Applied Digital, an AI data center company, reported first-quarter revenue that exceeded Wall Street expectations. Despite still recording a net loss, the company demonstrated strong growth momentum.

AI Data Center Company $Applied Digital (APLD.US)$ The first-quarter revenue exceeded Wall Street expectations despite still reporting a net loss, demonstrating robust growth momentum. Behind this performance lies a surge in demand for data center services as an increasing number of customers are expanding their computing capacity to support the rapidly evolving generative AI applications. Boosted by this trend, the company’s stock price surged more than 12% in after-hours trading, with gains extending to 14% during the night session.

The earnings report released on Thursday showed that for the quarter ended August 31, the company’s revenue increased by 84% year-on-year to USD 64.2 million, surpassing analysts’ previous expectation of USD 50 million.

Adjusted loss per share was USD 0.03, better than the expected loss of USD 0.13 per share forecasted by analysts.

During the period from June to August, the company’s data center colocation business unit generated revenue of USD 37.9 million. The cost of revenue for the quarter rose 144% to USD 55.6 million. The company stated that approximately USD 25 million of the costs were related to facility construction and customer preparation work within the high-performance computing colocation business segment.

It is understood that Applied Digital has successfully transitioned from its initial cryptocurrency mining business to become a key player in the AI infrastructure sector. The company currently designs and operates specialized data centers, providing high-performance computing infrastructure for AI and blockchain applications.

Currently, companies are racing to deploy next-generation AI models, driving demand for high-performance data center infrastructure capable of supporting intensive computing workloads.

In August this year, Applied Digital and $CoreWeave (CRWV.US)$ Finalizing a new lease agreement to add 150 MW of power capacity for its Polaris Forge 1 data center campus in North Dakota. Together with the two initial leases signed earlier this year with CoreWeave, the company’s total contracted lease revenue is expected to reach approximately $11 billion, with the previously announced 15-year contracts contributing $7 billion in revenue.

Roth Capital noted in a report last week that Applied Digital is expected to secure another high-performance computing hosting agreement by the end of the year. Analysts at the firm predict more large-scale hosting contracts will emerge in the future. As companies compete for next-generation computing capabilities, this sector is expected to maintain robust growth momentum.

Wes Cummins, Chairman and Chief Executive Officer of Applied Digital, stated: ‘We believe this new lease validates the strength and execution capability of our platform, reinforcing Applied Digital’s position as a trusted strategic partner for top-tier global technology enterprises.’

‘Considering hyperscale firms are projected to invest approximately USD 350 billion in AI deployment this year, we are confident that the company is well-positioned to become an indispensable infrastructure provider in the intelligent era—akin to the ‘picks and shovels’ of yesteryear.’

Additionally, Applied Digital highlighted that its Polaris Forge 1 campus has significant expansion potential, with additional power allocations expected to increase the campus’s total capacity beyond 1 GW between 2028 and 2030.

As of the quarter-end, the company held approximately USD 114.1 million in cash, cash equivalents, and restricted cash, with total debt amounting to USD 687.3 million.

Applied Digital emphasized: ‘Our team will continue to focus on securing capital at the lowest cost, establishing a replicable financing framework, and laying the groundwork for large-scale business expansion across the United States.’

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Editor /rice