Applied Digital Corporation (Nasdaq: APLD)
("Applied Digital" or the "Company"), a designer,
builder and operator of next-generation digital infrastructure that
is designed for High Performance Computing (“HPC”) applications,
today reported financial results for the fiscal third quarter of
2023 ended February 28, 2023. The Company also provided an
operational update and outlook.
Recent Financial and Operational
Highlights
- Fiscal third quarter 2023 revenue of
$14.1 million.
- Fiscal third quarter 2023 adjusted
EBITDA of $0.9 million.
- Fiscal third quarter 2023 adjusted
loss from continuing operations of $1.4 million, or adjusted
loss per share of $0.01.
- Energized second co-hosting facility
in Ellendale, North Dakota in early March. The Company anticipates
the first half of the facility’s 180-Megawatt (“MW”) capacity will
be turned on by the end of April and the rest to be turned on by
the end of June.
- Continued progress on third co-hosting
facility in Garden City, Texas with energization expected following
final metering approval.
- Recognized first HPC revenue during
the quarter and anticipate initial operations in our new Jamestown
HPC building to begin in the next 4-5 weeks.
Management Commentary“Demand for
our services from both traditional customers and emerging HPC
applications remains robust, which validates our position as a
financially strong and leading digital infrastructure provider to
serve various hosting needs,” said Applied Digital Chairman and CEO
Wes Cummins. “We’ve been diligently working toward providing
digital infrastructure solutions that provide differentiated
services from traditional datacenters, and successfully initiated
energization of our 180 MW facility in Ellendale, North Dakota in
early March. In addition to Ellendale, we are making great progress
at our 200 MW facility in Garden City, Texas and are ready to power
on the site following approval of technical details given the
unique aspects of the facility.”
“Looking ahead, we remain excited about the future
and in our ability to deliver long-term, high-margin, sustainable
cash flow. While we continue to see robust demand from
cryptocurrency miners, we aim to diversify our customer base and
exposure to the growing segments of the HPC market as we believe
that will provide a high return on invested capital for
shareholders.”
Jamestown, North Dakota Facility Update
(100MW)Applied Digital’s first facility is in Jamestown,
North Dakota with capacity of 100MW. The entire 100MW of capacity
has been fully contracted on multi-year contracts, providing
revenue visibility for the Company. Additionally, the facility is
powered through a five-year Energy Services Agreement (ESA) with a
local utility.
Garden City, Texas Facility Update
(200MW)Applied Digital’s second facility is in Garden
City, Texas, planned for capacity of 200MW. Construction of the
facility is complete and miners are actively being installed. The
Company has received regulatory approval for this site and is
finalizing technical details with the utility provider and energy
partner. The site is currently expected to energize following final
approvals.
Ellendale, North Dakota Facility Update
(180MW)Applied Digital’s third co-hosting facility is in
Ellendale, North Dakota with planned capacity of 180MW. The site is
close to significant wind power capacity and is at a different
location than the Company's Jamestown facility. The Company
successfully initiated energization in early March and is now
powering and operating the new site only six months after initial
construction began. The Company previously entered into a five-year
Energy Service Agreement (ESA) with a utility partner in Dickey
County servicing Ellendale, North Dakota.
HPC Customer UpdateApplied
Digital’s next-generation datacenters are ideal hosting sites for
HPC applications that can offer lower cost, high compute power
solutions compared to traditional datacenters that are typically
higher cost and do not have the ability in most current facilities
to provide the power density required for AI/ML workloads. The
Company successfully retrofitted a small portion of its existing
100MW Jamestown facility to support a GPU deployment. During the
quarter the company had three customers utilizing this GPU capacity
at our facility. Construction started during the quarter on our
specialized 5MW standalone processing center, adjacent to its
existing 100MW Jamestown facility. We expect the initial capacity
in the new HPC facility to come online in the next 4-5 weeks. The
facility will be completed in two additional stages with full
capacity online by year end. We have had significant interest in
the new facility and are optimistic we will secure a large anchor
customer in the next two months.
Financial Results for Fiscal Third Quarter
2023 Ended February 28, 2023Note: Applied Digital did not
have operations in the prior year comparable period and thus no
comparative analysis is included.
