Applied Digital (APLD) 10-Q 11 Apr 24 2024 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Feb. 29, 2024	Apr. 08, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Feb. 29, 2024
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	427-1704
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)		122,739,540
Entity Central Index Key	0001144879
Current Fiscal Year End Date	--05-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Feb. 29, 2024	May 31, 2023
Current assets:
Cash and cash equivalents	$ 4,435	$ 28,999
Restricted cash	29,545	14,575
Accounts receivable	225	82
Prepaid expenses and other current assets	6,127	2,012
Current assets held for sale	65,369	0
Total current assets	105,701	45,668
Property and equipment, net	211,172	195,593
Operating lease right of use assets, net	95,429	1,290
Finance lease right of use assets, net	189,627	14,303
Other assets	41,239	7,103
TOTAL ASSETS	643,168	263,957
Current liabilities:
Accounts payable	93,918	6,446
Accrued liabilities	27,545	9,960
Current portion of operating lease liability	13,023	320
Current portion of finance lease liability	86,438	5,722
Current portion of debt	19,329	7,950
Current liabilities held for sale	8,279	0
Total current liabilities	349,160	115,460
Long-term portion of operating lease liability	69,260	1,005
Long-term portion of finance lease liability	63,803	8,334
Other long-term related party liabilities	0	1,000
Total liabilities	524,680	194,278
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value, 166,666,667 shares authorized, 127,486,937 shares issued and 122,417,839 shares outstanding at February 29, 2024, and 100,927,358 shares issued and 95,925,630 shares outstanding at May 31, 2023	127	101
Treasury stock, 5,069,098 shares at February 29, 2024 and 5,001,728 shares at May 31, 2023, at cost	(62)	(62)
Additional paid in capital	303,963	160,194
Accumulated deficit	(185,540)	(100,716)
Total stockholders’ equity attributable to Applied Digital Corporation	118,488	59,517
Noncontrolling interest	0	10,162
Total stockholders' equity including noncontrolling interest	118,488	69,679
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	643,168	263,957
Nonrelated Party
Current liabilities:
Customer deposits	32,410	32,560
Deferred revenue	63,121	47,168
Long-term debt	24,845	33,222
Related Party
Current liabilities:
Customer deposits	3,810	3,810
Deferred revenue	1,287	1,524
Long-term debt	$ 17,612	$ 35,257

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Feb. 29, 2024	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)	127,486,937	100,927,358
Common stock, shares outstanding (in shares)	122,417,839	95,925,630
Treasury stock, (in shares)	5,069,098	5,001,728

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Revenue:
Total revenue		$ 43,348	$ 14,090	$ 121,876	$ 33,354
Costs and expenses:
Cost of revenues	[1]	47,061	10,533	102,051	28,450
Selling, general and administrative	[2]	30,386	10,546	67,142	42,779
Loss on classification as held for sale		21,723	0	21,723	0
Loss from legal settlement		0	0	2,380	0
Total costs and expenses		99,170	21,079	193,296	71,229
Operating loss		(55,822)	(6,989)	(71,420)	(37,875)
Interest expense, net	[3]	4,404	352	8,836	1,061
Loss on change in fair value of related party debt		2,612	0	2,612	0
Loss on extinguishment of debt	[4]	0	0	2,353	94
Net loss before income tax expenses		(62,838)	(7,341)	(85,221)	(39,030)
Income tax benefit		0	0	0	(280)
Net loss		(62,838)	(7,341)	(85,221)	(38,750)
Net loss attributable to noncontrolling interest		0	(316)	(397)	(577)
Net loss attributable to Applied Digital Corporation		$ (62,838)	$ (7,025)	$ (84,824)	$ (38,173)
Basic net loss per share attributable to Applied Digital Corporation (in dollars per share)		$ (0.52)	$ (0.07)	$ (0.77)	$ (0.41)
Diluted net loss per share attributable to Applied Digital Corporation (in dollars per share)		$ (0.52)	$ (0.07)	$ (0.77)	$ (0.41)
Basic weighted average number of shares outstanding (in shares)		121,426,622	94,119,944	110,500,556	93,545,687
Diluted weighted average number of shares outstanding (in shares)		121,426,622	94,119,944	110,500,556	93,545,687
Nonrelated Party
Revenue:
Total revenue		$ 40,284	$ 10,054	$ 110,993	$ 23,139
Related Party
Revenue:
Total revenue		$ 3,064	$ 4,036	$ 10,883	$ 10,215
[1] Includes cost of revenues attributable to related party revenues of $2.5 million and $3.1 million for the three months ended February 29, 2024 and February 28, 2023, respectively, and $6.6 million and $8.8 million for the nine months ended February 29, 2024 and February 28, 2023, respectively. Includes related party selling, general and administrative expense of $0.1 million and $0.5 million for the three and nine months ended February 29, 2024, respectively. There was no related party selling, general and administrative expense incurred during the three and nine months ended February 28, 2023. Includes related party interest expense of $0.2 million and $0.8 million for the three months ended and nine months ended February 29, 2024, respectively. There was no related party debt issued during three and nine months ended February 28, 2023 and as such, no interest expense was incurred related to related party debt. Amounts included in the nine months ended February 29, 2024 are related to the extinguishment of related party debt.

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Cost of revenues	[1]	$ 47,061	$ 10,533	$ 102,051	$ 28,450
Selling, general and administrative	[2]	30,386	10,546	67,142	42,779
Interest expense, net	[3]	4,404	352	8,836	1,061
Affiliated Entity
Cost of revenues		2,500	3,100	6,600	8,800
Selling, general and administrative		100	0	500	0
Interest expense, net		$ 200	$ 0	$ 800	$ 0
[1] Includes cost of revenues attributable to related party revenues of $2.5 million and $3.1 million for the three months ended February 29, 2024 and February 28, 2023, respectively, and $6.6 million and $8.8 million for the nine months ended February 29, 2024 and February 28, 2023, respectively. Includes related party selling, general and administrative expense of $0.1 million and $0.5 million for the three and nine months ended February 29, 2024, respectively. There was no related party selling, general and administrative expense incurred during the three and nine months ended February 28, 2023. Includes related party interest expense of $0.2 million and $0.8 million for the three months ended and nine months ended February 29, 2024, respectively. There was no related party debt issued during three and nine months ended February 28, 2023 and as such, no interest expense was incurred related to related party debt.

Condensed Consolidated Statem_3

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 (in shares)			1,633,425
Shares issued from awards vesting	0		$ 2		(2)
Tax payments for restricted stock upon vesting	(114)	(114)			(114)
Stock-based compensation	26,878	26,878			26,878
Capital contribution to noncontrolling interest	4,146
Common stock forfeited and cancelled (in shares)				(4,965,432)
Net loss	(38,750)	(38,173)				(38,173)	(577)
Ending balance, common stock (in shares) at Feb. 28, 2023			99,471,128
Ending balance at Feb. 28, 2023	71,395	60,850	$ 100	$ (62)	155,055	(94,243)	10,545
Ending balance, treasury stock (in shares) at Feb. 28, 2023				(5,001,728)
Beginning balance, common stock (in shares) at Nov. 30, 2022			98,948,082
Beginning balance at Nov. 30, 2022	71,970	63,509	$ 99	$ (62)	150,690	(87,218)	8,461
Beginning balance, treasury stock (in shares) at Nov. 30, 2022				(5,001,728)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued from award vestings (in shares)			523,046
Shares issued from awards vesting	0		$ 1		(1)
Tax payments for restricted stock upon vesting	(114)	(114)			(114)
Stock-based compensation	4,480	4,480			4,480
Capital contribution to noncontrolling interest	2,400						2,400
Net loss	(7,341)	(7,025)				(7,025)	(316)
Ending balance, common stock (in shares) at Feb. 28, 2023			99,471,128
Ending balance at Feb. 28, 2023	$ 71,395	60,850	$ 100	$ (62)	155,055	(94,243)	10,545
Ending balance, treasury stock (in shares) at Feb. 28, 2023				(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)			18,945,841
Shares issued in offering, net of costs	$ 121,002	121,002	$ 20		120,982
Shares issued from award vestings (in shares)			6,129,471
Shares issued from awards vesting	0		$ 5		(5)
Tax payments for restricted stock upon vesting	(606)	(606)			(606)
Stock-based compensation	13,634	13,634			13,634
Common stock forfeited and cancelled (in shares)				(67,370)
Net loss	$ (85,221)	(84,824)				(84,824)	(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 Feb. 29, 2024	122,417,839		127,486,937
Ending balance at Feb. 29, 2024	$ 118,488	118,488	$ 127	$ (62)	303,963	(185,540)	0
Ending balance, treasury stock (in shares) at Feb. 29, 2024	(5,069,098)			(5,069,098)
Beginning balance, common stock (in shares) at Nov. 30, 2023			122,734,060
Beginning balance at Nov. 30, 2023	$ 155,658	155,658	$ 123	$ (62)	278,299	(122,702)	0
Beginning balance, treasury stock (in shares) at Nov. 30, 2023				(5,001,728)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued in offering, net of costs (in shares)			4,158,243
Shares issued in offering, net of costs	23,080	23,080	$ 4		23,076
Shares issued from award vestings (in shares)			594,634
Tax payments for restricted stock upon vesting	(606)	(606)			(606)
Stock-based compensation	3,194	3,194			3,194
Common stock forfeited and cancelled (in shares)				(67,370)
Net loss	$ (62,838)	(62,838)				(62,838)
Ending balance, common stock (in shares) at Feb. 29, 2024	122,417,839		127,486,937
Ending balance at Feb. 29, 2024	$ 118,488	$ 118,488	$ 127	$ (62)	$ 303,963	$ (185,540)	$ 0
Ending balance, treasury stock (in shares) at Feb. 29, 2024	(5,069,098)			(5,069,098)

