What changed in this filing

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Item 2. Management’s Discussion and Analysis

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These factors include, but are not limited to:

• our ability to complete construction of our HPC facilities at each of the Polaris Forge 1 and Polaris Forge 2 campuses;

• our ability to complete the negotiation and execution of the definitive transaction documents to close the sale of our Cloud Services Business that is currently held for sale and treated as discontinued operations;

• our dependence on principal customers, including our ability to execute leases with key customers, including leases for our Polaris Forge 1 and Polaris Forge 2 data center campuses;

• our ability to complete construction of our HPC facilities at each of the Polaris Forge, Polaris Forge 2 and Delta Forge 1 campuses;

• our dependence on principal customers, including our ability to execute leases with key customers, including leases for our data center campuses;

• our ability to close the sale of our Cloud Services Business;

• availability of financing to continue to grow our business;

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• our sensitivity to general economic conditions including changes in disposable income levels and consumer spending trends;

• our ability to timely and successfully build new hosting facilities with the appropriate contractual margins and efficiencies;

• our ability to timely and successfully build new data center facilities with the appropriate contractual margins and efficiencies;

• our ability to continue to grow sales in our hosting business;

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You should carefully review the risks described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended May 31, 2025, which was filed with the SEC on July 30, 2025, as well as any other cautionary language in this Quarterly Report on Form 10-Q, as the occurrence of any of these events could have an adverse effect, which may be material, on our business, results of operations, financial condition or cash flows.

A comparison of our results of operations and cash flows for the three and six months ended November 30, 2024 can be found under “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the quarter ended November 30, 2024, filed with the SEC on October 9, 2025.

A comparison of our results of operations and cash flows for the three and nine months ended February 28, 2025 can be found under “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the quarter ended February 28, 2025, filed with the SEC on April 14, 2025.

Moreover, we operate in an evolving environment.

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Headquartered in Dallas, TX, and founded in 2021, the Company combines hyperscale expertise, proprietary waterless cooling, and rapid deployment capabilities to deliver secure, scalable compute at industry-leading speed and efficiency, while creating economic opportunities in underserved communities through its award-winning Polaris Forge AI Factory model.

We operate in two distinct business segments, data center hosting (the "Data Center Hosting Business") and HPC data center hosting (the "HPC Hosting Business"), as further discussed below.

We operate in three distinct business segments, data center hosting (the "Data Center Hosting Business"), cloud services (the “Cloud Services Business”) and HPC data center hosting (the "HPC Hosting Business"), all of which are included in our consolidated financial statements and continuing operations, as further discussed below.

Management considers the Data Center Hosting Business and the HPC Hosting Business to be its core operations for long-run strategic and performance evaluation purposes.

The Company consolidates a Variable Interest Entity (“VIE”) where it has been determined that the Company is the primary beneficiary of the entity's operation in accordance with ASC Topic 810, Consolidations .

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The Company also evaluates its economic interests in the VIE.

During the fiscal quarter ended May 31, 2025, we determined that our Cloud Services Business met the criteria for held for sale and discontinued operations.

As such, the results of the Cloud Services Business, which was previously included as a reportable segment, are presented as discontinued operations in the unaudited condensed consolidated statements of operations and have been excluded from both continuing operations and segment results for all periods presented.

In the fourth quarter of fiscal year 2025, we determined that the Cloud Services Business, which operates primarily through our wholly-owned subsidiary, Applied Digital Cloud Corporation, met the criteria to be classified as “held for sale.” As a sale would represent a strategic shift for the Company the Cloud Services Business was classified as discontinued operations.

On December 30, 2025, the Company announced it had entered into a non-binding term sheet for a proposed business combination of the Cloud Services Business with EKSO Bionics Holdings, Inc.

EKSO) (“EKSO”), which, once closed, will go forward as ChronoScale Corporation (“ChronoScale”), an accelerated compute platform purpose-built to support AI workloads (the “Proposed Transaction”).

On February 15, 2026, APLD Intermediate HoldCo LLC, a Delaware limited liability company (“APLD Intermediate”), APLD ChronoScale HoldCo LLC, a Delaware limited liability company and a wholly owned subsidiary of APLD Intermediate (“Contributor”), each a wholly owned direct or indirect subsidiary of the Company, and Applied Digital Cloud Corporation, which at the time of the closing of the Proposed Transaction, will be a wholly owned subsidiary of Contributor, entered into a Contribution and Exchange Agreement with EKSO (the “Contribution and Exchange Agreement”) for purposes of consummating the Proposed Transaction (the “Business Combination”), as a result of which (i) Applied Digital Cloud Corporation will become a wholly owned subsidiary of Ekso, (ii) Ekso will, immediately after the consummation of the Business Combination, continue as the parent of the combined company, and (iii) Ekso will change its name to ChronoScale.

