Applied Digital's quarterly net loss widens on rising costs, one-time charge

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)

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