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands		9 Months Ended
		Feb. 29, 2024	Feb. 28, 2023
CASH FLOW FROM OPERATING ACTIVITIES
Net loss		$ (85,221)	$ (38,750)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		12,899	2,580
Stock-based compensation		13,634	26,878
Lease expense		41,473	2,296
Deferred income taxes		0	(280)
Loss on extinguishment of debt	[1]	2,353	94
Amortization of debt issuance costs		498	0
Loss on classification as held for sale		21,723	0
Loss on change in fair value of related party debt		2,612	0
Changes in operating assets and liabilities:
Accounts receivable		(143)	145
Prepaid expenses and other current assets		(4,115)	(266)
Accounts payable		55,464	(10,019)
Accrued liabilities		8,191	1,562
Lease assets and liabilities		(35,675)	(580)
Other assets		(1,363)	(104)
CASH FLOW PROVIDED BY OPERATING ACTIVITIES		47,896	54,144
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property and equipment and other assets		(86,996)	(96,214)
Finance lease prepayments		(35,132)	0
Purchases of investments		(390)	(100)
CASH FLOW USED IN INVESTING ACTIVITIES		(122,518)	(96,314)
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of finance leases		(27,527)	(1,635)
Payment of deferred financing costs		0	(333)
Tax payments for restricted stock upon vesting		(606)	(114)
Noncontrolling interest contributions		0	4,146
Proceeds from issuance of common stock, net of costs		121,002	0
CASH FLOW PROVIDED BY FINANCING ACTIVITIES		72,028	18,792
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(2,594)	(23,378)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD		43,574	46,299
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD		40,980	22,921
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid		9,121	1,118
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
Operating right-of-use assets obtained by lease obligation		95,018	0
Finance right-of-use assets obtained by lease obligation		219,268	8,693
Property and equipment in accounts payable and accrued liabilities		41,100	9,384
Extinguishment of non-controlling interest		9,765	0
Nonrelated Party
Changes in operating assets and liabilities:
Customer deposits		(150)	24,584
Deferred revenue		15,953	42,261
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings of long-term debt		8,422	25,567
Repayments of long-term debt		(6,763)	(8,839)
Related Party
Changes in operating assets and liabilities:
Customer deposits		0	2,262
Deferred revenue		(237)	1,481
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings of related party debt		23,000	0
Repayment of related party debt		$ (45,500)	$ 0
[1] Amounts included in the nine months ended February 29, 2024 are related to the extinguishment of related party debt.

Business and Organization

Business and Organization	9 Months Ended
	Feb. 29, 2024
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 11 - Business Segments.

Basis of Presentation and Signi

Basis of Presentation and Significant Accounting Policies	9 Months Ended
	Feb. 29, 2024
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 is in conformity with accounting principles generally accepted in the United States of America (“GAAP”). 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 other services is generally recognized at a point in time when the services are complete. 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. Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities are classified using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. • Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company will update its assumptions each reporting period based on new developments and will calculate fair value based on the revised assumptions, as applicable. See Note 8 - Fair Value Measurements for further discussion of the Company’s fair value measurements. 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. Assets Held For Sale The Company generally considers assets to be held for sale when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) management has initiated an active program to locate a buyer or buyers and other actions required to complete the plan to sell the disposal group, (iv) the sale of the property within one year is considered probable, (iv) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value and (vi) significant changes to the plan to sell are not expected. Property classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell in accordance with ASC 360, Property, Plant and Equipment - Impairment or Disposal of Long-Lived Assets . Reclassifications Balance Sheet We have reclassified certain prior period amounts in our condensed consolidated balance sheets to conform to our current period presentation. Specifically, we have reclassified “Accounts payable and accrued expenses” to separate captions of “Accounts payable” and “Accrued expenses.” We have also reclassified the presentations of restricted cash from “Prepaid expenses and other current assets” to its own caption of “Restricted cash” and security deposits from “Prepaid expenses and other current assets” to “Other assets.” Finally, we have condensed “Sales and use tax payable” into “Accrued expenses.” Income Statement We have reclassified certain prior period revenue amounts from “Revenue” to “Related party revenue” and have reclassified interest income from “Selling, general and administrative” expense 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 The Company has restricted cash related to its letters of credit totaling $36.5 million, which is held in money market funds. The Company is required to keep these balances in separate accounts for the duration of the letter of credit agreements, which have terms of up to two years. These letters of credit were issued in lieu of security deposits. The Company considers the money market funds to be Level 1 which the Company believes approximates fair value. Cash, cash equivalents, and restricted cash within the consolidated balance sheets that are included in the consolidated statements of cash flows as of February 29, 2024 and May 31, 2023 were as follows (in thousands): February 29, 2024 May 31, 2023 Cash and cash equivalents $ 4,435 $ 28,999 Restricted cash 29,545 14,575 Restricted cash included in other assets 7,000 — Total cash, cash equivalents, and restricted cash $ 40,980 $ 43,574

Property and Equipment

Property and Equipment	9 Months Ended
	Feb. 29, 2024
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and Equipment Property and equipment consisted of the following as of February 29, 2024, and May 31, 2023 (in thousands): Estimated Useful Life February 29, May 31, Networking equipment, electrical equipment, and software 5 years $ 31,003 $ 21,173 Electric generation and transformers 15 years 5,983 4,655 Land and building Building 39 years 103,624 63,350 Land 6,205 2,152 Land improvements 15 years 1,380 1,293 Leasehold improvements 3 years - 7 years 468 — Construction in progress 67,297 106,226 Other equipment and fixtures 5 years - 7 years 6,781 1,684 Total cost of property and equipment 222,741 200,533 Accumulated depreciation (11,569) (4,940) Property and equipment, net $ 211,172 $ 195,593 Depreciation expense totaled $7.9 million and $12.9 million for the three and nine months ended February 29, 2024 and $0.9 million and $2.6 million for the three and nine months ended February 28, 2023. During the three months ended February 29, 2024, the Company recognized $2.8 million of accelerated depreciation expense related to the abandonment of certain transformers and $1.4 million of accelerated amortization on the related right of use assets. These expenses relate primarily to transformers at the Company’s Ellendale datacenter hosting facility that required additional repairs and upgrades. The accelerated expense amount is presented within Cost of revenues in the accompanying Condensed Consolidated Statements of Operations.

Revenue from Contracts with Cus

Revenue from Contracts with Customers	9 Months Ended
	Feb. 29, 2024
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 nine months ended February 29, 2024 and February 28, 2023, respectively. Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Customer A 68 % — % 69 % — % Customer B — % 26 % — % 23 % Customer C — % 26 % — % 31 % Customer D — % 16 % — % 17 % Customer E — % 13 % — % 14 % Customer F — % 13 % — % 13 % Customer G 10 % — % — % — % Deferred Revenue Changes in the Company's deferred revenue balances for the nine months ended February 29, 2024 and February 28, 2023, respectively, are shown in the following table (in thousands): Nine Months Ended February 29, 2024 February 28, 2023 Balance, beginning of period $ 48,692 $ 3,877 Advance billings 129,044 76,961 Revenue recognized (121,875) (33,354) Other adjustments 8,547 135 Less: Related party balances (1,287) (2,435) Balance, end of period $ 63,121 $ 45,184 Customer Deposits Changes in the Company's customer deposits balances for the nine months ended February 29, 2024 and February 28, 2023, respectively, are shown in the following table (in thousands): Nine Months Ended February 29, 2024 February 28, 2023 Balance, beginning of period $ 36,370 $ 9,524 Customer deposits received 8,397 26,980 Other adjustments (8,547) (135) Less: Related party balances (3,810) (3,810) Balance, end of period $ 32,410 $ 32,559

Related Party Transactions

Related Party Transactions	9 Months Ended
	Feb. 29, 2024
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Related Party Revenue The following table illustrates related party revenue for the three and nine months ended February 29, 2024 and February 28, 2023 (in thousands): Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Customer D* $ 1,662 $ 2,250 $ 5,980 $ 5,690 Customer E** $ 1,402 $ 1,786 $ 4,903 $ 4,525 * 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 February 29, 2024 and May 31, 2023 (in thousands): Customer D balances as of Customer E balances as of February 29, 2024 May 31, 2023 February 29, 2024 May 31, 2023 Deferred revenue $ 895 $ 1,474 $ 392 $ 50 Customer Deposits $ 2,450 $ 2,450 $ 1,360 $ 1,360 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. As previously disclosed, the Company’s Chairman and Chief Executive Officer, served as the President of B. Riley Asset Management, and effective February 5, 2024, resigned from that position. Sublease income is included in selling, general and administrative expenses in our condensed consolidated statements of operations. The following table illustrates related party sublease income for the three and nine months ended February 29, 2024 and February 28, 2023 (in thousands): Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Sublease Income $ 23 $ 23 $ 70 $ 81 B. Riley Loan During the nine months ended February 29, 2024, the Company borrowed an additional $8.0 million and early repaid the total outstanding balance of $44.5 million. Interest expense and deferred issuance cost amortization associated with the loan was $0.7 million for the nine months ended February 29, 2024. The Company recognized a $2.4 million loss on debt extinguishment associated with the early repayment of the outstanding balance for the nine months ended February 29, 2024. On February 5, 2024, the Company entered into a Termination of Loan and Security letter with B. Riley Commercial Capital, LLC and B. Riley Securities, Inc. which terminated the Loan and Security Agreement dated as of May 23, 2023, as amended, among the parties. At the time of the Termination Letter, all principal, interest and fees under the Loan and Security Agreement had been paid in full. No early termination penalty was paid in connection with the Termination of Loan and Security letter. AI Bridge Loan On January 30, 2024, the Company issued an Unsecured Promissory Note (the “AI Bridge Loan”) payable to AI Bridge Funding LLC (the “Lender”), providing for an unsecured loan in the aggregate principal amount of up to $20.0 million, of which $15.0 million was available immediately and funded upon the execution of the AI Bridge Loan. The obligation of the Lender to advance the remaining $5.0 million shall be in the Lender’s sole discretion. The AI Bridge Loan will mature on January 30, 2026 and bears interest at a rate of 12.5% per annum. Additionally, upon the receipt by the Company or any of its subsidiaries of any cash proceeds from either the incurrence of any indebtedness (other than the AI Bridge Loan) or the issuance of any equity interests in the Company, which net proceeds total more than $35.0 million, the Company shall apply such net proceeds toward the prepayment of the outstanding principal of the AI Bridge Loan. Pursuant to the terms of the AI Bridge Loan, the Company is obligated to pay to the Lender a repayment fee in an amount sufficient for the Lender to receive an aggregate amount equal to 1.25x the aggregate principal amount funded as loans by the Lender to the Company. As of February 29, 2024, the total outstanding balance under the AI Bridge Loan was $15.0 million. The Company has elected to recognize the entire note at fair value under ASC 815, Derivatives and Hedging . During the three and nine months ended February 29, 2024, the Company recognized a $2.6 million loss on change in fair value of debt associated with such election which is included in our condensed consolidated statements of operations. See Note 8 - Fair Value Measurements for further discussion on the Company’s fair value considerations. Affiliates of the Lender are both an investor in B. Riley Financial, Inc. and also an investment management client of B. Riley Asset Management. As previously disclosed, the Company’s Chairman and Chief Executive Officer, served as the President of B. Riley Asset Management, and effective February 5, 2024, resigned from that position. Other Related Party Transactions During the three and nine months ended February 29, 2024, the Company paid construction and consulting costs of $44.4 thousand and $0.3 million, respectively, to a company owned by a family member of the Company’s Chief Financial Officer. During the three and nine months ended February 29, 2024, the Company paid software license fees of $0.1 million and $0.2 million, respectively, to a company whose chairman is also a member of the Company’s Board of Directors. During the three and nine months ended February 29, 2024, the Company paid $23 thousand in consulting fees to a Board of Director member for sales consulting work. The Company did not make any payments to these related parties during the three and nine months ended February 28, 2023.

