Cover
Cover - shares | 6 Months Ended | |
Nov. 30, 2023 | Jan. 10, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-31968 | |
Entity Registrant Name | APPLIED DIGITAL CORPORATION | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 95-4863690 | |
Entity Address, Address Line One | 3811 Turtle Creek Boulevard | |
Entity Address, Address Line Two | Suite 2100 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75219 | |
City Area Code | 214 | |
Local Phone Number | 556-2465 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | APLD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 122,044,737 | |
Entity Central Index Key | 0001144879 | |
Current Fiscal Year End Date | --05-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Nov. 30, 2023 | May 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 9,217 | $ 28,999 |
Restricted cash | 25,416 | 14,575 |
Accounts receivable | 307 | 82 |
Prepaid expenses and other current assets | 1,517 | 2,012 |
Total current assets | 36,457 | 45,668 |
Property and equipment, net | 258,508 | 195,593 |
Operating lease right of use assets, net | 73,373 | 1,290 |
Finance lease right of use assets, net | 95,199 | 14,303 |
Other assets | 17,117 | 7,103 |
TOTAL ASSETS | 480,654 | 263,957 |
Current liabilities: | ||
Accounts payable | 38,262 | 6,446 |
Accrued liabilities | 10,538 | 8,330 |
Current portion of operating lease liability | 8,887 | 320 |
Current portion of finance lease liability | 42,805 | 5,722 |
Current portion of debt | 9,279 | 7,950 |
Sales and use tax payable | 4 | 1,630 |
Total current liabilities | 202,423 | 115,460 |
Long-term portion of operating lease liability | 52,324 | 1,005 |
Long-term portion of finance lease liability | 36,748 | 8,334 |
Other long-term related party liabilities | 0 | 1,000 |
Total liabilities | 324,996 | 194,278 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 166,666,667 shares authorized, 122,734,060 shares issued and 117,732,332 shares outstanding at November 30, 2023, and 100,927,358 shares issued and 95,925,630 shares outstanding at May 31, 2023 | 123 | 101 |
Treasury stock, 5,001,728 shares at November 30, 2023 and 5,001,728 shares at May 31, 2023, at cost | (62) | (62) |
Additional paid in capital | 278,299 | 160,194 |
Accumulated deficit | (122,702) | (100,716) |
Total stockholders’ equity attributable to Applied Digital Corporation | 155,658 | 59,517 |
Noncontrolling interest | 0 | 10,162 |
Total stockholders' equity including noncontrolling interest | 155,658 | 69,679 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 480,654 | 263,957 |
Nonrelated Party | ||
Current liabilities: | ||
Customer deposits | 36,833 | 32,559 |
Deferred revenue | 50,051 | 47,168 |
Long-term debt | 33,501 | 33,222 |
Related Party | ||
Current liabilities: | ||
Customer deposits | 3,811 | 3,811 |
Deferred revenue | 1,953 | 1,524 |
Long-term debt | $ 0 | $ 35,257 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Nov. 30, 2023 | May 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 166,666,667 | 166,666,667 |
Common stock, shares issued (in shares) | 122,734,060 | 100,927,358 |
Common stock, shares outstanding (in shares) | 117,732,332 | 95,925,630 |
Treasury stock, (in shares) | 5,001,728 | 5,001,728 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 42,203 | $ 12,340 | $ 78,527 | $ 19,264 |
Costs and expenses: | ||||
Cost of revenues | 29,222 | 11,812 | 53,620 | 17,905 |
Selling, general and administrative | 21,075 | 27,226 | 38,127 | 32,245 |
Loss from legal settlement | 80 | 0 | 2,380 | 0 |
Total costs and expenses | 50,377 | 39,038 | 94,127 | 50,150 |
Operating loss | (8,174) | (26,698) | (15,600) | (30,886) |
Interest expense, net | 2,355 | 364 | 4,430 | 709 |
Loss on extinguishment of debt | 0 | 0 | 2,353 | 94 |
Net loss before income tax expenses | (10,529) | (27,062) | (22,383) | (31,689) |
Income tax expense (benefit) | 0 | (312) | 0 | (280) |
Net loss | (10,529) | (26,750) | (22,383) | (31,409) |
Net loss attributable to noncontrolling interest | 0 | (133) | (397) | (261) |
Net loss attributable to Applied Digital Corporation | $ (10,529) | $ (26,617) | $ (21,986) | $ (31,148) |
Basic net loss per share attributable to Applied Digital Corporation (in dollars per share) | $ (0.10) | $ (0.28) | $ (0.21) | $ (0.33) |
Diluted net loss per share attributable to Applied Digital Corporation (in dollars per share) | $ (0.10) | $ (0.28) | $ (0.21) | $ (0.33) |
Basic weighted average number of shares outstanding (in shares) | 109,663,030 | 93,422,427 | 105,067,375 | 93,263,266 |
Diluted weighted average number of shares outstanding (in shares) | 109,663,030 | 93,422,427 | 105,067,375 | 93,263,266 |
Datacenter hosting revenue | Nonrelated Party | ||||
Revenue: | ||||
Total revenue | $ 34,119 | $ 8,747 | $ 64,106 | $ 13,086 |
Datacenter hosting revenue | Related Party | ||||
Revenue: | ||||
Total revenue | 3,634 | 3,593 | 7,819 | 6,178 |
Cloud services revenue | ||||
Revenue: | ||||
Total revenue | $ 4,450 | $ 0 | $ 6,602 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Total | Stockholders’ Equity | Common Stock | Treasury Stock | Additional Paid in Capital | Accumulated Deficit | Noncontrolling interest |
Beginning balance, common stock (in shares) at May. 31, 2022 | 97,837,703 | ||||||
Beginning balance at May. 31, 2022 | $ 79,235 | $ 72,259 | $ 98 | $ (62) | $ 128,293 | $ (56,070) | $ 6,976 |
Beginning balance, treasury stock (in shares) at May. 31, 2022 | (36,296) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued from award vestings & stock awards (in shares) | 1,110,379 | ||||||
Shares issued from award vestings | 0 | $ 1 | (1) | ||||
Stock-based compensation | 22,398 | 22,398 | 22,398 | ||||
Capital contribution to noncontrolling interest | $ 1,746 | ||||||
Common stock forfeited (in shares) | 4,965,432 | ||||||
Net loss | $ (31,409) | (31,148) | (31,148) | (261) | |||
Ending balance, common stock (in shares) at Nov. 30, 2022 | 98,948,082 | ||||||
Ending balance at Nov. 30, 2022 | 71,970 | 63,509 | $ 99 | $ (62) | 150,690 | (87,218) | 8,461 |
Ending balance, treasury stock (in shares) at Nov. 30, 2022 | (5,001,728) | ||||||
Beginning balance, common stock (in shares) at Aug. 31, 2022 | 97,837,703 | ||||||
Beginning balance at Aug. 31, 2022 | 76,901 | 68,307 | $ 98 | $ (62) | 128,872 | (60,601) | 8,594 |
Beginning balance, treasury stock (in shares) at Aug. 31, 2022 | (5,001,728) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued from award vestings & stock awards (in shares) | 1,110,379 | ||||||
Shares issued from award vestings | $ 1 | (1) | |||||
Stock-based compensation | 21,819 | 21,819 | 21,819 | ||||
Net loss | (26,750) | (26,617) | (26,617) | (133) | |||
Ending balance, common stock (in shares) at Nov. 30, 2022 | 98,948,082 | ||||||
Ending balance at Nov. 30, 2022 | $ 71,970 | 63,509 | $ 99 | $ (62) | 150,690 | (87,218) | 8,461 |
Ending balance, treasury stock (in shares) at Nov. 30, 2022 | (5,001,728) | ||||||
Beginning balance, common stock (in shares) at May. 31, 2023 | 95,925,630 | 100,927,358 | |||||
Beginning balance at May. 31, 2023 | $ 69,679 | 59,517 | $ 101 | $ (62) | 160,194 | (100,716) | 10,162 |
Beginning balance, treasury stock (in shares) at May. 31, 2023 | (5,001,728) | (5,001,728) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued in offering, net of costs (in shares) | 14,787,598 | ||||||
Shares issued in offering, net of costs | $ 97,922 | 97,922 | $ 16 | 97,906 | |||
Shares issued from award vestings & stock awards (in shares) | 5,534,837 | ||||||
Shares issued from award vestings | 0 | $ 5 | (5) | ||||
Stock-based compensation | 10,440 | 10,440 | 10,440 | ||||
Net loss | $ (22,383) | (21,986) | (21,986) | (397) | |||
Extinguishment of noncontrolling interest (in shares) | 1,484,267 | ||||||
Extinguishment of noncontrolling interest | (9,765) | $ (1) | (9,764) | 9,765 | |||
Ending balance, common stock (in shares) at Nov. 30, 2023 | 117,732,332 | 122,734,060 | |||||
Ending balance at Nov. 30, 2023 | $ 155,658 | 155,658 | $ 123 | $ (62) | 278,299 | (122,702) | 0 |
Ending balance, treasury stock (in shares) at Nov. 30, 2023 | (5,001,728) | (5,001,728) | |||||
Beginning balance, common stock (in shares) at Aug. 31, 2023 | 110,850,885 | ||||||
Beginning balance at Aug. 31, 2023 | $ 127,948 | 127,948 | $ 110 | $ (62) | 240,073 | (112,173) | 0 |
Beginning balance, treasury stock (in shares) at Aug. 31, 2023 | (5,001,728) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued in offering, net of costs (in shares) | 6,879,070 | ||||||
Shares issued in offering, net of costs | 33,440 | 33,440 | $ 8 | 33,432 | |||
Shares issued from award vestings & stock awards (in shares) | 5,004,105 | ||||||
Shares issued from award vestings | 0 | $ 5 | (5) | ||||
Stock-based compensation | 4,799 | 4,799 | 4,799 | ||||
Net loss | $ (10,529) | (10,529) | (10,529) | ||||
Ending balance, common stock (in shares) at Nov. 30, 2023 | 117,732,332 | 122,734,060 | |||||
