TLDR
- APLD surged over 6% in after-hours trading following its Q4 fiscal earnings release
- Revenue hit $258.7 million, a 581% year-over-year jump, crushing the $104.3 million estimate
- EPS came in at $0.04, beating analyst forecasts of a $0.19 loss
- The company announced a $20 billion order backlog tied to a major hyperscaler
- Wall Street holds a Strong Buy consensus with an average price target of $71.50
Applied Digital stock jumped more than 6% in after-hours trading on July 27 after the company dropped a fiscal fourth-quarter earnings report that blew past Wall Street estimates on nearly every metric.
The stock was trading around $26.91 heading into the print.
APLD posted revenue of $258.7 million for the quarter, a 581% increase year over year. That result crushed the analyst consensus estimate of $104.3 million by 148%.
The revenue surge was driven by new AI infrastructure deployments and rising demand from hyperscale customers needing specialized compute capacity.
On the earnings side, APLD reported adjusted EPS of $0.04. Analysts had expected a loss of $0.19 per share. That’s a big swing into positive territory for a company still in heavy buildout mode.
Adjusted EBITDA came in at $42.35 million, beating the $29.78 million estimate by 42.2%. The adjusted operating margin improved to 1.2%, up 9.3 percentage points year over year.
Free cash flow was -$1.16 billion for the quarter, compared to -$191.4 million in the same period last year, reflecting the scale of its ongoing infrastructure spending.
$20 Billion Backlog Takes Center Stage
The headline that really moved the stock was the announcement of a $20 billion order backlog tied to a major hyperscaler.
The backlog covers multi-year commitments for compute infrastructure and hosting services, giving APLD long-term revenue visibility that most early-stage data center operators don’t have.
Management said the backlog will help fund continued expansion and provide a stable base for future earnings.
CEO Wes Cummins said: “Nearly three years ago, we made a deliberate decision to build a company that scales, not just a company that builds data centers.”
The company’s HPC Hosting Business also commenced operations at its first HPC data center at the Polaris Forge 1 campus during the quarter, resulting in recognition of approximately $270.6 million related to tenant fit-out services.
What Analysts Are Saying
Wall Street currently rates APLD a Strong Buy, based on seven Buy ratings and one Hold over the past three months.
The average price target sits at $71.50, implying upside of over 171% from recent levels. Those estimates will likely be revised following the earnings beat.
Looking ahead, sell-side analysts expect revenue to grow 59.2% over the next 12 months, a slowdown from recent rates but still a healthy pace.
Full-year EPS forecasts tell a more cautious story. Analysts expect the full-year figure to swing from $0.10 to -$1.29 over the next 12 months, reflecting ongoing capital expenditure as APLD scales.
Applied Digital has grown revenue at a 172% annualized rate over the past four years, one of the faster growth trajectories in the data center space.
The stock had a market capitalization of $7.77 billion heading into the earnings release.
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