Applied Digital Q3 results crush estimates
The AI data center operator just released its fiscal Q3 results.
Applied Digital delivered Q3 results far better than expected, but the stock is running into some overhead resistance.
For its fiscal Q3, the data center operator reported:
Revenue of $126.6 million (estimate: $76.5 million).
Adjusted EBITDA of $44.1 million (estimate: $20.8 million).
The stock had risen double digits during regular trading on Wednesday, with enthusiasm for risk assets returning as the US and Iran agreed to a two-week ceasefire. It was up another 3% after-hours, briefly breaching $30, before paring gains.
That $30 level is noteworthy, as it’s the strike with by far the most call open interest among options expiring this Friday. So if the shares are unable to breach that level, that will likely fuel some mechanical selling pressure as the contracts become less likely to be money-good following this catalyst.
“We are also starting to see the earnings power of our platform come through, with a full quarter of revenue from our first building now recognized,” Chairman and CEO Wes Cummins said in a press release. “That initial 100 MW represents approximately one-sixth of our contracted capacity and one-tenth of what is operating or under construction, but we believe it begins to show what’s possible from here as we continue to bring additional capacity online in the coming quarters.”
During the conference call that followed Q2 results three months ago, Cummins said that the company was in “advanced discussions” on three sites that represent 900 megawatts in total with “another investment-grade hyperscaler across multiple regions.” Investors will be hoping that management reports progress on those talks in this release or the subsequent call.
Earnings reactions have been incredibly strong for APLD in recent quarters, with the shares gaining 8%, 16%, and 31% the session after dropping its three most recent sets of results.
The options-implied move for the stock on earnings is plus or minus 13.2%.
