Applied Digital Corporation Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

  • Revenue: $12.3 million, entirely from hosting operations at the Jamestown, ND facility. This slightly exceeded the previously expected steady-state figure of $12 million communicated in the prior quarter.
  • Gross Margin: GAAP gross margin was negatively impacted by billing adjustments due to a partial outage in the previous quarter and higher seasonal energy costs. Non-GAAP gross margin stood at 12% ($1.5 million). Guidance for next quarter suggests >25% gross margin; long-term target is 30% gross margin with optimized operations.
  • Adjusted EBITDA: Loss of $2.1 million for the quarter.
  • Net Loss:
    • Adjusted net loss from continuing operations: $3.8 million ($0.04 loss per basic and diluted share).
    • GAAP net loss: $26.6 million ($0.29 loss per share), largely driven by $21.8 million in catch-up, non-cash stock-based compensation triggered by RSU registration becoming effective.
  • CapEx and Liquidity:
    • Ended quarter with $18.1 million in cash and $20.5 million in debt.
    • Collected $20.8 million in deposit and prepayments during the quarter, aiding CapEx funding.

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Operator: Good afternoon, and welcome to Applied Blockchain's Second Fiscal Quarter 2023 Conference Call. My name is Doug and I will be your operator today. Before this call, Applied Blockchain issued its financial results for the second quarter of fiscal 2023 ended November 30, 2022 in a press release, a copy of which will be furnished in a report on Form 8-K filed with the SEC and will be available in the Investor Relations section of the company's website. Joining us on today's call are Applied Blockchain's Chairman and CEO, Wes Cummins; and CFO, David Rench. Following their remarks, we will open the call for questions. Before we begin, Jeff Grampp from Gateway Group will make a brief introductory statement. Mr. Grampp, please proceed. Jeff Grampp: Thank you. Good afternoon, everyone, and welcome to Applied Digital’s fiscal second quarter 2023 conference call. Before management begins their formal remarks, we would like to remind everyone that some statements we're making today may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties and assumptions relating to our forward-looking statements please see the disclosures in our earnings release and public filings

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