Ending balance at Nov. 30, 2023 | $ 155,658 | $ 155,658 | $ 123 | $ (62) | $ 278,299 | $ (122,702) | $ 0 |
Ending balance, treasury stock (in shares) at Nov. 30, 2023 | (5,001,728) | (5,001,728) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net loss | $ (22,383) | $ (31,409) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 21,284 | 2,704 |
Stock-based compensation | 10,440 | 22,398 |
Deferred income taxes | 0 | (280) |
Loss on extinguishment of debt | 2,353 | 94 |
Amortization of debt issuance costs | 352 | 0 |
Loss on abandonment of assets | 189 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (225) | (49) |
Prepaid expenses and other current assets | 495 | (1,061) |
Accounts payable | 6,442 | (6,844) |
Accrued liabilities | 2,093 | 1,099 |
Lease assets and liabilities | (16,904) | (220) |
Sales and use tax payable | (1,626) | 865 |
Other assets | (1,040) | 0 |
CASH FLOW PROVIDED BY OPERATING ACTIVITIES | 9,056 | 27,979 |
CASH FLOW FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment and other assets | (45,830) | (70,305) |
Finance lease prepayments | (19,388) | 0 |
Purchases of investments | (390) | 0 |
CASH USED IN INVESTING ACTIVITIES | (65,608) | (70,305) |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Repayment of finance leases | (13,071) | (778) |
Payment of deferred financing costs | 0 | (378) |
Tax payments for restricted stock upon vesting | 0 | (43) |
Noncontrolling interest contributions | 0 | 1,747 |
Proceeds from issuance of common stock, net of costs | 97,922 | 0 |
CASH FLOW PROVIDED BY FINANCING ACTIVITIES | 47,612 | 14,101 |
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (8,940) | (28,225) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | 43,574 | 46,299 |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 34,634 | 18,074 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest paid | 4,370 | 707 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES | ||
Operating right-of-use assets obtained by lease obligation | 69,329 | 0 |
Finance right-of-use assets obtained by lease obligation | 96,946 | 6,925 |
Property and equipment in accounts payable | 23,572 | 3,466 |
Conversion of non-controlling interest | 9,765 | 0 |
Nonrelated Party | ||
Changes in operating assets and liabilities: | ||
Customer deposits | 4,274 | 14,784 |
Deferred revenue | 2,883 | 25,147 |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Borrowings of long-term debt | 4,732 | 21,711 |
Repayments of long-term debt | (4,471) | (8,158) |
Related Party | ||
Changes in operating assets and liabilities: | ||
Customer deposits | 0 | 381 |
Deferred revenue | 429 | 370 |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Borrowings of related party debt | 8,000 | 0 |
Repayment of related party debt | $ (45,500) | $ 0 |
Business and Organization
Business and Organization | 6 Months Ended |
Nov. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization Applied Digital Corporation (the “Company”), is a designer, builder, and operator of digital infrastructure providing cost-competitive solutions to customers. The Company has three reportable segments. Financial information for each segment is contained in Note 10 - Business Segments. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Nov. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Principles of Consolidation The accompanying interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in the Company's annual consolidated financial statements on Form 10-K have been condensed or omitted. The condensed consolidated balance sheet as of May 31, 2023 has been derived from the audited consolidated financial statements as of that date, but does not include all disclosures required for audited annual financial statements. In the Company’s opinion, all necessary adjustments have been made for the fair presentation of the results of the interim periods presented. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year. For further information, please refer to and read these interim unaudited condensed consolidated financial statements in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2023 filed with the SEC on August 2, 2023. Significant Accounting Policies and Use of Estimates Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates of the valuation allowance associated with the Company’s deferred tax assets. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers. Datacenter Hosting Revenue The Company provides energized space to customers who locate their hardware within the Company’s co-hosting facility. All datacenter hosting performance obligations are achieved simultaneously by providing the hosting environment for the customers’ operations. Customers pay a fixed rate to the Company in exchange for a managed hosting environment supported by customer-provided equipment. Revenue is recognized based on the contractual fixed rate, net of any credits for non-performance, over the term of the agreements. Any ancillary revenue for maintenance or installation services is at a point in time when the maintenance or installation service is complete. As these services are directly attributable to the Company’s datacenter hosting service, this revenue is captured within the datacenter hosting revenue caption in our condensed consolidated statements of operations. Customer contracts include advance payment terms. All advanced service payments are recorded as deferred revenue and are recognized as revenue once the related service is provided. Cloud Services Revenue The Company also provides managed cloud infrastructure services to customers, such as artificial intelligence and machine learning developers, to help develop their advanced products. Customers pay a fixed rate to the Company in exchange for managed cloud services supported by Company-provided equipment. Revenues are recognized based on the fixed rate, net of any credits for non-performance, over the term of the agreements. Segments The Company has identified three reportable segments: cloud services (“Cloud services”), high-performance compute hosting (“HPC hosting”), and datacenter hosting (“Datacenter hosting”). The Company’s chief operating decision-maker evaluates performance, makes operating decisions and allocates resources on both a consolidated basis and on the basis of these three reportable segments. Intercompany transactions between segments are excluded for management reporting purposes. The Datacenter hosting segment operates datacenters to provide energized space to crypto mining customers. Customer-owned hardware is installed in the Company’s facilities and the Company provides operational and maintenance services for a fixed fee. The Cloud services segment operates through our Sai Computing brand and provides cloud services to customers, such as artificial intelligence and machine learning developers, to develop their advanced products. Customers pay a fixed rate to the Company in exchange for a managed hosting environment supported by Company-provided equipment. The HPC hosting segment designs, builds, and operates datacenters which are designed to support high-compute applications using advanced and sophisticated infrastructures to provide services to customers. See Note 3 - Basis of Presentation and Significant Accounting Policies to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended May 31, 2023, as filed with the SEC, for additional information regarding the Company’s significant accounting policies and use of estimates. Recent Accounting Pronouncements We reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements. Reclassifications We have reclassified certain prior period revenue amounts from datacenter hosting revenue to related party datacenter hosting revenue on our condensed consolidated statements of operations. We have also reclassified amounts from accounts payable and accrued expenses and prepaid expenses and other current assets to accounts payable, accrued expenses, prepaid expenses, and other current assets as well as from customer deposits and deferred revenue to the associated related party caption lines and from prepaid expenses and other current assets to other assets in our condensed consolidated balance sheets to conform to our current period presentation. Lastly, we have reclassified interest income from selling, general and administrative to interest expense, net in our condensed consolidated statement of operations to conform to our current period presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities. Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents, and restricted cash within the consolidated balance sheets that are included in the consolidated statements of cash flows as of November 30, 2023 and May 31, 2023 were as follows (in thousands): November 30, 2023 May 31, 2023 Net Cash & Equivalents $ 9,217 $ 28,999 Restricted Cash 25,416 14,575 Total Cash & Cash Equivalents $ 34,633 $ 43,574 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Nov. