Applied Digital (NASDAQ: APLD) posted a stunning 407% surge in quarterly revenue to $258.7 million, cementing its position as a major force in AI data center infrastructure.
The company’s fiscal fourth quarter results underscore a rapid transformation, with full-year revenue climbing 167% to $611.3 million compared to the prior year.
Excluding the spun-off ChronoScale segment, revenue rose from $38 million to $240.4 million, reflecting the scale of Applied Digital’s expanding operations.
The high-performance computing business drove the bulk of quarterly revenue at $203 million, with tenant fit-out services accounting for $152.1 million of that total.
Tenant fit-out revenue, which the company earns by constructing dedicated facilities for large customers, carries low gross margins but paves the way for higher-margin recurring income down the line.
CoreWeave is the primary source of that tenant fit-out revenue, making the hyperscaler relationship a critical pillar of Applied Digital’s near-term financial performance.
The company’s data center hosting segment saw revenue slip 2% to $37.63 million for the quarter, though it still generated operating income of $12.5 million.
Applied Digital ended the quarter holding $1.6 billion in unrestricted cash against $5 billion in debt, while reporting operating cash flow of $89.7 million and negative free cash flow of $2.8 billion.
During the quarter, the company signed leases for three new campuses with a single high-investment-grade hyperscaler, representing $20 billion in lease value.
Applied Digital now has five campuses under contracted long-term leases, bringing its total contracted lease value to $36 billion, a figure that has grown 125% from a year earlier.
Management noted that all current construction projects remain on time and on budget, a meaningful distinction in a sector frequently plagued by costly delays.
CEO Wes Cummins told analysts the company expects to reach a $1 billion annualized net operating income run rate within approximately one year.
Applied Digital’s non-GAAP net operating income for the full fiscal year 2026 came in at $90.4 million, with the quarterly run rate in Q4 reaching $39.9 million, representing a 91% margin on base-rent revenue.
With power remaining one of the most significant bottlenecks across AI infrastructure, Applied Digital’s growing portfolio of contracted campuses positions the company favorably for long-term demand.
The stock remains a high-risk, high-reward proposition, but its expanding backlog and clear path toward $1 billion in NOI give investors a concrete growth milestone to watch.
