(Reuters) -Applied Digital topped Wall Street estimates for first-quarter revenue on Thursday, driven by surging demand for its data center services as more customers scale up computing to support fast-growing generative AI applications.
Shares of the company rose 3.3% in extended trading.
Businesses are racing to deploy next-generation AI models, driving demand for high-performance data center infrastructure that can support intensive computing workloads.
Applied Digital finalized a new lease agreement with CoreWeave in August for an additional 150MW in North Dakota.
This brings the total anticipated contracted lease revenue to about $11 billion, which includes the $7 billion in revenue from the initial two 15-year leases with CoreWeave announced earlier this year.
In a note last week, Roth Capital said Applied Digital could potentially secure another high-performance computing (HPC) colocation agreement by year-end.
The company’s revenue rose 84% to $64.2 million for the quarter ended August 31, compared with analysts’ estimate of $50 million, according to data compiled by LSEG.
Applied Digital reported an adjusted loss per share of 3 cents, smaller than the 13 cent loss expected by analysts.
The company generated $37.9 million in revenue from the Data Center Hosting Business segment during the June-to-August period.
Cost of revenues rose 144% to $55.6 million in the quarter. About $25 million of the cost was associated with building and preparing facilities for clients in the high-performance computing hosting segment, the company said.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shailesh Kuber)
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