Highlights

  • First quarter fiscal 2027 revenue rose to $341.9 million from $80.9 million, while the net loss widened to $184.1 million.
  • Interest expense reached $77.4 million, and unrestricted cash was $2.9 billion against $6.72 billion of scheduled debt principal.
  • A roughly 15-year, 210 MW hyperscaler lease signed for Delta Forge 2 represents about $5.2 billion of contracted base-term revenue.
  • It issued $1.59 billion of 7.000% senior secured notes and raised its Series G preferred commitment to $2.0 billion.

Applied Digital (NASDAQ:APLD) shares were trading near their 52-week low at USD 21.44 on October 21, 2026, up 10.94%. The data center developer reported first quarter fiscal 2027 results in a Form 10-Q filed on October 7, 2026, with sharply higher revenue, a wider net loss and several financings and customer agreements completed since May.

Based in Dallas, Texas, Applied Digital is a Nevada corporation that describes itself as a designer, developer and operator of high-performance, sustainably engineered data centers and colocation services for artificial intelligence, networking and blockchain workloads. It has two segments: HPC Hosting, which builds and runs high-performance computing data centers, and Data Center Hosting, which provides energized infrastructure to crypto mining customers. It also owns about 96% of ChronoScale, its separated cloud business. Its fiscal year ends May 31.

Revenue Climbs, Losses and Interest Costs Widen

Revenue for the quarter ended August 31, 2026 was $341.9 million, versus $80.9 million a year earlier. Services and other revenue, which includes tenant fit-out services, was $262.8 million, and data center rental revenue was $79.1 million, which includes about $65.8 million of base rent. The HPC Hosting segment contributed $262.6 million and Data Center Hosting $37.8 million.

Costs rose faster than the prior year. Selling, general and administrative expense grew to $114.7 million, including a $51.7 million increase in stock-based compensation. The operating loss was $62.4 million, against $9.8 million. Interest expense climbed to $77.4 million from $8.0 million as borrowing increased. It also booked a $49.5 million derivative fair value loss and an $11.4 million loss on its Babcock & Wilcox investment.

Net loss was $184.1 million, including a $16.1 million loss from discontinued operations tied to the Ekso business. Net loss attributable to common stockholders was $237.1 million, or $0.82 per share, compared with $18.5 million, or $0.07. On a non-GAAP basis, adjusted EBITDA was $64.4 million and adjusted operating income was $37.8 million, which exclude the cloud services business. Net operating income from HPC hosting rental was $58.8 million, an 89% margin, also non-GAAP.

Capacity Build-Out, Financing and Legal Matters

The second building at Polaris Forge 1 in Ellendale, North Dakota reached its full 150 MW, and a third 150 MW building is under construction with readiness expected in calendar 2027. Polaris Forge 2, Polaris Forge 3 and Delta Forge 1 each total 300 MW and are under construction. On June 5, 2026, the company signed the 210 MW Delta Forge 2 lease with a high investment-grade hyperscaler, with delivery expected in the first half of calendar 2028. On October 4, it signed a power purchase agreement tied to a roughly 1,200 MW gas-fired facility intended to supply Polaris Forge 3.

That growth is funded largely by debt and preferred equity. The company ended the quarter with $2.9 billion of unrestricted cash and $728.0 million of restricted cash. Scheduled debt principal totals $6.72 billion, including $4.26 billion due in fiscal 2031. In June, it closed a $1.59 billion offering of 7.000% senior secured notes due 2031 to refinance a bridge facility, upsized its revolving credit facility to $430.0 million. It sold 283,250 Series G preferred shares for $275.0 million, and conversions added 4.5 million common shares, followed by 5.2 million more after quarter end.

Operating activities provided $63.9 million of cash, while investing activities used $2.1 billion, mostly construction. Management acknowledged net losses through the period and said it may be unable to raise funds on favorable terms, but expects liquidity to cover at least 12 months.

Legal items include a putative securities class action filed in 2023 against the company and two executives, for which it cannot estimate a range of loss, and a dismissed derivative suit.

ChronoScale and Outlook

ChronoScale entered a Microsoft partnership for roughly 50 MW of AI compute capacity, extended to a three-year term, and sold its legacy Ekso business on September 30, 2026. Management expects significant investment in property and equipment throughout fiscal 2027, along with rising general and administrative and operating expenses. The filing gives no revenue or earnings guidance.