Applied Digital Shares Drop 30% After Revenue Miss and Cloud Unit Sale Plan
Shares of Applied Digital fell sharply after disappointing quarterly results. Key points include:
- Revenue for Q3 2025 was $52.9 million, a 22% year-over-year increase but below the $64.5 million estimate by nearly 18%.
- Non-GAAP net loss per share was $0.08, better than the expected $0.10 loss.
- Adjusted EBITDA reached $10 million, missing the $16.9 million target by 41% due to ongoing margin pressure from infrastructure investments.
- Cloud Services reported a 36% sequential decline in revenue, dropping from $27.7 million to $17.8 million.
- The board approved a plan to sell the Cloud Services unit to refocus on high-performance computing operations.
- CEO Wes Cummins stated that separating the Cloud Services business will benefit shareholders long-term.
Following these developments, APLD shares plunged approximately 30%, trading around $3.90 early in the session.