Revenues in the fiscal third quarter 2023 were
$14.1 million. Hosting revenues were generated entirely from the
Company’s first hosting facility in Jamestown, North Dakota. The
Jamestown facility operated at full capacity during the
quarter.
Cost of revenues in the fiscal third quarter 2023
was $10.5 million, consisting of approximately $8.6 million of
energy costs, $0.9 million of depreciation and amortization
expense, and $1.0 million of personnel expenses for employees
directly working at the Jamestown hosting facility.
Adjusted Gross Profit, a non-GAAP measure, for the
fiscal third quarter of 2023 was $4.4 million, or 31% of
revenue.
Operating expenses for the fiscal third quarter of
2023 were $10.5 million, which included $4.5 million in
stock-based compensation, $3.9 million in other selling, general
and administrative costs and $1.1 million of depreciation and
amortization expenses not attributable to cost of sales.
Net loss attributable to Applied Digital for the
fiscal third quarter of 2023 was $7.0 million, or $0.08 per
basic and diluted share, based on a weighted average share count
during the quarter of 94.1 million.
Adjusted EBITDA, a non-GAAP measure, for the fiscal
third quarter of 2023 was $0.9 million.
Adjusted net loss attributable to Applied Digital,
a non-GAAP measure, for the fiscal third quarter of 2023, was a
loss of $1.4 million, or $0.01 per basic and diluted share,
based on a weighted average share count during the quarter of
approximately 94.1 million.
Applied Digital ended the fiscal third quarter 2023
with cash and cash equivalents of $22.9 million and
$23.7 million in debt outstanding.
Conference CallApplied Digital
will host a conference call today, April 6, 2023 at 9:00 a.m.
Eastern Time (6:00 a.m. Pacific Time) to discuss these results. A
question-and-answer session will follow management’s
presentation.
To participate, please dial the appropriate number
at least ten minutes prior to the start time and ask for the
Applied Digital conference call.
U.S. dial-in number: 1-877-407-0792International
number: 1-201-689-8263Conference ID: 13736971
The conference call will broadcast live and be
available for replay here.
Please call the conference telephone number
approximately 10 minutes before the start time. An operator will
register your name and organization. If you have any difficulty
connecting with the conference call, please contact Applied
Digital’s investor relations team at 1-949-574-3860.
A replay of the call will be available after 1:00
p.m. Eastern time April 6, 2023 through April 20, 2023.
Toll-free replay number:
1-844-512-2921International replay number: 1-412-317-6671Conference
ID: 13736971
About Applied DigitalApplied
Digital Corporation (Nasdaq: APLD) is a builder and operator of
next-generation datacenters across North America which provide
substantial compute power to blockchain infrastructure and support
Bitcoin mining. The Company has partnered with the most recognized
names in the industry to develop, deploy, and scale its business.
Find more information at www.applieddigital.com. Follow us on
Twitter at @APLDdigital.
Forward-Looking StatementsThis
release contains "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995 regarding, among
other things, future operating and financial performance, product
development, market position, business strategy and objectives.
These statements use words, and variations of words, such as
"continue," "build," "future," "increase," "drive," "believe,"
"look," "ahead," "confident," "deliver," "outlook," "expect," and
"predict." Other examples of forward-looking statements may
include, but are not limited to, (i) statements of Company plans
and objectives, including our evolving business model, or estimates
or predictions of actions by suppliers, (ii) statements of future
economic performance, and (iii) statements of assumptions
underlying other statements and statements about the Company or its
business. You are cautioned not to rely on these forward-looking
statements. These statements are based on current expectations of
future events and thus are inherently subject to uncertainty. If
underlying assumptions prove inaccurate or known or unknown risks
or uncertainties materialize, actual results could vary materially
from the Company's expectations and projections. These risks,
uncertainties, and other factors include: decline in demand for our
products and services; the volatility of the crypto asset industry;
the inability to comply with developments and changes in
regulation; cash flow and access to capital; and maintenance of
third party relationships. Information in this release is as of the
dates and time periods indicated herein, and the Company does not
undertake to update any of the information contained in these
materials, except as required by law.
