April 8 (Reuters) – Applied Digital’s third-quarter net loss widened from last year due to rising expenses and a charge tied to its cloud business, overshadowing the company’s revenue beat on the back of strong demand for its data center services.
Shares of the company fell 3% in extended trading on Wednesday. The stock has gained 13% this year, after more than tripling in 2025 on expectations of strong artificial intelligence-driven growth.
The quarter included a $59.7 million impairment charge related to the cloud services business. Applied Digital had previously classified the business as held for sale, but now plans to combine with Ekso Bionics to form a new company.
The company’s costs nearly tripled to $212.3 million for the quarter, as it ramped up investments into building and operating high-performance data centers.
In January, Applied Digital began construction of its Delta Forge 1 campus, a 300-megawatt data-center project across more than 600 acres in the southern U.S., with initial operations expected in mid-2027.
Big tech and AI companies are racing to lock in power and data center capacity, signing long-term deals worth billions of dollars as demand for AI computing surges.
The rapid rise of AI is reshaping data center design, driving demand for facilities that can handle soaring power and cooling needs.
“We are also starting to see the earnings power of our platform come through, with a full quarter of revenue from our first building now recognized,” CEO Wes Cummins said.
Applied Digital’s first large-scale AI data center reached full operations at its initial 100-megawatt scale in November.
Net loss for the third quarter came in at 36 cents per share, wider than a loss of 16 cents reported a year earlier.
The company’s quarterly revenue rose 139% to $126.6 million, compared with analysts’ estimates of $76.6 million, according to data compiled by LSEG.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Leroy Leo)
