Applied Digital Revenue Misses Estimates, Shares Fall 10%

Applied Digital reported third-quarter earnings that beat analyst expectations on a per-share basis but fell short on revenue, leading to a 10% decline in its stock price. The company posted a revenue of $52.9 million, a 22% increase year-over-year, but below the expected $64.8 million. Its cloud services unit saw significant growth, with revenue rising 220% to $17.8 million, although it experienced a sequential decline due to technical issues. Applied Digital also narrowed its net loss to $35.6 million from $62.8 million a year prior. The CEO emphasized the company's strategy to separate its cloud services from its data center hosting business and highlighted ongoing investments in AI infrastructure. Despite the revenue miss, Applied reported improved financial health indicators compared to previous quarters.