Q2 2026 Applied Digital Corp Earnings Call Transcript
Key Points
- Applied Digital Corp (APLD) achieved significant milestones with the completion of the first building at Polaris Forge1, energizing 100 megawatts on schedule.
- The company secured a $5 billion 15-year lease with a US-based investment-grade hyperscaler for 200 megawatts at Polaris Forge2, indicating strong demand and future revenue potential.
- APLD's data center hosting segment reported a 15% increase in revenue compared to the prior year, driven by increased capacity online.
- The company has a robust financial position with $2.3 billion in cash and equivalents, providing flexibility for future investments.
- APLD is in advanced discussions for additional hyperscale leases, suggesting potential for further expansion and revenue growth.
- The company reported a net loss of $31.2 million for the quarter, highlighting ongoing financial challenges.
- Interest expenses increased significantly to $11.5 million from $2.9 million, impacting overall profitability.
- SG&A expenses rose due to increased stock-based compensation and professional service expenses, indicating higher operational costs.
- The company faces risks associated with construction timelines and potential delays due to factors like weather.
- APLD's reliance on debt financing, including a $2.35 billion private offering, could pose financial risks if not managed effectively.
Good afternoon, and welcome to Applied Digital's fiscal second-quarter 2026 conference call. My name is Constantine, and I will be your operator for today. Before this call, Applied Digital issued its financial results for the fiscal second quarter ended November 30, 2025, in a press release, a copy of which has been furnished in a report on a Form 8-K filed with the Securities and Exchange Commission, or 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, Saidal Mohmand. Following the remarks, we will open the call for questions. Before we begin, Matt Glover from Gateway Group will make a brief introductory statement.
Mr. Glover, you may begin.
Thank you, operator. Hello, everyone, and welcome to Applied Digital's fiscal second-quarter 2026 conference call. Before management begins formal remarks, we'd like to remind everyone that some statements we're making today may
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