Applied Digital Beats Estimates as AI Data Center Demand Stays Strong

Applied Digital Corporation posted fiscal third-quarter revenue of $126.6 million on April 8, roughly 65% above Wall Street's consensus estimate of $76.56 million, as its high-performance computing hosting business delivered its first full quarter of lease payments from a 100-megawatt AI campus in North Dakota now described as fully operational.

The beat was driven primarily by the HPC Hosting segment, which generated $71.0 million in revenue for the quarter ended February 28, 2026. The Data Center Hosting segment contributed $37.5 million, up 7% from the year-earlier period. Total revenue climbed 139% year-over-year, reflecting the scale of Applied Digital's pivot from cryptocurrency hosting to AI infrastructure.

Despite the top-line outperformance, the company reported a GAAP net loss of $100.9 million, or $0.36 per share, missing the consensus EPS estimate of minus $0.16. Management attributed the gap largely to stock-based compensation and costs tied to the reclassification of its cloud business. On an adjusted basis, Applied Digital posted net income of $33.2 million and adjusted EBITDA of $44.1 million.

"We now operate one of the only 100 MW direct-to-chip liquid-cooled data centers online today, and more importantly, it is fully operational," said Wes Cummins, chairman and chief executive officer. He noted that first building represents approximately one-sixth of Applied Digital's contracted capacity and one-tenth of what is operating or under construction. The demand signal was equally direct: "We are seeing a clear acceleration in demand for high-performance AI data center capacity, with hyperscalers as aggressive as we have ever seen them," Cummins said.

That demand is being locked in through long-dated contracts that form the backbone of the company's investment thesis. CoreWeave holds commitments covering 400 megawatts at the Polaris Forge 1 campus in North Dakota; Oracle was identified in a March regulatory filing as the anchor tenant for an additional 200 megawatts at Polaris Forge 2. Together, those two deals carry potential lease revenue estimated at roughly $16 billion over their full terms, a number that explains why investors are willing to absorb near-term GAAP losses against the company's capital spending cycle.

That spending is substantial. Applied Digital closed a $2.15 billion private offering of 6.750% senior secured notes due 2031 to fund Polaris Forge 2 construction, and secured a separate $100 million equipment facility with Macquarie Equipment Capital. The company ended the quarter carrying approximately $2.1 billion in cash, cash equivalents and restricted cash against $2.7 billion of total debt. It also broke ground on Delta Forge 1, a 430-megawatt campus, during the quarter.

Cummins said buildings at both Polaris Forge 1 and Polaris Forge 2 are "progressing on time and on budget" despite winter conditions in North Dakota, where 1,200 skilled craft professionals are advancing the next two 150-megawatt facilities at PF1 simultaneously. At PF2, foundations are largely complete. Management said it expects revenues to ramp significantly over the next 12 months as those buildings come online.

The structural risk embedded in that outlook is customer concentration. CoreWeave is the anchor tenant for Polaris Forge 1, meaning its financial health is directly coupled to Applied Digital's near-term revenue trajectory. Whether a third hyperscaler, which Cummins had flagged in prior quarters as a party in advanced discussions, materializes as a signed contract will determine whether the AI infrastructure buildout behind Applied Digital's results is broadening or still resting on two names. Shares rose 2.37% in after-hours trading to $28.45 following the release.