Shares of Applied Digital (APLD), a Texas Bitcoin mining and data center company, dropped sharply on Tuesday after the digital infrastructure provider reported quarterly results that fell below the Wall Street expectations.
The company, which has turned from its crypto mining operations, to focus on high performance computing (HPC) and AI-focused data centers, reported $ 52.9 million revenue for the quarter, ending February 28, 2025-one increase of 22% from a year earlier, but below under analyte overview of $ 64.5 million, a nearly 18% Miss.
Despite the top Line Miss, Applied Digital reported a non-GAAP network loss of $ 0.08 per year. Share, as analysts’ expectations of $ 0.10 per Stock loss. However, adjusted EBITDA came in at $ 10 million, a 41% Miss compared to the expected $ 16.9 million, signaling continued margin pressure in the midst of heavy infrastructure investments.
APLD shares fell as much as 30% from Monday close and traded about $ 3.90 in the early hours of the session.
A significant feature came from the company’s Cloud Service Unit, which released a sharp sequential 36%decrease in 36%, which fell from $ 27.7 million in the previous quarter to $ 17.8 million. Applied Digital attributed the fall to a shift from single rental contracts to a multi-tenant, on-demand GPU model-a transition facing the first technical challenges.
Remarkably approved the company’s board of directors on April 10, a plan to sell the cloud service company completely with the aim of focusing on its central HPC data center operations and potentially placing itself as a real estate investment (reit) in the future.
“We believe that separation of the cloud service company from our data center operations better serves our shareholders’ long-term interests,” said CEO Wes Cummins in the company’s earnings call.
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