During the quarter ended February 28, 2026, we determined that the Cloud Services Business, which had previously been classified and reported as held for sale in accordance with ASC 360-10 and discontinued operations in accordance with ASC 205-20, no longer met the criteria for classification as held for sale and discontinued operations due to the Company entering into the Contribution and Exchange Agreement.

We have restated our comparative financial statements for prior periods to reflect this change in classification.

The statements of operations, cash flows, and segment information for prior periods have been adjusted to include the results of the Cloud Services Business within continuing operations rather than within discontinued operations, and previously classified assets and liabilities of the Cloud Services Business are presented within the respective held‑and‑used asset and liability line items as of each balance sheet date.

Revenues, income (loss) before income taxes, net income (loss), total assets and liabilities, and cash flows previously reported as related to discontinued operations and asset and liabilities held for sale of the Cloud Services Business are now

reported in the corresponding line items within continuing operations and held‑and‑used asset and liability categories for all periods presented.

There was no material impact on our previously reported net income, total assets, or equity as a result of this reclassification.

The reclassification was necessary because the Cloud Services Business no longer met the requirements for held for sale presentation and discontinued operations presentation as set forth in ASC 360-10 and ASC 205-20, respectively, as the planned sale did not occur and the segment remains part of the Company’s ongoing operations as of February 28, 2026.

Management has further determined that the operating characteristics and strategic role of the Cloud Services Business differ meaningfully from the Company’s long-run core operations of building and developing data center infrastructure.

As a result, while the segment continues to be actively managed and reported as part of consolidated results and continuing operations, management evaluates long-term operating performance and core business trends using financial measures that exclude the results of this segment, as discussed below.

Trends and Other Factors Affecting Our Business

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Our custom-designed data centers allow customers to rent space based on their power requirements.

As of November 30, 2025, our 106 MW facility in Jamestown, North Dakota and our 180 MW facility in Ellendale, North Dakota continue to operate at full capacity.

We recognized $41.6 million and $79.5 million, in revenue from this business segment during the three and six months ended November 30, 2025, respectively.

As of February 28, 2026, our 106 MW facility in Jamestown, North Dakota and our 180 MW facility in Ellendale, North Dakota continue to operate at full capacity.

We recognized $37.5 million and $117.1 million, in revenue from this business segment during the three and nine months ended February 28, 2026, respectively.

Cloud Services Business

Our Cloud Services Business provides high-performance computing power for artificial intelligence and machine learning applications.

We recognized revenue of $18.1 million and $53.2 million from this business segment during the three and nine months ended February 28, 2026, respectively.

We currently operate our Cloud Services Business in three states:

Colorado, Minnesota, and Utah, by renting space at third party colocation centers and providing our customers with Company-owned equipment to generate revenue.

As of February 28, 2026, this business segment had one customer and generated 14% of total revenue for the fiscal quarter ended February 28, 2026.

As previously disclosed, during the fourth quarter of fiscal year 2025, we determined that the Cloud Services Business, which operates primarily through our wholly-owned subsidiary, Applied Digital Cloud Corporation, met the criteria to be classified as “held for sale.” As a sale would represent a strategic shift for the Company the Cloud Services Business was classified as discontinued operations.

On December 30, 2025, the Company announced it had entered into a non-binding term sheet for a proposed business combination of the Cloud Services Business with EKSO Bionics Holdings, Inc.

As a result, effective February 15, 2026, the assets and liabilities of the Cloud Services Business have been reclassified from held for sale to held and used in their respective financial statement lines on our unaudited condensed consolidated

balance sheets for all periods presented.

Similarly, the results of the Cloud Services Business have been reclassified from discontinued operations to continuing operations in our unaudited condensed consolidated statements of operations for all periods presented.

In connection with this change in classification, the long‑lived assets of the Cloud Services Business were remeasured in accordance with ASC 360‑10‑35‑44 at the lower of (i) their carrying amounts immediately before classification as held for sale, adjusted for depreciation and amortization that would have been recognized had the assets been continuously classified as held and used, and (ii) their fair values at the date we determined that the held‑for‑sale criteria were no longer met.

Management determined that as of February 15, 2026, when the Cloud Services Business no longer met the criteria for held for sale and discontinued operations, the carrying value of the long-lived assets of the Cloud Business was less than the fair value.

