DALLAS, July 27, 2026 (GLOBE NEWSWIRE) -- 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 fourth quarter ended May 31, 2026. The Company also provided operational updates.
During the quarter, the Company completed the separation of its Cloud Services Business in a series of transactions that resulted in the Company owning approximately 96% of the issued and outstanding equity of ChronoScale Holdings Corporation, f/k/a ChronoScale Corporation ("ChronoScale") as of the end of the fiscal year. ChronoScale, a public company, owns and operates our historic cloud services business and is consolidated into our financial statements, but excluded from the non-GAAP financial measures set forth below. Unless otherwise specified, disclosures in this earnings release, including the below, reflect continuing operations only.
Fiscal Fourth Quarter 2026 Financial Highlights
-- Revenues: $258.7 million, up 407% from the prior year comparable period
-- Net loss attributable to common stockholders: $110.6 million, down 108%
from the prior year comparable period
-- Net loss attributable to common stockholders per basic and diluted share:
$0.39, up 63% from the prior year comparable period
-- Adjusted revenue: $240.4 million
-- Adjusted net income: $12.9 million
-- Adjusted net income per diluted share: $0.04
-- Adjusted EBITDA: $42.4 million
-- Net Operating Income: $39.9 million
Fiscal Year 2026 Financial Highlights
-- Revenues: $611.3 million, up 167% from the prior year comparable period
-- Net loss attributable to common stockholders: $249.2 million, down 7%
from the prior year comparable period
-- Net loss attributable to common stockholders per basic and diluted share:
$0.91, down 22% from the prior year comparable period
-- Adjusted revenue: $539.7 million
-- Adjusted net income: $36.1 million
-- Adjusted net income per diluted share: $0.11
-- Adjusted EBITDA: $107.2 million
-- Net Operating Income: $90.4 million
Adjusted revenue, Adjusted net income (loss), Adjusted net income (loss) per diluted share, Adjusted EBITDA, and Net Operating Income are non-GAAP measures. A reconciliation of each of these Non-GAAP Measures to the most directly comparable financial measure presented in accordance with accounting principles generally accepted in the United States ("GAAP") is set forth below. These non-GAAP measures exclude the results of ChronoScale. See "Reconciliation of GAAP to Non-GAAP Measures."
Recent Highlights
-- Signed a 15-year take-or-pay lease with a new U.S. based, high
investment-grade hyperscaler for 300 megawatts ("MW") of critical IT load
at Delta Forge 1, a new AI Factory campus in Boyce, Louisiana. The lease
provides for approximately $7.5 billion in base-term contracted revenue,
with initial operations expected to commence calendar year 2027.
-- Signed a second 15-year take-or-pay lease with the same high
investment-grade hyperscaler for 300 MW at Polaris Forge 3, which
provides for approximately $7.5 billion in base-term contracted revenue,
with initial operations expected to commence during calendar year 2027.
-- Completed a $2.15 billion private offering of 6.750% Senior Secured Notes
due 2031 (issued at 98% of par) through its subsidiary APLD ComputeCo 2
LLC. Proceeds will fund development of 200 MW of critical IT load at
Polaris Forge 2 in Harwood, North Dakota.
-- Closed a revolving credit facility of up to $550 million ($350 million
committed + $200 million accordion), arranged by Goldman Sachs and
maturing in May 2029, to support pre- and post-lease development across
campuses.
-- Enhanced credit quality on existing CoreWeave leases through a
restructured SPV subsidiary, unconditional springing guarantees from
CoreWeave, Inc., and a $50 million letter of credit. These changes
followed CoreWeave's investment-grade A3-rated refinancing and provide
additional security for the Company's 9.250% Senior Secured Notes due
2030.
-- Closed a $300 million senior secured bridge facility led by Goldman Sachs
to support development of the fourth building (150 MW) at Polaris Forge 1
(which has been repaid with the proceeds from the Senior Secured Notes
Offering described below).
