Applied Digital Corporation Q2 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Fiscal Q2 2026 revenue was 126.6 million dollars, a 250 percent increase compared with 36.2 million dollars in the prior-year quarter. Growth was driven by 73 million dollars of tenant fit-out revenue for the HPC Hosting business and 12 million dollars of initial lease revenue from CoreWeave at Polaris Forge 1.
  • Data Center Hosting revenue was 41.6 million dollars, up 15 percent year-over-year due to increased ASIC hosting capacity.
  • Adjusted EBITDA reached 20.2 million dollars. Adjusted net income was 100,000 dollars.
  • Net loss was 31.2 million dollars or 0.11 dollars per share, primarily due to higher SG and A from accelerated stock-based comp, legal fees, and personnel expansion.

Operational Highlights

  • Polaris Forge 1 delivered its first 100-megawatt building on schedule, beginning lease revenue recognition. Two additional buildings will be completed by 2027.
  • Polaris Forge 1's 400-megawatt CoreWeave lease represents approximately 11 billion dollars in revenue over 15 years. Polaris Forge 2 added a new 200-megawatt, 15-year, 5 billion dollar lease with an investment-grade hyperscaler.
  • Total contracted capacity in the Dakotas now stands at 600 megawatts, representing 16 billion dollars in future lease revenue.
  • Company is in advanced discussions for an additional 3 sites totaling 900 megawatts with another investment-grade hyperscaler.

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Operator: Good afternoon, and welcome to Applied Digital's Fiscal Second Quarter 2026 Conference Call. My name is Konstantin, and I will be your operator for today. Before this call, Applied Digital issued its financial results for the fiscal second quarter ended November 30, 2025, in a press release, a copy of which has been furnished in a report on a Form 8-K filed with the Securities and Exchange Commission, or SEC, and will be available in the Investor Relations section of the company's website. Joining us on today's call are Applied Digital's Chairman and CEO, Wes Cummins, and CFO, Saidal Mohmand. Following the remarks, we will open the call for questions. Before we begin, Matt Glover from Gateway Group will make a brief introductory statement. Mr. Glover, you may begin. Matt Glover: Thank you, operator. Hello, everyone, and welcome to Applied Digital's Fiscal Second Quarter 2026 Conference Call. Before management begins formal remarks, we'd like to remind everyone that some statements we're making today may be considered forward-looking statements under securities laws 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. More detailed risks, uncertainties and assumptions relating to our forward-looking statements, please see the disclosures in our earning

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