Applied Digital Corporation (NASDAQ: APLD), a high-performance computing (HPC) and AI data center infrastructure firm, reported its fiscal third-quarter 2026 earnings after the market close on April 8th, delivering results that significantly exceeded Wall Street expectations. The company posted adjusted earnings per share (EPS) of $0.09, a stark reversal from the consensus analyst estimate of a loss of $0.16 per share.
Revenue skyrocketed 139% year-over-year to $126.64 million, nearly doubling the forecast of $75.5 million. Adjusted revenue was also strong at $108.6 million. This performance underscores the company's successful pivot from its origins in cryptocurrency hosting to becoming a vertically integrated AI data center provider.
CEO Wes Cummins highlighted a dramatic shift in market dynamics, stating, "We are seeing a clear acceleration in demand for high-performance AI data center capacity, with hyperscalers as aggressive as we have ever seen them." The company confirmed its first 100-megawatt direct-to-chip liquid-cooled data center is now fully operational and contributed a full quarter of revenue.
Despite the impressive beat, APLD stock exhibited significant volatility. After surging 10% during Wednesday's regular session to close at $27.79—partly buoyed by a broader market rally—the stock dropped 6.2% in Thursday's premarket trading to around $26.07. This 'sell-the-news' reaction is attributed to profit-taking after a strong pre-earnings run and the stock's high beta of over 3.2, making it sensitive to market sentiment.
The company's financial health and future prospects are anchored by a massive contracted revenue backlog. Applied Digital finalized a new lease with CoreWeave in August 2025 for an additional 150 MW data center in North Dakota. This pushed its total anticipated contracted lease revenue to approximately $11 billion, which includes $7 billion locked in from two 15-year leases signed in May 2025. Furthermore, the company is in advanced talks with an investment-grade hyperscaler for 900 megawatts of power across three sites, with a potential deal closing in early 2026.
Investors are closely monitoring the company's transition to a "steady-state" financial model, as Q3 is the first full quarter without one-time fit-out payments skewing results, providing a clearer view of the underlying profitability of its hosting contracts. The company's recent $2.15 billion senior secured note pricing for its Polaris Forge 2 campus provides capital to monetize its backlog, though bears caution about its capital-intensive model and current cash-flow negative status.
