On January 16, 2024, Applied Digital Corp (APLD, Financial) released its 8-K filing, detailing the financial outcomes for the fiscal second quarter ended November 30, 2023. The company, which specializes in designing, developing, and operating next-generation datacenters for high-performance computing (HPC), cloud services, and datacenter hosting, demonstrated significant revenue growth alongside operational advancements.
Fiscal Performance and Operational Updates
APLD's revenue for the quarter was a highlight, with a substantial year-over-year increase to $42.2 million. This growth was primarily driven by full-quarter revenue generation from the Ellendale facility and the commencement of revenue generation at the Garden City facility. Despite the revenue surge, the company reported a net loss of $10.5 million, which, while still significant, marks an improvement from the net loss of $26.8 million in the fiscal second quarter of 2023.
Adjusted EBITDA stood at $10.6 million, a notable recovery from the previous year's loss. The company's operational achievements included energizing a 200 MW hosting facility in Garden City, Texas, and initiating construction of a 100 MW high-performance computing facility in Ellendale, North Dakota.
Financial Highlights and Challenges
APLD's balance sheet reflected a cash position of $34.6 million, with $42.8 million in debt. The quarter also saw an additional $11.1 million in customer prepayments and $23.1 million in net proceeds from the completion of an at-the-market (ATM) offering.
However, the company faced challenges, including higher energy costs impacting the cost of revenues, which rose to $29.2 million from $11.8 million in the same quarter of the previous year. Selling, general, and administrative expenses decreased to $21.1 million, down from $27.2 million, primarily due to a reduction in stock-based compensation expense.
“Our second quarter results demonstrate the continued execution of our growth strategy and the meaningful progress we’ve made across our business,” said Applied Digital Chairman and CEO Wes Cummins. “Looking ahead, we remain well-positioned to capitalize on the growing opportunities from both traditional customers and emerging HPC applications as a leading next-gen datacenter provider.”
Guidance and Outlook
APLD revised its fiscal year 2024 guidance downward due to delayed delivery of networking components for GPU clusters, which impacted revenue and EBITDA. Nevertheless, the company anticipates exiting the fiscal year with a significant year-over-year growth in revenue and adjusted EBITDA run-rates, expecting approximately $500 million in annual revenue and $250 million in annualized adjusted EBITDA.
Investors and stakeholders are encouraged to review the full details of Applied Digital Corp's fiscal second quarter 2024 results and the forward-looking statements with caution, as they involve risks and uncertainties. For a more comprehensive understanding of APLD's financials and operations, the full earnings release and financial statements are available in the provided 8-K filing link.
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Explore the complete 8-K earnings release (here) from Applied Digital Corp for further details.
