Results
Applied Digital Reports Fiscal First Quarter 2027 Results
DALLAS, TX – October 7, 2026 -- Applied Digital Corporation (Nasdaq: APLD) ("Applied Digital" or the "Company") , a U.S. based designer, developer, owner, and operator of large-scale, purpose-built data centers engineered to support high-performance computing (“HPC”) workloads, including artificial intelligence (“AI”), machine learning, and other accelerated-compute applications, reported financial results for the fiscal first quarter ended August 31, 2026.
Fiscal First Quarter 2027 Financial Highlights
Revenues: $341.9 million, up 322% from the prior year comparable period
Net loss attributable to common stockholders: $221.0 million
Net loss attributable to common stockholders per basic and diluted share: $0.76
Adjusted revenue: $300.4 million
6Adjusted net loss: $4.1 million
Adjusted net loss per diluted share: $0.01
Adjusted EBITDA: $64.4 million
Net Operating Income: $58.8 million
Recent Highlights
Corporate events
As previously announced on June 8, 2026, signed a 210 MW, 15-year lease at Delta Forge 2 with the Company’s tier-one investment grade hyperscaler customer, representing approximately $5.2 billion of base-term contracted revenue.
Results
Delivered Phase 1 of Building 2 (75 MW) at Polaris Forge 1 Ready for Service on July 1, 2026, bringing total live capacity at the campus to 175 MW.
Corporate events
Closed $1.59 billion of 7.000% Senior Secured Notes due 2031, issued at par through subsidiary APLD ComputeCo 3 LLC, to fund construction of the third HPC building (150 MW) at Polaris Forge 1 and to repay the $300 million bridge facility.
ChronoScale announced plans with Microsoft for a 50 MW AI compute deployment in North America featuring NVIDIA GB300 NVL72 systems and liquid cooling.
Subsequent to the Quarter
Delivered the second 75 MW phase of Building 2 at Polaris Forge 1 Ready for Service, bringing total live capacity at the campus to 250 MW.
Secured up to approximately 1 GW of potential power capacity in Finland, establishing a strategic foothold in an emerging European AI market.
Entered into a Power Purchase Agreement with Base Electron, for the purchase of capacity and energy from an approximately 1,200 MW natural gas-fired generation facility to be developed by Base Electron in North Dakota.
Polaris Forge 1 was named Project of the Year by the Mid-America Economic Development Council, recognizing its economic impact, community investment, partnerships, and technological innovation.
Through Applied Digital Cares, committed $350,000 in grants across five organizations in Oliver County, North Dakota, home to Polaris Forge 3, supporting first responders, schools, and community facilities.
Management commentary
Management Commentary
“Our goal is to establish Applied Digital as the category leader in the design, construction, deployment, and operation of purpose-built AI factories,” said Wes Cummins, Chairman and Chief Executive Officer of Applied Digital.
“We are building for the long term, with a clear focus on developing large-scale, sustainable AI factory campuses and securing durable, high-quality, long-term contracts with proven, tier-one, investment grade hyperscalers that are leaders in the AI industry.”
On October 1, 2026, the Company achieved Ready for Service for the second 75 MW phase of Building 2 at Polaris Forge 1, bringing fully operational critical IT load at the campus to 250 MW across two buildings and 10 data halls.
2The Company expects initial operations at Polaris Forge 2 in Harwood to increase delivered critical IT load across our North Dakota campuses to 300 MW by the end of calendar 2026, further demonstrating the Company's ability to execute against its development pipeline.
The Company also took its first step outside the United States, signing an agreement for up to approximately 1 GW of potential power capacity in Finland.
Finland shares many of the characteristics that made North Dakota a compelling location for the Company's AI factories: a cool climate that supports efficient operations, access to abundant and reliable power, and room to scale.
Management believes this agreement offers meaningful long-term potential while limiting the Company's initial exposure.
While Applied Digital's near-term development strategy and execution priorities remain firmly centered on its growing U.S. portfolio, Finland presented itself to us as a measured, opportunistic step into a market that offers attractive long-term potential.
North Dakota remains central to the Company’s strategy.
The Company believes the state’s low-cost power, abundant energy resources, low population density, and climate make it one of the most compelling locations in North America for AI factory development, and management expects additional hyperscalers to enter the Dakotas over time.
