Applied Digital reported second-quarter fiscal 2026 revenue of $126.6 million, up 250% year-over-year, driven by hosting growth in its high-performance computing division. In the same period, management announced plans to spin off its money-losing cloud services segment, ChronoScale, in partnership with EKSO, effectively removing a major overhang that investors had long criticized. This strategic separation is expected to sharpen the company’s focus on its core data-center hosting business and unlock hidden value for shareholders.

The company has completed engineering and permitting for two data-center campuses in North Dakota with a combined power capacity of 600 megawatts, and has sold out this capacity to CoreWeave and another unnamed hyperscaler. These contracts are expected to generate approximately $16 billion in lease revenue over 15 years. Applied Digital has already commenced revenue recognition from its initial 100MW facility, with lease receipts poised to ramp over the next 18 to 24 months as remaining capacity is brought online.

Following the successful land-to-lease execution, inbound demand has surged. CEO Wes Cummins disclosed that the company is in advanced discussions with an investment-grade hyperscaler for up to 900MW across multiple regions, including additional sites in the Dakotas and selective southern U.S. markets. Leveraging prefabricated components and on-site concrete plants, Applied Digital projects that these campuses can be constructed within 12 to 14 months each, positioning it to capitalize on the industry’s projected annual shortfall of 10 gigawatts of data-center capacity through 2028.