Condensed
Consolidated Balance Sheets (Unaudited) |
(In
thousands, except number of shares and par value
data) |
|
|
|
February 28, 2023 |
|
May 31, 2022 |
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
22,921 |
|
|
$ |
46,299 |
|
Accounts receivable |
|
|
82 |
|
|
|
227 |
|
Prepaid expenses and other current assets |
|
|
1,387 |
|
|
|
1,336 |
|
Total current assets |
|
|
24,390 |
|
|
|
47,862 |
|
Property and equipment, net |
|
|
167,276 |
|
|
|
64,260 |
|
Right of use asset, net |
|
|
12,911 |
|
|
|
6,408 |
|
Other Assets |
|
|
3,030 |
|
|
|
1,450 |
|
TOTAL ASSETS |
|
$ |
207,607 |
|
|
$ |
119,980 |
|
|
|
|
|
|
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS'
EQUITY |
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
14,000 |
|
|
$ |
13,260 |
|
Current portion of lease liability |
|
|
4,193 |
|
|
|
1,004 |
|
Current portion of term loan |
|
|
4,855 |
|
|
|
1,333 |
|
Customer deposits |
|
|
36,370 |
|
|
|
9,524 |
|
Current deferred revenue |
|
|
47,619 |
|
|
|
3,877 |
|
Sales and use tax payable |
|
|
1,563 |
|
|
|
— |
|
Total current liabilities |
|
|
108,600 |
|
|
|
28,998 |
|
Deferred tax liability |
|
|
260 |
|
|
|
540 |
|
Long-term portion of lease liability |
|
|
8,490 |
|
|
|
5,310 |
|
Long-term term loan |
|
|
18,862 |
|
|
|
5,897 |
|
Total liabilities |
|
$ |
136,212 |
|
|
$ |
40,745 |
|
Commitments and contingencies |
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common stock, $0.001 par value, 166,666,667 shares authorized,
99,471,127 shares issued and 94,469,399 shares outstanding at
February 28, 2023, and 97,837,702 shares issued and 97,801,406
shares outstanding at May 31, 2022 |
|
$ |
100 |
|
|
$ |
98 |
|
Treasury stock, 5,001,728 shares at February 28, 2023 and
36,296 shares at May 31, 2022, at cost |
|
|
(62 |
) |
|
|
(62 |
) |
Additional paid in capital |
|
|
155,055 |
|
|
|
128,293 |
|
Accumulated deficit |
|
|
(94,243 |
) |
|
|
(56,070 |
) |
Total stockholders’ equity attributable to Applied Digital
Corporation |
|
|
60,850 |
|
|
|
72,259 |
|
Noncontrolling interest |
|
|
10,545 |
|
|
|
6,976 |
|
Total Stockholders' equity including noncontrolling interest |
|
$ |
71,395 |
|
|
$ |
79,235 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT |
|
$ |
207,607 |
|
|
$ |
119,980 |
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations (Unaudited) |
(In
thousands, except per share data) |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
February 28,2023 |
|
February 28,2022 |
|
|
February 28,2023 |
|
February 28,2022 |
Revenues: |
|
|
|
|
|
|
|
|
|
Hosting revenue |
|
$ |
14,090 |
|
|
$ |
1,026 |
|
|
|
$ |
33,354 |
|
|
$ |
1,026 |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
$ |
10,533 |
|
|
$ |
2,073 |
|
|
|
$ |
28,438 |
|
|
$ |
2,073 |
|
Gross profit |
|
|
3,557 |
|
|
|
(1,047 |
) |
|
|
|
4,916 |
|
|
|
(1,047 |
) |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
$ |
10,514 |
|
|
$ |
1,370 |
|
|
|
$ |
42,727 |
|
|
$ |
15,585 |
|
Total costs and expenses |
|
$ |
10,514 |
|
|
$ |
1,370 |
|
|
|
$ |
42,727 |
|
|
$ |
15,585 |
|
Operating loss |
|
$ |
(6,957 |
) |
|
$ |
(2,417 |
) |
|
|
$ |
(37,811 |
) |
|
$ |
(16,632 |
) |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
Interest Expense |
|
$ |
(384 |
) |
|
$ |
— |
|
|
|
$ |
(1,125 |
) |
|
$ |
— |
|
Gain on extinguishment of accounts payable |
|
|
— |
|
|
|
80 |
|
|
|
|
— |
|
|
|
