Applied Digital Corporation Q1 FY2026 earnings call

• Wes Cummins highlighted HPC data center hosting developments like expanded CoreWeave leases, Polaris Forge Two groundbreaking, and ability to scale construction. - Blockchain hosting remains with 286 megawatts contracted. - Cloud services segment under strategic review. - Saidal Mohmand discussed financials including $112.5M draw from Macquarie, revenue increase due to tenant fit-out services, and financial metrics. - Wes Cummins emphasized growth potential, community impact, and ability to scale development.

HPC data center hosting: Expanded long-term lease agreements with CoreWeave, now covering 400 megawatts with contract value ~$11B; broke ground on Polaris Forge Two with 300 megawatts initial capacity. Blockchain hosting: Operates 286 megawatts of fully contracted capacity. Cloud services: Board initiated strategic review, financial results classified as held for sale. Revenues for 2026 were $64.2M, up 84% from $34.8M in 2025. Cost of revenues $55.6M vs $22.7M. SG&A $29.2M vs $11M. Net loss $27.8M or $0.11 per share.

• Expect significant increase in net operating income with Polaris Forge Two. - Pipeline of four gigawatts active, with ability to scale. - Project financing for Ellendale 400 megawatts expected to be completed within the fiscal quarter. - Expect to proceed with at least one third-party project this year.

• Forward-looking statements involve risks and uncertainties beyond control. - Supply chain challenges. - Potential delays in construction timelines. - Market shakeout and competition among new entrants in the data center market.

Q: On project financing, what are the largest remaining factors and expected terms?

A: Finalizing credit agreement docs, expecting 70% LTC range, pricing between 400 - 450 basis points over SOFR.

Q: On Polaris Forge Two power infrastructure, timeline and progress?

A: Initial $3B development cost, first building starts late 2026, full capacity 2027.

Q: On new hyperscalers and locations, timeline and potential?

A: Negotiations ongoing, expected to be constant with 90-120 days from start to finish.

Q: On limiting factor for expanding to one gigawatt, what's needed?

A: Infrastructure and grid transmission, matching power ramp with building ability.

Q: On MAM financing and go-forward basis, what it does?

A: Unlocks $20-25B total capital, eliminates need for constant market capital raising.

Q: On active pipeline definition and four gigawatt status?

A: Active pipeline includes things moving into construction in 6-12 months.

Q: On human capital and balancing multiple sites, headwinds?

A: Supply chain, localized labor force, and selection of right sites.

Q: On Harwood site lease economics and customer demand?

A: Similar to Ellendale with investment-grade hyperscalers, demand for large scale sites.

Q: On supply chain for long lead equipment, lead times and pricing?

A: Lead times stretched industry-wide, but no major pricing inflation for Applied Digital.

Q: On South Dakota power and sales tax exemption?

A: Power available 2026, gating factor is sales tax exemption for IT equipment.

Q: On project financing timeline (calendar vs fiscal) and MAM draw if delayed?

A: Fiscal quarter, details on MAM draw if delayed not specified.

Q: On future demand drivers beyond power availability?

A: Potential shakeout of new entrants, proven vendors gaining more business.