Applied Digital (APLD) Q1 fiscal 2027 earnings: most of the $341.9 million in revenue was fit-out work

Applied Digital (NASDAQ: APLD) reported revenue of $341.9 million for its fiscal first quarter, the three months to August 31, 2026, after the close on Wednesday, October 7, more than double the $133.8 million analysts expected according to LSEG. Most of that revenue came from building work: $183.5 million was tenant fit-out services billed to the companies leasing its data centers, against $65.8 million of base rent. The stock, which had closed the regular session at $23.81, down 6.04%, traded at $24.96 in the minute the release came out. When the results reached the MoveSurge news feed at 16:28:28 ET it was already falling: it was at $24.31 a minute later, down 2.60%, at $24.15 after ten minutes, down 3.23%, and at $24.14 after fifteen, down 3.29% from the post-release level and about 1.4% above the regular-session close.

Applied Digital Q1 fiscal 2027 results

Two revenue figures circulated after the release because the company reports both. Total revenue of $341.9 million includes ChronoScale, the GPU cloud subsidiary in which Applied Digital holds about 96%. Adjusted revenue of $300.4 million leaves ChronoScale out and is the sum of the two data center segments, HPC Hosting at $262.6 million and Data Center Hosting at $37.8 million.

What fit-out revenue is

Inside HPC Hosting, the segment that leases AI data center capacity, base rent was $65.8 million, tenant fit-out services were $183.5 million and tenant recoveries were $13.3 million. Fit-out revenue is the building and equipment work Applied Digital carries out for a tenant as a new hall is readied, so it rises when buildings are being completed and falls once they are handed over. The company said services revenue grew mainly because fit-out revenue rose by about $157.2 million from a year earlier, plus $23.0 million of GPU hardware sales at ChronoScale. The quarter's revenue beat therefore came largely from the pace of construction, while the rent that continues after a building is finished was about a fifth of the total.

Why the net loss widened to $184.1 million

Interest expense of $77.4 million was larger than the quarter's base rent of $65.8 million. Applied Digital ended the quarter with about $6.4 billion of debt and $3.7 billion of cash, restricted cash included, raised to build campuses that are only partly in service. The loss also included $49.5 million on derivatives and $59.4 million of stock-based compensation, and $16.1 million came from discontinued operations at ChronoScale. Adjusted figures exclude most of those items, which is how a $184.1 million net loss sits beside an adjusted loss of one cent a share and adjusted EBITDA of $64.4 million.

Capacity coming into service

• Polaris Forge 1 in Ellendale, North Dakota, leased to CoreWeave, now has 250 MW in service after the second building's two 75 MW phases became ready on July 1 and October 1, 2026. A 150 MW building is under construction there.
• Polaris Forge 2 in Harwood, North Dakota, leased to an investment-grade hyperscaler, is expected to start operations by the end of 2026.
• Across five campuses the company has about 1.41 GW under lease, worth about $36 billion over the initial terms.
• On October 6 Applied Digital announced access to up to about 1 GW of potential power in Finland, with first power expected in 2028.

On the call management said it expects more than 600 MW to enter service over the next twelve months, according to Investing.com's transcript summary. As each building is finished, fit-out revenue for it ends and base rent begins, so the revenue mix in later quarters depends on how fast halls move from construction to rent.