Applied Digital (APLD) Financials

Applied Digital (NASDAQ: APLD) has shown significant fluctuations in its financial performance and financial position over the last few years, based on the quarterly data from early 2022 through mid-2025.

Revenue and Profitability Trends:

• Revenue steadily grew from around $7.5 million in Q4 2022 to a peak near $63.9 million in Q2 2025, demonstrating top-line expansion over this period.
• Despite increasing revenue, the company consistently posted negative net income in most quarters, including substantial losses in recent quarters (e.g., a net loss of $52.5 million in Q4 2025 and $138.7 million in Q2 2025).
• Gross profit has been volatile, sometimes positive but often negative (e.g., a gross loss of $356,000 in Q1 2025 and $2.6 million loss in Q4 2024), reflecting challenges in generating operating profits from core activities.
• Interest expense has been significant and increasing over time, with $8.9 million in interest expense in Q4 2025, which adds pressure on net income.
• Non-operating items have generally added to losses or expenses, such as other special charges and large other expenses, notably a large negative $112.6 million other expense in Q2 2025.

Cash Flow and Capital Spending:

• Operating cash flow has been positive in recent quarters (e.g., $6.9 million in Q4 2025 and $5.9 million in Q3 2025), indicating some cash generation despite reported net losses, often supported by non-cash charges like depreciation.
• Capital expenditures are very high, with property, plant, and equipment purchases of $171 million in Q2 2025 and $198 million in Q4 2025, which result in significant negative investing cash flows.
• The company has engaged in substantial financing activity, including large debt issuances and repayments, preferred and common stock issuances and repurchases, underpinning efforts to fund operations and growth investments.
• Overall net change in cash often shows large outflows corresponding with investment activities, such as a $137.9 million decrease in cash and equivalents in Q4 2025 and $53.3 million decrease in Q3 2025, raising concerns about liquidity and reliance on financing.

Balance Sheet and Liquidity:

• Total assets have grown considerably from $634 million in Q3 2022 to approximately $1.71 billion in Q3 2025, mainly driven by increases in property, plant, and equipment.
• Total liabilities have also increased, from about $136 million in Q3 2022 to $1.2 billion in Q3 2025, with significant long-term debt outstanding ($679 million in Q3 2025) that increases financial risk and interest burden.
• Total common equity remains positive but shows some fluctuations, reaching $454 million in Q3 2025, indicating that the company has equity but also increased leverage over time.
• Cash and equivalents show volatility, increasing and then sharply declining, e.g., from $29 million in Q3 2024 to $68 million in Q3 2025, but dropping sharply thereafter, which might challenge short-term liquidity depending on operational cash needs.

Summary:

Applied Digital’s financials reflect a company aggressively investing in infrastructure and growth, as seen by rising revenues and capital expenditures. However, profitability remains elusive with consistent net losses, high interest expenses, and volatile cash balances raising caution about sustainable profitability and liquidity. The company’s expanding asset base and equity suggest growth, but the elevated liabilities and loss patterns highlight financial risks that investors should carefully monitor.