$36 billion of contracted revenue, one unnamed tenant behind half of it, and a $249 million year

01Snapshot

Key figures, each tagged by provenance.

02Business model

Applied Digital designs, builds, owns and operates large-scale data centers for high-performance computing, and leases them whole to a small number of very large tenants. It calls the buildings AI Factories. The company describes a franchise model: a core team of design, construction and operations professionals replicated across every campus, running on a common supply chain and on design approvals from the major hyperscalers.

There are two revenue-earning businesses and they are paid on quite different terms.

AI data center leasing is the strategic business. Capacity is contracted under 15-year take-or-pay leases before it is built, then delivered in phases. Take-or-pay means the tenant owes the rent whether or not it uses the capacity, which is what makes the contracted revenue figure meaningful and what allows the build to be financed with secured notes at the project subsidiary. Five campuses are under way: Polaris Forge 1, 2 and 3, and Delta Forge 1 and 2, for two hyperscalers and CoreWeave.

Data center hosting is the legacy business and the more profitable one per dollar of assets. Applied Digital operates 286 MW across two North Dakota sites for a bitcoin mining customer. The chief executive states plainly that the company is paid for the data center capacity provided rather than for the mining output, so revenue does not move with the bitcoin price as long as the customer keeps mining. Filed 8-K, Jul 27, 2026.

A third business left during the year. The cloud services operation was separated and combined with Ekso Bionics Holdings to form ChronoScale, listed on Nasdaq as CHRN. Applied Digital retains roughly 96% of the equity, so ChronoScale is still consolidated into these financial statements while being excluded from every non-GAAP measure the company presents. Filed 8-K, Jul 27, 2026.

03Revenue streams

The reported streams and, separately, the contracted book that does not appear in revenue yet.

Applied Digital's revenue nearly tripled in the fourth quarter, to $258.7M from a base 407% lower a year earlier. Almost all of that growth is the AI data center business beginning to earn rent as Polaris Forge 1 came into service. The hosting business is roughly flat and is the smaller number.

The distance between adjusted net income of $36.1M and a reported net loss of $249.2M is the single largest interpretive question in this company's accounts, and a reader should hold both figures rather than choosing one. The adjustments exclude ChronoScale entirely and remove items the company treats as non-recurring; the reported figure carries the financing cost of a build that is mostly not yet earning.

The contracted book

None of the following is in revenue yet, and the timing is stated by the company rather than estimated here.

Beyond the contracted portfolio and the roughly 1.4 GW under construction, the company states it is marketing a further 1.7 GW of capacity across multiple states. That is a marketing position rather than a contract and carries no revenue figure.

04Industry & market backdrop

Applied Digital operates in the part of the AI build-out where the scarce input is interconnected power rather than land, capital or demand. Its own commercial record is the clearest evidence of the demand side: three 15-year take-or-pay leases signed with one investment-grade hyperscaler within a few months, each in a different state, plus the earlier CoreWeave arrangements.

Two features of the market shape how the company is financed. First, tenants of this credit quality will contract capacity years before it exists, which lets a developer raise secured debt against a signed lease rather than against a completed building. Applied Digital has done exactly that: $2.15B of 6.750% senior secured notes due 2031 at APLD ComputeCo 2 for Polaris Forge 2, and $1.59B of 7.000% senior secured notes due 2031 at APLD ComputeCo 3 for the fourth building at Polaris Forge 1. Second, the tenant's own credit is part of the financing: the company enhanced credit quality on the existing CoreWeave leases through a restructured special purpose subsidiary, unconditional springing guarantees from CoreWeave and a $50M letter of credit, following what it describes as CoreWeave's investment-grade A3-rated refinancing. Filed 8-K, Jul 27, 2026.

Power

The company is pursuing generation rather than waiting on the grid. It is working with Base Electron Corp., an independent power producer that has engaged Babcock & Wilcox, to develop approximately 1.2 GW of front-of-the-meter natural gas-fired generation in the Dakotas in collaboration with regional utilities. Applied Digital states its shareholders own approximately 10% of Base Electron through the company's investment. Filed 8-K, Jul 27, 2026.

05Competitive position

Named peers on comparable metrics. The relevant comparison is contracted capacity and the credit behind it, not installed megawatts.

Applied Digital's competitive position rests on one claim it can evidence and one it cannot yet. The evidenced claim is delivery: Polaris Forge 1's first 100 MW came online on schedule and live capacity at the campus has since reached 175 MW, following Ready for Service on the 75 MW first phase of Building 2. The unevidenced claim is that the franchise model replicates, which will be tested at Delta Forge 1 and Polaris Forge 3 in calendar 2027. Filed 8-K, Jul 27, 2026.