405 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
|
(94 |
) |
|
|
(1,342 |
) |
Total other expense, net |
|
|
(384 |
) |
|
|
80 |
|
|
|
|
(1,219 |
) |
|
|
(937 |
) |
Net loss from continuing operations before income tax expenses |
|
|
(7,341 |
) |
|
|
(2,337 |
) |
|
|
|
(39,030 |
) |
|
|
(17,569 |
) |
Income tax benefit (expense) |
|
|
— |
|
|
|
(60 |
) |
|
|
|
280 |
|
|
|
(274 |
) |
Net loss from continuing operations |
|
|
(7,341 |
) |
|
|
(2,397 |
) |
|
|
|
(38,750 |
) |
|
|
(17,843 |
) |
Net gain from discontinued operations, net of income taxes |
|
|
— |
|
|
|
(4,048 |
) |
|
|
|
— |
|
|
|
(2,870 |
) |
Net loss including noncontrolling interests |
|
|
(7,341 |
) |
|
|
(6,445 |
) |
|
|
|
(38,750 |
) |
|
|
(20,713 |
) |
Net loss attributable to noncontrolling interest |
|
|
(316 |
) |
|
|
— |
|
|
|
|
(577 |
) |
|
|
— |
|
Net loss attributable to Applied Digital Corporation |
|
$ |
(7,025 |
) |
|
$ |
(6,445 |
) |
|
|
$ |
(38,173 |
) |
|
$ |
(20,713 |
) |
|
|
|
|
|
|
|
|
|
|
Basic and diluted net (loss) gain per share: |
|
|
|
|
|
|
|
|
|
Continuing Operations |
|
$ |
(0.08 |
) |
|
$ |
(0.04 |
) |
|
|
$ |
(0.41 |
) |
|
$ |
(0.35 |
) |
Discontinued Operations |
|
$ |
— |
|
|
$ |
(0.08 |
) |
|
|
$ |
— |
|
|
$ |
(0.06 |
) |
Basic and diluted net loss per share |
|
$ |
(0.08 |
) |
|
$ |
(0.12 |
) |
|
|
$ |
(0.41 |
) |
|
$ |
(0.41 |
) |
Basic and diluted weighted average number of shares
outstanding |
|
|
94,119,944 |
|
|
|
53,396,920 |
|
|
|
|
93,545,687 |
|
|
|
50,546,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows (Unaudited) |
(In
thousands) |
|
|
Nine Months Ended |
|
February 28, 2023 |
|
February 28, 2022 |
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
|
Net loss attributable to Applied Digital Corporation |
$ |
(38,173 |
) |
|
$ |
(20,713 |
) |
Net loss from discontinued operations, net of income taxes |
|
— |
|
|
|
(2,870 |
) |
Net Loss attributable to noncontrolling interest |
|
(577 |
) |
|
|
— |
|
Net Income (loss) from continuing operations |
|
(38,750 |
) |
|
|
(17,843 |
) |
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
Depreciation and Amortization |
|
4,631 |
|
|
|
245 |
|
Gain on extinguishment of accounts payable |
|
— |
|
|
|
(405 |
) |
Loss on extinguishment of debt |
|
94 |
|
|
|
1,342 |
|
Stock-Based Compensation |
|
26,878 |
|
|
|
12,337 |
|
Lease Expense |
|
246 |
|
|
|
136 |
|
Deferred Tax |
|
(280 |
) |
|
|
274 |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
|
145 |
|
|
|
12 |
|
Prepaid expenses and other current assets |
|
(51 |
) |
|
|
(2,091 |
) |
Customer deposits |
|
26,846 |
|
|
|
2,126 |
|
Deferred revenue |
|
43,742 |
|
|
|
2,883 |
|
Accounts payable and accrued liabilities |
|
(10,020 |
) |
|
|
4,479 |
|
Sales and use tax payable |
|
1,563 |
|
|
|
— |
|
Interest on finance leases |
|
(104 |
) |
|
|
— |
|
Lease Assets and Liabilities |
|
(796 |
) |
|
|
(233 |
) |
Net cash provided by operating activities of continuing
operations |
|
54,144 |
|
|
|
3,262 |
|
Net cash provided by operating activities of discontinued
operations |
|
— |
|
|
|
966 |
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
54,144 |
|
|
|
4,228 |
|
CASH FLOW FROM INVESTING ACTIVITIES |
|
|
|
Purchases of property and equipment |
|
(96,214 |
) |
|
|
(28,180 |
) |
Investments in private companies |
|
(100 |
) |
|
|
— |
|
Net cash used in investing activities of continuing operations |
|
(96,314 |
