Applied Digital Beats Revenue Estimates by 67% as AI Data Center Backlog Hits $16 Billion
Applied Digital's Q3 revenue of $126.6mn beat estimates by 67% on surging AI data center demand, but CoreWeave accounts for 69% of the company's $16bn contracted backlog.
Applied Digital Beats Revenue Estimates by 67% as AI Data Center Backlog Hits $16 Billion
NEW YORK, April 15 —
Applied Digital Corporation (APLD) posted Q3 fiscal 2026 revenue of $126.6mn, beating the Street's $76mn estimate by 67% and sending shares up 14%.
- Revenue surged 139% YoY to $126.6mn. Non-GAAP EPS flipped to $0.09 profit against a -$0.17 consensus estimate.
- At $31.47, the stock trades at -58.3x forward P/E. The negative multiple stems from GAAP losses of $0.60/share this quarter, driven by a $59.7mn non-cash cloud segment write-down.
- Next catalyst: construction on ~900 MW under development and mid-2027 energization of Delta Forge One, APLD's next major HPC facility.
What Actually Happened
The HPC hosting segment carried the quarter, generating $71mn in revenue. The company's first 100 MW data center at Polaris Forge contributed a full quarter of operations and is now fully leased. Data center hosting — the legacy crypto business — added $37.5mn, up a modest 7% YoY. The cloud segment brought in $18.1mn but took a $59.7mn non-cash write-down. Management is exiting that business through a merger with Exo Bionic, which will create a new entity called ChronoScale Corporation.
The balance sheet tells a bigger story. Applied Digital holds $2.1bn in cash against $2.7bn in debt, with $4.1bn in preferred equity commitments from Macquarie Asset Management still available to draw. This is a company gearing up to build, not one trying to survive. Management laid out a path to "five-plus gigawatts" of total capacity. They expect to cross $1bn in annual net operating income within five years.
The Catch
CoreWeave accounts for $11bn of the $16bn contracted backlog — 69% customer concentration on a single counterparty. An unnamed investment-grade hyperscaler covers most of the remaining $5.5bn. Two customers, $16bn in commitments. If you own APLD, you are making a leveraged bet on CoreWeave's creditworthiness and on continued AI infrastructure spending.
Management knows this is the bear case. They pointed out that the CoreWeave SPV was upgraded to A3 investment-grade by Moody's, up from BB, and set a target of 70% investment-grade tenants. The credit upgrade helps. But diversification remains a goal, not an achievement. The GAAP net loss was $100.9mn this quarter. Even stripping out the cloud write-down, the company was not profitable on a GAAP basis.
Bottom Line
This is one of the purest leveraged bets on AI infrastructure spending available in public markets. The revenue beat was enormous. The backlog is real at $16bn. The Macquarie financing gives APLD a plausible funding path to build it all out. H.C. Wainwright's Kevin Dede reiterated his $40 target, noting APLD's cost of capital is declining as it scales. The risk is equally concentrated: if CoreWeave hits a wall, APLD's backlog evaporates. The two things to track are customer diversification and MW energization milestones at the next quarterly update.
For a deeper look at APLD's valuation and financial profile, generate a free Applied Digital report on Basis Report.
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Applied Digital (APLD) reported Q1 earnings, with shares surging ~14% as analysts focused on data center expansion and customer concentration during the earnings call.