Applied Digital's Revenue Surges by Over 400% Amid Expansion
Applied Digital (NASDAQ: APLD) reported a significant revenue surge of 407% in fiscal Q4, reaching $258.7 million. The growth is largely driven by its high-performance computing business and tenant fit-out services for large customers like CoreWeave. However, much of this revenue comes from low-margin construction work that sets the stage for future recurring income. The company's legacy data center hosting segment saw a 2% decline in revenue to $37.6 million but still generated an operating profit of $12.5 million. Applied Digital is also considering converting into a real estate investment trust (REIT) and has signed long-term leases worth $36 billion across five campuses with major hyperscalers. Despite strong top-line growth, the company reported negative free cash flow of -$280 million due to heavy capital expenditures and debt accumulation. It ended Q4 with $1.6 billion in unrestricted cash against $5 billion in total debt.
