Applied Digital reported second-quarter revenues of $126.6 million, a 250% year-over-year increase driven by rapid expansion of high-performance computing hosting capacity. Despite this top-line surge, the company recorded a loss per share of $0.11, widening from a $0.06 loss in the year-ago quarter. Management highlighted a negative net margin of 43.5% and negative return on equity of 17.5%, underscoring that operating leverage has yet to materialize in profitability.

As of quarter end, Applied Digital held $2.3 billion in cash and short-term investments but continues to burn through capital to fund its AI infrastructure build-out. The company forecasts cash burn through fiscal 2027 as it targets 5 gigawatts of data center capacity over the next five years. Management warned that ongoing investment requirements will likely necessitate significant equity raises, leading to material dilution for existing shareholders.

Facing a multi-year backlog for conventional gas turbines, Applied Digital struck a deal with Babcock & Wilcox to deploy 1 gigawatt of natural gas–fired steam turbine capacity by 2028. The arrangement calls for multiple 300 MW boiler-and-turbine plants to be supplied by Siemens Energy at one of the company’s AI campuses. This century-old technology could enable Applied Digital to bring new data center capacity online three to four years earlier than competitors, supporting long-term revenue visibility through multi-year hyperscaler commitments.