Applied Digital Corp (NASDAQ:APLD), a company specializing in next-generation digital infrastructure for high-performance computing (HPC) applications, cloud services, and data center hosting, stock plunges 27.02% (As on April 15, 11:17:16 AM UTC-4, Source: Google Finance) after the company reported third-quarter earnings that beat analyst expectations, but revenue fell short of estimates. Applied Digital’s Cloud Services segment generated $17.8 million in revenue, up 220% from the same quarter last year. However, this marked a sequential decline from $27.7 million in the previous quarter due to technical issues in transitioning some GPU capacity to a multi-tenant model. The Data Center Hosting segment saw revenue decrease 7% YoY to $35.2 million. The company reported a net loss attributable to common stockholders of $36.1 million, or -$0.16 per share, compared to a loss of $62.8 million, or -$0.52 per share, in the year-ago quarter. Applied Digital closed a $375 million financing arrangement with Sumitomo Mitsui Banking Corporation during the quarter. The company used part of the proceeds to repay its Macquarie Promissory Note and plans to use the remainder to develop data center buildings at its Ellendale HPC Campus. As of February 28, 2025, Applied Digital had $261.2 million in cash, cash equivalents, and restricted cash, along with $689.1 million in debt. Further, the company also welcomed Laura Laltrello as the new Chief Operating Officer to strengthen its leadership in next-generation data centers.
In addition, the company began the process with a $450 million convertible note at 2.75%, followed by the strategic transaction of Macquarie Asset Management, providing potential access to up to $5 billion in capital. Over the past year, the company has deployed nearly $1 billion in assets with a significant portion allocated to the construction of the data centers.
Moreover, the company remains focused on completing the construction of its first 100 MW HPC facility in Ellendale, North Dakota, which is scheduled to be operational in the second half of the calendar year. Applied Digital is also in negotiations with multiple US-based hyperscalers to lease up to 400 MW of capacity, including the Ellendale HPC data center and two forthcoming buildings at the Ellendale Campus.
APLD in the third quarter of FY25 has reported the adjusted earnings per share of -8 cents, beating the analysts’ estimates for the adjusted earnings per share of -11 cents. The company had reported the adjusted revenue growth of 22 percent to $52.9 million in the third quarter of FY25, missing the analysts’ estimates for revenue of $64.96 million.