Investment Thesis
Applied Digital is experiencing severe cash burn with negative operating cash flow of -$97.9M and massive negative free cash flow of -$899.4M, driven by extraordinarily high capital expenditure relative to revenue. Despite 5.5% revenue growth and a strong cash position of $1.9B, the company's negative profitability across all metrics (gross margin 5.8%, operating margin -27.9%, net margin -16.4%) indicates an unsustainable business model that is consuming capital at an alarming rate.
APLD Strengths
- Strong liquidity position with $1.9B in cash and 4.82x current ratio providing runway for operations
- Revenue growth of 5.5% YoY shows top-line traction despite profitability challenges
- Low leverage with 0.00x debt-to-equity ratio and only $7.2M long-term debt minimizing financial distress risk
APLD Risks
- Massive capital burn: -$899.4M free cash flow with CapEx at $801.5M suggests unsustainable investment cycle relative to $190.8M revenue
- Severe profitability deficit: negative operating margin of -27.9% and negative net margin of -16.4% indicate the business is unprofitable at all levels
- Cash runway concern: at current burn rate of ~$900M annually, the $1.9B cash position provides less than 2.5 years of runway without profitability inflection
Key Metrics to Watch
- Operating cash flow trend and path to positive cash generation
- Capital expenditure as percentage of revenue and CapEx efficiency metrics
- Gross margin expansion and operating leverage as revenue scales
- Cash balance depletion rate and timeline to cash flow breakeven
APLD Financial Metrics
APLD Profitability Ratios
APLD Balance Sheet & Liquidity
APLD 5-Year Financial Trend
5-Year Trend Summary: Applied Digital Corp.'s revenue has grown significantly by 1,587% over the 5-year period, indicating strong business expansion. The most recent EPS of $-0.47 indicates the company is currently unprofitable.
APLD Growth Metrics (YoY)
APLD Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $36.2M | -$14.5M | $-0.07 |
| Q1 2026 | $34.8M | -$4.2M | $-0.03 |
| Q3 2025 | $43.3M | N/A | $-0.16 |
| Q2 2025 | $42.2M | N/A | $-0.10 |
| Q1 2025 | $36.3M | N/A | $-0.03 |
| Q3 2024 | $14.1M | -$7.0M | $-0.07 |
| Q2 2024 | $12.3M | -$10.5M | $-0.10 |
| Q1 2024 | $6.9M | -$4.5M | $-0.05 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
APLD Capital Allocation
APLD SEC Filings
Access official SEC EDGAR filings for Applied Digital Corp. (CIK: 0001144879)