As coastal and metro markets become increasingly constrained and more expensive, Applied Digital believes campuses in low-cost, power-rich regions can support stronger long-term terminal values and become more difficult to replicate.
Power remains the gating factor for AI infrastructure, and the Dakotas are among the few regions where meaningful new capacity can be added at scale.
Base Electron Corp., an independent power producer in which Applied Digital holds an approximately 10% equity interest, is developing front-of-the-meter generation that could add multiple gigawatts of new power in the Dakotas over time.
Although Base Electron operates independently, the Company believes this new supply source strengthens its ability to expand its Polaris Forge campuses on its own timeline and provides greater visibility into the power available to support future growth in the region.
“As new data center development becomes more difficult in certain markets, we believe the scarcity value of established, powered, and community-supported campuses increases,” Cummins said.
“Put simply, we view every new restriction elsewhere as making what we already own harder to replicate.
Our approach has always been simple: do it the right way.
We don’t just build in communities.
We build with them.”
Our community commitment is not abstract.
Polaris Forge 1 in Ellendale, North Dakota, was recently named Project of the Year by the Mid-America Economic Development Council for its economic impact, community investment, partnerships, and technological innovation.
At the campus, the Company’s use of excess regional grid capacity has returned more than $45 million in electricity credits to local ratepayers.
In Center, North Dakota, home to Polaris Forge 3, Applied Digital Cares grants are funding a new sheriff’s deputy, school devices, ambulance and fire equipment, and community facilities.
The Company believes this model of local partnership is increasingly important as permitting, power access, and community support become more critical to large-scale AI infrastructure development.
HPC Hosting Update
Results
Applied Digital’s HPC Hosting Business designs, builds, and operates purpose-built AI Factory data centers.
As of August 31, 2026, the Company has leases for approximately 1.41 GW of critical IT load across five campuses: Polaris Forge 1, 2, and 3 in North Dakota; Delta Forge 1 in Louisiana; and Delta Forge 2 in Alabama.
Those leases represent approximately $36 billion of contracted revenue over their initial base terms, or approximately $86 billion if all renewal options are exercised.
Polaris Forge 1 is leased to CoreWeave, Polaris Forge 2 to an investment-grade hyperscaler, and Delta Forge 1, Polaris Forge 3, and Delta Forge 2 to a tier-one investment-grade hyperscaler.
Corporate events
The first 100 MW building at Polaris Forge 1 became operational in October 2025.
Building 2 (150 MW) was delivered in two 75 MW phases, the first on July 1, 2026 and the second on October 1 subsequent to quarter end, bringing live capacity at the campus to 250 MW.
The third HPC building at Polaris Forge 1 (150 MW), along with Polaris Forge 2, Polaris Forge 3, Delta Forge 1, and Delta Forge 2, are in various stages of construction.
Results
Revenue from our HPC Hosting business totaled $262.6 million for the quarter, including $65.8 million related to base rent, $183.5 million related to tenant fit-out services, and $13.3 million related to tenant recoveries.
This resulted in $33.4 million of segment operating profit for the quarter ended August 31, 2026.
Management commentary
Data Center Hosting Update
Results
Applied Digital’s Data Center Hosting Business operates data centers to provide energized space to crypto mining customers.
As of August 31, 2026, the Company’s 106 MW facility in Jamestown, ND, and 180 MW facility in Ellendale, ND, were operating at full capacity.
During the three months ended August 31, 2026, the Company generated $37.8 million in revenue from the Data Center Hosting Business segment, compared to $37.9 million during the three months ended August 31, 2025.
The results were materially consistent year over year due to stable operating conditions across the Company’s data center hosting facilities.
We are very pleased with our Data Center Hosting Business, which generated $13.3 million in segment operating profit for the three months ended August 31, 2026 on $111.9 million in reported assets at the end of the period.
Corporate events
ChronoScale Update
ChronoScale Holdings Corporation (Nasdaq: CHRN) is a publicly traded accelerated-compute platform in which Applied Digital owns approximately 96%.
During the quarter, ChronoScale announced plans with Microsoft for a 50 MW AI compute deployment in North America featuring NVIDIA GB300 NVL72 systems and advanced liquid cooling.
Management commentary
The Company considers its Data Center Hosting Business and the HPC Hosting Business to represent its core operations for long-term strategic and performance evaluation purposes.
