Applied Digital Corporation (APLD) is having a good day. Shares jumped more than 10% after the company delivered second-quarter earnings that weren't just good—they were substantially better than anyone expected.

The Numbers Tell the Story

Applied Digital reported adjusted earnings per share of 0 cents, which might not sound exciting until you realize Wall Street was bracing for a 10-cent loss. Revenue came in at $126.58 million, crushing the consensus estimate of $89.75 million by more than 40%.

The real driver here is the company's high-performance computing hosting business. Revenue exploded 250% year over year, largely thanks to Applied reaching a major milestone at its Polaris Forge 1 campus. The company delivered 100 megawatts on schedule and fully energized its first building, which triggered approximately $85 million in payments from CoreWeave. That breakdown includes $73 million for tenant fit-out services and $12 million in partial-quarter lease revenue.

Meanwhile, Applied's data center hosting business continues performing well, generating $41.6 million in revenue during the quarter with improved performance across facilities.

Bottom Line Improvement

Adjusted EBITDA climbed to $20.2 million from $6.1 million in the prior-year period. The net loss attributable to common stockholders narrowed significantly to $31.2 million from $129 million a year earlier—a clear sign the business model is working.

Applied also beefed up its financial position during the quarter, completing a $2.35 billion private offering of senior secured notes and drawing additional capital under its preferred equity financing facility. The company ended the quarter with approximately $2.3 billion in cash, cash equivalents, and restricted cash.

At last check, Applied Digital shares were trading 10.42% higher at $32.56.