As such, we recorded a loss on classification of held for sale on our unaudited condensed consolidated statements of operations of $59.7 million for the three and nine months ended February 28, 2026 representing the write down of the Cloud Services Business assets to their carrying value as of February 15, 2026 when it no longer qualified as held for sale.

Following the reclassification of the Cloud Services Business into our consolidated and continuing operations results, Management has determined that the segment’s operating characteristics and strategic role differ meaningfully from those of the Company’s core operations.

As a result, Management evaluates long-term performance and core business trends using non-GAAP financial measures that exclude the results of this segment, and the non-GAAP financial measures presented herein exclude the Cloud Services Business.

HPC Hosting Business

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based investment grade hyperscaler for 200 MW of critical IT load at our Polaris Forge 2 campus.

We recognized $85.0 million and $111.3 million , in revenue from this business segment during the three and six months ended November 30, 2025, respectively.

Discontinued Operations

The Cloud Services Business provides high-performance computing power for AI and machine learning applications.

Near the end of the fiscal third quarter 2024, this business began generating revenue.

In the fourth quarter of fiscal year 2025, we determined that the Cloud Services Business met the criteria to be classified as “held for sale,” and as the sale represents a strategic shift for the Company, discontinued operations.

As such, for the three and six months ended November 30, 2025, we have reported the Cloud Services Business as held for sale on the unaudited condensed consolidated balance sheets and discontinued operations on the unaudited condensed consolidated statement of operations.

The comparative periods have been updated to present the Cloud Services Business as held for sale and discontinued operations as of June 1, 2024.

We recognized $18.4 million and $35.1 million in revenue from this business segment during three and six months ended November 30, 2025, respectively, and $27.7 million and $53.6 million during the three and six months ended November 30, 2024, respectively, within discontinued operations.

The Cloud Services Business operates in three states:

Colorado, Minnesota and Utah, by renting space at third party co-location centers and providing customers with Company-owned equipment.

On December 30, 2025, we announced we had entered into a non-binding term sheet for a proposed business combination of the Cloud Services Business, Applied Digital Cloud, with EKSO Bionics Holdings, Inc.

EKSO) (“EKSO”), which, once closed, will go forward as ChronoScale Corporation, an accelerated compute platform purpose-built to support AI workloads (the “Proposed Transaction”).

Upon closing of the Proposed Transaction, we expect to initially own over 80% of the combined company, which will operate under the name ChronoScale.

The Applied Digital Cloud and EKSO businesses would continue to operate upon consummation of the Proposed Transaction.

On January 22, 2026 we announced that we broke ground on Delta Forge 1, a 300 MW critical IT load campus located in a strategic southern U.S.

We recognized $71.0 million and $182.3 million , in revenue from this business segment during the three and nine months ended February 28, 2026, respectively.

Management Update

On August 1, 2025, we entered into an employment agreement with Jason Zhang, one of the Company’s founders and former directors, to serve in the role of Chief Strategy Officer of the Company.

On January 15, 2026, the Company appointed Jason Zhang, co-founder and Chief Strategy Officer, to serve as the Company’s co-founder and President.

Organizational Update

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APLD ComputeCo is wholly owned by a joint venture entity, APLD HPC TopCo 2, in which we own 90.0% of fully diluted common equity, and an affiliate of funds and investment vehicles managed by entities within MAM owns 10.0% of fully diluted common equity, as well as preferred equity.

In order to facilitate the 2031 Notes Offering (as defined below), we also completed a targeted reorganization of the entities and assets related to the Polaris Forge 2 campus consistent with the reorganizations completed in connecting with the 2030 Notes Offering.

This reorganization includes a series of steps such as renaming certain existing entities and forming new direct and indirect wholly owned subsidiaries of APLD FAR Holdings LLC, including APLD ComputeCo 2 LLC (“APLD ComputeCo 2”), the issuer of the 2031 Notes, and additional internal transactions, including equity distributions and contributions and asset transfers.

Under the resulting structure, APLD FAR-01 LLC and APLD FAR-02 LLC are owned by APLD ComputeCo 2.

APLD ComputeCo 2 is wholly owned by a joint venture entity, APLD HPC TopCo 2, in which we own 90.0% of fully diluted common equity, and an affiliate of funds and investment vehicles managed by entities within MAM owns 10.0% of fully diluted common equity, as well as preferred equity.

Debt and Equity Offerings and Changes to Equity

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The Second Amendment amends the PEPA to, among other things, increase the aggregate commitment amount of the shares of Series G Preferred Stock from $300 million to $450 million.

Concurrent with the Second Amendment, the Company filed an amendment to the Certificate of Designations to increase the number of shares authorized for issuance as Series G Preferred Stock from 156,000 to 204,000 shares.