Against this set Applied Digital has the largest disclosed contracted book, and it is the only one in the group whose leases are described as take-or-pay with a stated investment-grade counterparty. The offsetting position is that the same counterparty stands behind three of the five campuses and is not named, so the credit cannot be independently assessed by a reader of this document.

06Financial performance

The fiscal year ends 31 May, so FY2026 covers June 2025 to May 2026. Every comparative below is a full twelve months against a full twelve months.

The trend is stated first: revenue is growing very fast, the reported loss is roughly flat, and the balance sheet has changed shape entirely. Total liabilities grew fivefold in one year while equity grew threefold, and property and equipment more than tripled.

Filed 8-K, Jul 27, 2026, and 10-K for the year ended May 31, 2026, filed Jul 29, 2026. FY2025 revenue and loss per share are derived from the company's stated percentage changes against FY2026 and are marked below.

What the balance sheet change means

Two figures deserve attention together. Restricted cash of $2,381.0M exceeds unrestricted cash of $1,592.0M. That is the signature of construction financing: proceeds from the secured note issues sit in controlled accounts and are released against certified construction spending. It is committed money, and a liquidity read that adds the two together will overstate the company's freedom by more than $2.3B.

Against that, the loss is being carried while the assets are built. Interest on $3.74B of senior secured notes at 6.750% and 7.000%, plus the 9.250% notes due 2030, accrues now against capacity that mostly begins operating in calendar 2027 and 2028.

07Capital structure & dilution

A common equity that grew 28% in a year, two preferred series outstanding, a $2B preferred purchase facility, an at-the-market program substantially used, and $3.74B of new project-level secured notes.

Common equity

295,048,903 shares were issued and 287,883,603 outstanding at May 31, 2026, against 234,200,868 issued and 224,909,669 outstanding a year earlier: an increase of 62,973,934 outstanding shares, or 28%, in one year. Treasury stock stood at 7,165,300 shares. The 10-K cover reports 291,469,112 shares outstanding as of July 28, 2026, a further 3,585,509 since the year end. Filed 8-K, Jul 27, 2026, and 10-K, Jul 29, 2026.

Preferred stock

Filed 8-K, Jul 27, 2026. Common stock issuable to holders of Series E and E-1 on redemption is capped at 19.99% of the outstanding shares.

The preferred equity purchase agreement

Under a preferred equity purchase agreement entered on April 30, 2025, Applied Digital may issue up to $2B of Series G convertible preferred stock at its option, through the earlier of August 27, 2029 and the investors' full funding. None was outstanding at the year end, so the entire $2B remains available. Measured against a market capitalization of $8,310M, that is authority equal to 24% of the current equity value, exercisable at the company's election and convertible into common stock. Filed 10-K, Jul 29, 2026, and 8-K, Jun 26, 2026.

At-the-market program

A sales agreement dated June 2, 2025 with Northland Securities, Inc. and Wells Fargo Securities, LLC allows up to $200,000,000 of common stock to be sold. As of May 31, 2026 the company had sold approximately 15.3 million shares under it for gross proceeds of approximately $196.4M, so the program is substantially exhausted. Filed 10-K, Jul 29, 2026. Northland Securities is also one of the twelve firms on Applied Digital's own analyst coverage list, which is taken up in section 8.

Debt

Filed 8-K, Jul 27, 2026; 10-K, Jul 29, 2026; 8-K, Jun 26, 2026; 8-K, Jun 16, 2026.

Two features of this stack matter more than the coupons. The notes are issued at ring-fenced project subsidiaries rather than at the parent, which is standard for this kind of build and which determines where the recourse runs; the indentures were not read for this document, so nothing is asserted about that. And Goldman Sachs appears three times, as arranger of the revolver, as a lender under the credit agreement and as lead of the repaid bridge, without appearing on the company's analyst coverage list.

08Valuation

Multiples shown with their basis and pricing date. No target price.

Third-party coverage

Every row is market data: attributed, dated, tagged, never adopted. Price at publication is the close on the last trading day before the action, taken from the exchange's own daily record for APLD, and this convention governs every row in the table. Applied Digital's own investor relations page, read on August 5, 2026, names twelve firms and their analysts; it publishes no ratings or targets. Rows carrying a rating and a target are cited to the note that published them.

The shape of the coverage

Twelve firms follow Applied Digital according to the company's own investor relations page, read on August 5, 2026. Three published actions are established here, all dated within two days of the fiscal year results on 27 July. Two carry targets, Texas Capital at $74 and Compass Point at $70, both Buy; the spread between them is $4, or 6% of the lower. The Northland action of 27 July is established as to firm, analyst and date but not as to rating or target. No published consensus figure is reported here, because none was retrieved from a source that attributes and dates it; the count used here is a floor rather than a current figure.