Debt

Debt	9 Months Ended
	Feb. 29, 2024
Debt Disclosure [Abstract]
Debt	Debt Long-term debt consisted of the following components (in thousands): Interest Rate Maturity Date February 29, 2024 May 31, 2023 Starion term loan 6.50% July 25, 2027 $ 10,730 $ 12,786 Vantage Garden City loan 6.15% April 26, 2028 12,757 10,074 Starion Ellendale loan 7.48% February 3, 2028 17,079 19,728 Vantage transformer loan 6.50% February 8, 2029 3,660 — Other long-term debt 373 354 Deferred financing costs, net of amortization (425) (1,770) Less: Current portion of term loan (19,329) (7,950) Long-term debt, net $ 24,845 $ 33,222 Remaining Principal Payments Below is a summary of the remaining principal payments due over the life of the term loans as of February 29, 2024 (in thousands): Remainder of FY24 $ 14,429 FY25 6,946 FY26 8,555 FY27 9,172 FY28 5,492 Thereafter 5 Total $ 44,599 Letters of Credit As of February 29, 2024, the Company had letters of credit totaling $36.5 million. The Company has restricted cash related to its letters of credit and is required to keep these balances in separate accounts for the duration of the letter of credit agreements. The Company presents all restricted cash amounts with letter of credit term of 12 months or less within the Restricted Cash caption within current assets and any amounts with a related letter of credit term of over 12 months in Other Assets. Vantage Garden City Loan During the third quarter of fiscal year 2024, the Company approved plans to sell its Garden City facility. In accordance with the original loan agreement, the sale of the Garden City facility will cause the associated loan to become immediately callable by the lender as those assets were pledged as collateral for the loan. As such, the Company has reclassified the outstanding balance on the loan of $12.8 million to Current portion of long-term debt on its condensed consolidated balance sheets as of February 29, 2024. Cornerstone Bank Loan On February 28, 2024, APLD GPU-01, LLC, a wholly-owned subsidiary of the Company, entered into a Loan Agreement with Cornerstone Bank and the Company as Guarantor (the “Cornerstone Bank Loan”). The Cornerstone Bank Loan provides for a term loan in the principal amount of $16.0 million with a maturity date of March 1, 2029. The Cornerstone Bank Loan contains customary covenants, representations, warranties and events of default. The Cornerstone Bank Loan provides for an interest rate of 8.59% per annum. The proceeds of the Cornerstone Bank Loan will be used to finance, in part, existing improvements to real property. As of February 29, 2024, the Company had not received funding from the Cornerstone Bank Loan and accordingly, no amounts have been included in the tables above. Vantage Transformer Loan

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Feb. 29, 2024
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 February 29, 2024, the Company had issued awards for approximately 15.1 million shares of common stock of the Company under the plans. During the three and nine months ended February 29, 2024 the Company recognized $3.2 million and $13.6 million in stock-based compensation, respectively. Restricted Stock Awards The following is a summary of the activity and balances for unvested restricted stock awards granted for the nine months ended February 29, 2024: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2023 380,955 $ 2.22 Granted 315,265 4.94 Vested (391,416) 2.30 Forfeited (67,370) 4.75 Outstanding as of February 29, 2024 237,434 $ 4.98 As of February 29, 2024, total remaining expense to be recognized related to these awards was $1.0 million and the weighted average remaining recognition period for the unvested awards was 1.4 years. Restricted Stock Units The following is a summary of the activity and balances for unvested restricted stock units granted for the nine months ended February 29, 2024: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2023 12,465,935 $ 2.53 Granted 2,278,400 6.81 Vested (5,920,463) 2.68 Forfeited (314,575) 2.49 Outstanding as of February 29, 2024 8,509,297 $ 3.62 As of February 29, 2024, total remaining expense to be recognized related to these awards was $29.6 million and the weighted average remaining recognition period for the unvested awards was 2.0 years. Public Offering During the nine months ended February 29, 2024, the Company completed sales of common stock under an "at the market" sale agreement pursuant to which the Company could sell up to $125 million in aggregate proceeds of common stock. The Company sold approximately 18.9 million shares for net proceeds of approximately $121.0 million in total. Commission and legal fees related to the issuance were $0.7 million and $4.0 million for the three and nine months ended February 29, 2024, respectively. 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, or 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.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Feb. 29, 2024
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The carrying values of cash and cash equivalents, restricted cash and restricted cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term nature. The majority of the Company’s non-financial instruments, which include lease assets and property and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur, a non-financial instrument is required to be evaluated for impairment. If the Company determines that the non-financial instrument is impaired, the Company would be required to write down the non-financial instrument to its fair value. No such triggering events were identified during the three and nine months ended February 29, 2024. The Company’s debt outstanding under the AI Bridge Loan (See Note 5 - Related Party Transactions for further discussion) contains an accelerated redemption feature and the Company has elected to measure the entire note at fair value. The Company has not elected to measure its other existing long-term debt instruments at fair value. The Company engaged a third party valuation specialist to assist management in its determination of the fair value of the AI Bridge Loan. Changes in the fair value of debt are disclosed in loss on change in fair value of debt on the condensed consolidated statements of operations. Fair value of debt is determined on a recurring basis, which results are summarized as follows (in thousands): February 29, 2024 Debt instrument Fair Value Hierarchy Outstanding Principal Fair Value AI Bridge Loan Level 3 $ 15,000 $ 17,612 The fair value of the AI Bridge Loan was estimated using a discounted cash flow method applied to the remaining quarterly payments using a credit-adjusted discount rate calculated based on a risk-free rate derived from the U.S. yield curve for a similar term plus a credit risk adjustment derived from an estimated credit rating of CCC and above and which ranged from 5.31% to 5.71%. The resulting fair value represents a Level 3 fair value measurement.

Leases

Leases	9 Months Ended
	Feb. 29, 2024
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 Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Operating lease cost: Operating lease expense $ 5,203 $ 82 $ 8,174 $ 246 Short-term lease expense 12 118 52 341 Total operating lease cost 5,215 200 8,226 587 Finance lease expense: Amortization of right-of-use assets (1) 18,350 1,017 34,840 2,051 Interest on lease liabilities 3,253 224 5,994 516 Total finance lease cost 21,603 1,241 40,834 2,567 Variable lease cost 48 — 125 — Sublease Income (23) (23) (70) (81) Total net lease cost $ 26,843 $ 1,418 $ 49,115 $ 3,073 (1) Amortization of right-of-use assets is included 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 February 29, 2024: Operating Leases Finance Leases Total Remainder of FY24 $ 4,574 $ 24,119 $ 28,693 FY25 18,833 96,099 114,932 FY26 19,514 45,220 64,734 FY27 19,868 14 19,882 FY28 20,290 1 20,291 Thereafter 16,029 — 16,029 Total lease payments 99,108 165,453 264,561 Less: imputed interest (16,825) (15,212) (32,037) Total lease liabilities 82,283 150,241 232,524 Less: Current portion of lease liability (13,023) (86,438) (99,461) Long-term portion of lease liability $ 69,260 $ 63,803 $ 133,063 Supplemental cash flow and other information related to leases is as follows: Nine Months Ended February 29, 2024 February 28, 2023 Weighted-average years remaining (in years): Finance leases 2.5 years 28.6 years Operating leases 5.3 years 3.9 years Weighted-average discount rate: Finance leases 10.7 % 8.0 % Operating leases 7.6 % 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 Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Operating lease cost: Operating lease expense $ 5,203 $ 82 $ 8,174 $ 246 Short-term lease expense 12 118 52 341 Total operating lease cost 5,215 200 8,226 587 Finance lease expense: Amortization of right-of-use assets (1) 18,350 1,017 34,840 2,051 Interest on lease liabilities 3,253 224 5,994 516 Total finance lease cost 21,603 1,241 40,834 2,567 Variable lease cost 48 — 125 — Sublease Income (23) (23) (70) (81) Total net lease cost $ 26,843 $ 1,418 $ 49,115 $ 3,073 (1) Amortization of right-of-use assets is included 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 February 29, 2024: Operating Leases Finance Leases Total Remainder of FY24 $ 4,574 $ 24,119 $ 28,693 FY25 18,833 96,099 114,932 FY26 19,514 45,220 64,734 FY27 19,868 14 19,882 FY28 20,290 1 20,291 Thereafter 16,029 — 16,029 Total lease payments 99,108 165,453 264,561 Less: imputed interest (16,825) (15,212) (32,037) Total lease liabilities 82,283 150,241 232,524 Less: Current portion of lease liability (13,023) (86,438) (99,461) Long-term portion of lease liability $ 69,260 $ 63,803 $ 133,063 Supplemental cash flow and other information related to leases is as follows: Nine Months Ended February 29, 2024 February 28, 2023 Weighted-average years remaining (in years): Finance leases 2.5 years 28.6 years Operating leases 5.3 years 3.9 years Weighted-average discount rate: Finance leases 10.7 % 8.0 % Operating leases 7.6 % 12.5 %

