Q3 2024 Applied Digital Corp Earnings Call Transcript
Key Points
- Jamestown facility operated at full capacity with uninterrupted uptime throughout the quarter, marking the sixth consecutive quarter of full capacity operation.
- Entered into exclusivity and executed an LOI with a US-based hyperscaler for 400 megawatts of capacity at the Ellendale campus, which is a significant development for future growth.
- Strengthened balance sheet post-quarter with $160 million of announced asset sales and financing transactions.
- Successfully procured replacement transformers from North American industry-leading manufacturers for the Ellendale facility, which is now reenergized to approximately 14% of its full capacity.
- Revenue for the fiscal third quarter of 2024 was $43.3 million, compared to $14.1 million for the fiscal third quarter of 2023, driven primarily by increased capacity across data center hosting facilities and revenue from cloud services contracts.
- Encountered challenges in the data center hosting business due to facility power outages, particularly at the 180 megawatt Ellendale facility, which impacted financial performance.
- Adjusted EBITDA loss of approximately $2.3 million for the quarter, with several one-time significant items affecting financial performance and comparability.
- Incurred unexpected expenses from addressing power outages at the Ellendale data center hosting facility, estimated at $4.5 million impact on operating loss during the quarter.
- Recorded a $21.7 million loss on held-for-sale classification related to the Garden City transaction and $4.2 million of accelerated depreciation and amortization related to the disposal of damaged equipment.
- Lack of significant sequential revenue growth in the cloud services business due to delays in clusters entering revenue generation.
Good afternoon and welcome to Applied Digital's Fiscal Third Quarter 2024 conference call. My name is Doug and I will be your operator today. Before this call, Applied Digital issued its financial results for the fiscal third quarter ended February 29th, 2024 in our press release, a copy of which will be furnished in a report on Form eight K filed with the SEC and will be available in the Investor Relations section of the company's website.
Joining us on today's call are Applied Digital's Chairman and CEO, Wes Cummins and CFO, David Rench. Following their remarks, we will open the call for questions.
Before we begin, Alex Kovtun from Gateway Group will make a brief introductory statement. Mr. Kovtun, please proceed.
Thank you, operator. Good afternoon, everyone, and welcome to Applied Digital's Fiscal Third Quarter 2024 conference call. Before management begins their formal remarks, we would like to remind everyone that some statements we're making today may be considered forward-looking statements under
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