Accordingly, although we
Results
Financial Results from Operations for Fiscal First Quarter 2027
Operating Results
5Services revenue in the fiscal first quarter 2027 was $262.8 million compared to $80.9 million, up 225% from the fiscal first quarter 2026.
3The increase was primarily due to an increase in tenant fit-out services of approximately $157.2 million, as well as $23.0 million in GPU hardware sales related to ChronoScale.
4Data center rental and other revenue was $79.1 million for the three months ended August 31, 2026 compared to no revenue for the three months ended August 31, 2025, as our HPC Hosting Business commenced rental operations in the second quarter of fiscal year 2026.
This quarter, we recognized $65.8 million in base rental revenue and $13.3 million related to tenant recoveries.
8Services cost of revenues increased $186.9 million, or 318%, from $58.8 million for the three months ended August 31, 2025 to $245.7 million for the three months ended August 31, 2026.
The increase in services cost of revenues was primarily due to an increase of approximately $151.1 million in expenses associated with tenant fit-out services for our HPC Hosting Business, as well as approximately $22.4 million associated with GPU hardware sales related to ChronoScale.
Data center rental and other cost of revenues for the three months ended August 31, 2026 were $43.9 million.
The primary components included $22.4 million in depreciation and amortization expense on our operational AI Factories at our Polaris Forge 1 campus, $13.3 million in expenses which are reimbursable as tenant recoveries, and $7.8 million in personnel and other operating costs supporting our facilities.
Selling, general and administrative expenses in the fiscal first quarter 2027 were $114.7 million compared to $29.5 million, up 289% from the fiscal first quarter of 2026 driven by the Company’s overall business growth.
This increase was primarily due to increases of $51.7 million in stock based compensation due to performance awards and the increase in headcount, $9.9 million in personnel expenses related to the increase in headcount, and $12.1 million in professional service expense primarily related to legal services provided on discrete transactions and projects, as well as general support of the business.
1Interest expense increased $69.4 million, or 866%, from $8.0 million for the three months ended August 31, 2025, to $77.4 million for the three months ended August 31, 2026 due to an increase in debt arrangements between the periods.
7Interest income increased $35.0 million, or 4,080%, from $0.9 million for the three months ended August 31, 2025 to $35.8 million for the three months ended August 31, 2026 due to an increase in funds held in interest-bearing accounts.
Loss on the change in fair value of derivatives was $49.5 million for the three months ended August 31, 2026, due to a decrease of $56.1 million in the fair value of our Babcock & Wilcox Enterprises, Inc. (“B&W”) common stock warrant and an increase of $6.6 million in the fair value of the derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2’s redeemable noncontrolling interest.
Loss on change in fair value of investment was $11.4 million for the three months ended August 31, 2026, due to a decrease in fair value of our investment in B&W common stock.
Net loss from discontinued operations was $16.1 million for the three months ended August 31, 2026 and represents the income statement activity related to the Ekso business at ChronoScale which is classified as held for sale and discontinued operations.
Net loss from continuing operations attributable to common stockholders for the fiscal first quarter 2027 was $221.0 million, or $0.76 per basic and diluted share.
This compares to a net loss attributable to common stockholders from continuing operations of $18.5 million, or $0.07 per basic and diluted share for the fiscal first quarter of 2026.
Adjusted revenue, a non-GAAP financial measure, was $300.4 million for the fiscal first quarter 2027 compared to $64.2 million for the fiscal first quarter of 2026.
Adjusted net loss, a non-GAAP financial measure, was $4.1 million, or $0.01 per diluted share for the fiscal first quarter 2027.
This compares to an adjusted net loss, a non-GAAP financial measure, of $7.6 million, or $0.03 per diluted share, for the fiscal first quarter of 2026.
Adjusted EBITDA, a non-GAAP financial measure, was $64.4 million for the fiscal first quarter 2027 compared to an Adjusted EBITDA of $0.5 million for the fiscal first quarter 2026.
Net Operating Income, a non-GAAP financial measure, was $58.8 million for the fiscal first quarter 2027.
Balance Sheet
As of August 31, 2026, the Company had $3.7 billion in cash, cash equivalents, and restricted cash, along with $6.4 billion in debt.
Adjusted Operating Income (Loss), Adjusted Net Loss from Continuing Operations, and Adjusted Net Loss from Continuing Operations per Diluted Share
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