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Applied Digital Corporation (APLD)
NASDAQ:APLD
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Applied Digital Corporation
(NASDAQ:APLD)
39Underperform
Positive Factors
Financial Performance
Revenue of $63.9 million was above the $59.5 million estimate due to better-than-expected Bitcoin hosting and AI Cloud revenue.
Financing and Partnerships
Applied closed a $375M financing with Sumitomo Mitsui Banking Corporation to fund Ellendale's development and strengthen credibility in leasing discussions.
Strategic Partnerships
Macquarie's backing validates the long-term viability of Applied Digital's HPC- and AI-focused model.
Negative Factors
Cloud Services
Revenue from cloud services dropped significantly due to technical disruptions during the transition of GPU capacity.
Investor Concerns
Investor sentiment soured primarily because of expectations around HPC and the limited details on lease timeline.
Liquidity and Expenditure
Concerns related to liquidity and capital expenditure spend.
Applied Digital Corporation (APLD) vs. S&P 500 (SPY)
Market Cap
$1.17B
Dividend YieldN/A
Average Volume (3M)33.79M
Price to Earnings (P/E)―
Beta (1Y)3.23
Revenue Growth53.70%
EPS Growth-72.91%
CountryUS
Employees150
SectorFinancial
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-0.08
Shares Outstanding224,717,710
10 Day Avg. Volume34,515,292
30 Day Avg. Volume33,794,281
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.19
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit148.67
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.25Price Target Upside90.17% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Applied Digital Corporation Business Overview & Revenue Model
Company DescriptionApplied Digital Corporation (APLD) is a technology company that focuses on developing and operating next-generation digital infrastructure. The company specializes in providing solutions for high-performance computing applications, including data centers for cryptocurrency mining, artificial intelligence, and other intensive computing processes. Its operations are primarily within the technology infrastructure sector, where it leverages advanced technology to optimize performance and efficiency.
How the Company Makes MoneyApplied Digital Corporation generates revenue primarily through the operation and management of data centers that host and manage computing power for various applications. A significant portion of its revenue comes from hosting services for cryptocurrency mining operations, where the company provides infrastructure and power solutions to mining clients. Additionally, APLD may engage in mining activities directly, further contributing to its income. The company may also benefit from partnerships and agreements with technology providers and clients who require high-performance computing capabilities. These revenue streams are supported by the demand for efficient and scalable infrastructure solutions in the rapidly growing digital and cryptocurrency economies.
Applied Digital Corporation Financial Statement Overview
Summary
Applied Digital Corporation demonstrates strong revenue growth but faces significant challenges in profitability and cash flow. High leverage and negative profit margins suggest financial instability, necessitating improvements in profitability and debt management.Income Statement
Applied Digital Corporation has shown significant revenue growth, increasing from $8.5 million in 2022 to $221.2 million in TTM (Trailing-Twelve-Months). However, the company is facing substantial profitability challenges, with negative EBIT and net income margins. The gross profit margin is low, indicating cost management issues.22
Negative
Balance Sheet
The company has a high debt-to-equity ratio, indicating significant leverage, which poses a financial risk. Stockholders' equity has improved over the years, but the return on equity remains negative due to losses. The equity ratio suggests moderate equity financing, but liabilities are high relative to assets.30
Negative
Cash Flow
Applied Digital Corporation's cash flow situation is concerning, with negative free cash flow and a high operating cash flow deficit in TTM (Trailing-Twelve-Months). The free cash flow to net income ratio indicates cash flow issues despite financing activities supporting liquidity.18
Very Negative
| Breakdown | ||||
| Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 165.57M | 55.39M | 8.55M | 0.00 | 0.00 | Gross Profit |
| 17.23M | 11.00M | -957.00K | -1.00K | 0.00 | EBIT |
| -99.02M | -44.05M | -20.90M | -332.00K | -263.00K | EBITDA |
| -43.38M | -36.88M | -20.71M | -331.00K | 0.00 | Net Income Common Stockholders |
| -149.27M | -45.61M | -22.49M | -804.00K | -263.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.34M | 43.57M | 38.80M | 11.75M | 0.00 | Total Assets |
| 762.87M | 263.96M | 119.98M | 15.05M | 0.00 | Total Debt |
| 427.81M | 91.81M | 13.54M | 2.13M | 1.90M | Net Debt |
| 424.47M | 48.24M | -25.25M | -9.62M | 1.90M | Total Liabilities |
| 638.04M | 194.28M | 40.74M | 17.64M | 2.02M | Stockholders Equity |
| 124.83M | 59.52M | 72.26M | -2.58M | -2.02M |
| Cash Flow | Free Cash Flow | |||
| -128.01M | -72.54M | -59.12M | -3.38M | 0.00 | Operating Cash Flow |
| 13.79M | 58.73M | -872.00K | -83.00K | 0.00 | Investing Cash Flow |
| -172.44M | -132.09M | -45.87M | -3.30M | 0.00 | Financing Cash Flow |
| 146.76M | 70.63M | 81.29M | 15.13M | 0.00 |
Applied Digital Corporation Technical Analysis
Neutral
5.39
Price Trends
5.79
Negative
7.13
Negative
6.91
Negative
Market Momentum
-0.10
Negative
52.60
Neutral
85.89
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APLD, the sentiment is Neutral. The current price of 5.39 is above the 20-day moving average (MA) of 4.71, below the 50-day MA of 5.79, and below the 200-day MA of 6.91, indicating a neutral trend. The MACD of -0.10 indicates Negative momentum. The RSI at 52.60 is Neutral, neither overbought nor oversold. The STOCH value of 85.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for APLD.