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following as of November 30, 2023, and May 31, 2023 (in thousands): Estimated Useful Life November 30, May 31, Electric generation and transformers 15 years $ 13,169 $ 4,655 Other equipment and fixtures 5 years - 7 years 5,074 1,684 Construction in progress 70,846 106,226 Information systems and software 5 years 41,295 21,173 Land and building Land 6,213 2,152 Land improvements 15 years 1,391 1,293 Building 39 years 129,815 63,350 Leasehold improvements 3 years - 7 years 468 — Total cost of property and equipment 268,271 200,533 Accumulated depreciation (9,763) (4,940) Property and equipment, net $ 258,508 $ 195,593 Depreciation expense totaled $2.6 million and $4.9 million for the three and six months ended November 30, 2023 and $0.8 million and $1.7 million for the three and six months ended November 30, 2022. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Nov. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Below is a summary of the Company’s revenue concentration by major customers for the three and six months ended November 30, 2023 and 2022, respectively. Three Months Ended November 30, Six Months Ended November 30, 2023 2022 2023 2022 Customer A 70 % — % 69 % — % Customer B — % 27 % — % 22 % Customer C — % 33 % — % 34 % Customer D — % 16 % — % 18 % Customer E — % 13 % — % 14 % Customer F — % 12 % — % 13 % Customer G 11 % — % — % — % Deferred Revenue As of November 30, 2023, the Company had $52.0 million in deferred revenue (inclusive of related party deferred revenue), which represents the Company’s remaining performance obligations, and expects to recognize the entire balance within the next 12 months. Changes in the Company's deferred revenue balances for the six months ended November 30, 2023 and 2022, respectively, are shown in the following tables (in thousands): Six Months Ended November 30, 2023 November 30, 2022 Balance, beginning of period $ 48,692 $ 3,877 Advance billings 81,839 44,646 Revenue recognized (78,527) (19,264) Other adjustments — 135 Less: Related party balances (1,953) (1,639) Balance, end of period $ 50,051 $ 27,755 Customer Deposits Changes in the Company's customer deposits balances for the six months ended November 30, 2023 and 2022, respectively, are shown in the following table (in thousands): Six Months Ended November 30, 2023 November 30, 2022 Balance, beginning of period $ 36,370 $ 9,524 Customer deposits received 4,274 15,300 Customer deposits refunded — — Other adjustments — (135) Less: Related party balances (3,811) (1,940) Balance, end of period $ 36,833 $ 22,749 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Nov. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Related Party Revenue The following table illustrates related party revenue for the three and six months ended November 30, 2023 and November 30, 2022 (in thousands): Three Months Ended November 30, Six Months Ended November 30, 2023 2022 2023 2022 Customer D* $ 1,986 $ 1,996 $ 4,319 $ 3,446 Customer E** $ 1,648 $ 1,596 $ 3,500 $ 2,732 * Customer D is a subsidiary of an entity which is deemed to beneficially own over 5% of the Company's outstanding common stock ** Customer E is 60% owned by an individual who is deemed to beneficially own over 5% of the Company's outstanding common stock The following table illustrates related party deferred revenue and deposits balances as of November 30, 2023 and May 31, 2023 (in thousands): Customer D balances as of Customer E balances as of November 30, 2023 May 31, 2023 November 30, 2023 May 31, 2023 Deferred revenue $ 1,470 $ 1,474 $ 483 $ 50 Customer Deposits $ 2,450 $ 2,450 $ 1,361 $ 1,361 Related Party Sublease Income The Company receives sublease income from B. Riley Asset Management, which is also a wholly-owned subsidiary of B. Riley Financial, Inc. Mr. Cummins, the CEO of the Company, is also the President of B. Riley Asset Management. The following table illustrates related party revenue for the three and six months ended November 30, 2023 and November 30, 2022 (in thousands): Three Months Ended November 30, Six Months Ended November 30, 2023 2022 2023 2022 Sublease Income $ 24 $ 30 $ 47 $ 58 B. Riley Loan |
Debt
Debt | 6 Months Ended |
Nov. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following components (in thousands): Interest Rate Maturity Date November 30, 2023 May 31, 2023 Starion term loan 6.50% July 25, 2027 $ 11,428 $ 12,786 Vantage Garden City loan 6.15% April 26, 2028 13,427 10,074 Starion Ellendale loan 7.48% February 3, 2028 17,974 19,728 Other long-term debt 372 354 Deferred financing costs, net of amortization (421) (3,012) Less: Current portion of term loan (9,279) (7,950) Long-term debt, net $ 33,501 $ 31,980 Remaining Principal Payments Below is a summary of the remaining principal payments due over the life of the term loans as of November 30, 2023 (in thousands): Remainder of FY24 $ 4,645 FY25 9,768 FY26 10,441 FY27 11,150 FY28 7,197 Total $ 43,201 Letters of Credit |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Nov. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Equity Plans On October 9, 2021, the Company’s Board of Directors approved two equity incentive plans, which the Company’s stockholders approved on January 20, 2022. The two plans consist of the 2022 Incentive Plan, previously referred to in the Company’s SEC filings as the 2021 Incentive Plan (the “Incentive Plan”), which provides for grants of various equity awards to the Company’s employees and consultants, and the 2022 Non-Employee Director Stock Plan previously referred to in the Company’s SEC filings as the 2021 Non-Employee Director Stock Plan (the “Director Plan” and, together with the Incentive Plan, the “Plans”), which provides for grants of restricted stock to non-employee directors and for deferral of cash and stock compensation if such deferral provisions are activated at a future date. As of November 30, 2023, the Company had issued awards for approximately 14.2 million shares of common stock of the Company (the “Common Stock”) under the plans. During the three and six months ended November 30, 2023 the Company recognized $4.8 million and $10.4 million in stock-based compensation. Restricted Stock Awards The following is a summary of the activity and balances for unvested restricted stock awards granted for the six months ended November 30, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2023 380,955 $ 2.22 Granted 202,110 4.75 Vested (380,955) 2.22 Forfeited — — Outstanding as of November 30, 2023 202,110 $ 4.75 As of November 30, 2023, total remaining expense to be recognized related to these awards was $0.9 million and the weighted average remaining recognition period for the unvested awards was 0.9 years. Restricted Stock Units The following is a summary of the activity and balances for unvested restricted stock units granted for the six months ended November 30, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2023 12,465,935 $ 2.53 Granted 1,564,400 7.38 Vested (5,377,778) 2.64 Forfeited (305,110) 2.43 Outstanding as of November 30, 2023 8,347,447 $ 3.42 As of November 30, 2023, total remaining expense to be recognized related to these awards was $29.2 million and the weighted average remaining recognition period for the unvested awards was 2.1 years. Public Offering During the six months ended November 30, 2023, the Company began issuing and selling common stock under an "at the market" sale agreement pursuant to which the Company may sell up to $125 million in aggregate proceeds of Common Stock. As of November 30, 2023, the Company has sold approximately 14.8 million shares. Net proceeds, less commission and legal fees of approximately $3.3 million, were approximately $97.9 million. Extinguishment of Noncontrolling Interest On August 31, 2023, pursuant to the joint venture agreement, the minority partner in 1.21 Gigawatts LLC exercised the option to exchange their interest in the joint venture for approximately 1.5 million shares for a value of $9.8 million of the Company’s common stock. The Company is now the sole member of 1.21 Gigawatts LLC and will report all activity as attributable to the Company in future periods. |
Leases
Leases | 6 Months Ended |
