Applied Digital's fourth quarter was marked by strong revenue growth and a positive market reaction, with results exceeding Wall Street expectations. Management credited the rapid energization of the Polaris Forge 1 data center, which began generating lease revenues ahead of schedule, as a key driver. CEO Wes Cummins highlighted the completion of the first of three contracted buildings for CoreWeave and the signing of a major lease with a U.S.-based hyperscaler as instrumental milestones. The company also benefited from robust demand for high-performance computing infrastructure, particularly for artificial intelligence and cloud workloads. Management emphasized that modular, efficient construction and access to low-cost energy in the Dakotas provided a competitive advantage.
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Applied Digital (APLD) Q4 CY2025 Highlights:
- Revenue: $126.6 million vs analyst estimates of $110.3 million (98.2% year-on-year growth, 14.8% beat)
- Adjusted EPS: $0 vs analyst estimates of -$0.21 (significant beat)
- Adjusted EBITDA: $20.2 million vs analyst estimates of $4.16 million (16% margin, significant beat)
- Operating Margin: -24.5%, down from -19.5% in the same quarter last year
- Market Capitalization: $10.26 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Applied Digital’s Q4 Earnings Call
- Nick Giles (B. Riley Securities) asked about the growth prospects for the ChronoScale spin-off and how Applied Digital’s facilities will support future GPU deployments. CEO Wes Cummins emphasized the value of access to large-scale data centers for accelerated computing needs and suggested this relationship would give ChronoScale a competitive advantage.
- Darren Aftahi (ROTH Capital) inquired about lease pricing trends and the rationale for pre-lease financing at new sites. Cummins responded that pricing has been stable to slightly better, with more favorable contract terms, and explained that construction starts reflect high confidence in securing leases with investment-grade customers.
- Robert Brown (Lake Street Capital Markets) questioned the timeline and requirements for finalizing the ChronoScale merger. Cummins outlined the upcoming steps, including reaching a definitive agreement and a shareholder vote, targeting completion in the first half of 2026.
- Mike Grondahl (Northland Securities) sought clarity on the number and scale of projects under advanced discussion. Cummins disclosed that three sites totaling 900 megawatts are in late-stage negotiations, and described the pipeline as robust, with internal focus shifting to execution capacity.
- George Sutton (Craig-Hallum) asked about the benefits of being qualified by investment-grade hyperscalers and how this impacts contract timelines. Cummins explained that having master agreements in place significantly shortens the time required to close future deals with these customers.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the ramp-up of lease revenues as additional data center capacity comes online, (2) announcements of new hyperscale contracts or campus expansions, and (3) progress on the ChronoScale spin-off and its ability to secure strategic partnerships. Developments in power sourcing and technology adoption, such as advanced liquid cooling, will also be important markers of execution.
Applied Digital currently trades at $36.73, up from $29.22 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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