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Feb. 29, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Commitments Energy Contracts The Company has a minimum commitment of approximately $82.2 million related to the energy services agreement for its Jamestown, North Dakota co-hosting facility with a remaining term of approximately 2.9 years as of February 29, 2024. Construction Contracts The Company routinely engages with construction vendors for the construction of our facilities. These engagements are governed by contracts containing standard terms and conditions, including certain milestones that obligate the Company to pay as work is completed. In the event of termination of any of these contracts by the Company, the Company would be liable for all work that has been completed or in process, plus any applicable fees. The Company generally has the right to cancel these open purchase orders prior to delivery or terminate the contracts without cause. 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. The Company, Wes Cummins, the Company's Chief Executive Officer, and David Rench, the Company's Chief Financial Officer, have been named as defendants in a putative securities class action lawsuit in the matter styled, McConnell v. Applied Digital Corporation, et al. , Case No. 3:23-cv-1805, filed in August 2023 in the U.S. District Court for the Northern District of Texas (the “Securities Lawsuit”). Specifically, the complaint asserts claims pursuant to Section 10(b) of the Securities and Exchange Act of 1934 based on allegedly false or misleading statements regarding the company’s business, operations, and compliance policies, including claims 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 case is in an early stage, and the Court has not appointed a lead plaintiff nor has any class been certified. The Company has not yet responded to the complaint and no response is currently due. On November 15, 2023, a derivative action was filed in the matter styled, Weich v. Cummins, et al. , Case No. A-23-881629-C in the District Court of Clark County, Nevada. The Weich complaint names as defendants certain members of the Company’s Board of Directors and its Chief Executive Officer Wesley Cummins and purports to name chief Financial Officer David Rench as a defendant. The complaint asserts claims for breaches of fiduciary duties, unjust enrichment, and corporate waste against the individual defendants largely based on the same fact allegations as the Securities Lawsuit. On February 27, 2024, the plaintiff filed an amended complaint, asserting the same causes of action against the same defendants as the original complaint. The deadline to file or otherwise respond the amended complaint is April 12, 2024. 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 February 29, 2024, 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	9 Months Ended
	Feb. 29, 2024
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 Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Datacenter hosting segment $ 37,795 $ 14,090 $ 109,720 $ 33,354 Cloud services segment 5,553 — 12,156 — Total revenue $ 43,348 $ 14,090 $ 121,876 $ 33,354 Segment profit (loss) and a reconciliation to net loss before income tax expenses is as follows (in thousands): Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Segment loss: Datacenter hosting segment (1) $ (24,443) $ (3,117) $ (4,647) $ (18,218) Cloud services segment (21,565) (741) (40,694) (741) HPC hosting segment (1,445) (18) (3,106) (18) Total segment loss (47,453) (3,876) (48,447) (18,977) Other (2) (8,369) (3,113) (22,973) (18,898) Operating loss (55,822) (6,989) (71,420) (37,875) Interest expense, net 4,404 352 8,836 1,061 Loss on change in fair value of related party debt 2,612 — 2,612 — Loss on debt extinguishment — — 2,353 94 Net loss before income tax expenses $ (62,838) $ (7,341) $ (85,221) $ (39,030) (1) The three and nine months ended February 29, 2024 includes $21.7 million loss on held for sale classification related to the sale of the Garden City facility, as well as $2.8 million of accelerated depreciation and $1.4 million of accelerated amortization related to damaged transformers at the Company’s Ellendale facility that have been rendered obsolete. See Note 13 - Assets Held for Sale and Note 3 - Property and Equipment, respectively, for further discussion of these events. (2) Other includes corporate related items not allocated to reportable segments. We also provide the following additional segment disclosures (in thousands): Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Depreciation and amortization: Datacenter hosting segment $ 9,162 $ 1,904 $ 16,902 $ 4,596 Cloud services segment 16,534 13 29,824 13 HPC hosting segment 407 1 717 1 Other (1) 102 8 221 20 Total depreciation and amortization (2) $ 26,205 $ 1,926 $ 47,664 $ 4,630 (1) Other includes corporate related items not allocated to reportable segments. (2) Includes amortization of the finance lease right-of-use assets. Information on segment assets and a reconciliation to consolidated assets are as follows (in thousands): February 29, 2024 May 31, 2023 Datacenter hosting segment $ 218,698 $ 224,447 Cloud services segment 297,561 3,127 HPC hosting segment 103,896 10,949 Total segment assets 620,155 238,523 Other (1) 23,013 25,434 Total assets $ 643,168 $ 263,957 (1) Other includes corporate related items not allocated to reportable segments.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Feb. 29, 2024
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share Basic net income (loss) per share (“EPS”) of common stock is computed by dividing a 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 Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Net loss $ (62,838) $ (7,341) $ (85,221) $ (38,750) Net loss attributable to noncontrolling interest — (316) (397) (577) Net loss attributable to Applied Digital Corporation $ (62,838) $ (7,025) $ (84,824) $ (38,173) Basic and diluted net loss per share attributable to Applied Digital Corporation $ (0.52) $ (0.07) $ (0.77) $ (0.41) Basic and diluted weighted average number of shares outstanding 121,426,622 94,119,944 110,500,556 93,545,687

Assets Held for Sale

Assets Held for Sale	9 Months Ended
	Feb. 29, 2024
Discontinued Operations and Disposal Groups [Abstract]
Assets Held for Sale	Assets Held for Sale During the third quarter of fiscal 2024, the Company’s board approved plans to sell its Garden City facility. As such, the Company determined that the Garden City datacenter hosting facility met the “held for sale” classification as of February 29, 2024. On March 14, 2024, the Company entered into an agreement to sell the facility for a total potential cash consideration of $87.3 million (the “Cash Purchase Price”). As part of the agreement, the Company can earn additional consideration if it is able to assist the buyer in achieving regulatory approval for additional megawatt energization for the Garden City datacenter hosting facility within 120 days after the transaction closing (the “Contingent Amount”). As such, the associated property, equipment, and lease assets and liabilities have been classified as “held for sale” and the Company recorded a charge of $21.7 million in loss on held for sale classification on its condensed consolidated statements of operations for the three and nine months ended February 29, 2024 to record the asset group at its fair value less costs to sell. The Company has determined that this disposal did not qualify as a discontinued operation as the sale of the Garden City Facility was determined to not be a strategic shift as it does not represent a change in services provided or a change to the Company’s customer base. Assets and liabilities held for sale as of February 29, 2024 are as follows: Assets held for sale Property and equipment, net $ 57,260 Finance lease right of use assets 8,109 Total assets held for sale $ 65,369 Liabilities held for sale Current portion of finance lease liability $ 3,657 Long-term portion of finance lease liability 4,622 Total liabilities held for sale $ 8,279 The Company has calculated the loss on assets held for sale as of February 29, 2024 based on the purchase price agreed upon with Marathon on March 14, 2024. The Company notes that the purchase agreement contains a $34.0 million “holdover” amount that is conditionally owed to the Company if additional energy capacity at the facility receives regulatory approval within 120 days of closing. For purposes of applying the fair value as of February 29, 2024, the Company did not consider achievement of this approval probable, and therefore has not considered any of the holdover amount when calculating the implied purchase price and fair value. Further, the Company notes that Marathon will release approximately $10.0 million of deferred revenue held by the Company in conjunction with the closing of the agreement. The Company also notes that Marathon will receive all assets related to the facility but is only assuming the ground lease liabilities, and the remaining $5.1 million of equipment lease liabilities are the responsibility of the Company to pay off at closing. Accordingly, the Company has excluded these lease liabilities in its calculation of fair value below. See below for the Company’s calculation of the implied transaction price and fair value and the resulting loss on the classification of assets as held for sale (in thousands): Assets held for sale Maximum Purchase Price $ 87,329 Less: Conditional Amount (34,000) Cash Consideration 53,329 Lease Liabilities Assumed 3,207 Deferred Revenue Released 9,971 Implied Fair Value 66,507 Less: Estimated Costs to Sell (1,200) Total fair value less costs to sell $ 65,307 Loss calculation Carrying value of assets held for sale $ 87,030 Less: Fair value less costs to sell 65,307 Loss on classification of held for sale $ 21,723

