Applied Digital Corporation Q3 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Applied Digital reported significant progress in scaling its AI-focused high-performance computing (HPC) data centers, advancing multiple large campus projects, and strengthening its financial position.
  • The company generated $44.1M in adjusted EBITDA and $126.6M in total revenue, a 139% increase compared to the prior quarter.
  • Management emphasized strong demand from hyperscalers, increasing industry power constraints, and a long-term strategy centered on multi-gigawatt AI data center development.

Financial Performance

  • Total revenue: $126.6M (up 139% quarter-over-quarter), driven primarily by a full quarter of revenue from the first 100 MW HPC building.
  • HPC Hosting revenue: $71M (base rents $44.1M; tenant fit-out $18.9M; power pass-through and other revenue $8.1M).
  • Crypto Data Center revenue: $37.5M, up 7% year-over-year.
  • Cloud segment (ChronoScale spinoff path): $18.1M revenue but $59.7M noncash write-down; non-GAAP results exclude this segment.
  • Adjusted net income: $33.2M ($0.09 per share).
  • Net loss attributable to shareholders: $100.9M ($0.36 per share), mainly due to write-down.
  • Adjusted EBITDA: $44.1M.
  • Cash and equivalents: $2.1B vs. debt of $2.7B; no significant maturities for 2 years.

Key Business Updates

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Operator: Ladies and gentlemen, good afternoon, and welcome to Applied Digital's Fiscal Third Quarter 2026 Conference Call. My name is Abby, and I will be your operator today. Before this call, Applied Digital issued its financial results for the fiscal third quarter ended February 28, 2026, in a press release, a copy of which has been furnished in a report on 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 their 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, Abby. Hello, everyone, and welcome to Applied Digital's Fiscal Third Quarter 2026 Conference Call. Before management begins formal remarks, we would like to remind everyone that some statements we are 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. For more detailed risks, uncertainties and assumptions relating to our forward-looking statements, please see the disclosures

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