Nov. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company enters into leases for equipment, office space, and land. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company presents operating and finance right of use assets and liabilities separately on the balance sheet as their own captions, with the liabilities split between current and long-term, respectively. Components of lease expense were as follows (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Operating lease cost: Operating lease expense $ 2,486 $ 82 $ 2,970 $ 164 Short-term lease expense 80 105 207 223 Total operating lease cost 2,566 187 3,177 387 Finance lease expense: Amortization of right-of-use assets (1) 10,860 735 16,490 1,033 Interest on lease liabilities 1,659 183 2,741 292 Total finance lease cost 12,519 918 19,231 1,325 Variable lease cost 40 — 77 — Sublease Income (24) (30) (47) (58) Total net lease cost $ 15,101 $ 1,075 $ 22,438 $ 1,654 (1) Amortization of right-of-use assets is included within depreciation expense, and is recorded within cost of revenues and selling, general and administrative expense in the condensed consolidated statements of operations. The following table represents the Company’s future minimum lease payments as of November 30, 2023: Operating Leases Finance Leases Total Remainder of FY24 $ 6,605 $ 24,341 $ 30,946 FY25 13,562 47,340 60,902 FY26 14,031 12,108 26,139 FY27 14,166 188 14,354 FY28 14,360 180 14,540 Thereafter 12,441 89,944 102,385 Total lease payments 75,165 174,101 249,266 Less: imputed interest (13,954) (94,548) (108,502) Total lease liabilities 61,211 79,553 140,764 Less: Current portion of lease liability (8,887) (42,805) (51,692) Long-term portion of lease liability $ 52,324 $ 36,748 $ 89,072 Supplemental cash flow and other information related to leases is as follows: Six Months Ended November 30, 2023 November 30, 2022 Weighted-average years remaining (in years): Finance leases 5.5 years 28.6 years Operating leases 5.7 years 3.9 years Weighted-average discount rate: Finance leases 8.8 % 8.0 % Operating leases 7.9 % 12.5 % |
Leases | Leases The Company enters into leases for equipment, office space, and land. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company presents operating and finance right of use assets and liabilities separately on the balance sheet as their own captions, with the liabilities split between current and long-term, respectively. Components of lease expense were as follows (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Operating lease cost: Operating lease expense $ 2,486 $ 82 $ 2,970 $ 164 Short-term lease expense 80 105 207 223 Total operating lease cost 2,566 187 3,177 387 Finance lease expense: Amortization of right-of-use assets (1) 10,860 735 16,490 1,033 Interest on lease liabilities 1,659 183 2,741 292 Total finance lease cost 12,519 918 19,231 1,325 Variable lease cost 40 — 77 — Sublease Income (24) (30) (47) (58) Total net lease cost $ 15,101 $ 1,075 $ 22,438 $ 1,654 (1) Amortization of right-of-use assets is included within depreciation expense, and is recorded within cost of revenues and selling, general and administrative expense in the condensed consolidated statements of operations. The following table represents the Company’s future minimum lease payments as of November 30, 2023: Operating Leases Finance Leases Total Remainder of FY24 $ 6,605 $ 24,341 $ 30,946 FY25 13,562 47,340 60,902 FY26 14,031 12,108 26,139 FY27 14,166 188 14,354 FY28 14,360 180 14,540 Thereafter 12,441 89,944 102,385 Total lease payments 75,165 174,101 249,266 Less: imputed interest (13,954) (94,548) (108,502) Total lease liabilities 61,211 79,553 140,764 Less: Current portion of lease liability (8,887) (42,805) (51,692) Long-term portion of lease liability $ 52,324 $ 36,748 $ 89,072 Supplemental cash flow and other information related to leases is as follows: Six Months Ended November 30, 2023 November 30, 2022 Weighted-average years remaining (in years): Finance leases 5.5 years 28.6 years Operating leases 5.7 years 3.9 years Weighted-average discount rate: Finance leases 8.8 % 8.0 % Operating leases 7.9 % 12.5 % |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Nov. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Energy Commitment The Company also has a minimum commitment of approximately $89.2 million related to the energy services agreement for its Jamestown, North Dakota co-hosting facility with a remaining term of approximately 3.2 years as of November 30, 2023. Claims and Litigation From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. On August 12, 2023, a putative securities class action complaint, captioned McConnell v. Applied Digital Corporation, Wesley Cummins and David Rench , No. 3:23-cv-1805, was filed in the U.S. District Court for the Northern District of Texas, Dallas Division against Applied Digital Corporation (the “Company”) and two of its officers, Chief Executive Officer Wesley Cummins and Chief Financial Officer David Rench, asserting violations of Sections 10(b) and 20(a) of the Securities Exchange Act. The complaint alleges that the defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the complaint alleges that the Company overstated the profitability of its datacenter hosting business and its ability to successfully transition into a low-cost cloud services provider and that the Company’s board of directors was not “independent” within the meaning of NASDAQ listing rules. On November 15, 2023, a putative securities complaint, captioned Robert Weich v. Wes Cummins, Chuck Hastings, Kelli McDonald, Douglas Miller, Virginia Moore, and Richard Nottenburg, No. A-23-881629-C, was filed in the U.S. District Court for Clark County, Nevada against certain members of Applied Digital Corporation’s Board of Directors and two of its officers, Chief Executive Officer Wesley Cummins and Chief Financial Officer David Rench, asserting breaches of fiduciary duties and unjust enrichment from April 2022 through the present. The complaint alleges that the defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the complaint alleges that the Company overstated the profitability of its datacenter hosting business and its ability to successfully transition into a low-cost cloud services provider and that the Company’s board of directors was not “independent” within the meaning of NASDAQ listing rules. The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in this action. If an unfavorable action were to occur, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable. As of November 30, 2023, there were no other pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s consolidated operations. There are also no legal proceedings in which any of the Company’s management or affiliates is an adverse party or has a material interest adverse to the Company’s interest. Settlement of Potential Claim During the second quarter of fiscal year 2024, the Company entered into a settlement agreement with respect to employment-related claims by a former executive. The terms of the settlement included payment to the claimant of $2.3 million, which is included in Loss on legal settlement on our condensed consolidated statements of operations. |
Business Segments
Business Segments | 6 Months Ended |
Nov. 30, 2023 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments Revenue by segment (excluding HPC hosting as that segment has no revenue) was as follows (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Datacenter hosting segment $ 37,753 $ 12,340 $ 71,925 $ 19,264 Cloud services segment 4,450 — 6,602 — Total revenue $ 42,203 $ 12,340 $ 78,527 $ 19,264 Segment profit (loss) and a reconciliation to net loss before income tax expenses is as follows (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Segment Profit (Loss): Datacenter hosting segment $ 10,846 $ (14,236) $ 19,804 $ (15,101) Cloud services segment (11,719) — (19,129) — HPC hosting segment (908) — (1,662) — Total segment loss (1,781) (14,236) (987) (15,101) Other (1) (6,393) (12,462) (14,613) (15,785) Interest expense, net 2,355 364 4,430 709 Loss on debt extinguishment — — 2,353 94 Net loss before income tax expenses $ (10,529) $ (27,062) $ (22,383) $ (31,689) (1) Other includes corporate related items not allocated to reportable segments. We also provide the following additional segment disclosures (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Depreciation and amortization: Datacenter hosting segment $ 4,365 $ 1,568 $ 7,564 $ 2,692 Cloud services segment 8,782 — 13,290 — HPC hosting segment 184 — 311 — Other (1) 93 — 119 12 Total depreciation and amortization $ 13,424 $ 1,568 $ 21,284 $ 2,704 (1) Other includes corporate related items not allocated to reportable segments. Information on segment assets and a reconciliation to consolidated assets are as follows (in thousands): November 30, 2023 May 31, 2023 Datacenter hosting segment $ 232,747 $ 224,447 Cloud services segment 166,536 3,127 HPC hosting segment 54,748 10,949 Total segment assets 454,031 238,523 Other (1) 26,623 25,434 Total assets $ 480,654 $ 263,957 (1) Other includes corporate related items not allocated to reportable segments. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Nov. