Applied Digital Corporation (APLD) beat Wall Street's fiscal fourth-quarter forecasts by a wide margin on 27 Jul, posting adjusted earnings of $0.04 a share against a forecast loss, and revenue of $258.7mn against an estimate of $95.3mn. But the number that explains what Applied Digital has actually become sits on the balance sheet, not the income statement. In one year its total assets grew from $1.87bn to $9.93bn, funded almost entirely by new debt and a single outside investor, not by cash the business generated itself.
Applied Digital's AI Pivot Turns Bitcoin Miner into $36bn Landlord
28 July 2026 - 11:25 UTC
By Stu Clelland
A balance sheet transformed by debt
Applied Digital borrowed $4.96bn in long-term debt over the fiscal year and raised a further $815mn in preferred stock, against operating cash flow of just $89.7mn. Cash and restricted cash swelled to $4.2bn, but most of that is committed to construction already under way, not spare capital. The company's own accounting reflects how new the strategy is. Its non-GAAP measures now exclude ChronoScale Holdings (CHRN), the cloud business Applied Digital spun off in May and still owns 96% of. Management said including ChronoScale "obscures underlying trends" in what it now considers the company's core business: leasing AI data centre capacity to hyperscalers.
That business barely existed a year ago. Applied Digital's HPC hosting segment, which builds and rents out AI-ready data centres, generated $203mn of the quarter's revenue. Bitcoin mining, the business Applied Digital was built on, contributed $37.3mn, flat on the year. The company still calls mining its highest-return segment on assets employed. It is also, now, a side business, part of a wider pattern of Bitcoin miners chasing AI hosting deals to replace shrinking mining revenue as the economics of mining alone have deteriorated across the sector.
One customer, most of the growth
CEO Wes Cummins told analysts that the same "high investment-grade" hyperscaler now anchors three of the company's five campuses: Polaris Forge 3 and both Delta Forge sites. That single customer accounts for roughly $20bn of the $36bn in total contracted revenue Applied Digital now reports, against $11bn tied to CoreWeave at Polaris Forge 1 and $5bn tied to a third, separate hyperscaler at Polaris Forge 2. Combined, CoreWeave and the unnamed tenant now represent close to 90% of contracted revenue.
Applied Digital has not named the customer in its filings, its earnings release or the call, and no one else has either. Louisiana's state economic-development office announced the $3.6bn Delta Forge 1 investment without naming the tenant, and the underlying utility filings look built to keep it that way. Large-load applications of this kind in Louisiana run under a framework used across multiple utilities that explicitly seals tenant-identifying material as "Highly Sensitive Protected Material" and "Attorneys' Eyes Only." That is a structural confidentiality arrangement, not simply a company declining to say.
Cummins framed the concentration as discipline, arguing Applied Digital deliberately avoided signing with AI model developers themselves. He pointed to swings in which model maker looked strongest even over the past 18 months as a reason why the company prefers to rent out compute to hyperscalers. That is a reasonable case for picking durable counterparties. It does not remove the fact that one unnamed customer now anchors most of the company's growth.
The financing engine behind the build
The more interesting story here may be how Applied Digital is paying for all this without diluting shareholders into oblivion. Macquarie Asset Management has committed up to $5bn to the buildout through a preferred-equity structure carrying a 12.75% paid-in-kind return, taking a stake in a subsidiary that holds the leased data centres rather than in Applied Digital directly. CFO Saidal Mohmand described it as one leg of a three-part "flywheel," alongside cheap corporate revolving credit and site-specific project debt raised against the hyperscaler leases themselves. That project debt has already re-priced down, from 9.25% on the company's first note sale to 7% on its most recent, after Applied Digital restructured its CoreWeave leases through a special-purpose vehicle backed by CoreWeave's own investment-grade credit.
It is a financing model built to keep leverage looking conservative on paper (management pegs it at under seven times projected net operating income) while still running up billions in secured notes. Whether that holds depends entirely on the leases behind it performing, and on that one hyperscaler continuing to pay.
Why the stock rallied on the beat
Applied Digital shares fell 6% during the regular session on 27 Jul, in line with a broader selloff in AI-adjacent names that day, before rising as much as 10% to $29 in after-hours trading once the results landed. At 09:15UTC on 28 Jul, APLD was trading at around $27 in pre-market trading.
Management's disclosure that it now expects to hit a $1bn annualized net operating income run rate within a year, three years ahead of the original five-year target, appears to be what changed the reaction. Bitcoin's price was not part of the conversation on the call at all, a pattern echoing MARA's own 10% jump on a Texas AI power deal earlier in the month, where the share reaction likewise tracked AI infrastructure news rather than crypto prices.
That is worth sitting with. Applied Digital still carries a Bitcoin-mining segment and still appears on crypto-stock screens, but its share price now moves on hyperscaler lease economics and Macquarie financing terms, not on BTC. The AI pivot has not just changed the revenue mix. It has changed what kind of stock this is.
One structural wrinkle got less attention on the call: Base Electron, an independent power developer formed by Applied Digital's own executives and directors to build 1.2 gigawatts of gas-fired generation for the company's North Dakota campuses. Applied Digital shareholders hold roughly 10% of it through a separate investment. Management calls it essential to securing power, the industry's tightest bottleneck. It is also a related-party structure worth watching, as the company's insiders stand to benefit from a business selling power back to the company they run.
