Fri, Aug 30, 11:05 AM (137 days ago)
Applied Digital Corporation reported significant growth in revenue for the fiscal year ending May 31, 2024, totaling $165.6 million, a 268% increase from $55.4 million in 2023. This growth was primarily driven by the expansion of its Data Center Hosting and Cloud Services segments, with the Data Center Hosting segment accounting for approximately 83% of total revenues. However, the company faced substantial operating losses of $99 million and a net loss of $149.3 million, largely attributed to increased costs in energy, depreciation, and legal settlements. Operating expenses surged to $264.6 million, up from $99.4 million in the prior year, reflecting the costs associated with scaling operations and addressing prior outages. The company also incurred significant interest expenses and losses related to the fair value of debt. Looking forward, Applied Digital is focused on expanding its HPC Hosting capabilities and securing additional customers for its Cloud Services. However, it faces risks including customer concentration, regulatory scrutiny in the crypto sector, and potential disruptions in energy supply. The company has a working capital deficit of $355.3 million, raising concerns about its liquidity and ability to sustain operations without additional funding. Overall, while the revenue growth is promising, the financial performance highlights ongoing challenges that need to be addressed for future profitability.