Applied Digital Corporation (APLD) Q4 2026 Financial Results Summary
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Applied Digital (APLD) Q4 2026: Revenue Surge, Losses Persist — Cautiously Optimistic
Applied Digital Corporation (Nasdaq: APLD) reported its fiscal fourth quarter results for the period ending May 31, 2026, showcasing a remarkable revenue increase but continued net losses. The company achieved revenues of $258.7 million, reflecting a substantial growth of $207.6 million or +407% compared to the same quarter last year. This impressive revenue growth is indicative of the company's expanding footprint in the high-performance computing (HPC) sector, particularly in artificial intelligence (AI) infrastructure.
Despite the significant revenue increase, the net loss attributable to common stockholders was $110.6 million, which is a deterioration of $57.5 million or -108% from the prior year. This translates to a net loss per share of $0.39, up from $0.24 in the same quarter last year, marking a 63% increase in losses per share.
Analyst View
For shareholders, this quarter presents a mixed bag. The substantial revenue growth is a positive sign, indicating strong demand for Applied Digital's services and its strategic positioning in the AI and HPC markets. However, the continued increase in net losses raises concerns about the company's cost management and operational efficiency. The significant rise in selling, general, and administrative expenses, which surged 303% to $165.3 million, primarily due to stock-based compensation and increased headcount, suggests that while the company is scaling, it is also incurring high costs that could impact future profitability.
Key Financial Metrics
- Revenues: $258.7 million, up 407% YoY
- Net Loss: $110.6 million, down 108% YoY
- Net Loss per Share: $0.39, up 63% YoY
- Adjusted Revenue: $240.4 million
- Adjusted Net Income: $12.9 million
- Adjusted EBITDA: $42.4 million
- Net Operating Income: $39.9 million
Operational Highlights
The company has made significant strides in its operational capabilities, including:
- Signing a 15-year take-or-pay lease with a high investment-grade hyperscaler for 300 MW of critical IT load at Delta Forge 1, which is expected to generate approximately $7.5 billion in base-term contracted revenue.
- A second similar lease for 300 MW at Polaris Forge 3, also projected to yield $7.5 billion in revenue.
- The completion of a $2.15 billion private offering of 6.750% Senior Secured Notes due 2031 to fund the development of 200 MW at Polaris Forge 2.
These contracts represent a total of $20 billion in long-term contracted revenue from a single customer, highlighting the company's strong relationships and trust with major players in the industry.
Shareholder Returns and Future Guidance
While there were no announcements regarding dividends or share buybacks, the company’s focus on securing long-term contracts and expanding its operational capacity is a positive indicator for future shareholder value. The management has expressed confidence in the ongoing demand for AI data centers, suggesting that the company is well-positioned for continued growth.
Forward-Looking Catalysts
Investors should closely monitor the following catalysts in the upcoming quarters:
- The operational commencement of the new AI Factory campuses in 2027, which could significantly boost revenues.
- The impact of the recent lease agreements on cash flow and profitability as these facilities come online.
- Continued developments in the HPC sector and how Applied Digital adapts to evolving market demands.
In conclusion, while Applied Digital's fourth quarter results reflect impressive revenue growth, the persistent net losses and rising operational costs warrant cautious optimism. The company's strategic initiatives and long-term contracts position it well for future growth, but effective cost management will be crucial to turning losses into profits.
APPLIED DIGITAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)
Note: All amounts are in thousands.
| Three Months Ended May 31, | Fiscal Year Ended May 31, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Services revenue | 208,190 | 51,076 | 496,642 | 226,643 |
| Data center rental and other revenue | 50,558 | — | 114,735 | — |
| Total revenue | 258,748 | 51,076 | 611,377 | 228,569 |
| Costs and expenses | ||||
| Services cost of revenue | 193,121 | 54,196 | 396,845 | 216,759 |
| Data center rental and other cost of revenue | 25,110 | — | 56,771 | — |
| Total costs and expenses | 383,568 | 95,177 | 847,740 | 300,744 |
| Operating loss | -124,820 | -44,101 | -236,363 | -72,175 |
| Interest expense, net | 10,633 | 8,451 | 29,516 | 32,139 |
| Gain on change in fair value of derivatives | -53,276 | — | -75,818 | — |
| Gain on change in fair value of investments | -4,768 | — | -10,840 | — |
| Net loss from continuing operations | -81,387 | -52,578 | -183,341 | -231,065 |
| Net loss attributable to common stockholders | -110,554 | -53,030 | -250,306 | -233,609 |
| Basic and diluted net loss per share attributable to common stockholders | -0.39 | -0.24 | -0.91 | -1.16 |
APPLIED DIGITAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and par value data)
Note: All amounts are in thousands.
| May 31, 2026 | May 31, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | 1,591,988 | 43,950 |
| Restricted cash | 2,381,027 | 72,368 |
| Accounts receivable | 56,309 | 6,830 |
| Prepaid expenses and other current assets (1) | 613,692 | 9,652 |
| Current assets held for sale | 19,841 | — |
| Total current assets | 4,662,857 | 132,800 |
| Property and equipment, net | 4,236,300 | 1,252,287 |
| Other assets | 830,710 | 179,353 |
| TOTAL ASSETS | 9,929,312 | 1,870,090 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | 395,474 | 251,491 |
| Accrued liabilities | 548,493 | 30,121 |
| Total current liabilities | 1,162,856 | 499,725 |
| Long-term debt | 4,959,516 | 677,825 |
| TOTAL LIABILITIES | 6,185,735 | 1,236,365 |
| Stockholders' equity | ||
| Common stock, par value $0.001, 600,000,000 shares authorized, 295,048,903 shares issued | 296 | 230 |
| Additional paid-in capital | 2,432,250 | 1,009,913 |
| Accumulated deficit | -662,333 | -481,055 |
| Total stockholders' equity | 1,717,476 | 497,688 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 9,929,312 | 1,870,090 |
(1) Includes a related party loan receivable of $58.6 million as of May 31, 2026.
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