Applied Digital (NASDAQ:APLD) Issues Quarterly Earnings Results

Key Points

• Applied Digital posted a material top‑line beat with total revenue of $126.6 million (up ~139%) and adjusted EBITDA of $44.1 million, with the crypto/data‑center hosting segment generating strong returns (≈$37.5M revenue and $13.9M operating profit).
• Profitability remains pressured — EPS missed at (−$0.36) and GAAP net loss was $100.9 million largely from a $59.7 million non‑cash cloud impairment — but the company finished the quarter with $2.1 billion cash versus $2.7 billion of debt and has disclosed a $2.15 billion senior secured note offering to finance its buildout.
• Operationally, Applied Digital has its first 100 MW liquid‑cooled data center online and roughly ~1 GW of capacity under construction, including the 300 MW Delta Forge One project (ground broken, initial operations expected mid‑2027).

Applied Digital (NASDAQ:APLD - Get Free Report) released its earnings results on Wednesday. The company reported ($0.36) earnings per share for the quarter, missing the consensus estimate of ($0.13) by ($0.23), RTT News reports. The company had revenue of $108.55 million during the quarter, compared to the consensus estimate of $78.47 million. Applied Digital had a negative return on equity of 13.53% and a negative net margin of 43.49%.Applied Digital's revenue for the quarter was up 139.3% on a year-over-year basis. During the same period in the previous year, the firm posted ($0.08) EPS.

Here are the key takeaways from Applied Digital's conference call:

• Applied Digital has its first 100 MW direct‑to‑chip liquid‑cooled data center online, says PF1 and PF2 construction are on time and on budget, and the company has roughly ~1 GW of capacity under construction with Delta Forge One (300 MW) broken ground and initial operations expected mid‑2027.
• Quarter results show total revenue of $126.6 million (up 139% QoQ) and adjusted EBITDA of $44.1 million, but GAAP net loss was $100.9 million largely driven by a $59.7 million non‑cash cloud impairment; the company finished the quarter with $2.1 billion cash versus $2.7 billion of debt and no significant maturities in the next two years.
• Management reports significant financing progress — a disclosed $2.15 billion senior secured note offering, most equity/debt for the first two campuses completed, and a CoreWeave lease restructuring (SPV rated A3 with a $50M letter of credit) that management says de‑risks 250 MW and should help lower future borrowing costs.
• The company is separating Applied Digital Cloud via a proposed combination with Exo to form Chronos Scale (Applied to be majority holder) to pursue independent capital and growth; cloud revenues were consolidated this quarter but will be excluded from the company's non‑GAAP metrics going forward.
• The crypto/data‑center hosting segment remains a high‑return business, producing $37.5 million in revenue and $13.9 million in operating profit this quarter, which management highlights as the company's highest return on assets.

Applied Digital Price Performance

NASDAQ APLD opened at $27.79 on Thursday. The company's 50 day simple moving average is $29.29 and its 200 day simple moving average is $29.47. The company has a debt-to-equity ratio of 1.79, a current ratio of 4.82 and a quick ratio of 4.82. The firm has a market capitalization of $7.77 billion, a PE ratio of -51.46 and a beta of 7.25. Applied Digital has a 12 month low of $3.31 and a 12 month high of $42.27.

Insider Transactions at Applied Digital

In related news, Director Richard N. Nottenburg sold 12,000 shares of Applied Digital stock in a transaction dated Thursday, January 15th. The stock was sold at an average price of $35.45, for a total transaction of $425,400.00. Following the transaction, the director directly owned 233,378 shares of the company's stock, valued at $8,273,250.10. The trade was a 4.89% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Wes Cummins sold 165,000 shares of Applied Digital stock in a transaction that occurred on Friday, January 16th. The stock was sold at an average price of $36.42, for a total transaction of $6,009,300.00. Following the completion of the transaction, the chief executive officer directly owned 4,176,329 shares in the company, valued at $152,101,902.18. This represents a 3.80% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 244,593 shares of company stock worth $9,003,278. Corporate insiders own 9.50% of the company's stock.

