Applied Digital shares fell 6.1% to $23.81 on Wednesday. The filing shows why the business now looks much larger, alongside the costs of the scale-up: three-month revenue jumped 322% to $341.9 million, while capital spending rose to $2.1 billion and the net loss widened to $184.1 million.
That is not a small-company income statement wearing a bigger hat. Those figures show the scale of the build-out. Applied Digital's operating cash flow swung from an $81.5 million outflow to a $63.9 million inflow, but the cash generated by operations was dwarfed by the money going into new facilities.
The revenue surge came mainly from the first two buildings at the Polaris Forge 1 campus and from tenant fit-out work. HPC Hosting revenue rose nearly tenfold to $262.6 million, while the older Data Center Hosting line was essentially flat at $37.8 million.
Management describes the top-line change this way:
"The change is primarily due to revenue generated from the first two buildings at our Polaris Forge 1 campus, as well as tenant fit-out services performed, net of expenses during the three months ended August 31, 2026 compared to the three months ended August 31, 2025."
10-Q 2026-10-07
The distinction matters because the filing does not quantify how much of the jump belongs to recurring hosting versus work performed for tenants. The latest numbers show that both activities are present, but do not say how much of the jump belongs to recurring hosting versus work performed for tenants.
The spending receipt is even bigger:
"This increase was primarily due to an increase of approximately $1.8 billion in investments in property and equipment during the three months ended August 31, 2026 as our payments in the current period for construction of each of our Polaris Forge 1, Polaris Forge 2, Polaris Forge 3, Delta Forge 1, and Delta Forge 2 campus data center facilities increased as well as investment in companies."
10-Q 2026-10-07
Applied Digital ended the period with $2.9 billion of cash, up from $73.9 million a year earlier. The filing also reports $313.5 million more in long-term debt repayments and $196.4 million less in common-stock proceeds than in the comparable period, without assigning the cash increase to one single source in the disclosed comparison.
The income statement has its own complication. Operating margin fell to negative 18.2% from negative 12.1%, as services and other costs included about $151.1 million of additional tenant fit-out expense, $22.4 million tied to GPU hardware sales at ChronoScale, and $14.2 million of additional depreciation and amortization. Diluted shares also rose 13.9% to 291.6 million, adding another layer to the expansion story.
The company has been growing quickly for several years. Annual revenue reached $611.3 million in the fiscal year ended May 31, up 167.5%, while the latest annual operating margin was negative 38.7%. The current filing sharpens that pattern: revenue is arriving alongside a much larger physical and financial commitment to data-center capacity.
Accounts receivable rose to $114.1 million from $29.1 million, roughly tracking the scale of the revenue increase. The next quarterly report can put that working-capital balance beside another period of tenant fit-out and hosting revenue. The filing does not quantify the split between ongoing hosting revenue and fit-out services within the $341.9 million.
Source: Applied Digital 10-Q filed October 7, 2026, for the three months ended August 31, 2026.