-- Completed the separation of our cloud services business, combining it
with Ekso Bionics Holdings, Inc. to form ChronoScale (Nasdaq: CHRN), an
independent publicly traded accelerated-compute platform. Applied Digital
currently owns approximately 96% of ChronoScale.
Subsequent to the Quarter
-- Signed a third 15-year take-or-pay lease with the same high
investment-grade hyperscaler for 210 MW at Delta Forge 2 (fifth AI
Factory campus, third consecutive with this customer) in a new southern
state. The lease provides for approximately $5.2 billion in base-term
contracted revenue, with initial operations expected in the first half of
calendar 2028.
-- Entered a Memorandum of Understanding with CoreWeave to assign the
Building 4 lease at Polaris Forge 1 to a CoreWeave subsidiary upon
achieving an investment-grade credit rating.
-- Closed $1.59 billion of 7.000% Senior Secured Notes due 2031 (issued at
par) through our subsidiary APLD ComputeCo 3 LLC. Proceeds from this
offering were used to repay the $300 million bridge facility and will
fund the construction of the fourth building (150 MW), at Polaris Forge
1.
-- Upsized the revolving credit facility, bringing the total committed
amount to $430 million, with an additional $120 million accordion
remaining.
-- Achieved Ready for Service for Phase 1 of Building 2 (75 MW) at Polaris
Forge 1 on schedule, bringing total live capacity at the campus to 175
MW.
Management Commentary
This was a defining quarter for Applied Digital, capping a defining year. Since the end of last quarter, we have signed three new leases -- at Delta Forge 1, Polaris Forge 3, and Delta Forge 2 -- all with the same high investment-grade hyperscaler and each in a different state. Delta Forge 1 and Polaris Forge 3 each provides for approximately $7.5 billion in base-term contracted lease revenue, while Delta Forge 2 adds approximately $5.2 billion. Together, these deals represent roughly $20 billion in long-term contracted revenue from a single, world-class customer that has now chosen us three times in a row.
With these agreements, we have secured 1.4 gigawatts ("GW") of contracted critical IT load, representing approximately $36 billion in total contracted lease revenue -- or approximately $86 billion if all renewal options are exercised. We are building five multibillion-dollar AI Factory campuses for two hyperscalers and CoreWeave-- a scale that we believe speaks to both the quality of our platform and the trust these customers place in our ability to execute.
"Nearly three years ago, we made a deliberate decision to build a company that scales, not just a company that builds data centers," said Wes Cummins, Chairman and Chief Executive Officer of Applied Digital. "We call it our franchise model -- a core team of design, construction, and operations professionals replicated across every campus, in each market. Combined with our proven supply chain and design approvals from every major hyperscaler, we believe this repeatable, differentiated platform is why we have emerged as one of the clear leaders in AI infrastructure."
"We believe delivering on time is a genuine differentiator in this industry," Cummins continued. "We brought Polaris Forge 1's first 100 MW online on schedule and have now scaled total live capacity at the campus to 175 MW. We're not just securing power -- we're turning it into operational AI capacity."
Beyond the contracted portfolio and the approximately 1.4 GW already under construction, Applied Digital is actively marketing an additional 1.7 GW of capacity across multiple states, we see as underscoring robust demand for its AI Factories.
To fuel sustainable expansion, the Company is advancing a strategic power initiative. Applied Digital is working with Base Electron Corp., an independent power producer who has engaged Babcock & Wilcox to develop approximately 1.2 GW of front-of-the-meter natural gas-fired generation in the Dakotas, in collaboration with regional utilities. Applied Digital shareholders own approximately 10% of Base Electron Corp. through our investment in Base Electron. This deepens access to abundant, reliable, low-cost power -- a critical competitive advantage for both existing campuses and future growth.
"We are still in the early innings of what we believe will likely be the largest buildout of critical infrastructure in modern economic history," Cummins added. "We see demand for high-power-density, purpose-built AI data centers remaining extremely robust. Our approach is simple: Do it the right way. For customers, that means delivering high-quality, GPU-ready facilities on time. For communities, it means creating lasting economic value. When we do right by both, our shareholders win over the long term."
