Applied Digital Q4 Highlights: 56% Sequential Revenue Growth, AI Cloud Service, Solid Outlook & More

Applied Digital Corp APLD reported Q4 FY23 revenue of $22 million, up 193% Y/Y, which missed the consensus of $29.57 million.

Revenues benefited from its improved operations in Jamestown (North Dakota) and increased energized MW capacity at the Ellendale (North Dakota) facility. 

Adjusted gross profit rose to $7.8 million (margin: 36%) from $1.1 million (margin: 15%) a year ago.

Adjusted EBITDA came in at $2.9 million in Q4 compared to an adjusted EBITDA loss of $(3.1) million in the prior year. 

Adjusted EPS of $(0.01) was better than the consensus of $(0.04).

As of May 31, 2023, unrestricted cash and cash equivalents stood at $29.0 million and outstanding debt at $79.4 million.

In Q4, the company launched an AI cloud service and disclosed the signing and successful onboarding of its first AI customer, Character A.I., with a deal worth up to $180 million over 24 months. 

In June, APLD acquired its second AI customer through a deal worth up to $460 million over 36 months.

Outlook: For FY 2024, the company expects revenue within $385 million – $405 million (vs. consensus of $308.8 million) and adjusted EBITDA of $195 million – $205 million.

"Looking ahead, we will accelerate our focus on non-crypto use cases and leverage the capabilities of our next-generation proprietary data center assets for HPC applications. Demand for our services from both traditional customers and emerging HPC applications remains robust, and we remain excited about the year ahead. We are incredibly proud of the progress made during the quarter and look forward to providing further updates on our progress as we head into fiscal 2024," said Wes Cummins, Chairman and CEO.

Price Action: APLD shares are trading higher by 20.3% at $9.29 on the last check Monday.