Applied Digital (APLD) Q1 2026 Earnings Report

Applied Digital reported QQ1 2026 revenue of $64.2 million, up 84% year over year versus $34.8 million in the prior year period, driven primarily by $26.3 million of revenue from tenant fit-out services for the HPC hosting business. Despite robust top-line growth, the quarter produced a negative EBITDA of $18.1 million and a net loss of $16.9 million, translating to an EPS of -0.072. The quarter also featured a notable shift in the company’s capital deployment, with ongoing construction and financing activity that underpins a multi-campus expansion strategy. On the asset side, the company ended the period with $73.9 million in cash and cash equivalents and a total debt load of $687.3 million (net debt of approximately $626.3 million), with net working capital and working capital intensity signaling the heavy capex required to scale multi-megawatt campuses.

Management reaffirmed a strategic thesis rooted in hyperscale demand and rapid execution. Polaris Forge One (400 MW under construction) and Polaris Forge Two (300 MW under construction) form the backbone of near-term cash generation through long-term leases, while a four-gigawatt active development pipeline positions Applied Digital to scale further via additional campuses. CoreWeave’s expanded leases now cover the full 400 MW at Polaris Forge One, with a total contracted value of about $11 billion over 15 years and an embedded fit-out obligation for the first 100 MW, suggesting a phased ramp from fit-out revenue to amortizing leases. Management also flagged a strategic review of the Cloud Services segment, with HPC-focused activities expected to drive near-term earnings growth as the company’s asset-light segments evolve.

Looking ahead, management articulated a bold growth trajectory, targeting roughly $1 billion of NOI run rate within five years, underpinned by a robust multi-gigawatt pipeline and a broadening tenant roster. Financing arrangements with Macquarie (including a $5 billion preferred equity facility) and project-finance initiatives are designed to support rapid scale while maintaining a capital-efficient approach. Investors should monitor: (1) the cadence of CoreWeave-fit-out revenue transitioning into lease income, (2) the pace of Polaris Forge Two’s ramp and potential expansion into new sites, and (3) the industry-wide power/supply constraints and regulatory incentives that could influence project timelines and economics.Overall, APLD presents a high-growth capital deployment story with meaningful longer-term NOI upside, tempered by near-term negative profitability and execution risk associated with large-scale data-center builds.