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic net income (loss) per share (“EPS”) of common stock is computed by dividing the Company’s net earnings (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if the securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Potentially dilutive securities are excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive. The table below shows the calculation for earnings per share: Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Net loss $ (10,529) $ (26,750) $ (22,383) $ (31,409) Net loss attributable to noncontrolling interest — (133) (397) (261) Net loss attributable to Applied Digital Corporation $ (10,529) $ (26,617) $ (21,986) $ (31,148) Basic and diluted net loss per share attributable to Applied Digital Corporation $ (0.10) $ (0.28) $ (0.21) $ (0.33) Basic and diluted weighted average number of shares outstanding 109,663,030 93,422,427 105,067,375 93,263,266 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Nov. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events At-The-Market Common Stock Offering The Company completed sales of common stock under the “at the market” common stock sale agreement dated June 26, 2023. The Company sold approximately 4.2 million shares subsequent to November 30, 2023. Net proceeds from these sales, less commission fees of approximately $0.7 million, are approximately $23.1 million. Indemnification Agreements On January 13, 2024, the Company entered into an individual Indemnification Agreement with each member of its Board of Directors. The Indemnification Agreements generally provide that the Company will indemnify the indemnitees, to the fullest extent permitted by applicable law, against liabilities that may arise by reason of their status with, or service to, the Company. The Indemnification Agreements also generally provide that the Company advance expenses incurred by the indemnitees as a result of any proceeding related to such matters. Conditional Agreement On January 15, 2024, the Company entered into a conditional agreement to provide HPC datacenter capacity at its Ellendale, North Dakota campus, subject to finalization of definitive lease documents. The conditional agreement is for a total of 100 MWs for a term of 10 years, with a total value of approximately $2.2 billion over such 10 year term. The conditional agreement is conditioned upon each party securing satisfactory financing for the completion of construction, with the ability of each party to terminate within 45 days, without penalty, if the condition is not satisfied. Other Agreements Subsequent to November 30, 2023, the Company entered into three additional agreements for services in our cloud services and datacenter hosting segments totaling a combined $104.4 million over a weighted average term of 32 months. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Nov. 30, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in the Company's annual consolidated financial statements on Form 10-K have been condensed or omitted. The condensed consolidated balance sheet as of May 31, 2023 has been derived from the audited consolidated financial statements as of that date, but does not include all disclosures required for audited annual financial statements. In the Company’s opinion, all necessary adjustments have been made for the fair presentation of the results of the interim periods presented. The results of operations for such interim periods are not necessarily indicative of the results to be expected for the full year. For further information, please refer to and read these interim unaudited condensed consolidated financial statements in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2023 filed with the SEC on August 2, 2023. |
Significant Accounting Policies and Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates of the valuation allowance associated with the Company’s deferred tax assets. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers. Datacenter Hosting Revenue The Company provides energized space to customers who locate their hardware within the Company’s co-hosting facility. All datacenter hosting performance obligations are achieved simultaneously by providing the hosting environment for the customers’ operations. Customers pay a fixed rate to the Company in exchange for a managed hosting environment supported by customer-provided equipment. Revenue is recognized based on the contractual fixed rate, net of any credits for non-performance, over the term of the agreements. Any ancillary revenue for maintenance or installation services is at a point in time when the maintenance or installation service is complete. As these services are directly attributable to the Company’s datacenter hosting service, this revenue is captured within the datacenter hosting revenue caption in our condensed consolidated statements of operations. Customer contracts include advance payment terms. All advanced service payments are recorded as deferred revenue and are recognized as revenue once the related service is provided. Cloud Services Revenue |
Segments | Segments The Company has identified three reportable segments: cloud services (“Cloud services”), high-performance compute hosting (“HPC hosting”), and datacenter hosting (“Datacenter hosting”). The Company’s chief operating decision-maker evaluates performance, makes operating decisions and allocates resources on both a consolidated basis and on the basis of these three reportable segments. Intercompany transactions between segments are excluded for management reporting purposes. The Datacenter hosting segment operates datacenters to provide energized space to crypto mining customers. Customer-owned hardware is installed in the Company’s facilities and the Company provides operational and maintenance services for a fixed fee. The Cloud services segment operates through our Sai Computing brand and provides cloud services to customers, such as artificial intelligence and machine learning developers, to develop their advanced products. Customers pay a fixed rate to the Company in exchange for a managed hosting environment supported by Company-provided equipment. The HPC hosting segment designs, builds, and operates datacenters which are designed to support high-compute applications using advanced and sophisticated infrastructures to provide services to customers. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
Reclassifications | Reclassifications We have reclassified certain prior period revenue amounts from datacenter hosting revenue to related party datacenter hosting revenue on our condensed consolidated statements of operations. We have also reclassified amounts from accounts payable and accrued expenses and prepaid expenses and other current assets to accounts payable, accrued expenses, prepaid expenses, and other current assets as well as from customer deposits and deferred revenue to the associated related party caption lines and from prepaid expenses and other current assets to other assets in our condensed consolidated balance sheets to conform to our current period presentation. Lastly, we have reclassified interest income from selling, general and administrative to interest expense, net in our condensed consolidated statement of operations to conform to our current period presentation. These reclassifications had no impact on reported net income, cash flows, or total assets and liabilities. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | Cash, cash equivalents, and restricted cash within the consolidated balance sheets that are included in the consolidated statements of cash flows as of November 30, 2023 and May 31, 2023 were as follows (in thousands): November 30, 2023 May 31, 2023 Net Cash & Equivalents $ 9,217 $ 28,999 Restricted Cash 25,416 14,575 Total Cash & Cash Equivalents $ 34,633 $ 43,574 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following as of November 30, 2023, and May 31, 2023 (in thousands): Estimated Useful Life November 30, May 31, Electric generation and transformers 15 years $ 13,169 $ 4,655 Other equipment and fixtures 5 years - 7 years 5,074 1,684 Construction in progress 70,846 106,226 Information systems and software 5 years 41,295 21,173 Land and building Land 6,213 2,152 Land improvements 15 years 1,391 1,293 Building 39 years 129,815 63,350 Leasehold improvements 3 years - 7 years 468 — Total cost of property and equipment 268,271 200,533 Accumulated depreciation (9,763) (4,940) Property and equipment, net $ 258,508 $ 195,593 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Below is a summary of the Company’s revenue concentration by major customers for the three and six months ended November 30, 2023 and 2022, respectively. Three Months Ended November 30, Six Months Ended November 30, 2023 2022 2023 2022 Customer A 70 % — % 69 % — % Customer B — % 27 % — % 22 % Customer C — % 33 % — % 34 % Customer D — % 16 % — % 18 % Customer E — % 13 % — % 14 % Customer F — % 12 % — % 13 % Customer G 11 % — % — % — % |
Schedule of Deferred Revenue | Changes in the Company's deferred revenue balances for the six months ended November 30, 2023 and 2022, respectively, are shown in the following tables (in thousands): Six Months Ended November 30, 2023 November 30, 2022 Balance, beginning of period $ 48,692 $ 3,877 Advance billings 81,839 44,646 Revenue recognized (78,527) (19,264) Other adjustments — 135 Less: Related party balances (1,953) (1,639) Balance, end of period $ 50,051 $ 27,755 |
