Applied Digital posts bigger-than-expected loss on higher expenses; shares drop

Reuters
·1-min read

(Reuters) - Data center operator Applied Digital posted a bigger-than-expected fourth-quarter loss on Wednesday, impacted by substantial expenses related to facilities and equipment that have yet to generate revenue.

Shares of the Dallas, Texas-based company fell 13% in extended trading.

Constructing and maintaining data center facilities to swiftly meet demand is a lengthy and capital-intensive process that requires substantial investments over time.

Moreover, tech firms have kept their budgets tight in a bid to control costs, as they look forward to build their own independent data centers.

For the fourth quarter, Applied Digital posted an adjusted loss per share of 36 cents, bigger than the 22 cents expected by analysts, according to LSEG data.

The company said adjusted loss of $45.3 million in the quarter was negatively impacted by expenses worth $15.5 million.

The results follow its July announcement of a deal to sell up to $125 million worth of shares, a move that aims to bolster its balance sheet after experiencing power outages earlier this year.

The outages occurred at its Ellendale facility in North Dakota, which necessitated the replacement of faulty transformers.

The company reported fourth-quarter revenue of $43.7 million, compared with estimates of $37.6 million.

Net loss for the reported quarter widened to $64.8 million, from $6.5 million a year ago.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi)

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