Subsequent Events

Subsequent Events	9 Months Ended
	Feb. 29, 2024
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Cornerstone Bank Loan Funding On March 1, 2024, the Company received funding under the Cornerstone Bank Loan. The funding, net of issuance fees, totaled $15.7 million. See Note 6 - Debt for further discussion of the Cornerstone Bank Loan. AI Bridge Loan Subsequent to the quarter ended February 29, 2024, the Company borrowed the remaining $5 million in funds available under the existing AI Bridge Loan. This additional borrowing brings the total outstanding under the AI Bridge loan to $20.0 million. On March 27, 2024, concurrent with the Yorkville Promissory Notes, the Company and the Lender entered into a Waiver, Consent and Amendment with respect to certain provisions of the AI Bridge Loan as set forth above (the “Amendment and Waiver”). Pursuant to the terms and conditions of the Amendment and Waiver, (i) the Lender agreed to waive the prepayment obligations of the Company that otherwise would have been triggered upon closing of the PPA and Promissory Notes described below, and (ii) the Company’s obligations with respect to the repayment fee due to the Lender were amended so that upon repayment the Lender would receive an aggregate amount equal to 1.30x the aggregate principal amount funded as loans by the Lender to the Company in accordance with the terms and provisions of the AI Bridge Loan. Sale of Garden City Facility On March 14, 2024, APLD – Rattlesnake Den I LLC, a Delaware limited liability company and a subsidiary of the Company, entered into a purchase and sale agreement with Mara Garden City LLC, a Delaware limited liability company and a subsidiary of Marathon Digital Holdings, Inc., pursuant to which Rattlesnake Den I LLC agreed to sell to Mara Garden City LLC its datacenter facility located in Garden City, Texas (the “Garden City Transaction”). The Garden City Transaction closed on April 1, 2024. Yorkville Convertible Notes On March 27, 2024, the Company entered into a Prepaid Advance Agreement (the “PPA”) with YA II PN, LTD., a Cayman Islands exempt limited partnership (the “Investor”). In accordance with the terms of the PPA, the Investor has agreed to advance up to $50.0 million to the Company pursuant to two convertible unsecured promissory notes (the “Promissory Notes”). The Company issued the first Promissory Note on March 27, 2024, in the principal amount of $40.0 million, in consideration of a cash payment from the Investor of approximately $38.0 million, representing a five percent original issue discount. The second Promissory Note will be issued in the principal amount of $10.0 million, less a five percent original issue discount, within two trading days after a resale registration statement relating to the shares of common stock underlying the Promissory Notes is declared effective. The Promissory Notes are convertible into shares of the Company’s common stock, which have a par value of $0.001 per share.

Basis of Presentation and Sig_2

Basis of Presentation and Significant Accounting Policies (Policies)	9 Months Ended
	Feb. 29, 2024
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	Significant Accounting Policies and Use of Estimates Use of Estimates The preparation of the unaudited condensed consolidated financial statements is in conformity with accounting principles generally accepted in the United States of America (“GAAP”). 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 other services is generally recognized at a point in time when the services are complete. 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
Fair Value Measurements	Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities are classified using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. • Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company will update its assumptions each reporting period based on new developments and will calculate fair value based on the revised assumptions, as applicable. See Note 8 - Fair Value Measurements for further discussion of the Company’s fair value measurements.
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.
Assets Held For Sale	Assets Held For Sale The Company generally considers assets to be held for sale when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) management has initiated an active program to locate a buyer or buyers and other actions required to complete the plan to sell the disposal group, (iv) the sale of the property within one year is considered probable, (iv) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value and (vi) significant changes to the plan to sell are not expected. Property classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell in accordance with ASC 360, Property, Plant and Equipment - Impairment or Disposal of Long-Lived Assets .
Reclassifications	Reclassifications Balance Sheet We have reclassified certain prior period amounts in our condensed consolidated balance sheets to conform to our current period presentation. Specifically, we have reclassified “Accounts payable and accrued expenses” to separate captions of “Accounts payable” and “Accrued expenses.” We have also reclassified the presentations of restricted cash from “Prepaid expenses and other current assets” to its own caption of “Restricted cash” and security deposits from “Prepaid expenses and other current assets” to “Other assets.” Finally, we have condensed “Sales and use tax payable” into “Accrued expenses.” Income Statement We have reclassified certain prior period revenue amounts from “Revenue” to “Related party revenue” and have reclassified interest income from “Selling, general and administrative” expense 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 The Company has restricted cash related to its letters of credit totaling $36.5 million, which is held in money market funds. The Company is required to keep these balances in separate accounts for the duration of the letter of credit agreements, which have terms of up to two years. These letters of credit were issued in lieu of security deposits. The Company considers the money market funds to be Level 1 which the Company believes approximates fair value.

Basis of Presentation and Sig_3

Basis of Presentation and Significant Accounting Policies (Tables)	9 Months Ended
	Feb. 29, 2024
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 February 29, 2024 and May 31, 2023 were as follows (in thousands): February 29, 2024 May 31, 2023 Cash and cash equivalents $ 4,435 $ 28,999 Restricted cash 29,545 14,575 Restricted cash included in other assets 7,000 — Total cash, cash equivalents, and restricted cash $ 40,980 $ 43,574

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Feb. 29, 2024
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	Property and equipment consisted of the following as of February 29, 2024, and May 31, 2023 (in thousands): Estimated Useful Life February 29, May 31, Networking equipment, electrical equipment, and software 5 years $ 31,003 $ 21,173 Electric generation and transformers 15 years 5,983 4,655 Land and building Building 39 years 103,624 63,350 Land 6,205 2,152 Land improvements 15 years 1,380 1,293 Leasehold improvements 3 years - 7 years 468 — Construction in progress 67,297 106,226 Other equipment and fixtures 5 years - 7 years 6,781 1,684 Total cost of property and equipment 222,741 200,533 Accumulated depreciation (11,569) (4,940) Property and equipment, net $ 211,172 $ 195,593

Revenue from Contracts with C_2

Revenue from Contracts with Customers (Tables)	9 Months Ended
	Feb. 29, 2024
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 nine months ended February 29, 2024 and February 28, 2023, respectively. Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Customer A 68 % — % 69 % — % Customer B — % 26 % — % 23 % Customer C — % 26 % — % 31 % Customer D — % 16 % — % 17 % Customer E — % 13 % — % 14 % Customer F — % 13 % — % 13 % Customer G 10 % — % — % — %
Schedule of Deferred Revenue	Changes in the Company's deferred revenue balances for the nine months ended February 29, 2024 and February 28, 2023, respectively, are shown in the following table (in thousands): Nine Months Ended February 29, 2024 February 28, 2023 Balance, beginning of period $ 48,692 $ 3,877 Advance billings 129,044 76,961 Revenue recognized (121,875) (33,354) Other adjustments 8,547 135 Less: Related party balances (1,287) (2,435) Balance, end of period $ 63,121 $ 45,184
Schedule of Customer Deposits	Changes in the Company's customer deposits balances for the nine months ended February 29, 2024 and February 28, 2023, respectively, are shown in the following table (in thousands): Nine Months Ended February 29, 2024 February 28, 2023 Balance, beginning of period $ 36,370 $ 9,524 Customer deposits received 8,397 26,980 Other adjustments (8,547) (135) Less: Related party balances (3,810) (3,810) Balance, end of period $ 32,410 $ 32,559

Related Party Transactions (Tab

Related Party Transactions (Tables)	9 Months Ended
	Feb. 29, 2024
Related Party Transactions [Abstract]
Schedule of Related Party Transactions	The following table illustrates related party revenue for the three and nine months ended February 29, 2024 and February 28, 2023 (in thousands): Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Customer D* $ 1,662 $ 2,250 $ 5,980 $ 5,690 Customer E** $ 1,402 $ 1,786 $ 4,903 $ 4,525 * 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 February 29, 2024 and May 31, 2023 (in thousands): Customer D balances as of Customer E balances as of February 29, 2024 May 31, 2023 February 29, 2024 May 31, 2023 Deferred revenue $ 895 $ 1,474 $ 392 $ 50 Customer Deposits $ 2,450 $ 2,450 $ 1,360 $ 1,360 Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Sublease Income $ 23 $ 23 $ 70 $ 81

Debt (Tables)

Debt (Tables)	9 Months Ended
	Feb. 29, 2024
Debt Disclosure [Abstract]
Schedule of Long-Term Debt Instruments	Long-term debt consisted of the following components (in thousands): Interest Rate Maturity Date February 29, 2024 May 31, 2023 Starion term loan 6.50% July 25, 2027 $ 10,730 $ 12,786 Vantage Garden City loan 6.15% April 26, 2028 12,757 10,074 Starion Ellendale loan 7.48% February 3, 2028 17,079 19,728 Vantage transformer loan 6.50% February 8, 2029 3,660 — Other long-term debt 373 354 Deferred financing costs, net of amortization (425) (1,770) Less: Current portion of term loan (19,329) (7,950) Long-term debt, net $ 24,845 $ 33,222
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 February 29, 2024 (in thousands): Remainder of FY24 $ 14,429 FY25 6,946 FY26 8,555 FY27 9,172 FY28 5,492 Thereafter 5 Total $ 44,599

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Feb. 29, 2024
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 nine months ended February 29, 2024: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2023 380,955 $ 2.22 Granted 315,265 4.94 Vested (391,416) 2.30 Forfeited (67,370) 4.75 Outstanding as of February 29, 2024 237,434 $ 4.98 The following is a summary of the activity and balances for unvested restricted stock units granted for the nine months ended February 29, 2024: Number of Shares Weighted Average Grant Date Fair Value Per Share Outstanding as of May 31, 2023 12,465,935 $ 2.53 Granted 2,278,400 6.81 Vested (5,920,463) 2.68 Forfeited (314,575) 2.49 Outstanding as of February 29, 2024 8,509,297 $ 3.62

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Feb. 29, 2024
Fair Value Disclosures [Abstract]
Schedule of Fair value of Debt Determined on Recurring Basis	Fair value of debt is determined on a recurring basis, which results are summarized as follows (in thousands): February 29, 2024 Debt instrument Fair Value Hierarchy Outstanding Principal Fair Value AI Bridge Loan Level 3 $ 15,000 $ 17,612

Leases (Tables)

