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Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Applied Digital's Degree of Operating Leverage for the quarter that ended in May. 2026 was 0.02. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Applied Digital's Degree of Operating Leverage or its related term are showing as below:
XSWX:APLD's Degree of Operating Leverage is ranked better than 58.49% of 2710
companies
in the Software industry
Industry Median: 0.62
vs XSWX:APLD: 0.02
Applied Digital (XSWX:APLD) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Applied Digital Degree of Operating Leverage Related Terms
Applied Digital Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for Applied Digital's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Applied Digital Degree of Operating Leverage Chart
XSWX:APLD vs INGM, GDS, PSN: Degree of Operating Leverage Comparison
For the Information Technology Services subindustry, Applied Digital's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Applied Digital Degree of Operating Leverage vs Software Industry
For the Software industry and Technology sector, Applied Digital's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Applied Digital's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of 0.02 mean?
Applied Digital (XSWX:APLD) has a Degree of Operating Leverage of 0.02 as of May. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Applied Digital and its competitors. According to the industry distribution chart, Applied Digital ranks #1125 out of 2710 companies in the Software industry, placing it in the top 41.5%.
Is Applied Digital's Degree of Operating Leverage too high?
Applied Digital's current Degree of Operating Leverage is 0.02. The Software industry median Degree of Operating Leverage is 0.62. Applied Digital's value of 0.02 is 96.8% below this industry median. Based on the distribution chart, Applied Digital ranks #1125 out of 2710 companies in the Software industry, which is above the industry midpoint. Overall, Applied Digital has a GF Score™ of 48/100, reflecting its overall financial health beyond just this single metric.
How does Applied Digital's Degree of Operating Leverage compare to INGM and GDS?
According to the Software industry distribution chart, Applied Digital ranks #1125 out of 2710 companies for Degree of Operating Leverage. This puts Applied Digital in the upper half of its industry. The industry median Degree of Operating Leverage is 0.62. Applied Digital's value of 0.02 is 96.8% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for a Software company?
The median Degree of Operating Leverage among Software companies is 0.62, based on 2,710 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Applied Digital's current Degree of Operating Leverage of 0.02 is 96.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Applied Digital and its competitors. For the Software industry, the median Degree of Operating Leverage is 0.62 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Applied Digital's current Degree of Operating Leverage is 0.02. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Applied Digital stock overvalued right now?
Applied Digital (XSWX:APLD) has a current Degree of Operating Leverage of 0.02. The stock's GF Value™ is CHF17.05, compared to a current price of CHF23.67 — trading 38.8% above its estimated fair value. The current Degree of Operating Leverage is 0.02 and 96.8% below the Software industry median of 0.62. Applied Digital's overall GF Score™ is 48/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For Applied Digital (XSWX:APLD), the current Degree of Operating Leverage is 0.02 as of May. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Applied Digital (XSWX:APLD) Overvalued in 2026?
Based on GuruFocus' analysis, Applied Digital stock appears to be overvalued.
The current stock price of CHF23.67 is trading 38.8% above its estimated GF Value™ of CHF17.05.
Key valuation signals for XSWX:APLD:
Degree of Operating Leverage: 0.02
GF Value™: CHF17.05 vs. price of CHF23.67 (38.8% above fair value)
Industry Position: 96.8% below the Software median (#1125 of 2710)
No single metric tells the full story. See the XSWX:APLD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Applied Digital Corp is a designer, developer, and operator of next-generation digital infrastructure across North America. It provides digital infrastructure solutions and cloud services to industries like High-Performance Computing (HPC) and Artificial Intelligence (AI). The company operates in the following business segments: Data Center Hosting Business and HPC Hosting Business. The majority of its revenue is generated from the Data Center Hosting Business, which operates data centers to provide energized space to crypto mining customers.
48GF Score
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