Concurrent with the Second Amendment, the

Company filed an amendment to the Certificate of Designations to increase the number of shares authorized for issuance as Series G Preferred Stock from 156,000 to 204,000 shares.

On September 25, 2025, the Company filed an amendment (the “Third CoD Amendment”) to the Series G Certificate of Designation, originally filed with the Secretary of State of the State of Nevada on April 30, 2025, as amended.

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and (v) eliminate the prohibition on Variable Rate Transactions (as defined in the PEPA).

On October 21, 2025, in connection with the entry into the Fourth Amendment, the Applied Digital filed an amendment (the “Fifth Certificate of

Designations Amendment”) to the Certificate of the Designations, Powers, Preferences and Rights of Series G Convertible Preferred Stock, originally filed with the Secretary of State of the State of Nevada on April 30, 2025, as amended on each of August 14, 2025, September 11, 2025, September 25, 2025 and October 14, 2025 (as amended, the “Certificate of Designations”).

On October 21, 2025, in connection with the entry into the Fourth Amendment, the Applied Digital filed an amendment (the “Fifth Certificate of Designations Amendment”) to the Certificate of the Designations, Powers, Preferences and Rights of Series G Convertible Preferred Stock, originally filed with the Secretary of State of the State of Nevada on April 30, 2025, as amended on each of August 14, 2025, September 11, 2025, September 25, 2025 and October 14, 2025 (as amended, the “Certificate of Designations”).

The Fifth Certificate of Designations Amendment amended the Certificate of Designations to, among other things, (i) increase the authorized shares of Series G Preferred Stock from 204,000 shares to 1,030,000 shares, and (ii) increase the limit below which the Floor Price (as defined in Section 1.5(c)(ii) of the Certificate of Designations) may not be reduced from $4.33 to $4.48.

In addition, under the Fifth Certificate of Designations Amendment, the Applied Digital’s Board of Directors may increase or decrease the applicable Floor Price with respect to any put, at its sole discretion.

As Series G Preferred Stock may be reissued, during the three and six months ended November 30, 2025, the Company issued and sold 424,050 and 604,050 shares of Series G Preferred Stock, respectively, for gross proceeds of $415.0 million and $590.0 million, respectively.

During the three and six months ended November 30, 2025, 380,800 and 638,800 shares of Series G Preferred Stock, respectively, were converted into 15.4 million and 43.6 million shares of the Company’s common stock, respectively.

As of November 30, 2025, 43,250 shares of Series G Preferred Stock were issued and outstanding.

As Series G Preferred Stock may be reissued, during the three and nine months ended February 28, 2026, the Company issued and sold 154,500 and 758,550 shares of Series G Preferred Stock, respectively, for gross proceeds of $150.0 million and $740.0 million, respectively.

During the three and nine months ended February 28, 2026, 197,750 and 836,550 shares of Series G Preferred Stock, respectively, were converted into 5.6 million and 49.2 million shares of the Company’s common stock, respectively.

As of February 28, 2026, no shares of Series G Preferred Stock were issued and outstanding.

CoreWeave Warrants

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On September 9, 2025, APLD FAR-01 LLC, our subsidiary, entered into a promissory note (the “Promissory Note”) with Macquarie Equipment Capital, Inc., a Delaware corporation (the “Lender”).

The Promissory Note provides for a principal sum of (a) $50 million (the “Initial Loan”), which was drawn on the Closing Date, plus (b) subject to the mutual consent of us and the Lender, additional loans in an aggregate principal amount not to exceed $25 million (the “Additional Loans” and together with the Initial Loan, the “Loan”).

The Promissory Note provides for a principal sum of (a) $50 million (the “Initial Loan”), which was drawn on the Closing Date, plus (b) subject to the mutual consent of

us and the Lender, additional loans in an aggregate principal amount not to exceed $25 million (the “Additional Loans” and together with the Initial Loan, the “Loan”).

The Loan shall bear interest at 8.0% per annum, unless an Event of Default (as defined therein) has occurred and is continuing, in which case, the Secured Obligations (as defined therein) shall bear interest at the sum of 8.0% per annum plus an additional 1.50% per month (the “Post-Default Rate”).

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Amounts repaid under the Promissory Note will not be available to be re-borrowed.

located on the Company’s campus in Harwood, ND (“Polaris Forge 2”), including all associated closing costs, title fees, and legal expenses, (iv) finance improvements to the Polaris Forge 2 properties, (v) fund the purchase of the Transformers (as defined therein) and other equipment expected to be installed and used for the improvements of the Polaris Forge 2 properties, (v) to pay any other costs, fees, expenses, or amounts related to or in connection with the development and construction of Polaris Forge 2, and (vi) for general corporate working capital purposes.