Two selling relationships are established from documents rather than assumed. Northland Securities, which covers the company, is also one of the two sales agents under the June 2025 at-the-market program through which roughly $196.4M of stock has been sold. Texas Capital Securities discloses on its own note that it has received investment banking compensation from Applied Digital in the last twelve months and expects to seek more within three. Those are different kinds of relationship: one is a standing selling agency disclosed in the issuer's annual report, the other a banking relationship disclosed by the firm.

The distribution is worth stating rather than any single point in it. Of the two established targets, the higher comes from the firm with the disclosed banking relationship and the lower from a firm whose disclosures were not read; the covering firm with the standing selling agency published no target this document could establish. A banking or selling relationship therefore appears at the top of the established range and at the abstention, and on this evidence it does not sort the views. That characterisation rests on three of twelve firms, and completing the other nine could withdraw it.

The other selling relationship in this company's financings does not appear in the coverage set at all. Goldman Sachs arranged the revolving credit facility, is a lender under the May 29, 2026 credit agreement and led the repaid $300M bridge, and does not cover the stock. Wells Fargo Securities is the other at-the-market sales agent and does not cover it either. What each of the nine unexamined firms discloses about this issuer is not established here.

09Growth drivers

Ranked by size and by how settleable each is from a document.

Delivering the contracted 1.4 GW

Almost the whole investment case is the conversion of approximately $36B of contracted base-term lease revenue into operating capacity. The schedule the company states is: Delta Forge 1 and Polaris Forge 3 beginning operations in calendar 2027, and Delta Forge 2 in the first half of calendar 2028. Polaris Forge 1 is already partly in service at 175 MW. Filed 8-K, Jul 27, 2026.

The fourth building at Polaris Forge 1, and the CoreWeave assignment

This report has described how the campuses are funded without naming an arrangement that sits ahead of the common equity. The company's investor presentation of June 2026, at pages 55 to 58, sets out a Macquarie Asset Management investment through a named issuer, APLD HPC TopCo 2 LLC: a 15% common equity interest in APLD HPC Holdings, at least $225M funded at closing, $2.25M of availability per contracted megawatt, and perpetual preferred at 12.75% PIK stepping to a 16.75% cap, with a 1.8x MOIC liquidation floor, force-redemption after year seven and a governance step-in right. Filed Neither this report nor the calendar mentioned it. A preferred that accrues in kind at 12.75% and steps to 16.75%, floored at 1.8 times money and redeemable at the holder's instance from year seven, is a claim ahead of the shareholder that compounds whether or not the build performs, so the equity value in section 5 is struck before it. The figures are the issuer's own statement of an executed arrangement and no filing read for this document set them out.

The 150 MW fourth building is funded by the $1.59B of 7.000% notes. Separately, Applied Digital has entered a memorandum of understanding with CoreWeave to assign the Building 4 lease to a CoreWeave subsidiary upon that subsidiary achieving an investment-grade credit rating. That is a conditional improvement in counterparty quality with an observable trigger. Filed 8-K, Jul 27, 2026.

Marketing the further 1.7 GW

The company states it is actively marketing an additional 1.7 GW across multiple states, beyond the contracted portfolio and the roughly 1.4 GW under construction. No lease, tenant or revenue figure attaches to it. On the record of the last year, in which three leases with one hyperscaler were signed in a few months, this is the driver with the widest range of outcomes. Filed 8-K, Jul 27, 2026.

Owned generation through Base Electron

Approximately 1.2 GW of front-of-the-meter natural gas-fired generation in the Dakotas is being developed by Base Electron Corp., which has engaged Babcock & Wilcox, in collaboration with regional utilities. If it is delivered it converts a queue dependency into a supply the company has an interest in. No commissioning date is disclosed. Filed 8-K, Jul 27, 2026.

The hosting business as a cash contributor

The chief executive describes the 286 MW data center hosting business as the highest return-on-assets business in the company, paid on capacity provided rather than on mining output. It is not a growth driver in size but it is a source of cash that does not depend on the AI build completing. Filed 8-K, Jul 27, 2026.

10Risks

Severity-ranked, most severe first.

11Bull / base / bear

Each case with its preconditions: what must be true, not what might be.

12Research summary

Applied Digital has contracted more AI data center capacity than any company in this coverage set: 1.4 GW of critical IT load, approximately $36B of base-term lease revenue, and approximately $86B if every renewal is exercised. It has also, in one fiscal year, taken total liabilities from $1,236.4M to $6,185.7M, raised $3.74B of project-level secured notes, and reported a net loss to common stockholders of $249.2M.

The company is therefore a construction risk wearing a contracted-revenue coat, and both halves of that description are accurate. The contracts are real, long, take-or-pay and with stated investment-grade counterparties. The revenue from them mostly begins in calendar 2027. Between now and then the interest is paid and the buildings are built, and the only completed evidence that the company can do this is Polaris Forge 1, where the first 100 MW came online on schedule and live capacity has reached 175 MW.