Cummins also pointed to the continued strength of the Company's Data Center Hosting business: "Our Data Center Hosting business, which operates 286 MW for bitcoin mining across our two North Dakota sites, remains the highest return-on-assets business in the company. We are paid based on the data center capacity provided to our customer, so as long as they are mining, we are paid regardless of where the price of bitcoin trades -- which makes this a steady, high-margin source of cash flow."
The Company also completed the separation of its cloud services business during the quarter and currently owns approximately 96% of ChronoScale, a public company trading on Nasdaq under the symbol "CHRN." ChronoScale has continued to build out its leadership team, including the appointments of Raj Jegannathan, previously a Vice President at Tesla, as Chief Technology Officer, and Lawrence Lam, who brings more than twenty years scaling global cloud and AI platforms at companies including Supermicro, as Chief Product Officer.
HPC Hosting Update
Applied Digital's HPC Hosting Business designs, builds, and operates next-generation, purpose-built AI Factory data centers. As of May 31, 2026, the Company had executed long-term leases representing approximately 1,410 MW of contracted critical IT load across five campuses -- Polaris Forge 1, 2, and 3 in North Dakota and Delta Forge 1 and 2 in Louisiana and another southern state -- representing approximately $36 billion of total contracted revenue over the initial 15-year base lease terms, or approximately $86 billion if all renewal options are exercised.
The first 100 MW data center at Polaris Forge 1 became operational in October 2025, and the Company delivered Phase 1 of Building 2 (75 MW) on June 30, 2026, bringing the total live capacity at the campus to 175 MW. Additional buildings at Polaris Forge 1, along with Polaris Forge 2, Polaris Forge 3, Delta Forge 1, and Delta Forge 2, are in various stages of construction.
Revenue from our HPC Hosting business totaled $203.0 million for the quarter, including $44.1 million related to base rent, $152.4 million related to tenant fit-out services, and $6.5 million related to tenant recoveries. This resulted in $26.2 million of segment operating profit for the quarter ended May 31, 2026.
Data Center Hosting Update
Applied Digital's Data Center Hosting Business operates data centers to provide energized space to crypto mining customers. As of May 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 May 31, 2026, the Company generated $37.3 million in revenue from the Data Center Hosting Business segment, compared to $38.0 million during the three months ended May 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 $12.5 million in segment operating profit for the three months ended May 31, 2026 on $113.8 million in reported assets at the end of the period.
Cloud Services Business Update
On May 5, 2026, we completed the separation of our cloud services business, combining it with Ekso Bionics Holdings, Inc. to form ChronoScale Holdings Corporation, an independent, publicly traded accelerated-compute platform that is trading on the Nasdaq Capital Market under the symbol "CHRN." Applied Digital currently owns approximately 96% of ChronoScale.
We consider the Data Center Hosting Business and the HPC Hosting Business to represent our core operations for long-run strategic and performance evaluation purposes as we evolve into a pure-play data center platform moving forward. Accordingly, although we consolidate ChronoScale's financial results as our majority owned subsidiary, we excluded the results of ChronoScale, including its cloud services business, in our Non-GAAP results presented herein. See "Reconciliation of GAAP to Non-GAAP Measures."
Financial Results from Operations for Fiscal Fourth Quarter 2026
Operating Results
Services revenue in the fiscal fourth quarter 2026 was $208.2 million compared to $51.1 million, up 308% from the fiscal fourth quarter 2025. The growth was primarily driven by revenue of approximately $152.4 million related to tenant fit-out services within our HPC Hosting Business, which we began providing during the fiscal year ended 2026.
Data center rental and other revenue in the fiscal fourth quarter 2026 was $50.6 million as the first HPC data center at our Polaris Forge 1 campus was fully operating during the current quarter. This revenue consisted of $44.1 million related to base rent, and $6.5 million related to tenant recoveries.
Services cost of revenues in the fiscal fourth quarter 2026 were $193.1 million compared to $54.2 million, up 256% from the fiscal fourth quarter 2025. This increase was primarily driven by an increase of $145.6 million in expenses associated with tenant fit-out services for our HPC Hosting Business.
