"We remain confident in our growth trajectory..." - Wes Cummins
— Wes Cummins
03Detailed Report
APLD
Applied Digital Corporation
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 18, 2026
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Executive Summary
In Q2 2025, Applied Digital Corporation reported a substantial increase in revenue of 51% year-over-year, reaching $63.9 million. This growth was primarily driven by robust demand in its Cloud Services segment and increased capacity utilization in Data Center Hosting. However, despite this revenue growth, the company reported a net loss of $138.7 million, largely impacted by significant conversion-related losses and fair value adjustments on convertible debt. Management has emphasized its strategic positioning for future growth, particularly through its recent partnership with Macquarie Asset Management, which is anticipated to advance its high-performance computing (HPC) capacities. Looking forward, executives are optimistic about scaling operations amidst challenges in securing hyperscaler contracts, indicating a focus on operational efficiency and enhancing cash flow.
Key Performance Indicators
Revenue
Increasing
63.87M
QoQ: 5.21% | YoY: 51.34%
Gross Profit
Decreasing
11.51M
18.02% margin
QoQ: 3 332.30% | YoY: -11.36%
Operating Income
Decreasing
-18.62M
QoQ: -296.30% | YoY: -127.73%
Net Income
Decreasing
-138.73M
QoQ: -3 166.45% | YoY: -1 217.56%
EPS
Decreasing
-0.66
QoQ: -2 191.67% | YoY: -587.50%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue Growth: $63.9 million (up 51% YoY) Net Income: -$138.7 million (EPS: -$0.66) Gross Profit Margin: 18.02% Operating Income: -$18.6 million (Operating Margin: -29.46%) EBITDA: -$104.8 million Total Assets: $1.54 billion Cash Position: $314.6 million with low liquidity ratios (Current Ratio: 0.774). Debt Levels: Total Debt of $799.4 million, with a focus on repaying obligations following new financing agreements. The increase in revenue appears promising, but challenges on the profitability front remain severe, highlighted by persistent negative operating income.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
63.87M
51.34%
5.21%
Gross Profit
11.51M
-11.36%
3 332.30%
Operating Income
-18.62M
-127.73%
-296.30%
Net Income
-138.73M
-1 217.56%
-3 166.45%
EPS
-0.66
-587.50%
-2 191.67%
Key Financial Ratios
Gross Profit Margin
Weak
18.00%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Weak
-0.29%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-2.17%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
-0.09%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.32%
Return on equity suggests inefficient capital allocation
Current Ratio
Concern
0.77
Current ratio below safe levels, potential liquidity risk
Debt to Equity
High Risk
1.84
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Negative
-3.81x
Negative earnings make P/E ratio not meaningful
Price to Book
Premium
4.87x
Trading at premium to book value, reflects strong intangibles or growth
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