLD reported GAAP continuing ops EPS of -$0.12 and Adjusted EPS of -$0.03 for Q4 FY25 .
S&P Global values marked with * (Values retrieved from S&P Global).

Quarterly trend – continuing operations focus (revenues) and key P&L items (as reported each quarter)

Metric	Q2 FY25	Q3 FY25	Q4 FY25
Data Center Hosting Revenue ($M)	$36.2	$35.2	$38.0
Total Revenue ($M) (as reported)	$63.87	$52.92	$38.01
SG&A ($M)	$29.79	$22.72	$28.10
Interest Expense, net ($M)	$7.48	$8.90	$4.50
Adjusted EBITDA ($M)	$21.36	$10.02	$0.98
Adjusted EPS ($)	-$0.06	-$0.08	-$0.03

Margins and mix

Metric	Q2 FY25	Q3 FY25	Q4 FY25
Adjusted Operating Margin (%)	(8)%	(17)%	(8)%

Segment revenue (as disclosed in each period)

Segment	Q2 FY25	Q3 FY25	Q4 FY25
Cloud Services ($M)	$27.7	$17.8	Discontinued ops (excluded)
Data Center Hosting ($M)	$36.2	$35.2	$38.0

KPIs and balance sheet

KPI	Q2 FY25	Q3 FY25	Q4 FY25
Hosting capacity at full utilization (Jamestown 106MW + Ellendale 180MW)	—	—	286MW
Contracted revenue from CoreWeave leases	—	—	~$7B signed; +$4B option exercised post-Q (total ~$11B if finalized)
Cash, cash equivalents & restricted cash ($M)	$314.6	$261.2	$120.9
Debt ($M)	$479.6	$689.1	$688.2

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue cadence	Q1 FY26 (quarter ending Aug 2025)	None	“Increase significantly sequentially” driven by CoreWeave fit-out revenue (customer-funded at a small margin) before lease revenue starts	Introduced directional guide
Fit-out revenue timing	Q1–Q2 FY26 (quarters ending Aug and Nov 2025)	None	Fit-out revenue to be recognized largely across the current quarter and quarter ending Nov 30, 2025	New disclosure
Polaris Forge 1 Building 1 go-live	Calendar Q4 2025	On track	Reiterated timeline	Maintained
Building 2 (150MW) go-live	Mid-2026	On track	Reiterated timeline	Maintained
Building 3 (150MW) go-live	2027	On track	Reiterated timeline	Maintained
Project financing	Near term	None	Expected close in ~4–10 weeks from call (dependency on advisors, seasonal slowdown)	New timeline

Earnings Call Themes & Trends

Topic	Q2 FY25 (Jan 2025)	Q3 FY25 (Apr 2025)	Q4 FY25 (Jul 2025)	Trend
Hyperscaler pipeline / leases	Late-stage Ellendale discussions, 400MW campus plan	Negotiations with multiple US hyperscalers; MAM & SMBC support	Two 15-year CoreWeave leases (250MW) signed; 150MW option exercised post-Q; additional hyperscalers in negotiations	Escalating conversions
Build timelines & design	100MW Ellendale under construction	100MW ready for service 2H’25	100MW in calendar Q4’25; 150MW mid-’26; 150MW in ’27; streamlined design reducing build times to 12–14 months	Execution visibility improving
Financing	Convertible notes, MAM facility framework	Closed $375M SMBC financing	Project financing expected in 4–10 weeks; post-Q ~$269M equity raised	Liquidity pathway defined
Cloud Services strategy	Growth but volatility	Board approved sale plan	Discontinued operations; strategic review ongoing	De-emphasized; focus on DC
Hosting operations	286MW hosting at full capacity	Full capacity operations continue	Full capacity; Bitcoin strength supports demand	Stable utilization
Unit economics / capital costs	—	—	Financing terms for IG tenant: LTC ~70%; market cost indications; fit-out margin described as small	Improving clarity

Management Commentary

“These long-term leases mark a defining moment for Polaris Forge 1... designed to scale up to 1 gigawatt” — Wes Cummins, CEO, on CoreWeave agreements .
“We’ve reduced projected build times from 24 months to 12 to 14 months” via SKU reduction, supplier consolidation, and repeatable design .
“This design is expected to achieve a PUE of 1.18 and a near-zero water consumption... a 100 MW data center customer could save up to approximately $2.7 billion over a thirty year period” .
“We’re actively working with our financing partners to finalize the project financing... over the next four to ten weeks” — CFO Saidal Mohmand .
“With the CoreWeave lease, we believe we’re now roughly halfway toward our internal goal of generating $1 billion in annual net operating income over the next three to five years” — CEO .

Q&A Highlights

Development cadence: Expect to break ground on one, potentially two, additional campuses before year-end, beyond Polaris Forge 1 .
Financing timing and gating items: 4–10 weeks; seasonal slowdown and third-party advisors can cause lag; identified lead banking partner aligned to expedite .
Additional customer pipeline: Advanced negotiations with an investment-grade North American hyperscaler; broader discussions with 4–6 hyperscalers across Dakotas and other regions .
Ellendale fit-out and ramp: Mostly fit-out underway; customer gear and cabling to follow; ramp expected in calendar Q4 (Oct–Nov) .
Delivery obligations and model: Standard late-delivery penalties apply; company focused on “full-stack colo” vs powered shell, given public-company economics .

Estimates Context

S&P Global consensus for Q4 FY25: Revenue $37.12M (8 ests) and Primary EPS -$0.17 (7 ests); reported revenue $38.01M and S&P Primary EPS actual -$0.03 — both beats (values marked *; Values retrieved from S&P Global).
APLD’s reported GAAP cont. ops EPS was -$0.12; Non-GAAP Adjusted EPS was -$0.03, aligning with S&P’s Primary EPS actual .
Near-term sell-side models likely need higher revenue for the next two quarters to reflect customer-funded fit-out recognition ahead of lease revenue commencement, per CFO .

Key Takeaways for Investors

Structural step-change from CoreWeave agreements (250MW signed; 150MW option exercised post-quarter) with potential ~$11B contracted revenue over ~15 years if the option’s third lease is finalized, materially improving multi-year visibility .
Near-term revenue tailwind from fit-out recognition across the quarters ending Aug and Nov 2025, even before lease revenue starts; watch for margin mix (fit-out at small margin) .
Financing de-risking likely near term (4–10 weeks), with terms for IG tenants typically implying LTC ~70%; added ~$269M equity raised post-quarter improves runway .
Operating leverage opportunity as hosting scales and interest expense remains lower YoY; yet SG&A discipline is key given Q4’s elevated stock-based comp .
Execution catalysts: on-time delivery of the 100MW facility in calendar Q4’25; lease execution on the 150MW option; potential additional hyperscaler leases in pipeline .
Watch classification/segment reporting (Cloud Services discontinued) and non-GAAP adjustments (debt fair value changes, SBC, diligence/litigation) to assess core profitability trajectory .
Medium-term thesis: repeatable “AI factory” build model, speed-to-power advantages in the Dakotas (target PUE 1.18; near-zero water), and expanding hyperscaler relationships can compound contracted revenue and NOI over 3–5 years .

S&P Global note: Asterisked values in the “vs Consensus” table are from S&P Global. Values retrieved from S&P Global.