Data center rental and other cost of revenues in the fiscal fourth quarter 2026 were $25.1 million. Data center rental and other cost of revenue included approximately $14.1 million in depreciation and amortization expense on our first HPC data center at our Polaris Forge 1 campus, $6.4 million in expenses which are reimbursable as tenant recoveries, and $4.5 million in personnel and other expenses directly supporting revenue.
Selling, general and administrative expenses in the fiscal fourth quarter 2026 were $165.3 million compared to $41.0 million, up 303% from the fiscal fourth quarter of 2025 driven by the Company's overall business growth. This increase was primarily due to increases of $116.8 million in stock based compensation due to accelerated vesting of certain employee stock awards as well as grant activity associated with separation of the cloud services business and the increase in headcount, $7.3 million in personnel expenses related to the increase in headcount, and $5.6 million in professional service expense primarily related to legal services provided on discrete transactions and projects, as well as general support of the business. These increases were partially offset by a decrease of $5.4 million in other selling, general, and administrative expense such as travel, computer and software expenses.
Interest expense, net in the fiscal fourth quarter 2026 was $10.6 million compared to $8.5 million, up 26%, from the fiscal fourth quarter 2025. As we entered into new debt arrangements during the current fiscal year, there was an increase of $31.9 million in interest expense. The increase in expense was partially offset by an increase of $30.5 million in interest income due to larger balances of funds held in interest-bearing demand deposit accounts.
Gain on change in fair value of derivatives was $53.3 million for the three months ended May 31, 2026, due to an increase of $69.9 million in the fair value of our Babcock & Wilcox Enterprises, Inc. ("B&W") common stock warrant which was partially offset by a decrease of $16.7 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 noncontrolling interest.
Gain on change in fair value of investment was $4.8 million for the three months ended May 31, 2026, due to the increase in the fair value of our investment in B&W common stock.
Net loss from discontinued operations was $1.0 million for the three months ended May 31, 2026 and represents the income statement activity related to the Ekso business at ChronoScale which was classified as held for sale and discontinued operations during the fiscal fourth quarter 2026.
Net loss from continuing operations attributable to common stockholders for the fiscal fourth quarter 2026 was $110.6 million, or $0.39 per basic and diluted share. This compares to a net loss attributable to common stockholders from continuing operations of $53.1 million, or $0.24 per basic and diluted share for the fiscal fourth quarter of 2025.
Adjusted revenue, a non-GAAP financial measure, was $240.4 million for the fiscal fourth quarter 2026 compared to $38.0 million for the fiscal fourth quarter of 2025.
Adjusted net income, a non-GAAP financial measure, was $12.9 million, or $0.04 per diluted share for the fiscal fourth quarter 2026. 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 fourth quarter of 2025.
Adjusted EBITDA, a non-GAAP financial measure, was $42.4 million for the fiscal fourth quarter 2026 compared to an Adjusted EBITDA of $1.0 million for the fiscal fourth quarter 2025.
Net Operating Income, a non-GAAP financial measure, was $39.9 million for the fiscal fourth quarter 2026.
Financial Results for Fiscal Year Ended May 31, 2026
Services revenue increased $270.0 million, or 119%, from $226.6 million for the fiscal year ended May 31, 2025 to $496.6 million for the fiscal year ended May 31, 2026. Our HPC Hosting Business commenced operations at our first HPC data center at our Polaris Forge 1 campus resulting in the recognition of approximately $270.6 million related to tenant fit-out services. Additionally, there was an increase of $12.1 million in revenue generated by our Data Center Hosting Business due to performance improvements compared to the fiscal year ended May 31, 2025. These increases were partially offset by a decrease of $12.4 million in revenue generated from ChronoScale primarily due to a reduction in rates for cloud services.
Data center rental and other revenue was $114.7 million for the fiscal year ended May 31, 2026, which is the period during which our HPC Hosting Business commenced operations. This revenue consisted of approximately $99.8 million related to base rent and $14.9 million related to tenant recoveries.