) |
|
|
(28,180 |
) |
Net cash provided by investing activities of discontinued
operations |
|
— |
|
|
|
(7,408 |
) |
NET CASH USED IN INVESTING ACTIVITIES |
|
(96,314 |
) |
|
|
(35,588 |
) |
Issuance of preferred stock |
|
— |
|
|
|
34,500 |
|
Repayment of finance leases |
|
(1,635 |
) |
|
|
(2 |
) |
Preferred issuance costs |
|
— |
|
|
|
(2,927 |
) |
Term loan payoff |
|
(7,056 |
) |
|
|
— |
|
Proceeds from issuance of term loan |
|
25,567 |
|
|
|
— |
|
Term Loan Issuance Costs |
|
(333 |
) |
|
|
— |
|
Loan Payments |
|
(1,784 |
) |
|
|
— |
|
Payments of employee restricted stock tax withholdings |
|
(114 |
) |
|
|
— |
|
Noncontrolling interest contributions |
|
4,147 |
|
|
|
— |
|
Net cash provided by financing activities of continuing
operations |
|
18,792 |
|
|
|
31,571 |
|
Net cash provided by financing activities of discontinued
operations |
|
— |
|
|
|
— |
|
CASH FLOW PROVIDED BY FINANCING ACTIVITIES |
|
18,792 |
|
|
|
31,571 |
|
NET (DECREASE ) INCREASE IN CASH AND CASH
EQUIVALENTS |
|
(23,378 |
) |
|
|
211 |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD |
|
46,299 |
|
|
|
11,750 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
22,921 |
|
|
|
11,961 |
|
Less: cash and cash equivalents of discontinued operations |
|
— |
|
|
|
— |
|
Cash and cash equivalents of continuing operations |
$ |
22,921 |
|
|
$ |
11,961 |
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION |
|
|
|
Interest Paid |
$ |
1,118 |
|
|
$ |
— |
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH
ACTIVITIES |
|
|
|
Right-of-use asset obtained by lease obligation |
$ |
8,693 |
|
|
$ |
1,207 |
|
Fixed assets in accounts payable |
$ |
9,384 |
|
|
$ |
12,156 |
|
|
|
|
|
|
|
|
|
Use and Reconciliation of Non-GAAP
Financial MeasuresThis press release and our related
earnings call contain certain non-GAAP financial measures. See
below for discussion on each non-GAAP metric.
Adjusted Operating Loss and Adjusted Net
LossAdjusted operating loss and adjusted net loss are
non-GAAP measures that represent operating loss and net loss from
continuing operations excluding stock-based compensation and
nonrecurring expenses. We believe these are useful metrics as they
provide additional information regarding factors and trends
affecting our business and provide perspective on results absent
one-time or significant non-cash items. However, Applied Digital’s
presentation of these measures should not be construed as an
inference that its future results will be unaffected by unusual or
non-recurring items. Applied Digital’s computation of Adjusted
Operating Loss and Adjusted Net Loss may not be comparable to other
similarly titled measures computed by other companies, because all
companies may not calculate Adjusted Operating Loss and Adjusted
Net Loss in the same fashion.
Because of these limitations, Adjusted Operating
Loss and Adjusted Net Loss should not be considered in isolation or
as a substitute for performance measures calculated in accordance
with GAAP. Applied Digital compensates for these limitations by
relying primarily on its GAAP results and using Adjusted Operating
Loss and Adjusted Net Loss on a supplemental basis. You should
review the reconciliation of operating loss to Adjusted Operating
Loss and net loss to Adjusted Net Loss above and not rely on any
single financial measure to evaluate Applied Digital’s
business.