Schedule of Customer Deposits | Changes in the Company's customer deposits balances for the six months ended November 30, 2023 and 2022, respectively, are shown in the following table (in thousands): Six Months Ended November 30, 2023 November 30, 2022 Balance, beginning of period $ 36,370 $ 9,524 Customer deposits received 4,274 15,300 Customer deposits refunded — — Other adjustments — (135) Less: Related party balances (3,811) (1,940) Balance, end of period $ 36,833 $ 22,749 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table illustrates related party revenue for the three and six months ended November 30, 2023 and November 30, 2022 (in thousands): Three Months Ended November 30, Six Months Ended November 30, 2023 2022 2023 2022 Customer D* $ 1,986 $ 1,996 $ 4,319 $ 3,446 Customer E** $ 1,648 $ 1,596 $ 3,500 $ 2,732 * Customer D is a subsidiary of an entity which is deemed to beneficially own over 5% of the Company's outstanding common stock ** Customer E is 60% owned by an individual who is deemed to beneficially own over 5% of the Company's outstanding common stock The following table illustrates related party deferred revenue and deposits balances as of November 30, 2023 and May 31, 2023 (in thousands): Customer D balances as of Customer E balances as of November 30, 2023 May 31, 2023 November 30, 2023 May 31, 2023 Deferred revenue $ 1,470 $ 1,474 $ 483 $ 50 Customer Deposits $ 2,450 $ 2,450 $ 1,361 $ 1,361 Three Months Ended November 30, Six Months Ended November 30, 2023 2022 2023 2022 Sublease Income $ 24 $ 30 $ 47 $ 58 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | Long-term debt consisted of the following components (in thousands): Interest Rate Maturity Date November 30, 2023 May 31, 2023 Starion term loan 6.50% July 25, 2027 $ 11,428 $ 12,786 Vantage Garden City loan 6.15% April 26, 2028 13,427 10,074 Starion Ellendale loan 7.48% February 3, 2028 17,974 19,728 Other long-term debt 372 354 Deferred financing costs, net of amortization (421) (3,012) Less: Current portion of term loan (9,279) (7,950) Long-term debt, net $ 33,501 $ 31,980 |
Schedule of Maturities of Long-Term Debt | Below is a summary of the remaining principal payments due over the life of the term loans as of November 30, 2023 (in thousands): Remainder of FY24 $ 4,645 FY25 9,768 FY26 10,441 FY27 11,150 FY28 7,197 Total $ 43,201 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Equity [Abstract] | |
Schedule of Share-Based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity | The following is a summary of the activity and balances for unvested restricted stock awards granted for the six months ended November 30, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2023 380,955 $ 2.22 Granted 202,110 4.75 Vested (380,955) 2.22 Forfeited — — Outstanding as of November 30, 2023 202,110 $ 4.75 The following is a summary of the activity and balances for unvested restricted stock units granted for the six months ended November 30, 2023: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2023 12,465,935 $ 2.53 Granted 1,564,400 7.38 Vested (5,377,778) 2.64 Forfeited (305,110) 2.43 Outstanding as of November 30, 2023 8,347,447 $ 3.42 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Leases [Abstract] | |
Schedule Of Components Of Lease Expense, Supplemental Cash Flow Information And Other Information | Components of lease expense were as follows (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Operating lease cost: Operating lease expense $ 2,486 $ 82 $ 2,970 $ 164 Short-term lease expense 80 105 207 223 Total operating lease cost 2,566 187 3,177 387 Finance lease expense: Amortization of right-of-use assets (1) 10,860 735 16,490 1,033 Interest on lease liabilities 1,659 183 2,741 292 Total finance lease cost 12,519 918 19,231 1,325 Variable lease cost 40 — 77 — Sublease Income (24) (30) (47) (58) Total net lease cost $ 15,101 $ 1,075 $ 22,438 $ 1,654 (1) Amortization of right-of-use assets is included within depreciation expense, and is recorded within cost of revenues and selling, general and administrative expense in the condensed consolidated statements of operations. Supplemental cash flow and other information related to leases is as follows: Six Months Ended November 30, 2023 November 30, 2022 Weighted-average years remaining (in years): Finance leases 5.5 years 28.6 years Operating leases 5.7 years 3.9 years Weighted-average discount rate: Finance leases 8.8 % 8.0 % Operating leases 7.9 % 12.5 % |
Schedule Of Future Minimum Operating Lease Payments | The following table represents the Company’s future minimum lease payments as of November 30, 2023: Operating Leases Finance Leases Total Remainder of FY24 $ 6,605 $ 24,341 $ 30,946 FY25 13,562 47,340 60,902 FY26 14,031 12,108 26,139 FY27 14,166 188 14,354 FY28 14,360 180 14,540 Thereafter 12,441 89,944 102,385 Total lease payments 75,165 174,101 249,266 Less: imputed interest (13,954) (94,548) (108,502) Total lease liabilities 61,211 79,553 140,764 Less: Current portion of lease liability (8,887) (42,805) (51,692) Long-term portion of lease liability $ 52,324 $ 36,748 $ 89,072 |
Schedule Of Future Minimum Finance Lease Payments | The following table represents the Company’s future minimum lease payments as of November 30, 2023: Operating Leases Finance Leases Total Remainder of FY24 $ 6,605 $ 24,341 $ 30,946 FY25 13,562 47,340 60,902 FY26 14,031 12,108 26,139 FY27 14,166 188 14,354 FY28 14,360 180 14,540 Thereafter 12,441 89,944 102,385 Total lease payments 75,165 174,101 249,266 Less: imputed interest (13,954) (94,548) (108,502) Total lease liabilities 61,211 79,553 140,764 Less: Current portion of lease liability (8,887) (42,805) (51,692) Long-term portion of lease liability $ 52,324 $ 36,748 $ 89,072 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Revenue by segment (excluding HPC hosting as that segment has no revenue) was as follows (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Datacenter hosting segment $ 37,753 $ 12,340 $ 71,925 $ 19,264 Cloud services segment 4,450 — 6,602 — Total revenue $ 42,203 $ 12,340 $ 78,527 $ 19,264 We also provide the following additional segment disclosures (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Depreciation and amortization: Datacenter hosting segment $ 4,365 $ 1,568 $ 7,564 $ 2,692 Cloud services segment 8,782 — 13,290 — HPC hosting segment 184 — 311 — Other (1) 93 — 119 12 Total depreciation and amortization $ 13,424 $ 1,568 $ 21,284 $ 2,704 (1) Other includes corporate related items not allocated to reportable segments. Information on segment assets and a reconciliation to consolidated assets are as follows (in thousands): November 30, 2023 May 31, 2023 Datacenter hosting segment $ 232,747 $ 224,447 Cloud services segment 166,536 3,127 HPC hosting segment 54,748 10,949 Total segment assets 454,031 238,523 Other (1) 26,623 25,434 Total assets $ 480,654 $ 263,957 (1) Other includes corporate related items not allocated to reportable segments. |
Schedule of Segment Profit and a Reconciliation to Net Income (Loss) Before Income Tax Expenses | Segment profit (loss) and a reconciliation to net loss before income tax expenses is as follows (in thousands): Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Segment Profit (Loss): Datacenter hosting segment $ 10,846 $ (14,236) $ 19,804 $ (15,101) Cloud services segment (11,719) — (19,129) — HPC hosting segment (908) — (1,662) — Total segment loss (1,781) (14,236) (987) (15,101) Other (1) (6,393) (12,462) (14,613) (15,785) Interest expense, net 2,355 364 4,430 709 Loss on debt extinguishment — — 2,353 94 Net loss before income tax expenses $ (10,529) $ (27,062) $ (22,383) $ (31,689) (1) Other includes corporate related items not allocated to reportable segments. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Nov. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The table below shows the calculation for earnings per share: Three Months Ended Six Months Ended November 30, 2023 November 30, 2022 November 30, 2023 November 30, 2022 Net loss $ (10,529) $ (26,750) $ (22,383) $ (31,409) Net loss attributable to noncontrolling interest — (133) (397) (261) Net loss attributable to Applied Digital Corporation $ (10,529) $ (26,617) $ (21,986) $ (31,148) Basic and diluted net loss per share attributable to Applied Digital Corporation $ (0.10) $ (0.28) $ (0.21) $ (0.33) Basic and diluted weighted average number of shares outstanding 109,663,030 93,422,427 105,067,375 93,263,266 |
Business and Organization (Deta
Business and Organization (Details) | 6 Months Ended |
Nov. 30, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) | 6 Months Ended |
Nov. 30, 2023 segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 3 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | May 31, 2023 |
Accounting Policies [Abstract] | ||