Leases (Tables)	9 Months Ended
	Feb. 29, 2024
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 Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Operating lease cost: Operating lease expense $ 5,203 $ 82 $ 8,174 $ 246 Short-term lease expense 12 118 52 341 Total operating lease cost 5,215 200 8,226 587 Finance lease expense: Amortization of right-of-use assets (1) 18,350 1,017 34,840 2,051 Interest on lease liabilities 3,253 224 5,994 516 Total finance lease cost 21,603 1,241 40,834 2,567 Variable lease cost 48 — 125 — Sublease Income (23) (23) (70) (81) Total net lease cost $ 26,843 $ 1,418 $ 49,115 $ 3,073 (1) Amortization of right-of-use assets is included 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: Nine Months Ended February 29, 2024 February 28, 2023 Weighted-average years remaining (in years): Finance leases 2.5 years 28.6 years Operating leases 5.3 years 3.9 years Weighted-average discount rate: Finance leases 10.7 % 8.0 % Operating leases 7.6 % 12.5 %
Schedule of Future Minimum Operating Lease Payments	The following table represents the Company’s future minimum lease payments as of February 29, 2024: Operating Leases Finance Leases Total Remainder of FY24 $ 4,574 $ 24,119 $ 28,693 FY25 18,833 96,099 114,932 FY26 19,514 45,220 64,734 FY27 19,868 14 19,882 FY28 20,290 1 20,291 Thereafter 16,029 — 16,029 Total lease payments 99,108 165,453 264,561 Less: imputed interest (16,825) (15,212) (32,037) Total lease liabilities 82,283 150,241 232,524 Less: Current portion of lease liability (13,023) (86,438) (99,461) Long-term portion of lease liability $ 69,260 $ 63,803 $ 133,063
Schedule of Future Minimum Finance Lease Payments	The following table represents the Company’s future minimum lease payments as of February 29, 2024: Operating Leases Finance Leases Total Remainder of FY24 $ 4,574 $ 24,119 $ 28,693 FY25 18,833 96,099 114,932 FY26 19,514 45,220 64,734 FY27 19,868 14 19,882 FY28 20,290 1 20,291 Thereafter 16,029 — 16,029 Total lease payments 99,108 165,453 264,561 Less: imputed interest (16,825) (15,212) (32,037) Total lease liabilities 82,283 150,241 232,524 Less: Current portion of lease liability (13,023) (86,438) (99,461) Long-term portion of lease liability $ 69,260 $ 63,803 $ 133,063

Business Segments (Tables)

Business Segments (Tables)	9 Months Ended
	Feb. 29, 2024
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 Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Datacenter hosting segment $ 37,795 $ 14,090 $ 109,720 $ 33,354 Cloud services segment 5,553 — 12,156 — Total revenue $ 43,348 $ 14,090 $ 121,876 $ 33,354 We also provide the following additional segment disclosures (in thousands): Three Months Ended Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Depreciation and amortization: Datacenter hosting segment $ 9,162 $ 1,904 $ 16,902 $ 4,596 Cloud services segment 16,534 13 29,824 13 HPC hosting segment 407 1 717 1 Other (1) 102 8 221 20 Total depreciation and amortization (2) $ 26,205 $ 1,926 $ 47,664 $ 4,630 (1) Other includes corporate related items not allocated to reportable segments. (2) Includes amortization of the finance lease right-of-use assets. Information on segment assets and a reconciliation to consolidated assets are as follows (in thousands): February 29, 2024 May 31, 2023 Datacenter hosting segment $ 218,698 $ 224,447 Cloud services segment 297,561 3,127 HPC hosting segment 103,896 10,949 Total segment assets 620,155 238,523 Other (1) 23,013 25,434 Total assets $ 643,168 $ 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 Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Segment loss: Datacenter hosting segment (1) $ (24,443) $ (3,117) $ (4,647) $ (18,218) Cloud services segment (21,565) (741) (40,694) (741) HPC hosting segment (1,445) (18) (3,106) (18) Total segment loss (47,453) (3,876) (48,447) (18,977) Other (2) (8,369) (3,113) (22,973) (18,898) Operating loss (55,822) (6,989) (71,420) (37,875) Interest expense, net 4,404 352 8,836 1,061 Loss on change in fair value of related party debt 2,612 — 2,612 — Loss on debt extinguishment — — 2,353 94 Net loss before income tax expenses $ (62,838) $ (7,341) $ (85,221) $ (39,030) (1) The three and nine months ended February 29, 2024 includes $21.7 million loss on held for sale classification related to the sale of the Garden City facility, as well as $2.8 million of accelerated depreciation and $1.4 million of accelerated amortization related to damaged transformers at the Company’s Ellendale facility that have been rendered obsolete. See Note 13 - Assets Held for Sale and Note 3 - Property and Equipment, respectively, for further discussion of these events. (2) Other includes corporate related items not allocated to reportable segments.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Feb. 29, 2024
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 Nine Months Ended February 29, 2024 February 28, 2023 February 29, 2024 February 28, 2023 Net loss $ (62,838) $ (7,341) $ (85,221) $ (38,750) Net loss attributable to noncontrolling interest — (316) (397) (577) Net loss attributable to Applied Digital Corporation $ (62,838) $ (7,025) $ (84,824) $ (38,173) Basic and diluted net loss per share attributable to Applied Digital Corporation $ (0.52) $ (0.07) $ (0.77) $ (0.41) Basic and diluted weighted average number of shares outstanding 121,426,622 94,119,944 110,500,556 93,545,687

Assets Held for Sale (Tables)

Assets Held for Sale (Tables)	9 Months Ended
	Feb. 29, 2024
Discontinued Operations and Disposal Groups [Abstract]
Schedule of Assets and Liabilities Held for Sale	Assets and liabilities held for sale as of February 29, 2024 are as follows: Assets held for sale Property and equipment, net $ 57,260 Finance lease right of use assets 8,109 Total assets held for sale $ 65,369 Liabilities held for sale Current portion of finance lease liability $ 3,657 Long-term portion of finance lease liability 4,622 Total liabilities held for sale $ 8,279 Assets held for sale Maximum Purchase Price $ 87,329 Less: Conditional Amount (34,000) Cash Consideration 53,329 Lease Liabilities Assumed 3,207 Deferred Revenue Released 9,971 Implied Fair Value 66,507 Less: Estimated Costs to Sell (1,200) Total fair value less costs to sell $ 65,307 Loss calculation Carrying value of assets held for sale $ 87,030 Less: Fair value less costs to sell 65,307 Loss on classification of held for sale $ 21,723

Business and Organization (Deta

Business and Organization (Details)	9 Months Ended
	Feb. 29, 2024 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) $ in Millions	9 Months Ended
	Feb. 29, 2024 USD ($) segment
Accounting Policies [Abstract]
Number of reportable segments | segment	3
Restricted cash | $	$ 36.5
Letters of credit, term	2 years

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	Feb. 29, 2024	May 31, 2023
Accounting Policies [Abstract]
Cash and cash equivalents	$ 4,435	$ 28,999
Restricted cash	29,545	14,575
Restricted cash included in other assets	7,000	0
Total cash, cash equivalents, and restricted cash	$ 40,980	$ 43,574

Property and Equipment - Schedu

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Feb. 29, 2024	May 31, 2023
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 222,741	$ 200,533
Accumulated depreciation	(11,569)	(4,940)
Property and equipment, net	$ 211,172	195,593
Networking equipment, electrical equipment, and software
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years
Total cost of property and equipment	$ 31,003	21,173
Electric generation and transformers
Property, Plant and Equipment [Line Items]
Estimated Useful Life	15 years
Total cost of property and equipment	$ 5,983	4,655
Building
Property, Plant and Equipment [Line Items]
Estimated Useful Life	39 years
Total cost of property and equipment	$ 103,624	63,350
Land
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 6,205	2,152
Land improvements
Property, Plant and Equipment [Line Items]
Estimated Useful Life	15 years
Total cost of property and equipment	$ 1,380	1,293
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
Construction in progress
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 67,297	106,226
Other equipment and fixtures
Property, Plant and Equipment [Line Items]
Total cost of property and equipment	$ 6,781	$ 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

Property and Equipment - Narrat

Property and Equipment - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Property, Plant and Equipment [Line Items]
Depreciation	$ 7,900	$ 900	$ 12,900	$ 2,600
Abandoned Equipment
Property, Plant and Equipment [Line Items]
Accelerated depreciation	2,800
Operating Lease, Right-Of-Use
Property, Plant and Equipment [Line Items]
Accelerated depreciation	$ 1,400

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		9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Customer A
Concentration Risk [Line Items]
Concentration risk	68%	0%	69%	0%
Customer B
Concentration Risk [Line Items]
Concentration risk	0%	26%	0%	23%
Customer C
Concentration Risk [Line Items]
Concentration risk	0%	26%	0%	31%
Customer D
Concentration Risk [Line Items]
Concentration risk	0%	16%	0%	17%
Customer E
Concentration Risk [Line Items]
Concentration risk	0%	13%	0%	14%
Customer F
Concentration Risk [Line Items]
Concentration risk	0%	13%	0%	13%
Customer G
Concentration Risk [Line Items]
Concentration risk	10%	0%	0%	0%

Revenue from Contracts with C_4

Revenue from Contracts with Customers - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands	9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023
Movement in Deferred Revenue [Roll Forward]
Balance, beginning of period	$ 48,692	$ 3,877
Advance billings	129,044	76,961
Revenue recognized	(121,875)	(33,354)
Other adjustments	8,547	135
Related Party
Movement in Deferred Revenue [Roll Forward]
Less: Related party balances	(1,287)	(2,435)
Nonrelated Party
Movement in Deferred Revenue [Roll Forward]
Balance, end of period	$ 63,121	$ 45,184

Revenue from Contracts with C_5

Revenue from Contracts with Customers - Schedule of Customer Deposits (Details) - USD ($) $ in Thousands	9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023
Customer Deposits [Roll Forward]
Balance, beginning of period	$ 36,370	$ 9,524
Customer deposits received	8,397	26,980
Other adjustments	(8,547)	(135)
Related Party
Customer Deposits [Roll Forward]
Less: Related party balances	(3,810)	(3,810)
Nonrelated Party
Customer Deposits [Roll Forward]
Balance, end of period	$ 32,410	$ 32,559