EBITDA and Adjusted EBITDA“EBITDA”
is defined as earnings before interest, taxes, and depreciation and
amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for
stock-based compensation, gain on extinguishment of accounts
payable, loss on extinguishment of debt, and one-time professional
service costs not directly related to the company’s offering and
therefore not deferred under the guidance in ASC 340 and SAB Topic
5A. These costs have been adjusted as they are not indicative of
business operations. Adjusted EBITDA is intended as a supplemental
measure of Applied Digital’s performance that is neither required
by, nor presented in accordance with, GAAP. Applied Digital
believes that the use of EBITDA and Adjusted EBITDA provides an
additional tool for investors to use in evaluating ongoing
operating results and trends and in comparing its financial
measures with those of comparable companies, which may present
similar non-GAAP financial measures to investors. We also believe
EBITDA and Adjusted EBITDA are useful metrics to investors because
they provide additional information regarding factors and trends
affecting our business, which are used in the business planning
process to understand expected operating performance, to evaluate
results against those expectations, and because of their importance
as measures of underlying operating performance, as the primary
compensation performance measure under certain programs and plans.
However, you should be aware that when evaluating EBITDA and
Adjusted EBITDA, Applied Digital may incur future expenses similar
to those excluded when calculating these measures. In addition,
Applied Digital’s presentation of these measures should not be
construed as an inference that its future results will be
unaffected by unusual or non-recurring items. Applied Digital’s
computation of Adjusted EBITDA may not be comparable to other
similarly titled measures computed by other companies, because all
companies may not calculate Adjusted EBITDA in the same
fashion.
Because of these limitations, EBITDA and Adjusted
EBITDA should not be considered in isolation or as a substitute for
performance measures calculated in accordance with GAAP. Applied
Digital compensates for these limitations by relying primarily on
its GAAP results and using EBITDA and Adjusted EBITDA on a
supplemental basis. You should review the reconciliation of net
loss to EBITDA and Adjusted EBITDA above and not rely on any single
financial measure to evaluate Applied Digital’s business.
Adjusted Gross Profit“Adjusted
Gross Profit” is a non-GAAP measure that represents gross profit
adjusted for depreciation expense within cost of revenues. We
believe this is a useful metric as it provide additional
information regarding gross profit aside from significant non-cash
expense in depreciation. However, Applied Digital’s presentation of
this measure should not be construed as an inference that its
future results will be unaffected by other factors within cost of
revenues. Applied Digital’s computation of Adjusted Gross Profit
may not be comparable to other similarly titled measures computed
by other companies, because all companies may not calculate
Adjusted Gross Profit in the same fashion.
Because of these limitations, Adjusted Gross Profit
should not be considered in isolation or as a substitute for
performance measures calculated in accordance with GAAP. Applied
Digital compensates for these limitations by relying primarily on
its GAAP results and using Adjusted Gross Profit on a supplemental
basis. You should review the reconciliation of gross profit to
Adjusted Gross Profit above and not rely on any single financial
measure to evaluate Applied Digital’s business.
Reconciliation of GAAP to Non-GAAP Measures |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