Applied Digital Corporation Risk Analysis
Applied Digital Corporation disclosed 85 risk factors in its most recent earnings report. Applied Digital Corporation reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Applied Digital Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.15B | 103.59 | 2.42% | ― | 18.72% | 347.70% | |
67 Neutral | $1.22B | 873.04 | 0.63% | ― | 20.97% | ― | |
67 Neutral | $1.26B | 28.05 | 11.35% | ― | 14.05% | 17.90% | |
64 Neutral | $12.60B | 9.73 | 7.92% | 16985.68% | 12.21% | -5.55% | |
53 Neutral | $2.90B | ― | -32.07% | ― | 23.79% | 4.10% | |
45 Neutral | $1.20B | ― | -19.49% | ― | -50.48% | -15.75% | |
39 Underperform | $1.17B | ― | -78.94% | ― | 53.70% | -72.91% |
* Financial Sector Average
Performance Comparison
APLD
Applied Digital Corporation
5.39
1.91
54.89%
VYX
NCR Voyix
10.57
-2.24
-17.49%
GDYN
Grid Dynamics Holdings
13.95
3.80
37.44%
AI
C3ai
23.37
-1.58
-6.33%
FLYW
Flywire
10.89
-6.32
-36.72%
TASK
TaskUs
16.85
2.67
18.83%
Applied Digital Corporation Earnings Call Summary
Earnings Call Date:Apr 14, 2025
(Q3-2025)
| % Change Since: 0.37%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Neutral
The earnings call revealed robust revenue growth and significant financial support from major institutions, indicating positive business momentum. However, this was tempered by a net loss, challenges in the Cloud Services segment, increased interest expenses, and margin compression. While the construction progress and financial partnerships are promising, the financial losses and operational challenges present a balanced outlook.Q3-2025 Updates
Positive Updates
Revenue Growth
Revenues for the fiscal third quarter of 2025 were $52.9 million, up 22% over the prior comparable period, driven by growth in the Cloud Services Business.
Significant Financial Partnerships
Secured a $5 billion potential investment from Macquarie Asset Management and a $375 million financing arrangement with Sumitomo Mitsui Bank Corporation.
Adjusted EBITDA Improvement
Adjusted EBITDA increased 878% to $10 million.
Construction Progress
Construction of the Ellendale campus remains on schedule, with the first building expected to be ready for service in Q4 2025.
Negative Updates
Net Loss
Net loss attributable to common stockholders was $36.1 million or $0.16 per basic and diluted share.
Cloud Services Revenue Decline
Cloud Services Business revenue declined sequentially from the last quarter due to a shift from reserve contracts to an on-demand model.
Increased Interest Expenses
Interest expense increased by $4.1 million to $8.9 million due to finance leases and interest-bearing loans.
Margin Compression
Experienced margin compression in the Data Center Hosting Business due to seasonal fluctuations in power costs.
Company Guidance
During Applied Digital's fiscal third quarter 2025 conference call, the company provided several key metrics and updates regarding its operations and strategic direction. The Data Center Hosting Business is currently operating 286 megawatts of fully contracted capacity across two locations in North Dakota, with Bitcoin prices remaining strong, positively impacting customer sentiment. In the HPC Hosting segment, significant milestones included a transaction with Macquarie Asset Management, allowing for a potential $5 billion investment in next-generation data centers, and a $375 million financing arrangement with Sumitomo Mitsui Bank Corporation. The Ellendale campus is expected to begin generating revenue in Q4 2025, with construction on subsequent buildings underway. The Cloud Services Business contributed $17.8 million in revenue, although it faced a sequential decline due to a shift to an on-demand model. Cost of revenues increased to $49.1 million, and SG&A expenses decreased to $22.7 million. Adjusted EBITDA saw a substantial increase of 878% to $10 million. The company ended the quarter with $261.2 million in cash and $689.1 million in debt. Additionally, the board is reviewing strategic options for the Cloud Services Business to potentially lower the cost of capital and align with future strategic goals.Applied Digital Corporation Corporate Events
Private Placements and Financing
Applied Digital Secures $150M Preferred Equity Agreement
Positive
May 1, 2025
On April 30, 2025, Applied Digital Corporation entered into a preferred equity purchase agreement with institutional investors, allowing the company to sell up to $150 million of Series G Convertible Preferred Stock over a 36-month period. This arrangement is intended to fund the development of their Ellendale High Performance Computing Campus and other corporate needs, providing flexibility in capital access without mandatory draw requirements. The stock is convertible into common shares under specific conditions, with protective measures like beneficial ownership caps and redemption rights in place to ensure compliance with Nasdaq rules.
Spark’s Take on APLD Stock
According to Spark, TipRanks’ AI Analyst, APLD is a Underperform.
Applied Digital Corporation’s stock score is primarily affected by financial instability, including significant profitability and cash flow issues, compounded by high leverage. Technical indicators suggest bearish momentum, while valuation metrics reflect underperformance. Despite positive developments highlighted in the earnings call, such as revenue growth and strategic partnerships, these are overshadowed by ongoing financial challenges and operational risks.
To see Spark’s full report on APLD stock, click here.
Executive/Board Changes
Applied Digital Approves Performance Stock Units for Executives
Neutral
Apr 2, 2025
On March 27, 2025, Applied Digital Corporation’s board approved performance stock unit grants for key executives under its 2024 Omnibus Equity Incentive Plan. These grants, which are subject to performance-based vesting conditions, include 1,600,000 units for CEO Wes Cummins, 245,000 units for CFO Saidal Mohmand, and 600,000 units for COO Laura Laltrello, highlighting the company’s commitment to aligning executive incentives with performance goals.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.