Applied Digital reported a wider net loss in its third quarter, driven by escalating expenses and a one-time charge related to its cloud business. This overshadowed the company's revenue, which significantly surpassed expectations thanks to robust demand for its data center services.
The quarter included a $59.7 million impairment charge for the cloud services segment, which the company now intends to combine with Ekso Bionics. Overall costs nearly tripled to $212.3 million as Applied Digital invested in building and operating high-performance data centers.
Construction is underway for its Delta Forge 1 campus, a 300-megawatt data center project in the southern U.S., with operations slated for mid-2027. The surge in AI computing is fueling demand for data center capacity, with major tech firms securing long-term deals.
CEO Wes Cummins highlighted the earnings potential of their platform, noting a full quarter of revenue from their initial building. Applied Digital's first large-scale AI data center achieved full operations in November.
Net loss for the quarter was 36 cents per share, compared to a 16-cent loss a year prior. Quarterly revenue increased 139% to $126.6 million, significantly exceeding analyst estimates of $76.6 million.