Applied Digital Q4 Revenue Jumps 407% to $258.7M, Tops Estimates

Applied Digital posted standout results for its fiscal 2026 fourth quarter, reporting revenue of $258.7 million, up 407% year over year, and adjusted earnings of $0.04 per diluted share. Both figures came in ahead of Wall Street expectations. For the full fiscal year, revenue reached $611.3 million, a 167% increase from the prior year. Growth was driven primarily by the company's HPC and AI data center business, which has been expanded to meet rising institutional demand for compute infrastructure. The company recently signed three 15-year take-or-pay lease agreements with a single investment-grade hyperscaler, a package valued at roughly $20 billion and covering 810 MW of capacity. Under take-or-pay terms, the tenant pays regardless of utilization. Following the agreements, Applied Digital's contracted portfolio stands at about 1.4 GW, representing roughly $36 billion in base-term revenue. The company said recent financing rounds totaling more than $3 billion have helped fund construction, supporting its ability to deliver the contracted capacity. Applied Digital's bitcoin mining exposure remains part of the business mix. Its Data Center Hosting segment, which provides colocation for bitcoin mining, generated $37.3 million in Q4 revenue and operated at full capacity of 286 MW. The company also completed the separation of its cloud services operation into ChronoScale Holdings, which now trades on Nasdaq under the ticker CHRN. Applied Digital retained approximately 96% ownership after the split, a move aimed at sharpening its investment narrative around AI infrastructure while keeping most of the upside from ChronoScale. Looking ahead, Applied Digital reported full-year adjusted net income of $36.1 million, or $0.11 per diluted share, pointing to profitability alongside revenue growth. Investors are likely to focus on the roughly $36 billion contracted backlog and the credit quality of the anchor tenant, described as investment grade. Execution remains a key risk, as permitting, power procurement, supply-chain constraints for specialized hardware, and the logistics of building out 1.4 GW of capacity could pressure margins or push out revenue timing.