Applied Digital Secures $5B Hyperscaler Lease, $2.35B Debt, and Announces Cloud Spin-Out
Summary
Applied Digital announced strong Q2 2026 results, a new 15-year, $5 billion hyperscaler lease, $2.35 billion in new debt financing, and plans to spin out its cloud business into ChronoScale, retaining over 80% ownership.
Key Events
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Significant Hyperscaler Lease Secured
Applied Digital signed an approximately 15-year lease with a U.S. based investment-grade hyperscaler for 200MW of AI and HPC capacity at its Polaris Forge 2 campus, expected to deliver approximately $5 billion in revenue. This brings total leased capacity to 600 MW and aggregate prospective lease revenue to approximately $16 billion.
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Substantial Capital Raise Completed
The company completed a $2.35 billion private offering of 9.25% senior secured notes due 2030 and drew an additional $562.5 million from its preferred equity financing facility with Macquarie Asset Management, providing significant capital for its AI Factory campuses.
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Cloud Business Spin-Out Announced
Applied Digital plans to spin out Applied Digital Cloud and combine it with EKSO Bionics Holdings to form ChronoScale, a dedicated accelerated-compute platform for GPU-optimized AI infrastructure. Applied Digital is expected to initially own over 80% of the combined company.
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Strong Q2 2026 Financial Performance
Revenues for the fiscal second quarter 2026 increased 250% year-over-year to $126.6 million. Net loss attributable to common stockholders decreased 76% to $31.2 million, and Adjusted EBITDA was $20.2 million.
Analysis
Applied Digital's latest earnings report reveals significant strategic and financial advancements that are highly positive for its growth trajectory. The company secured a substantial 15-year, 200MW lease with an investment-grade hyperscaler, projected to generate $5 billion in revenue, bringing total prospective lease revenue to $16 billion across 600 MW. This demonstrates strong demand for its AI data center capacity. To fund this expansion, Applied Digital completed a $2.35 billion private offering of senior secured notes and drew $900 million from its preferred equity financing facility, providing substantial capital for its AI Factory campuses. Additionally, the planned spin-out of Applied Digital Cloud to form ChronoScale, with Applied Digital retaining over 80% ownership, is a strategic move to unlock value and provide dedicated focus for its accelerated-compute platform. These developments, alongside robust revenue growth and a positive adjusted EBITDA, significantly de-risk the company's ambitious expansion plans and reinforce its position in the high-performance computing market.
At the time of this filing, APLD was trading at $31.19 on NASDAQ in the Technology sector, with a market capitalization of approximately $8.3B. The 52-week trading range was $3.31 to $40.20. This filing was assessed with positive market sentiment and an importance score of 9 out of 10.