- Revenue Surge Driven by New Services Q2 revenue reached $126.6M, up 250% YoY, fueled by $73M in tenant fit-out services and $12M from the CoreWeave lease.
- Strong Financing and Liquidity Position Completed $2.35B senior notes and maintains $2.3B in cash versus $2.6B in debt, with $100M in loan facilities and $5B equity facility.
- Hyperscaler Market Expansion Secured 600MW under contract with two hyperscalers in a $400B+ annual investment market, with a $16B 2025 deal pipeline.
- Strategic Campus Advantages Dakota sites leverage low-cost energy and natural cooling, targeting 1.4GW and 1GW expansion at PF-1 and PF-2, with potential to scale to 2GW+.
- ChronoScale Spin-Off Potential Proposed $60–75M growth opportunity from merging cloud business with EKSO Bionics, targeting AI compute markets with $60M+ in cloud assets.
Financial Performance and Liquidity
The substantial revenue growth was accompanied by a significant improvement in the company's financial position, with $2.3 billion in cash, cash equivalents, and restricted cash versus $2.6 billion in debt. Applied Digital completed a $2.35 billion private offering of its 9.25% senior secured notes due 2030, further bolstering its liquidity. The company has agreements in place with top-tier financial institutions, including a $100 million development loan facility and a $5 billion preferred equity facility, of which $900 million has been drawn.
Operational Highlights and Pipeline
Applied Digital is executing in a market characterized by extraordinary hyperscaler investment, now exceeding $400 billion annually. The company has two hyperscalers under contract for 600 megawatts and additional sites in advanced discussions. The Dakota campuses are expected to provide a durable strategic advantage due to their low-cost energy, natural cooling, and supportive regulatory environment. The company has a robust pipeline, with a $16 billion deal pipeline for 2025 and expectations of similar or better performance in 2026.
Valuation and Growth Prospects
Analysts estimate next year's revenue growth at 62.8%. The company's current valuation metrics, including a P/S Ratio of 37.33 and an EV/EBITDA of -228.7, suggest that the market is pricing in significant growth expectations. With a potential growth opportunity of $60-75 million from its cloud business, ChronoScale, and a focus on scaling and executing projects across multiple sites, Applied Digital is poised for continued growth.
Technological Advancements
The company's Corintis technology, with its cold plate solution, is being designed to integrate into semiconductor packaging and the manufacturing process, offering efficiency and scalability in chip cooling. This technology is expected to benefit customers by providing efficiency and scalability, helping to future-proof their infrastructure as power demands increase.