Earnings call transcript: Applied Digital Q1 2027 beats estimates, stock rebounds

Applied Digital Holdings reported impressive Q1 2027 earnings, beating Wall Street estimates with both revenue and earnings surpassing expectations. The company posted a loss of $0.01 per share, significantly better than the anticipated $0.27 loss. Revenue soared to $341.9 million, a staggering 322% increase from the previous year, primarily driven by the expansion of its high-performance computing hosting business.

Adjusted EBITDA rose to $64.4 million, up from $500,000 a year earlier, showcasing stronger operating leverage.

Management highlighted the strong demand for AI infrastructure, with most of 2027 capacity already secured. The company reported $262.6 million in revenue from high-performance computing hosting and $37.8 million from its bitcoin mining hosting segment. Despite still being near breakeven on an adjusted basis, the revenue growth suggests that new capacity is coming online faster than anticipated, a crucial factor for a company in a rapid buildout phase.

Shares initially fell 6.04% during regular trading but rebounded to a 4.13% gain after hours, reflecting the market's reaction to the earnings release. The company has $36 billion in contracted revenue across its campuses, signaling strong short-term liquidity with a current ratio of 4.01. Demand for AI compute capacity remains robust, with customers pushing for 2027 delivery slots, and expansion leases are expected to be signed at higher rates and possibly longer terms.

Despite heavy operating and noncash costs, Applied Digital's focus remains on turning its contracted base into sustainable, profitable growth.