Applied Digital Corporation reported its financial results for the fiscal third quarter ended February 28, 2025, with total revenues of $52.9 million, an increase of 22% from the prior year period, but falling below Wall Street estimates. The Cloud Services business generated $17.8 million in revenue, a 220% increase year-over-year, but experienced a sequential decline of $9.9 million from the previous quarter due to technical issues during a transition to an on-demand model, which have since been resolved.
The Data Center Hosting business segment generated $35.2 million in revenue, a 7% decrease compared to the prior year period. The company reported a net loss attributable to common stockholders of $36.1 million, or $0.16 per basic and diluted share, and an adjusted net loss of $17.8 million, or $0.08 per diluted share. Adjusted EBITDA for the quarter was $10.0 million, an improvement from a loss of $1.3 million in Q3 FY24, but a sequential decrease from Q2 FY25.
As of February 28, 2025, Applied Digital had $261.2 million in cash, cash equivalents, and restricted cash, along with $689.1 million in debt. The company disclosed a working capital deficit of $119.30 million, which raised substantial doubt about its ability to continue as a going concern, though management outlined mitigation strategies including potential preferred stock and Cloud Services business sales.
Operationally, construction on the first 100 MW Ellendale HPC building remains on schedule and is expected to be ready for service in the second half of the calendar year. Applied Digital continues negotiations with multiple US-based hyperscalers to lease up to 400 MW of capacity at the Ellendale campus. The Board of Directors also approved a plan on April 10, 2025, to sell the Cloud Services Business, aiming to remove perceived competitive friction and position the company for a potential future REIT structure.
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