Net Cash & Equivalents | $ 9,217 | $ 28,999 |
Restricted cash | 25,416 | 14,575 |
Total Cash & Cash Equivalents | $ 34,633 | $ 43,574 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | May 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 268,271 | $ 200,533 |
Accumulated depreciation | (9,763) | (4,940) |
Property and equipment, net | $ 258,508 | 195,593 |
Electric generation and transformers | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 15 years | |
Total cost of property and equipment | $ 13,169 | 4,655 |
Other equipment and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 5,074 | 1,684 |
Other equipment and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Other equipment and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 70,846 | 106,226 |
Information systems and software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Total cost of property and equipment | $ 41,295 | 21,173 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 6,213 | 2,152 |
Land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 15 years | |
Total cost of property and equipment | $ 1,391 | 1,293 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 39 years | |
Total cost of property and equipment | $ 129,815 | 63,350 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total cost of property and equipment | $ 468 | $ 0 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 7 years |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 2.6 | $ 0.8 | $ 4.9 | $ 1.7 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Concentration Risk by Major Customer (Details) - Customer Concentration Risk - Revenue Benchmark | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Customer A | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 70% | 0% | 69% | 0% |
Customer B | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 0% | 27% | 0% | 22% |
Customer C | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 0% | 33% | 0% | 34% |
Customer D | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 0% | 16% | 0% | 18% |
Customer E | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 0% | 13% | 0% | 14% |
Customer F | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 0% | 12% | 0% | 13% |
Customer G | ||||
Concentration Risk [Line Items] | ||||
Concentration risk | 11% | 0% | 0% | 0% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-01 $ in Millions | Nov. 30, 2023 USD ($) |
Revenue, Major Customer [Line Items] | |
Revenue, remaining performance obligation, amount | $ 52 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
Movement in Deferred Revenue [Roll Forward] | ||
Balance, beginning of period | $ 48,692 | $ 3,877 |
Advance billings | 81,839 | 44,646 |
Revenue recognized | (78,527) | (19,264) |
Other adjustments | 0 | 135 |
Related Party | ||
Movement in Deferred Revenue [Roll Forward] | ||
Less: Related party balances | (1,953) | (1,639) |
Nonrelated Party | ||
Movement in Deferred Revenue [Roll Forward] | ||
Balance, end of period | $ 50,051 | $ 27,755 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Schedule of Customer Deposits (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
Customer Deposits [Roll Forward] | ||
Balance, beginning of period | $ 36,370 | $ 9,524 |
Customer deposits received | 4,274 | 15,300 |
Customer deposits refunded | 0 | 0 |
Other adjustments | 0 | (135) |
Related Party | ||
Customer Deposits [Roll Forward] | ||
Less: Related party balances | (3,811) | (1,940) |
Nonrelated Party | ||
Customer Deposits [Roll Forward] | ||
Balance, end of period | $ 36,833 | $ 22,749 |
Related Party Transactions - Re
Related Party Transactions - Related Party Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | May 31, 2023 | May 31, 2022 | |
Related Party Transaction [Line Items] | ||||||
Total revenue | $ 42,203 | $ 12,340 | $ 78,527 | $ 19,264 | ||
Deferred revenue | $ 48,692 | $ 3,877 | ||||
Customer D | ||||||
Related Party Transaction [Line Items] | ||||||
Related party ownership interests | 5% | |||||
Customer D | Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenue | 1,986 | 1,996 | $ 4,319 | 3,446 | ||
Deferred revenue | 1,470 | 1,470 | 1,474 | |||
Customer Deposits | 2,450 | $ 2,450 | 2,450 | |||
Customer E | ||||||
Related Party Transaction [Line Items] | ||||||
Related party ownership interests | 60% | |||||
Customer E | Related Party | ||||||
Related Party Transaction [Line Items] | ||||||
Total revenue | 1,648 | $ 1,596 | $ 3,500 | $ 2,732 | ||
Deferred revenue | 483 | 483 | 50 | |||
Customer Deposits | $ 1,361 | $ 1,361 | $ 1,361 | |||
Customer E by Individual | ||||||
Related Party Transaction [Line Items] | ||||||
Related party ownership interests | 5% |
Related Party Transactions - Su
Related Party Transactions - Sublease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Related Party Transaction [Line Items] | ||||
Sublease Income | $ 24 | $ 30 | $ 47 | $ 58 |
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Sublease Income | $ 24 | $ 30 | $ 47 | $ 58 |
Related Party Transactions - B.
Related Party Transactions - B. Riley Loan (Details) - B. Riley Loan and Security Agreement - Medium-term Notes $ in Millions | 6 Months Ended |
Nov. 30, 2023 USD ($) | |
Related Party Transaction [Line Items] | |
Borrowings of related party debt | $ 8 |
Repayment of related party debt | 44.5 |
Interest expense associated with loan | 0.5 |
Total remaining unused capacity | $ 5.5 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt (Details) - Medium-term Notes - USD ($) $ in Thousands | Nov. 30, 2023 | May 31, 2023 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 43,201 | |
Deferred financing costs, net of amortization | (421) | $ (3,012) |
Less: Current portion of term loan | (9,279) | (7,950) |
Long-term debt, net | $ 33,501 | 31,980 |
Starion term loan | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.50% | |
Long-term debt, gross | $ 11,428 | 12,786 |
Vantage Garden City loan | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.15% | |
Long-term debt, gross | $ 13,427 | 10,074 |
Starion Ellendale loan | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.48% | |
Long-term debt, gross | $ 17,974 | 19,728 |
Other long-term debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 372 | $ 354 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-Term Debt (Details) - Medium-term Notes $ in Thousands | Nov. 30, 2023 USD ($) |
Debt Instrument [Line Items] | |
Remainder of FY24 | $ 4,645 |
FY25 | 9,768 |
FY26 | 10,441 |
FY27 | 11,150 |
FY28 | 7,197 |
Total | $ 43,201 |
Debt - Narrative (Details)
Debt - Narrative (Details) $ in Millions | Nov. 30, 2023 USD ($) |
Letter of Credit | |
Debt Instrument [Line Items] | |
Line of credit, maximum borrowing capacity | $ 25.4 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2023 USD ($) shares | Nov. 30, 2023 USD ($) shares | Nov. 30, 2023 USD ($) shares | Nov. 30, 2022 USD ($) | Oct. 09, 2021 plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of equity incentive plans | plan | 2 | ||||
Gross proceeds from sale | $ 125,000 | ||||
Number of shares sold in transaction (in shares) | shares | 14,800,000 | ||||
Payments of stock issuance costs | $ 3,300 | ||||
Issuance of common stock | 97,922 | $ 0 | |||
Extinguishment of noncontrolling interest (in shares) | shares | 1,500,000 | ||||
Stockholders’ Equity | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Extinguishment of noncontrolling interest | $ (9,800) | 9,765 | |||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock compensation expense | $ 29,200 | $ 29,200 | |||
Unrecognized stock compensation expense, period for recognition | 2 years 1 month 6 days | ||||
Restricted Stock Units (RSUs) And Restricted Stock Awards (RSAs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants to date (in shares) | shares | 14,200,000 | 14,200,000 | |||
Stock-based compensation recognized | $ 4,800 | $ 10,400 | |||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock compensation expense | $ 900 | $ 900 | |||
Unrecognized stock compensation expense, period for recognition | 10 months 24 days |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Restricted Stock Awards (Details) - Restricted Stock Awards | 6 Months Ended |
Nov. 30, 2023 $ / shares shares | |
Number of Shares | |
Outstanding at beginning of period (in shares) | shares | 380,955 |
Granted (in shares) | shares | 202,110 |
Vested (in shares) | shares | (380,955) |
Forfeited (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 202,110 |
Weighted Average Grant Date Fair Value Per Share | |
Weighted average grant date fair value, outstanding at beginning of period (in dollars per share) | $ / shares | $ 2.22 |
Granted (in dollars per share) | $ / shares | 4.75 |
Vested (in dollars per share) | $ / shares | 2.22 |
Forfeited (in dollars per share) | $ / shares | 0 |
