Overview

• Applied Digital reported Q3 revenue of $52.9 million, falling short of analyst expectations of $63.4 million.
• The Cloud Services business grew 220% year-over-year, contributing $17.8 million to total revenue and driving overall growth.
• Revenue from the Data Center Hosting segment declined 7% year-over-year to $35.2 million, with margins compressed by seasonal power cost fluctuations.
• Delays in client lease renewals contributed to the revenue shortfall, highlighting operational vulnerabilities in the hosting business.
• The board has approved plans to potentially sell the Cloud Services segment as part of a transition to a data center REIT model.