Related Party Transactions - Re

Related Party Transactions - Related Party Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023	May 31, 2023	May 31, 2022
Related Party Transaction [Line Items]
Total revenue	$ 43,348	$ 14,090	$ 121,876	$ 33,354
Deferred revenue					$ 48,692	$ 3,877
Related Party
Related Party Transaction [Line Items]
Total revenue	3,064	4,036	$ 10,883	10,215
Customer D
Related Party Transaction [Line Items]
Related party ownership interests			5%
Customer D | Related Party
Related Party Transaction [Line Items]
Total revenue	1,662	2,250	$ 5,980	5,690
Deferred revenue	895		895		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	1,402	$ 1,786	$ 4,903	$ 4,525
Deferred revenue	392		392		50
Customer Deposits	$ 1,360		$ 1,360		$ 1,360
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		9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Related Party Transaction [Line Items]
Sublease Income	$ 23	$ 23	$ 70	$ 81
Related Party
Related Party Transaction [Line Items]
Sublease Income	$ 23	$ 23	$ 70	$ 81

Related Party Transactions - Na

Related Party Transactions - Narrative (Details) - USD ($)			3 Months Ended		9 Months Ended
		Jan. 30, 2024	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023	May 31, 2023
Related Party Transaction [Line Items]
Interest expense, net	[1]		$ 4,404,000	$ 352,000	$ 8,836,000	$ 1,061,000
Loss on extinguishment of debt	[2]		0	0	2,353,000	94,000
Loss on change in fair value of related party debt			2,612,000	$ 0	2,612,000	0
Related Party
Related Party Transaction [Line Items]
Borrowings of related party debt					23,000,000	0
Repayment of related party debt					45,500,000	$ 0
Long-term debt			17,612,000		17,612,000		$ 35,257,000
Related Party | Construction And Consulting Costs
Related Party Transaction [Line Items]
Transaction fees			44,400		300,000
Related Party | Software License Fees
Related Party Transaction [Line Items]
Transaction fees			100,000		200,000
Related Party | Consulting Fees
Related Party Transaction [Line Items]
Transaction fees			23,000		23,000
B. Riley Loan and Security Agreement | Medium-term Notes
Related Party Transaction [Line Items]
Borrowings of related party debt					8,000,000
Repayment of related party debt					44,500,000
Interest expense, net					700,000
Loss on extinguishment of debt					2,400,000
AI Bridge Loan
Related Party Transaction [Line Items]
Long-term debt			$ 15,000,000		$ 15,000,000
AI Bridge Loan | Notes Payable, Other Payables
Related Party Transaction [Line Items]
Promissory note amount		$ 20,000,000
Funds available immediately upon execution of note		15,000,000
Remaining available amount		$ 5,000,000
Effective interest rate, percentage		12.50%
Threshold amount of proceeds before required prepayment		$ 35,000,000
Repayment fee		125%
[1] Includes related party interest expense of $0.2 million and $0.8 million for the three months ended and nine months ended February 29, 2024, respectively. There was no related party debt issued during three and nine months ended February 28, 2023 and as such, no interest expense was incurred related to related party debt. Amounts included in the nine months ended February 29, 2024 are related to the extinguishment of related party debt.

Debt - Schedule of Long-Term De

Debt - Schedule of Long-Term Debt (Details) - Medium-term Notes - USD ($) $ in Thousands	Feb. 29, 2024	May 31, 2023
Debt Instrument [Line Items]
Other long-term debt	$ 44,599
Deferred financing costs, net of amortization	(425)	$ (1,770)
Less: Current portion of term loan	(19,329)	(7,950)
Long-term debt, net	$ 24,845	33,222
Starion term loan
Debt Instrument [Line Items]
Interest rate	6.50%
Other long-term debt	$ 10,730	12,786
Vantage Garden City loan
Debt Instrument [Line Items]
Interest rate	6.15%
Other long-term debt	$ 12,757	10,074
Starion Ellendale loan
Debt Instrument [Line Items]
Interest rate	7.48%
Other long-term debt	$ 17,079	19,728
Vantage transformer loan
Debt Instrument [Line Items]
Interest rate	6.50%
Other long-term debt	$ 3,660	0
Other long-term debt
Debt Instrument [Line Items]
Other long-term debt	$ 373	$ 354

Debt - Schedule of Maturities o

Debt - Schedule of Maturities of Long-Term Debt (Details) - Medium-term Notes $ in Thousands	Feb. 29, 2024 USD ($)
Debt Instrument [Line Items]
Remainder of FY24	$ 14,429
FY25	6,946
FY26	8,555
FY27	9,172
FY28	5,492
Thereafter	5
Total	$ 44,599

Debt - Narrative (Details)

Debt - Narrative (Details) - USD ($) $ in Thousands	Feb. 29, 2024	Feb. 28, 2024	Feb. 08, 2024	May 31, 2023
Debt Instrument [Line Items]
Restricted cash	$ 36,500
Medium-term Notes
Debt Instrument [Line Items]
Other long-term debt	44,599
Deferred costs	425			$ 1,770
Cornerstone bank loan
Debt Instrument [Line Items]
Promissory note amount		$ 16,000
Cornerstone bank loan | Medium-term Notes
Debt Instrument [Line Items]
Interest rate		8.59%
Vantage Garden City loan | Medium-term Notes
Debt Instrument [Line Items]
Other long-term debt	$ 12,757			10,074
Interest rate	6.15%
Vantage transformer loan | Medium-term Notes
Debt Instrument [Line Items]
Other long-term debt	$ 3,660			$ 0
Promissory note amount			$ 3,700
Interest rate	6.50%

Stockholders' Equity - Narrativ

Stockholders' Equity - Narrative (Details) $ in Thousands, shares in Millions		3 Months Ended	9 Months Ended
	Aug. 31, 2023 USD ($) shares	Feb. 29, 2024 USD ($) shares	Feb. 29, 2024 USD ($) shares	Feb. 28, 2023 USD ($)	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			18.9
Issuance of common stock			$ 121,002	$ 0
Payments of stock issuance costs		$ 700	4,000
Extinguishment of noncontrolling interest (in shares) | shares	1.5
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		$ 29,600	$ 29,600
Unrecognized stock compensation expense, period for recognition			2 years
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		15.1	15.1
Stock-based compensation recognized		$ 3,200	$ 13,600
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock compensation expense		$ 1,000	$ 1,000
Unrecognized stock compensation expense, period for recognition			1 year 4 months 24 days

Stockholders' Equity - Schedule

Stockholders' Equity - Schedule of Restricted Stock Awards (Details) - Restricted Stock Awards	9 Months Ended
	Feb. 29, 2024 $ / shares shares
Number of Shares
Outstanding at beginning of period (in shares) | shares	380,955
Granted (in shares) | shares	315,265
Vested (in shares) | shares	(391,416)
Forfeited (in shares) | shares	(67,370)
Outstanding at end of period (in shares) | shares	237,434
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	4.94
Vested (in dollars per share) | $ / shares	2.30
Forfeited (in dollars per share) | $ / shares	4.75
Weighted average grant date fair value, outstanding at end of period (in dollars per share) | $ / shares	$ 4.98

Stockholders' Equity - Schedu_2

Stockholders' Equity - Schedule of Restricted Stock Awards & Units (Details) - Restricted Stock Units (RSUs) - $ / shares	9 Months Ended
	Feb. 29, 2024	May 31, 2023
Number of Shares
Outstanding at beginning of period (in shares)	12,465,935
Granted (in shares)	2,278,400
Vested (in shares)	(5,920,463)
Forfeited (in shares)	(314,575)
Outstanding at end of period (in shares)	8,509,297
Weighted Average Grant Date Fair Value Per Share
Weighted average grant date fair value, outstanding at beginning of period (in dollars per share)	$ 3.62	$ 2.53
Granted (in dollars per share)	6.81
Vested (in dollars per share)	2.68
Forfeited (in dollars per share)	2.49
Weighted average grant date fair value, outstanding at end of period (in dollars per share)	$ 3.62

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Fair value of Debt Determined on Non-Recurring Basis (Details) - USD ($) $ in Thousands	Feb. 29, 2024	May 31, 2023
Related Party
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	$ 17,612	$ 35,257
AI Bridge Loan
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	15,000
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt	15,000
Fair Value	$ 17,612

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - Measurement Input, Discount Rate	Feb. 29, 2024
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit-adjusted discount rate	0.0531
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Credit-adjusted discount rate	0.0571

Leases - Components of Lease Ex

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Operating lease cost:
Operating lease expense	$ 5,203	$ 82	$ 8,174	$ 246
Short-term lease expense	12	118	52	341
Total operating lease cost	5,215	200	8,226	587
Finance lease expense:
Amortization of right-of-use assets	18,350	1,017	34,840	2,051
Interest on lease liabilities	3,253	224	5,994	516
Total finance lease cost	21,603	1,241	40,834	2,567
Variable lease cost	48	0	125	0
Sublease Income	(23)	(23)	(70)	(81)
Total net lease cost	$ 26,843	$ 1,418	$ 49,115	$ 3,073

Leases - Schedule of Future Min

Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Feb. 29, 2024	May 31, 2023
Operating Leases
Remainder of FY24	$ 4,574
FY25	18,833
FY26	19,514
FY27	19,868
FY28	20,290
Thereafter	16,029
Total lease payments	99,108
Less: imputed interest	(16,825)
Total lease liabilities	82,283
Less: Current portion of lease liability	(13,023)	$ (320)
Long-term portion of lease liability	69,260	1,005
Finance Leases
Remainder of FY24	24,119
FY25	96,099
FY26	45,220
FY27	14
FY28	1
Thereafter	0
Total lease payments	165,453
Less: imputed interest	(15,212)
Total lease liabilities	150,241
Less: Current portion of lease liability	(86,438)	(5,722)
Long-term portion of lease liability	63,803	$ 8,334
Total
Remainder of FY24	28,693
FY25	114,932
FY26	64,734
FY27	19,882
FY28	20,291
Thereafter	16,029
Total lease payments	264,561
Less: imputed interest	(32,037)
Total lease liabilities	232,524
Less: Current portion of lease liability	(99,461)
Long-term portion of lease liability	$ 133,063

