Applied Digital beats Q1 2027 expectations with 432% revenue surge

Applied Digital posted revenue of $341.9 million for fiscal Q1 2027, beating expectations and reflecting 432% growth from the same quarter a year ago. The adjusted loss per share came in at just $0.01, far better than the $0.30 loss analysts expected.

The engine behind the quarter was the HPC Hosting segment, which generated $262.6 million in revenue as tenant fit-out services at the company's Polaris Forge campuses accelerated sharply. Adjusted EBITDA surged to $64.4 million from just $537,000 in the prior-year quarter, a sign that the infrastructure buildout is beginning to translate into real operating leverage.

Applied Digital has now leased approximately 1.41 GW of critical IT load representing roughly $36 billion in contracted revenue over initial base terms, with management noting that if all renewal options are exercised, that figure rises to approximately $86 billion.

The company is still spending heavily to keep up with demand. Capital expenditures reached approximately $2.07 billion in the quarter, funded in part by $1.59 billion in newly issued Senior Secured Notes earmarked for a third HPC building at Polaris Forge 1. Polaris Forge 2 in Harwood is expected to bring North Dakota capacity to 300 MW by the end of calendar 2026.

Management has also moved to extend its footprint internationally, securing up to approximately 1 GW of potential power capacity in Finland as an entry point into European AI markets. CEO Wes Cummins framed the broader strategy around the scarcity value of established, powered, community-supported campuses, arguing that new development restrictions in coastal and metro markets make Applied Digital's existing sites harder to replicate over time.

One risk investors are weighing alongside the growth is the GAAP net loss of $184.1 million for the quarter, driven by non-cash items including a $49.5 million loss on the change in fair value of derivatives. The company carries a substantial debt load alongside its growing cash position, meaning execution on the construction pipeline and continued hyperscaler demand remain the critical variables to monitor.