Hedge Funds Weigh In On Applied Digital

Hedge funds and other institutional investors have recently modified their holdings of the stock. Situational Awareness LP raised its holdings in Applied Digital by 63.3% during the 2nd quarter. Situational Awareness LP now owns 6,591,800 shares of the company's stock worth $66,379,000 after buying an additional 2,556,200 shares during the period. Value Aligned Research Advisors LLC purchased a new stake in Applied Digital during the fourth quarter valued at about $138,380,000. BNP Paribas Financial Markets boosted its holdings in shares of Applied Digital by 24,356.8% in the second quarter. BNP Paribas Financial Markets now owns 5,219,565 shares of the company's stock worth $52,561,000 after buying an additional 5,198,223 shares during the period. T. Rowe Price Investment Management Inc. increased its position in shares of Applied Digital by 104.8% in the fourth quarter. T. Rowe Price Investment Management Inc. now owns 4,209,702 shares of the company's stock worth $103,222,000 after acquiring an additional 2,154,213 shares in the last quarter. Finally, Marex Group plc raised its holdings in shares of Applied Digital by 38,484.6% during the fourth quarter. Marex Group plc now owns 3,904,759 shares of the company's stock valued at $95,745,000 after acquiring an additional 3,894,639 shares during the period. Institutional investors and hedge funds own 65.67% of the company's stock.

Analyst Upgrades and Downgrades

Several research firms have weighed in on APLD. Citigroup reiterated an "outperform" rating on shares of Applied Digital in a research note on Wednesday, January 28th. Arete Research assumed coverage on shares of Applied Digital in a research note on Wednesday, January 7th. They set a "buy" rating on the stock. B. Riley Financial raised their target price on shares of Applied Digital to $53.00 and gave the stock a "buy" rating in a report on Friday, January 9th. Lake Street Capital restated a "buy" rating and issued a $45.00 target price on shares of Applied Digital in a research note on Tuesday, December 30th. Finally, Texas Capital raised Applied Digital to a "strong-buy" rating in a report on Tuesday, January 20th. Two research analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating and one has assigned a Sell rating to the stock. According to MarketBeat, Applied Digital has an average rating of "Buy" and a consensus price target of $37.00.

Key Headlines Impacting Applied Digital

Here are the key news stories impacting Applied Digital this week:

• Positive Sentiment: Q3 revenue materially exceeded expectations, reflecting a ramp in AI/high‑performance computing demand and multi‑quarter contract wins that underpin near‑term capacity utilization. Applied Digital beats quarterly revenue estimates (Reuters)
• Positive Sentiment: Market reaction and headlines emphasize that AI infrastructure demand is accelerating — several outlets frame the print as a “blowout” for data‑center revenue, supporting optimism for further leaseups and long‑duration customer deals. AI Data-Center Developer's Earnings Top Views (Barron's)
• Positive Sentiment: Unusually large options flow — ~131,134 call contracts traded — signals speculative bullish positioning and may amplify upside intraday as traders press leverage into the earnings story.
• Neutral Sentiment: Management hosted an earnings call/transcript providing operational color on campus builds and capacity ramp timing; details may influence guidance and execution perceptions but require parsing for longer‑term impact. Q3 2026 Earnings Call Transcript (Seeking Alpha)
• Negative Sentiment: EPS missed estimates: the company reported a roughly ($0.36) loss per share, larger than consensus, leaving profitability and margin recovery as near‑term questions despite top‑line strength. Q3 results and EPS miss (MarketBeat)
• Negative Sentiment: Balance‑sheet and cost pressures: coverage highlights rising debt and interest expense tied to an aggressive ~500MW buildout plan, which could constrain margins and free‑cash‑flow until new capacity stabilizes. Can APLD Navigate Rising Interest Costs? (Yahoo Finance)
• Negative Sentiment: Profitability metrics remain weak (negative net margin and ROE) and analysts still expect negative EPS for the year — investors must weigh revenue momentum against an extended path to consistent profitability. Q3 loss, revenue beat (Zacks)

About Applied Digital

Applied Digital NASDAQ: APLD is a technology company specializing in the development and operation of large-scale digital infrastructure and sustainable Bitcoin mining solutions. Through its integrated platform, the company designs, builds and manages turnkey data center facilities while also providing comprehensive hosting services for cloud, colocation and enterprise computing needs. Applied Digital's modular approach to facility design enables rapid deployment of capacity and streamlined integration of power, cooling and network connectivity.

In addition to its data center business, Applied Digital operates a network of Bitcoin mining sites that leverage vertically integrated capabilities, including hardware procurement, mining farm engineering, energy management and real-time performance monitoring.