Applied Digital Corporation Reports 5.5% Revenue Growth to $144.2 Million, Faces $231.1 Million Net Loss

Applied Digital Corporation reported significant financial developments in its fiscal year ending May 31, 2025, with total revenues reaching $144.2 million, a 5.5% increase from $136.6 million in the previous fiscal year. The company attributed this growth primarily to the full operational capacity of its 180 MW Data Center Hosting Facility in Ellendale, North Dakota, which had previously experienced outages. However, the company also reported a net loss of $231.1 million, which included a substantial loss from discontinued operations of $72.7 million related to its Cloud Services Business, which is currently classified as held for sale.

The company's operational performance showed a marked improvement in its Data Center Hosting Business, which generated an operating profit of $63.9 million, up from $4.8 million the previous year. This increase was bolstered by a $25 million gain on the classification of held-for-sale assets, specifically from the sale of the Garden City facility. In contrast, the HPC Hosting Business reported an operating loss of $12.1 million, reflecting ongoing legal expenses and amortization costs as the company ramps up its high-performance computing capabilities.

Strategically, Applied Digital has made significant moves, including the construction of its Polaris Forge 1 campus, which is expected to enhance its HPC capabilities. The company has entered into lease agreements with CoreWeave for a total of 250 MW of infrastructure, which is anticipated to generate meaningful revenue once operational. Additionally, the company has engaged in various financing activities, including a $450 million offering of convertible senior notes and a $375 million credit agreement with Sumitomo Mitsui Banking Corporation, aimed at funding its expansion and operational needs.

As of May 31, 2025, Applied Digital employed approximately 205 full-time employees, reflecting its commitment to scaling operations. The company has also faced challenges, including a material weakness in its internal controls over financial reporting, which it is actively working to remediate. Looking ahead, the company anticipates continued investment in its data center infrastructure and aims to leverage its strategic partnerships to enhance its market position in the rapidly evolving sectors of high-performance computing and artificial intelligence.