Applied Digital 2026 Q1 Earnings Misses Targets as Net Loss Widens 298%

Applied Digital reported its Q1 2026 earnings on October 9, 2025. Despite a significant revenue increase, the company’s net loss more than tripled year-over-year, missing positive expectations and raising concerns about long-term profitability.

Revenue
Applied Digital reported total revenue of $64.22 million in Q1 2026, reflecting an 84.3% year-over-year increase from $34.85 million in the same period of 2025. The substantial growth underscores the company's expanding presence in the AI infrastructure market, driven by long-term lease agreements and ongoing development of its data center campuses.

Earnings/Net Income
The company's losses deepened significantly, with a net loss of $16.93 million, or $0.07 per share, in Q1 2026, compared to a loss of $4.25 million, or $0.03 per share, in Q1 2025. This represents a 298.5% increase in net loss and a 133.3% wider loss per share. The continued financial challenges highlight the company’s difficulty in achieving profitability despite rising top-line performance. These results point to ongoing operational inefficiencies or high capital expenditures.

Price Action
Shares of Applied Digital experienced strong price action following the earnings release. The stock rose 3.94% during the most recent trading day, surged 10.65% over the full trading week, and climbed an impressive 92.70% month-to-date, signaling market optimism despite the widening loss.

Post Earnings Price Action Review
The positive stock performance suggests investor confidence in the company's long-term strategic direction, including its AI infrastructure development and partnerships. However, the earnings results highlight the contrast between market sentiment and near-term profitability, underscoring the high expectations placed on Applied Digital’s future growth prospects.

CEO Commentary
Wes Cummins, Chairman and CEO of Applied Digital, emphasized the company’s progress in securing long-term infrastructure commitments, including a $11 billion contract with CoreWeave for the Polaris Forge 1 campus. He also noted the groundbreaking of Polaris Forge 2, which is planned to initially provide 300 megawatts of capacity. Cummins expressed confidence in the company's ability to leverage its early advantages in supply chain and construction, while also stressing the importance of sustainable development and community impact in its operations.

Guidance
Management outlined a timeline for Polaris Forge 2, with the first building expected to come online in late 2026 and reach full capacity by 2027. CFO Saidal Mohmand highlighted anticipated near-term revenue growth from tenant fit-out work and lease income recognition as projects are completed. The company is also advancing a $5 billion financing facility with Macquarie Asset Management to support continued development. With 700 megawatts currently under construction and a multi-gigawatt pipeline in place, management projects $1 billion in net operating income within five years.

Additional News
On October 7, 2025, Applied Digital announced that Macquarie Asset Management had funded the initial draw of $112.5 million from a previously disclosed $5 billion perpetual preferred equity financing facility. The proceeds will directly support the construction of the 400MW Polaris Forge 1 campus in North Dakota, leased to CoreWeave, which is designed to expand to 1 gigawatt over time. The partnership is expected to significantly reduce the company’s equity contribution requirements for future projects and is intended to accelerate its expansion in the AI data center market. Both Wes Cummins and CFO Saidal Mohmand highlighted the strategic value of the funding, emphasizing its role in strengthening the company’s balance sheet and enabling the rapid development of multiple campuses. The deal was executed with Northland Capital Markets as placement agent, and legal counsel was provided by Lowenstein Sandler LLP for Applied Digital and Simpson Thacher & Bartlett LLP for Macquarie.