Applied Digital Jumps as Leases Swell Backlog to $36 Billion

Applied Digital closed its fiscal year with a quarter that landed close to triple Wall Street's revenue forecast, then stacked a fresh $20.2 billion of contracted leases on top. Shares of the data center builder climbed in Monday's extended session after the report and remained a focus of Tuesday trading, with Benzinga recording an after-hours gain of just over 3 percent to $27.24 and Investing.com citing a move above 5 percent at the evening's peak.

Revenue for the fiscal fourth quarter ended May 31 reached $258.7 million, up 407 percent from a year earlier and far ahead of the roughly $95 million analysts expected, according to Investing.com. Adjusted earnings of 4 cents per share reversed a consensus call for a 19-cent loss. For a stock that had shed roughly a third of its value in the weeks before the print, per 24/7 Wall St, the report supplied exactly the evidence bulls had been demanding.

Quarter That Cleared Consensus by a Wide Margin

Growth was driven almost entirely by the company's shift from crypto-adjacent hosting toward artificial intelligence infrastructure. Benzinga reported that services revenue rose 308 percent to $208.2 million, supplemented by $50.6 million from legacy data center hosting. Adjusted EBITDA came in at $42.4 million for the quarter and $107.2 million for the full year, the company said in its release. Because the fiscal calendar runs through May, the period captures the first full quarter of revenue recognition from capacity energized over the winter, which is precisely why the beat was so much larger than models anticipated.

Full-year figures show the scale of the transition. Revenue reached $611.3 million, up 167 percent, while the GAAP net loss widened to $249.2 million for the year, including $110.6 million in the fourth quarter, reflecting the heavy depreciation and financing costs of an infrastructure build-out still in its early innings. On an adjusted basis the company earned $36.1 million for the year, and StockTitan noted net operating income of $39.9 million for the quarter and $90.4 million for the twelve months.

Lease Machine Adds 810 Megawatts

Alongside the results, Applied Digital disclosed three new 15-year take-or-pay leases with a single high investment-grade United States hyperscaler, covering 810 megawatts of critical IT load and roughly $20.2 billion in base-term contracted revenue. Per the company's release, Delta Forge 1 and Polaris Forge 3 each contribute 300 megawatts and about $7.5 billion, while Delta Forge 2 adds 210 megawatts and approximately $5.2 billion.

Those agreements lift total contracted capacity to 1.4 gigawatts across five campuses, representing about $36 billion in aggregate base-term lease revenue. Chief executive Wes Cummins told investors the company set out years ago to "build a company that scales, not just a company that builds data centers," and Investing.com quoted him describing "a defining quarter for Applied Digital, capping a defining year."

Dealmaking of this cadence has been building all year. When the Polaris Forge 3 lease was first announced in late May, covering 300 megawatts with the same class of tenant, shares surged 23.9 percent in a session and aggregate contracted revenue stood near $31 billion, according to Foreign Policy Journal's markets coverage. Weeks later the company added Delta Forge 2, its fifth campus, in a southern state it has not yet named publicly. Cummins told analysts the firm signed leases for five campuses during the fiscal year, three of them within the final four months.

Beyond the headline numbers, the identity of the counterparty matters. Benzinga noted that signing 810 megawatts with a high investment-grade tenant directly addresses the customer concentration question that has trailed the stock since its early leases clustered around CoreWeave. Long-dated, take-or-pay contracts with a hyperscaler-grade credit change the risk profile lenders assign to each campus, and by extension the cost of the debt that funds construction.

Balance Sheet Still Carries the Strain

Financing that growth remains the central tension in the story. Applied Digital ended the year with about $4.2 billion in cash against $5.0 billion of debt, according to Benzinga. Building AI factories ahead of lease commencement means capital flows out years before rent flows in, and the GAAP losses will persist while successive campuses move through construction. Management pointed to a major financing package closed during the period as evidence that lenders are underwriting the model, though every incremental campus resets the funding clock.

Skeptics framed the setup starkly before the release. Benzinga's earnings preview captured the divide in a single contrast, a booming order book set against a bleeding balance sheet. Tuesday's question for the market is which side of that ledger compounds faster, and Monday night's numbers gave the growth side its strongest data point yet.

Operationally, the ramp is measurable. Live capacity at the flagship Polaris Forge 1 campus in North Dakota reached 175 megawatts, with additional buildings under construction there and at Polaris Forge 2, Polaris Forge 3, Delta Forge 1 and Delta Forge 2. Each megawatt energized converts contracted backlog into recurring rental revenue of the kind public markets tend to reward with real estate style multiples rather than crypto-miner discounts.

Spinoff Reshapes the Corporate Structure

Buried in the release was a structural move with its own implications: Applied Digital completed the separation of its cloud services arm, combining it with Ekso Bionics to create ChronoScale Holdings, which now trades on Nasdaq under the symbol CHRN. Applied Digital retains roughly 97 percent ownership, per the company's announcement, giving the GPU cloud business its own currency while keeping economics consolidated for now.

For investors, the question after Monday night is duration rather than direction. Contracted revenue of $36 billion over 15-year terms dwarfs a market value implied by a share price near $27 in after-hours trading, but realizing it depends on execution across five simultaneous construction programs, continued hyperscaler appetite for third-party capacity, and debt markets that keep pricing the build-out generously. Fiscal 2027 guidance and the pace of lease commencements at Polaris Forge 1 now become the numbers to watch. After a 33 percent drawdown into the report, the double beat bought management credibility; the backlog gives it time.