Applied Digital (NASDAQ: APLD) delivered a robust performance in the first quarter of fiscal year 2026, ending August 31, 2025, marking an 84% increase in revenue to $64.2 million. This substantial growth was primarily fueled by intensive tenant fit-out projects and operational enhancements within its data center division. The company's strategic expansion is underscored by an extended $11 billion long-term lease contract with CoreWeave and the initiation of Polaris Forge Two, a new 300-megawatt campus. Furthermore, Applied Digital secured a significant $5 billion preferred equity facility from Macquarie Asset Management, reinforcing its financial capacity to meet the escalating demands of the AI and high-performance computing (HPC) sectors. These advancements position Applied Digital as a critical enabler in the development of advanced digital infrastructure, aiming for a $1 billion net operating income run rate within the next five years, driven by a growing multi-gigawatt development pipeline and a commitment to sustainable, community-focused growth.
Applied Digital's recent earnings call for the first fiscal quarter of 2026, held on Thursday, October 9, 2025, at 5 p.m. ET, unveiled several pivotal developments. Wes Cummins, Chairman and CEO, alongside CFO Saidal Mohmand, discussed the company's financial results and strategic direction. A highlight was the expansion of their long-term lease agreement with CoreWeave, a prominent AI hyperscaler, now encompassing the full 400 megawatts of capacity at the Polaris Forge One campus in Ellendale, North Dakota. This extended contract represents an estimated $11 billion in revenue over fifteen years, a significant increase from the initial $7 billion for 250 megawatts. Additionally, CoreWeave has commissioned Applied Digital to manage the tenant fit-out for the initial 100 megawatts, further solidifying their partnership.
The company also announced the groundbreaking of Polaris Forge Two, a new campus near Harwood, North Dakota, which will initially feature two buildings with a combined 300 megawatts of critical IT load. This facility is projected to commence operations in late 2026, reaching full capacity by 2027, with a potential to scale to one gigawatt as grid capabilities expand. Funding for this project includes an initial investment from Macquarie Equipment Capital, with future equity contributions planned from the $5 billion preferred equity facility secured with Macquarie Asset Management. This financing strategy is designed to minimize equity dilution at the public company level while providing substantial capital for growth.
Financially, the quarter saw $26.3 million in revenue from tenant fit-out services, contributing to the overall 84% revenue increase. However, the company reported a net loss of $27.8 million, or $0.11 per share, and an adjusted net loss of $7.6 million, or $0.03 per share. Adjusted EBITDA for the quarter was $5 million, a decrease from $6.3 million in the prior period. Cash and cash equivalents stood at $114.1 million, with total debt at $687.3 million, excluding $362.5 million in post-quarter-end financing proceeds. The company's cloud services segment is currently under strategic review and classified as held for sale, with no definitive updates provided.
Looking ahead, Applied Digital is intensely focused on scaling its development and construction efforts, having already shortened construction timelines to 12-14 months. The company boasts an active development pipeline of four gigawatts, with additional capacity under review, and anticipates new projects to begin construction within the next 6-12 months. Applied Digital emphasizes its unique positioning to address the "unprecedented" demand for AI infrastructure, particularly in power-dense data centers. Cummins highlighted the strategic advantages of their Northern campuses in the Dakotas, citing abundant, low-cost energy, a favorable regulatory environment, and natural cooling benefits. The company's proprietary design targets a PUE of 1.18 and near-zero water consumption, aligning with its commitment to environmental responsibility and community engagement.
The company's leadership emphasized the importance of trusted partnerships, operational efficiency, and a robust capital structure in driving its expansion. They are actively evaluating new sites across various states and regions to further diversify their footprint and capitalize on emerging opportunities. Applied Digital's dedication to responsible growth extends to local communities, with investments in housing, community centers, and infrastructure upgrades. This comprehensive approach, combining rapid development, strategic financing, and community support, is central to Applied Digital's ambition to become a leading provider of AI infrastructure, aiming for long-term value creation and a significant market presence.