Two disclosure features shape how much a reader can check. The customer behind roughly $20B of the contracted book is not named, so its credit cannot be independently assessed. And the company presents two accounting bases, one including the 96%-owned ChronoScale and one excluding it, which produce a $249.2M loss and $36.1M of adjusted net income for the same year.

Three things would move the reading and each is settleable from a document: whether Delta Forge 1 or Polaris Forge 3 begins operations within calendar 2027; whether any part of the marketed 1.7 GW is contracted; and whether the Series G preferred facility is drawn. What this document could not establish is set out in section 14, and includes the terms of the indentures, the identity of the hyperscaler, and nine of the twelve covering firms' published views.

13Null categories

Requested categories with nothing to report. Status reads Covered above, None where a named source was checked and found empty, or Not established where the category was not examined. A category nobody looked at is a gap, not an absence.

14Methodology & sources

Pricing basis, the tagging scheme, and, importantly, what was not checked.

Provenance tags

Pricing basis and the fiscal year

Every market figure in this document is struck on the close of August 18, 2026, at which APLD closed at $28.51 on volume of 18,093,170 shares. The document is stamped August 19, 2026, the following day, because the 19 August session had not closed when the figures were taken. An earlier version of this paragraph stated the stamp as August 5, 2026, which was the date the body was written; the masthead had since moved to August 12 without it, so the sentence described an overnight gap where eight days stood. That is the defect this revision closes, and the gap it describes is again a single night. The trading calendar behind the coverage table is derived from the exchange's own daily record for APLD over 253 sessions from August 1, 2025 to August 4, 2026. That window was not extended for this revision, so it establishes trading days to 4 August and nothing after it; the 18 August close is taken from the daily record directly and agrees to the cent with a second quote source on all seventeen overlapping sessions tested.

Applied Digital's fiscal year ends on 31 May, established from the filings rather than assumed: the annual report for the year ended May 31, 2026 was filed on July 29, 2026, and every annual report indexed under this CIK since the year ended May 31, 2003 carries a 31 May period end. No transition report on Form 10-KT appears in the index, so no comparative column in the current filings covers a stub period. References here to FY4Q26 mean the three months from March to May 2026.

Sources

Primary sources are the filings indexed under Central Index Key 0001144879, swept on August 12, 2026. The index holds 812 filings dated August 9, 2001 to August 6, 2026 and reports no overflow file, so the whole record under this CIK was available to the sweep. Every form family was enumerated before filtering, and register filings were matched on both the current and legacy spellings of the Schedule 13D and 13G form strings, which is what took the register count from 23 to 56. Each register filing was read to establish its direction. The principal documents are the 8-K of July 27, 2026 with the fiscal fourth quarter and full year results as Exhibit 99.1, the 10-K for the year ended May 31, 2026 filed July 29, 2026, and the 8-Ks of June 16 and 26, 2026 on the financings. Applied Digital's investor relations coverage page was read on August 5, 2026. Three research notes, from Texas Capital Securities and Northland Securities dated July 27, 2026 and Compass Point dated July 28, 2026, are the source of the ratings, targets, dates and the one disclosed conflict in section 8 and of nothing else in this document.

What was not checked

An unexamined area is a gap, not a clean bill. The following were not reached.

• No enterprise value is derived. The debt sits at ring-fenced project subsidiaries, the principal of the 9.250% notes due 2030 was not read, $2,381.0M of the cash is restricted to construction draws, and two preferred series sit in temporary equity. A single netted figure would obscure more than it shows, so the masthead field is omitted rather than filled.
• The indentures for the 6.750%, 7.000% and 9.250% senior secured notes were not read. Nothing is asserted here about recourse, covenants, security or the parent's obligations.
• The identity of the high investment-grade hyperscaler behind three leases is not disclosed by the company and was not established by any other route.
• Court dockets were not searched, on CourtListener, PACER or any state portal. No statement is made here about litigation.
• Interconnection and permitting records were not queried: no grid operator queue, no state utility commission docket in North Dakota or Louisiana, and no county or municipal planning record. Every capacity and timing figure here is the company's own statement.
• ChronoScale Holdings Corporation, Nasdaq CHRN, was not examined as an issuer in its own right, and its separate filings were not read. It is consolidated in these statements at roughly 96%.
• Nine of the twelve covering firms have no established rating, target or date here. Only Texas Capital's disclosure was read; Compass Point's and the others' were not, and those cells read Not established rather than being inferred.
• Credit rating actions, index membership and short interest were not checked, as recorded in section 13.

15Document log

Newest first. The original build entry is never removed or rewritten.