Leases - Schedule of Supplement

Leases - Schedule of Supplemental Cash Flow and Other Information (Details)	Feb. 29, 2024	Feb. 28, 2023
Weighted-average years remaining (in years):
Finance leases	2 years 6 months	28 years 7 months 6 days
Operating leases	5 years 3 months 18 days	3 years 10 months 24 days
Weighted-average discount rate:
Finance leases	10.70%	8%
Operating leases	7.60%	12.50%

Leases - Narrative (Details)

Leases - Narrative (Details) $ in Millions	Feb. 29, 2024 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease, not yet commenced, minimum payments	$ 120.7
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	6 years 8 months 12 days

Commitments and Contingencies -

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Nov. 30, 2023	Feb. 29, 2024
Purchase Commitment, Excluding Long-Term Commitment [Line Items]
Service contract, term		2 years 10 months 24 days
Mediation Related To The Threatened Claim Of Sexual Harassment | Settled Litigation | Former Executive
Purchase Commitment, Excluding Long-Term Commitment [Line Items]
Settlement amount	$ 2.3
Energy Service
Purchase Commitment, Excluding Long-Term Commitment [Line Items]
Contractual obligation		$ 82.2

Business Segments - Schedule of

Business Segments - Schedule of Revenue by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Segment Reporting Information [Line Items]
Total revenue	$ 43,348	$ 14,090	$ 121,876	$ 33,354
Operating Segments | Datacenter hosting segment
Segment Reporting Information [Line Items]
Total revenue	37,795	14,090	109,720	33,354
Operating Segments | Cloud services segment
Segment Reporting Information [Line Items]
Total revenue	5,553	0	12,156	0
Operating Segments | HPC hosting segment
Segment Reporting Information [Line Items]
Total revenue	$ 0	$ 0	$ 0	$ 0

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		9 Months Ended
		Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Segment Reporting Information [Line Items]
Total segment loss		$ (55,822)	$ (6,989)	$ (71,420)	$ (37,875)
Interest expense, net	[1]	4,404	352	8,836	1,061
Loss on change in fair value of related party debt		(2,612)	0	(2,612)	0
Loss on extinguishment of debt	[2]	0	0	2,353	94
Net loss before income tax expenses		(62,838)	(7,341)	(85,221)	(39,030)
Loss on classification as held for sale		21,723	0	21,723	0
Abandoned Equipment
Segment Reporting Information [Line Items]
Accelerated depreciation		2,800
Operating Lease, Right-Of-Use
Segment Reporting Information [Line Items]
Accelerated depreciation		1,400
Operating Segments
Segment Reporting Information [Line Items]
Total segment loss		(47,453)	(3,876)	(48,447)	(18,977)
Operating Segments | Datacenter hosting segment
Segment Reporting Information [Line Items]
Total segment loss		(24,443)	(3,117)	(4,647)	(18,218)
Operating Segments | Cloud services segment
Segment Reporting Information [Line Items]
Total segment loss		(21,565)	(741)	(40,694)	(741)
Operating Segments | HPC hosting segment
Segment Reporting Information [Line Items]
Total segment loss		(1,445)	(18)	(3,106)	(18)
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Other		$ (8,369)	$ (3,113)	$ (22,973)	$ (18,898)
[1] Includes related party interest expense of $0.2 million and $0.8 million for the three months ended and nine months ended February 29, 2024, respectively. There was no related party debt issued during three and nine months ended February 28, 2023 and as such, no interest expense was incurred related to related party debt. Amounts included in the nine months ended February 29, 2024 are related to the extinguishment of related party debt.

Business Segments - Additional

Business Segments - Additional Segment Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 26,205	$ 1,926	$ 47,664	$ 4,630
Operating Segments | Datacenter hosting segment
Segment Reporting Information [Line Items]
Depreciation and amortization	9,162	1,904	16,902	4,596
Operating Segments | Revenue
Segment Reporting Information [Line Items]
Depreciation and amortization	16,534	13	29,824	13
Operating Segments | HPC hosting segment
Segment Reporting Information [Line Items]
Depreciation and amortization	407	1	717	1
Corporate, Non-Segment | Other
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 102	$ 8	$ 221	$ 20

Business Segments - Segment Ass

Business Segments - Segment Assets and Reconciliation to Consolidated Assets (Details) - USD ($) $ in Thousands	Feb. 29, 2024	May 31, 2023
Segment Reporting Information [Line Items]
Total assets	$ 643,168	$ 263,957
Operating Segments
Segment Reporting Information [Line Items]
Total assets	620,155	238,523
Operating Segments | Datacenter hosting segment
Segment Reporting Information [Line Items]
Total assets	218,698	224,447
Operating Segments | Revenue
Segment Reporting Information [Line Items]
Total assets	297,561	3,127
Operating Segments | HPC hosting segment
Segment Reporting Information [Line Items]
Total assets	103,896	10,949
Corporate, Non-Segment | Other
Segment Reporting Information [Line Items]
Total assets	$ 23,013	$ 25,434

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		9 Months Ended
	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Earnings Per Share [Abstract]
Net loss	$ (62,838)	$ (7,341)	$ (85,221)	$ (38,750)
Net loss attributable to noncontrolling interest	0	(316)	(397)	(577)
Net loss attributable to Applied Digital Corporation	$ (62,838)	$ (7,025)	$ (84,824)	$ (38,173)
Basic net loss per share attributable to Applied Digital Corporation (in dollars per share)	$ (0.52)	$ (0.07)	$ (0.77)	$ (0.41)
Diluted net loss per share attributable to Applied Digital Corporation (in dollars per share)	$ (0.52)	$ (0.07)	$ (0.77)	$ (0.41)
Basic weighted average number of shares outstanding (in shares)	121,426,622	94,119,944	110,500,556	93,545,687
Diluted weighted average number of shares outstanding (in shares)	121,426,622	94,119,944	110,500,556	93,545,687

Assets Held for Sale - Narrativ

Assets Held for Sale - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Mar. 14, 2024	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on classification as held for sale		$ 21,723	$ 0	$ 21,723	$ 0
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mara Garden City Facility
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on classification as held for sale		$ 21,700		$ 21,700
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mara Garden City Facility | Subsequent Event
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Maximum Purchase Price	$ 87,329
Conditional agreement, term of contract	120 days
Loss on classification as held for sale	$ 21,723
Potential reduction to purchase price	34,000
Deferred Revenue Released	9,971
Equipment lease liabilities	$ 5,100

Assets Held for Sale - Schedule

Assets Held for Sale - Schedule of Assets and Liabilities Held for Sale (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Mara Garden City Facility $ in Thousands	Feb. 29, 2024 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Property and equipment, net	$ 57,260
Finance lease right of use assets	8,109
Total assets held for sale	65,369
Current portion of finance lease liability	3,657
Long-term portion of finance lease liability	4,622
Total Liabilities Held For Sale	$ 8,279

Assets Held for Sale - Schedu_2

Assets Held for Sale - Schedule of Implied Transaction Price (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Mara Garden City Facility - Subsequent Event $ in Thousands	Mar. 14, 2024 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Maximum Purchase Price	$ 87,329
Less: Conditional Amount	(34,000)
Cash Consideration	53,329
Lease Liabilities Assumed	3,207
Deferred Revenue Released	9,971
Implied Fair Value	66,507
Less: Estimated Costs to Sell	(1,200)
Total fair value less costs to sell	$ 65,307

Assets Held for Sale - Schedu_3

Assets Held for Sale - Schedule of Loss Calculation (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Mar. 14, 2024	Feb. 29, 2024	Feb. 28, 2023	Feb. 29, 2024	Feb. 28, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on classification as held for sale		$ 21,723	$ 0	$ 21,723	$ 0
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mara Garden City Facility
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on classification as held for sale		$ 21,700		$ 21,700
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mara Garden City Facility | Subsequent Event
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Carrying value of assets held for sale	$ 87,030
Total fair value less costs to sell	65,307
Loss on classification as held for sale	$ 21,723

Subsequent Events (Details)

Subsequent Events (Details) $ / shares in Units, $ in Thousands	Mar. 27, 2024 USD ($) day note $ / shares	Mar. 01, 2024 USD ($)	Apr. 10, 2024 USD ($)	Feb. 29, 2024 $ / shares	Jan. 30, 2024 USD ($)	May 31, 2023 $ / shares
Subsequent Event [Line Items]
Common stock, par value (in dollars per share) | $ / shares				$ 0.001		$ 0.001
Subsequent Event
Subsequent Event [Line Items]
Common stock, par value (in dollars per share) | $ / shares	$ 0.001
AI Bridge Loan | Medium-term Notes | Subsequent Event
Subsequent Event [Line Items]
Proceeds from debt, net of issuance costs		$ 15,700
AI Bridge Loan | Notes Payable, Other Payables
Subsequent Event [Line Items]
Remaining available amount					$ 5,000
Promissory note amount					$ 20,000
Repayment fee					125%
AI Bridge Loan | Notes Payable, Other Payables | Subsequent Event
Subsequent Event [Line Items]
Remaining available amount			$ 5,000
Promissory note amount			$ 20,000
Promissory Notes | Notes Payable, Other Payables
Subsequent Event [Line Items]
Repayment fee					130%
Promissory Notes | Unsecured Debt | Subsequent Event
Subsequent Event [Line Items]
Promissory note amount	$ 50,000
Unsecured promissory notes | note	2
Promissory Notes | Unsecured Debt | Subsequent Event | Debt Redemption Term One
Subsequent Event [Line Items]
Promissory note amount	$ 40,000
Proceeds from unsecured notes payable	$ 38,000
Debt instrument, redemption price, discount percentage	5%
Promissory Notes | Unsecured Debt | Subsequent Event | Debt Redemption Term Two
Subsequent Event [Line Items]
Promissory note amount	$ 10,000
Debt instrument, redemption price, discount percentage	5%
Number of trading days | day	2