Executive Summary
For the fiscal first quarter 2025, Applied Digital Corporation (APLD) reported revenue of $60.7 million, reflecting a robust year-over-year growth of 67%, propelled primarily by the cloud services segment. Despite this revenue increase, the company continues to grapple with substantial costs, resulting in a net loss of $4.2 million. Management emphasized the strategic importance of their ongoing investments, particularly in their North Dakota HPC campus, which is expected to drive future earnings growth. With plans for operational expansions and advancements in their technology offerings, APLD appears well-positioned to capitalize on the growing demand for high-performance computing solutions in the market.
Key Performance Indicators
QoQ: 86.25% | YoY:-102.99%
QoQ: 127.97% | YoY:284.96%
Key Insights
1. Revenue: $60.7 million, up 67.12% YoY; 2. Gross Profit: -$356,000; 3. Operating Income: $9.48 million, up 284.96% YoY; 4. Net Income: -$4.2 million; 5. EBITDA: $37.4 million, yielding a ratio of 61.57%; 6. Shareholder Equity: $241.8 million, driven by recent investment inflows. Cost increases are largely attributed to higher depreciation and facility leasing expenses, with total debt standing at $143.6 million. Cash and cash equivalents at quarter-end totaled $86.6 million, signaling healthy ...
Financial Highlights
1. Revenue: $60.7 million, up 67.12% YoY; 2. Gross Profit: -$356,000; 3. Operating Income: $9.48 million, up 284.96% YoY; 4. Net Income: -$4.2 million; 5. EBITDA: $37.4 million, yielding a ratio of 61.57%; 6. Shareholder Equity: $241.8 million, driven by recent investment inflows. Cost increases are largely attributed to higher depreciation and facility leasing expenses, with total debt standing at $143.6 million. Cash and cash equivalents at quarter-end totaled $86.6 million, signaling healthy liquidity.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
60.70M |
67.12% |
38.91% |
| Gross Profit |
-356.00K |
-102.99% |
86.25% |
| Operating Income |
9.48M |
284.96% |
127.97% |
| Net Income |
-4.25M |
62.93% |
93.44% |
| EPS |
-0.03 |
73.82% |
94.46% |
Key Financial Ratios
operatingProfitMargin
15.6%
operatingCashFlowPerShare
$-0.51
freeCashFlowPerShare
$-0.88
dividendPayoutRatio
-1.04%
priceEarningsRatio
-32.02
Management Commentary
1. Strategic Investments: Wes Cummins noted, "Our balance sheet significantly improved due to the strategic investments… We appreciate the vote of confidence from our investors and look forward to deploying this capital in high return projects."
2. Revenue Growth and Expenses: CFO David Rench commented, "Our adjusted EBITDA for the quarter increased significantly to $20 million despite our net loss of $21.6 million, primarily due to significant depreciation costs and expenses for non-revenue generating properties."
3. Future Outlook: Cummins stated, "We are exploring opportunities to accelerate the monetization of our over 1.4 gigawatt pipeline, which will enhance our revenue potential moving forward."
4. Cloud Services Expansion: Rench explained that the cloud services segment contributed $25.9 million in revenue, indicating strong growth in sector demand.
Our plan is to utilize these data centers in the future which will help offset these costs.
— David Rench
We believe our proprietary data center design and architecture redefines what's possible for advanced HPC.
— Wes Cummins
Forward Guidance
Looking ahead, management remains confident in continuing revenue growth, anticipating deployment of additional GPU clusters in the second half of fiscal year 2025. The company plans to finalize the lease agreement for their North Dakota campus, which is critical for supporting high-performance computing demand. The management has guided for operational expansions that could substantially increase revenue streams, alongside strategic engagement with hyperscalers for future capacity development.