Services cost of revenues increased by $180.1 million, or 83%, from $216.8 million for the fiscal year ended May 31, 2025 to $396.9 million for the fiscal year ended May 31, 2026. The increase was primarily due to $258.1 million in expenses associated with tenant fit-out services for our HPC Hosting Business which we began providing during the current fiscal year. This increase was partially offset by decreases of approximately $62.3 million in depreciation and amortization expense and $17.2 million in lease and related expense primarily due to the renegotiations of certain of our leases during fiscal year ended May 31, 2026, as well as due to the Cloud Services Business (one of our three operating business segments at the time) being classified as held for sale until February 15, 2026, which resulted in decreased depreciation and amortization recorded.
Data center rental and other cost of revenue was $56.8 million for the fiscal year ended May 31, 2026, which is when we commenced our data center rental operations within our HPC Hosting Business. The primary components of data center rental and other cost of revenue include approximately $32.2 million in depreciation and amortization expenses associated with our HPC Hosting Business, $14.9 million in expenses which are reimbursable as tenant recoveries, $8.5 million in rental property operating expenses, which are not eligible for recovery from our tenant, $0.7 million in property insurance expenses associated with our HPC Hosting Business, and $0.2 million in property tax expenses associated with our HPC Hosting Business.
Selling, general and administrative expense increased by $224.2 million, or 208%, from $107.9 million for the fiscal year ended May 31, 2025 to $332.1 million for the fiscal year ended May 31, 2026. The increase was primarily due to the overall growth in the business, with a $198.3 million increase in stock-based compensation primarily due to an increase in grant activity related to the separation of the cloud services business, the increase in headcount and performance stock awards granted during the fiscal year ended May 31, 2026 compared to the fiscal year ended May 31, 2025, $16.0 million increase in professional service expenses primarily related to legal services provided on discrete transactions and projects as well as general support of the business, $15.4 million increase in personnel expenses driven by increases in headcount to support the business, and $6.2 million increase in other selling, general, and administrative expense primarily related to travel, computer and software expenses. These increases were partially offset by a decrease of $11.7 million in lease and related expenses and depreciation and amortization expense, primarily due to the renegotiations of certain of our leases during the fiscal year ended May 31, 2026.
Loss (gain) on classification of held for sale changed by $84.3 million, or 342%, from a gain of $24.6 million for the fiscal year ended May 31, 2025 to a loss of $59.7 million for the fiscal year ended May 31, 2026. The loss during the fiscal year ended May 31, 2026 was primarily due to the write down of the Cloud Services Business assets to carrying value as of February 15, 2026 when it no longer qualified as held for sale. Comparatively, the gain during the fiscal year ended May 31, 2025 was due to the sale of our former Garden City facility.
Interest expense, net decreased $2.6 million, or 8%, from $32.1 million for the fiscal year ended May 31, 2025 to $29.5 million for the fiscal year ended May 31, 2026. As we entered into more debt arrangements during the current fiscal year, there was an increase of $53.3 million in interest expense. The increase in expense was partially offset by an increase of $52.6 million in interest income due to larger balances of funds held in interest-bearing demand deposit accounts.
Gain on change in fair value of derivatives was $75.8 million for the fiscal year ended May 31, 2026, due to an increase of $89.2 million in fair value of our Babcock & Wilcox Enterprises, Inc. ("B&W") common stock warrant partially offset by a decrease of $13.3 million in fair value of the derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2's noncontrolling interest.
Gain on change in fair value of investments was $10.8 million for the fiscal year ended May 31, 2026, due to an increase of $8.8 million in fair value of our investment in B&W common stock and an increase of $2.0 million in fair value of our investment in Base Electron, a related party.
Loss on conversion of debt was $33.6 million for the fiscal year ended May 31, 2025, due to the difference in the fair value compared to the price at which the promissory notes, totaling $92.1 million, entered into with YA II PN, LTD in the year ended May 31, 2024 (the "YA Notes") were converted. There was no such loss recorded in the current fiscal year.
