Oct 7, 2026 earnings call — Power deal and campus expansion focus
Applied Digital signed a long-term Power Purchase Agreement covering an approximately 1,200-megawatt natural gas facility.
Revenue $0.3B (est $0.1B) · EPS $-0.01 (est $-0.30)
Key quotes
"Over the next 12 months, we expect to place over 600 megawatts into service versus the 250 megawatts over the past 12 months."
"The agreement covers an approximately 1,200-megawatt natural gas facility that Base Electron is developing in Center, North Dakota, adjacent to our Polaris Forge 3 campus with deliveries expected to begin in 2030."
"In June, as we discussed on our last call, we closed that tranche, a $1.59 billion offering of 7% senior secured notes due 2031 issued at par."
Analyst Q&A 8
North Dakota demand and debt options
Q (Mike Grondahl · Northland): Analyst asked how hyperscalers view North Dakota and how receptive they are. He also asked what financing options exist now for investment-grade hyperscaler debt.
A: Management said they already have 3 customers in North Dakota and are talking with multiple Tier 1 hyperscalers; they expect many will enter the state. On financing, they cited multiple options beyond high-yield bonds, including project finance and new investment-grade bond products, and said they structure deals to refinance after construction to lower costs.
"once we go past the construction phase, we have the flexibility to lower our costs relatively quick into a more permanent financing" — Mohammad Saidal Mohmand (CFO)
Finland site exposure and design longevity
Q (Nick Giles · B. Riley): Analyst asked what 'limited initial exposure' means for the Finland deal and what commercial options exist. He also asked why management emphasized longer-lived campus design.
A: Management said they bought the Finland site with staged power and an off-ramp before later payments, so initial exposure is small while the site can scale. They also said their current data center design is their fourth generation, built to be flexible and longer lasting to handle higher power densities or lower ones if needed.
"So it's a pretty minimal amount for us to have this kind of exposure in a market that we think has become pretty attractive as far as the European market goes." — Wesley Cummins (CEO·CHAIR)
Current market demand and Finland build costs
Q (Derrick Whitfield · Texas Capital): Analyst asked how market demand and base rates look since the last call and whether regulatory moratoria help. He also asked how Finland build costs compare to the U.S.
A: Management said demand remains robust and they expect much of 2027 to be fairly contracted; they expect lease expansions and new campuses to come at materially higher rates than early 2026 deals. On Finland, they said build cost in euros converted back to dollars will be roughly the same, though delivery timelines in Europe may be longer.
"We fully expect to do some lease expansion and new campuses at materially higher rates versus what we signed our last contracts for in the first half of 2026." — Wesley Cummins (CEO·CHAIR)
Base Electron role and supply chain
Q (Robert Brown · Lake Street): Analyst asked how Base Electron and the PPA enable expansion in North Dakota and which years are affected. He also asked how Applied mitigated supply chain constraints.
A: Management said Base Electron capacity is expected in 2030 and will support expansion at Center, Harwood and possibly Jamestown, and that pipeline location gives near-unlimited expansion at Center. On supply chain, they said they locked key components roughly 2 years ago and in some cases purchased full factory output for a 4-year time frame to secure capacity.
"So we start to think about 2030, Rob, primarily on Base Electron." — Wesley Cummins (CEO·CHAIR)
Selective customers and premium pricing
Q (George Sutton · Craig-Hallum): Analyst asked if 'selective' means they will choose higher-quality customers rather than build less capacity. He also asked what 'premium pricing' for expansions means.
A: Management said they now have limited capacity and will be more selective, focusing on credit quality of customers. For premium pricing on expansions, they expect significantly higher lease rates and possibly longer lease duration compared with prior deals.
"I don't want to pin that, but you can think of definitely north of 15% plus increases on the lease rate, but also could include longer duration on the leases." — Wesley Cummins (CEO·CHAIR)
Finland power timeline and community reception
Q (Darren Paul Aftahi · Lucid): Analyst asked how much initial power is at the Finland site, the community or government risk, and whether the site was bought for a specific customer.
A: Management said the local community reception was positive, the country generally receptive, and the site has land and fiber and sits about 30 kilometers from a self-build by a large hyperscaler. They said the first 100 megawatts is available in 2028 and the site ramps to the full gigawatt by 2031.
"The first 100 megawatts is available in 2028, and then it continues to ramp up through 2031 to the full gigawatt." — Wesley Cummins (CEO·CHAIR)
Path to 3.5-4 GW and ChronoScale growth
Q (John Todaro · Needham & Company): Analyst asked what steps are needed to reach 3.5–4 gigawatts by year-end 2030 and how much depends on Base Electron or more European sites. He also asked if ChronoScale could grow to several hundred megawatts.
A: Management clarified the target is 3.5 to 4 gigawatts and said they have power in the pipeline, including Base Electron capacity in 2030. They said the key is their ability to ramp construction and delivery, and they also expect ChronoScale to secure many smaller grid-tied sites and could reach multiple hundreds of megawatts outside core Applied Digital campuses over 2027–28.
"we as a company think that, that's kind of the level we can ramp our construction and delivery up to." — Wesley Cummins (CEO·CHAIR)
Macquarie scope and tech fit changes
Q (Michael Donovan · Compass Point): Analyst asked if the Macquarie relationship would extend to Finland. He also asked whether inference workloads change GPU/CPU/storage needs and whether that drives premium rates, and whether smaller modular builds are possible.
A: Management said the Macquarie partnership is for North America only and not automatically for Finland, though similar arrangements could be possible. They said tenant fit-outs have become more flexible and larger dollar items, and they are exploring smaller modular builds for ChronoScale to secure near-term capacity.
"I'm not saying we couldn't have something similar, but the current agreement we have is just North America." — Wesley Cummins (CEO·CHAIR)