$ in thousands |
February 28,2023 |
|
February 28,2022 |
|
February 28,2023 |
|
February 28,2022 |
Adjusted operating loss |
|
|
|
|
|
|
|
Operating Loss from Continuing Operations (GAAP) |
$ |
(6,957 |
) |
|
$ |
(2,417 |
) |
|
$ |
(37,811 |
) |
|
$ |
(16,632 |
) |
Add: Stock-based compensation |
|
4,481 |
|
|
|
— |
|
|
|
26,879 |
|
|
|
12,337 |
|
Add: Gain on Extinguishment of Accounts Payable |
|
— |
|
|
|
(80 |
) |
|
|
— |
|
|
|
(405 |
) |
Add: Loss on Extinguishment of Debt |
|
— |
|
|
|
— |
|
|
|
94 |
|
|
|
1,342 |
|
Add: Non-recurring professional service costs |
|
365 |
|
|
|
433 |
|
|
|
1,437 |
|
|
|
1,069 |
|
Add: One-time electricity charges |
|
— |
|
|
|
— |
|
|
|
114 |
|
|
|
— |
|
Add: Other non-recurring expenses |
|
1,094 |
|
|
|
— |
|
|
|
1,675 |
|
|
|
— |
|
Adjusted Operating Loss from Continuing Operations (Non-GAAP) |
$ |
(1,017 |
) |
|
$ |
(2,064 |
) |
|
$ |
(7,613 |
) |
|
$ |
(2,289 |
) |
Adjusted operating margin from Continuing Operations |
|
(7.2) |
% |
|
|
(201.2) |
% |
|
|
(22.8) |
% |
|
|
(223.1) |
% |
|
|
|
|
|
|
|
|
Adjusted net income (loss) |
|
|
|
|
|
|
|
Net Loss from Continuing Operations (GAAP) |
$ |
(7,341 |
) |
|
$ |
(2,397 |
) |
|
$ |
(38,750 |
) |
|
$ |
(17,843 |
) |
Add: Stock-based compensation |
|
4,481 |
|
|
|
— |
|
|
|
26,879 |
|
|
|
12,337 |
|
Add: Gain on Extinguishment of Accounts Payable |
|
— |
|
|
|
(80 |
) |
|
|
— |
|
|
|
(405 |
) |
Add: Loss on Extinguishment of Debt |
|
— |
|
|
|
— |
|
|
|
94 |
|
|
|
1,342 |
|
Add: Non-recurring professional service costs |
|
365 |
|
|
|
433 |
|
|
|
1,437 |
|
|
|
1,069 |
|
Add: One-time electricity charges |
|
— |
|
|
|
— |
|
|
|
114 |
|
|
|
— |
|
Add: Other non-recurring expenses |
|
1,094 |
|
|
|
— |
|
|
|
1,675 |
|
|
|
— |
|
Adjusted net loss from Continuing Operations (Non-GAAP) |
$ |
(1,401 |
) |
|
$ |
(2,044 |
) |
|
$ |
(8,552 |
) |
|
$ |
(3,500 |
) |
|
|
|
|
|
|
|
|
EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
Net Loss from Continuing Operations (GAAP) |
$ |
(7,341 |
) |
|
$ |
(2,397 |
) |
|
$ |
(38,750 |
) |
|
$ |
(17,843 |
) |
Add: Interest Expense |
|
384 |
|
|
|
— |
|
|
|
1,125 |
|
|
|
— |
|
Add: Income Tax Benefit (Expense) |
|
— |
|
|
|
60 |
|
|
|
(280 |
) |
|
|
274 |
|
Add: Depreciation and Amortization |
|
1,927 |
|
|
|
245 |
|
|
|
4,631 |
|
|
|
245 |
|
EBITDA (Non-GAAP) |
$ |
(5,030 |
) |
|
$ |
(2,092 |
) |
|
$ |
(33,274 |
) |
|
$ |
(17,324 |
) |
Add: Stock-based compensation |
|
4,481 |
|
|
|
— |
|
|
|
26,879 |
|
|
|
12,337 |
|
Add: Gain on Extinguishment of Accounts Payable |
|
— |
|
|
|
(80 |
) |
|
|
— |
|
|
|
(405 |
) |
Add: Loss on Extinguishment of Debt |
|
— |
|
|
|
— |
|
|
|
94 |
|
|
|
1,342 |
|
Add: Non-recurring professional service costs |
|
365 |
|
|
|
433 |
|
|
|
1,437 |
|
|
|
1,069 |
|
Add: One-time electricity charges |
|
— |
|
|
|
— |
|
|
|
114 |
|
|
|
— |
|
Add: Other non-recurring expenses |
|
1,094 |
|
|
|
— |
|
|
|
1,675 |
|
|
|
— |
|
Adjusted EBITDA (Non-GAAP) |
$ |
910 |
|
|
$ |
(1,739 |
) |
|
$ |
(3,076 |
) |
|
$ |
(2,981 |
) |
|
|
|
|
|
|
|
|
Adjusted Gross Profit |
|
|
|
|
|
|
|
Gross profit (GAAP) |
$ |
3,557 |
|
|
$ |
(1,047 |
) |
|
$ |
4,916 |
|
|
$ |
(1,047 |
) |
Add: Depreciation and amortization in cost of revenues |
|
878 |
|
|
|
60 |
|
|
|
2,581 |
|
|
|
60 |
|
Add: One-time electricity charges |
|
— |
|
|
|
— |
|
|
|
114 |
|
|
|
— |
|
Adjusted Gross Profit (Non-GAAP) |
$ |
4,435 |
|
|
$ |
(987 |
) |
|
$ |
7,611 |
|
|
$ |
(987 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Relations ContactsMatt
Glover or Alex KovtunGateway Group, Inc.(949)
574-3860APLD@gatewayir.com
Media ContactRobert Collins or
Brenlyn Motlagh Gateway Group, Inc.(949)
899-3135APLD@gatewayir.com
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