Loss on change in fair value of debt was $85.4 million for the fiscal year ended May 31, 2025, primarily due to a loss of approximately $89.6 million related to the change in fair value of the conversion option derivative of the Convertible Notes during the two week period in which we did not have sufficient authorized shares to settle such conversion fully in shares, which was partially offset by a gain of approximately $4.1 million related to the change in the fair value of the YA Notes.
Net loss from discontinued operations was $1.0 million for the fiscal year ended May 31, 2026 and represents the income statement activity related to the Legacy Ekso business at ChronoScale classified as held for sale and discontinued operations.
Net loss from continuing operations attributable to common stockholders was $249.2 million, or $0.91 per basic and diluted share, for the fiscal year ended May 31, 2026. This compares to a net loss attributable to common stockholders from continuing operations of $233.7 million, or $1.16 per basic and diluted share, for the fiscal year ended May 31, 2025.
Net loss from discontinued operations attributable to common stockholders for the fiscal year ended May 31, 2026 was $1.0 million. There was no such activity in the prior fiscal year.
Adjusted revenue, a non-GAAP financial measure, was $539.7 million for the fiscal year ended May 31, 2026 compared to $144.2 million for the fiscal year ended May 31, 2025.
Adjusted net income from continuing operations attributable to common stockholders, a non-GAAP financial measure, was $36.1 million or $0.11 per diluted share for the fiscal year ended May 31, 2026. This compares to an adjusted net loss attributable to common stockholders of $12.5 million, or $0.06 per basic and diluted share, for the fiscal year ended May 31, 2025.
Adjusted EBITDA, a non-GAAP financial measure, was $107.2 million for the fiscal year ended May 31, 2026 compared to an Adjusted EBITDA of $19.6 million for the fiscal year ended May 31, 2025.
Net Operating Income, a non-GAAP financial measure, was $90.4 million for the fiscal year ended May 31, 2026.
Balance Sheet
As of May 31, 2026, the Company had $4.2 billion in cash, cash equivalents, and restricted cash, along with $5.0 billion in debt.
Conference Call
As previously announced, Applied Digital will host a conference call today, July 27, 2026, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss these results. A question-and-answer session will follow the management's presentation.
Date: Monday, July 27, 2026
Time: 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time)
North America Dial-In: 1-833-461-5787
International Dial-In: +1 (585) 542-9983
Conference ID: 735983255
The conference call will be broadcast live and available for replay for one year here.
Please call the conference telephone number approximately 10 minutes before the start time. An operator will register your name and organization. If you have difficulty connecting with the conference call, please get in touch with Applied Digital's investor relations team at 1-949-574-3860.
About Applied Digital
Applied Digital Corporation (Nasdaq: APLD) named Best Data Center in the Americas 2025 by Datacloud - designs, develops, owns, and operates large-scale, purpose-built data centers engineered to support HPC workloads, including AI, machine learning, and other accelerated-compute applications. Headquartered in Dallas, TX, and founded in 2021, the Company combines hyperscale expertise, closed-loop cooling, and rapid deployment capabilities to deliver secure, scalable compute at industry-leading speed and efficiency, while creating economic opportunities in underserved communities through its award-winning Polaris Forge AI Factory model. Find more information at www.applieddigital.com. Follow us on X (formerly Twitter) at @APLDdigital.
Forward-Looking Statements
This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position, business strategy and objectives and future financing plans. These statements use words, and variations of words, such as "intend," "will," "continue," "build," "future," "increase," "drive," "believe," "look," "ahead," "confident," "deliver," "outlook," "expect," "project" and "predict." Other examples of forward-looking statements may include, but are not limited to, (i) statements that reflect perspectives and expectations regarding lease agreements and any current or prospective data center campus development; (ii) statements about the high-performance computing (HPC) industry; (iii) statements of Company plans and objectives, including the Company's evolving business model, or estimates or predictions of actions by suppliers; (iv) statements of future economic performance; (v) statements of assumptions underlying other statements and statements about the Company or its business; (vi) the Company's plans to
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