Weighted average grant date fair value, outstanding at end of period (in dollars per share) | $ / shares | $ 4.75 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Restricted Stock Awards & Units (Details) - Restricted Stock Units (RSUs) - $ / shares | 6 Months Ended | |
Nov. 30, 2023 | May 31, 2023 | |
Number of Shares | ||
Outstanding at beginning of period (in shares) | 12,465,935 | |
Granted (in shares) | 1,564,400 | |
Vested (in shares) | (5,377,778) | |
Forfeited (in shares) | (305,110) | |
Outstanding at end of period (in shares) | 8,347,447 | |
Weighted Average Grant Date Fair Value Per Share | ||
Weighted average grant date fair value, outstanding at beginning of period (in dollars per share) | $ 3.42 | $ 2.53 |
Granted (in dollars per share) | 7.38 | |
Vested (in dollars per share) | 2.64 | |
Forfeited (in dollars per share) | 2.43 | |
Weighted average grant date fair value, outstanding at end of period (in dollars per share) | $ 3.42 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Operating lease cost: | ||||
Operating lease expense | $ 2,486 | $ 82 | $ 2,970 | $ 164 |
Short-term lease expense | 80 | 105 | 207 | 223 |
Total operating lease cost | 2,566 | 187 | 3,177 | 387 |
Finance lease expense: | ||||
Amortization of right-of-use assets | 10,860 | 735 | 16,490 | 1,033 |
Interest on lease liabilities | 1,659 | 183 | 2,741 | 292 |
Total finance lease cost | 12,519 | 918 | 19,231 | 1,325 |
Variable lease cost | 40 | 0 | 77 | 0 |
Sublease Income | (24) | (30) | (47) | (58) |
Total net lease cost | $ 15,101 | $ 1,075 | $ 22,438 | $ 1,654 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | May 31, 2023 |
Operating Leases | ||
Remainder of FY24 | $ 6,605 | |
FY25 | 13,562 | |
FY26 | 14,031 | |
FY27 | 14,166 | |
FY28 | 14,360 | |
Thereafter | 12,441 | |
Total lease payments | 75,165 | |
Less: imputed interest | (13,954) | |
Total lease liabilities | 61,211 | |
Less: Current portion of lease liability | (8,887) | $ (320) |
Long-term portion of lease liability | 52,324 | 1,005 |
Finance Leases | ||
Remainder of FY24 | 24,341 | |
FY25 | 47,340 | |
FY26 | 12,108 | |
FY27 | 188 | |
FY28 | 180 | |
Thereafter | 89,944 | |
Total lease payments | 174,101 | |
Less: imputed interest | (94,548) | |
Total lease liabilities | 79,553 | |
Less: Current portion of lease liability | (42,805) | (5,722) |
Long-term portion of lease liability | 36,748 | $ 8,334 |
Total | ||
Remainder of FY24 | 30,946 | |
FY25 | 60,902 | |
FY26 | 26,139 | |
FY27 | 14,354 | |
FY28 | 14,540 | |
Thereafter | 102,385 | |
Total lease payments | 249,266 | |
Less: imputed interest | (108,502) | |
Total lease liabilities | 140,764 | |
Less: Current portion of lease liability | (51,692) | |
Long-term portion of lease liability | $ 89,072 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow and Other Information (Details) | Nov. 30, 2023 | Nov. 30, 2022 |
Weighted-average years remaining (in years): | ||
Finance leases | 5 years 6 months | 28 years 7 months 6 days |
Operating leases | 5 years 8 months 12 days | 3 years 10 months 24 days |
Weighted-average discount rate: | ||
Finance leases | 8.80% | 8% |
Operating leases | 7.90% | 12.50% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | Nov. 30, 2023 USD ($) |
Lessee, Lease, Description [Line Items] | |
Operating lease, not yet commenced, minimum payments | $ 130.4 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, not yet commenced, term of contract | 2 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, not yet commenced, term of contract | 7 years |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 6 Months Ended | |
Nov. 30, 2023 USD ($) | Nov. 30, 2023 USD ($) | |
Purchase Commitment, Excluding Long-Term Commitment [Line Items] | ||
Service contract, term | 3 years 2 months 12 days | |
Mediation Related To The Threatened Claim Of Sexual Harassment | Settled Litigation | Former Executive | ||
Purchase Commitment, Excluding Long-Term Commitment [Line Items] | ||
Settlement amount | $ 2,300 | |
Energy Service | ||
Purchase Commitment, Excluding Long-Term Commitment [Line Items] | ||
Contractual obligation | $ 89,200 | $ 89,200 |
Business Segments - Schedule of
Business Segments - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | May 31, 2023 | |
Segment Reporting Information [Line Items] | |||||
Total revenue | $ 42,203 | $ 12,340 | $ 78,527 | $ 19,264 | |
Total depreciation and amortization | 13,424 | 1,568 | 21,284 | 2,704 | |
Total assets | 480,654 | 480,654 | $ 263,957 | ||
Cloud services segment | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 4,450 | 0 | 6,602 | 0 | |
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 454,031 | 454,031 | 238,523 | ||
Operating Segments | Datacenter hosting segment | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 37,753 | 12,340 | 71,925 | 19,264 | |
Total depreciation and amortization | 4,365 | 1,568 | 7,564 | 2,692 | |
Total assets | 232,747 | 232,747 | 224,447 | ||
Operating Segments | Cloud services segment | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 4,450 | 0 | 6,602 | 0 | |
Total depreciation and amortization | 8,782 | 0 | 13,290 | 0 | |
Total assets | 166,536 | 166,536 | 3,127 | ||
Operating Segments | HPC hosting segment | |||||
Segment Reporting Information [Line Items] | |||||
Total revenue | 0 | 0 | 0 | 0 | |
Total depreciation and amortization | 184 | 0 | 311 | 0 | |
Total assets | 54,748 | 54,748 | 10,949 | ||
Corporate, Non-Segment | |||||
Segment Reporting Information [Line Items] | |||||
Total depreciation and amortization | 93 | $ 0 | 119 | $ 12 | |
Corporate, Non-Segment | Other | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | $ 26,623 | $ 26,623 | $ 25,434 |
Business Segments - Schedule _2
Business Segments - Schedule of Segment Profit and a Reconciliation to Net Income (Loss) Before Income Tax Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total segment loss | $ (8,174) | $ (26,698) | $ (15,600) | $ (30,886) |
Interest expense, net | 2,355 | 364 | 4,430 | 709 |
Loss on extinguishment of debt | 0 | 0 | 2,353 | 94 |
Net loss before income tax expenses | (10,529) | (27,062) | (22,383) | (31,689) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total segment loss | (1,781) | (14,236) | (987) | (15,101) |
Operating Segments | Datacenter hosting segment | ||||
Segment Reporting Information [Line Items] | ||||
Total segment loss | 10,846 | (14,236) | 19,804 | (15,101) |
Operating Segments | Cloud services segment | ||||
Segment Reporting Information [Line Items] | ||||
Total segment loss | (11,719) | 0 | (19,129) | 0 |
Operating Segments | HPC hosting segment | ||||
Segment Reporting Information [Line Items] | ||||
Total segment loss | (908) | 0 | (1,662) | 0 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Other | $ (6,393) | $ (12,462) | $ (14,613) | $ (15,785) |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (10,529) | $ (26,750) | $ (22,383) | $ (31,409) |
Net loss attributable to noncontrolling interest | 0 | (133) | (397) | (261) |
Net loss attributable to Applied Digital Corporation | $ (10,529) | $ (26,617) | $ (21,986) | $ (31,148) |
Basic net loss per share attributable to Applied Digital Corporation (in dollars per share) | $ (0.10) | $ (0.28) | $ (0.21) | $ (0.33) |
Diluted net loss per share attributable to Applied Digital Corporation (in dollars per share) | $ (0.10) | $ (0.28) | $ (0.21) | $ (0.33) |
Basic weighted average number of shares outstanding (in shares) | 109,663,030 | 93,422,427 | 105,067,375 | 93,263,266 |
Diluted weighted average number of shares outstanding (in shares) | 109,663,030 | 93,422,427 | 105,067,375 | 93,263,266 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jan. 15, 2024 USD ($) MW | Jan. 11, 2024 USD ($) | Jan. 16, 2024 USD ($) agreement | Nov. 30, 2023 USD ($) | Nov. 30, 2022 USD ($) | Nov. 30, 2023 USD ($) | Nov. 30, 2022 USD ($) | |
Subsequent Event [Line Items] | |||||||
Gross proceeds from sale | $ 125,000 | ||||||
Payments of stock issuance costs | 3,300 | ||||||
Proceeds from issuance of common stock, net of costs | 97,922 | $ 0 | |||||
Revenue from agreements | $ 42,203 | $ 12,340 | 78,527 | 19,264 | |||
Cloud services revenue | |||||||
Subsequent Event [Line Items] | |||||||
Revenue from agreements | $ 4,450 | $ 0 | $ 6,602 | $ 0 | |||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Gross proceeds from sale | $ 4,200 | ||||||
Payments of stock issuance costs | 700 | ||||||
Proceeds from issuance of common stock, net of costs | $ 23,100 | ||||||
Subsequent Event | Cloud services revenue | |||||||
Subsequent Event [Line Items] | |||||||
Number of agreements | agreement | 3 | ||||||
Revenue from agreements | $ 104,400 | ||||||
Other agreements, weighted-average term | 32 months | ||||||
Subsequent Event | Ellendale, North Dakota | HPC hosting segment | |||||||
Subsequent Event [Line Items] | |||||||
Conditional agreement, megawatts provided | MW | 100 | ||||||
Conditional agreement, term of contract | 10 years | ||||||
Conditional agreement, payment to be received | $ 2,200,000 | ||||||
Conditional agreement, option to terminate | 45 days |