Proceeds of the Loan under the Promissory Note will be used, in part, to (i) pay transaction costs, (ii) pay transaction expenses in connection with the Note Documents (as defined therein), (iii) fund the purchase of the financed properties located on the Company’s campus in Harwood, ND (“Polaris Forge 2”), including all associated closing costs, title fees, and legal expenses, (iv) finance improvements to the Polaris Forge 2 properties, (v) fund the purchase of the Transformers (as defined therein) and other equipment expected to be installed and used for the improvements of the Polaris Forge 2 properties, (v) to pay any other costs, fees, expenses, or amounts related to or in connection with the development and construction of Polaris Forge 2, and (vi) for general corporate working capital purposes.

In connection with the Loan, (i) APLD FAR-01 LLC, APLD FAR Holdings LLC (“Intermediate Holdings”), a Delaware limited liability company, as parent of the APLD FAR-01 LLC, and APLD FAR-02 LLC (“FAR-02”), a Delaware limited liability company, as a subsidiary of Intermediate Holdings, have entered into a guarantee and collateral agreement, as grantors thereunder, in favor of the Lender (the “Guarantee and Collateral Agreement”).

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At the Initial Closing, the Subsidiary Issuer sold to the Purchaser 112,500 Preferred Units in the Subsidiary Issuer at a price per Preferred Unit of $1,000, for an aggregate purchase price of $112.5 million, and for no additional consideration, the Subsidiary Issuer agreed to issue to the Purchaser such number of Common Units of the Subsidiary Issuer representing, in the aggregate, seven and a half percent (7.5%) of the fully diluted common equity of the Subsidiary Issuer as of immediately following the Initial Closing.

The proceeds of the Initial Closing will be used to pay, among other things, construction and development costs of Polaris Forge 1 and transaction expenses.

The proceeds of the Initial Closing will be used to pay, among other

things, construction and development costs of Polaris Forge 1 and transaction expenses.

MAM has the right to invest up to an additional $4.9 billion under the A&R UPA.

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On November 25, 2025, the Subsidiary Issuer sold to the Purchaser 450,000 Preferred Units in the Subsidiary Issuer at a price per Preferred Unit of $1,000, for an aggregate purchase price of $450.0 million.

On December 9, 2025, the Subsidiary Issuer sold to the Purchaser an additional 337,500 Preferred Units in the Subsidiary Issuer at a price per Preferred Unit of $1,000, for an aggregate purchase price of $337.5 million, bringing the total amount funded to date under the A&R UPA to $900.0 million.

Additionally, 27,778 common units were issued.

Retirement of Treasury Stock

On October 7, 2025, the Board of Directors approve and authorized 9,291,199 shares of the Company’s capital stock that was currently held in treasury stock to be retired and returned to the authorized but unissued capital stock.

During the quarter ended November 30, 2025, 800,000 of the STB Warrants were exercised for $6.3 million.

During the quarter ended February 28, 2026, 800,000 of the STB Warrants were exercised for $6.3 million.

Settlement of Prepaid Forward Transaction

On November 3, 2025, the Company’s Prepaid Forward Transaction associated with the Convertible Notes matured and the Company received 7,165,300 shares of common stock which are now held in treasury stock as of November 30, 2025.

Increase In Authorized Shares

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The loan is secured by all of the Company’s (but none of its subsidiaries’) assets.

As of November 30, 2025, there have been no draws on the facility.

As of February 28, 2026, approximately $61.9 million of letters of credit were issued under the revolving credit facility.

Senior Secured Notes

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The 2030 Notes will mature on December 15, 2030, unless earlier redeemed or repurchased in accordance with their terms.

The Notes are fully and unconditionally guaranteed by the subsidiary guarantors, all of which are wholly owned subsidiaries of APLD ComputeCo.

The 2030 Notes are fully and unconditionally

guaranteed by the subsidiary guarantors, all of which are wholly owned subsidiaries of APLD ComputeCo.

Other than a customary completion guarantee, the Company is not providing credit support for the 2030 Notes Offering.

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Concurrently with the closing of the 2030 Notes Offering, we repaid in full the aggregate principal balance plus accrued interest under the Credit and Guaranty Agreement, dated as of February 11, 2025, by and among APLD HPC Holdings LLC, the Subsidiary Guarantors thereunder (as defined therein), the lenders party thereto and Sumitomo Mitsui Banking Corporation (“SMBC”), as administrative agent.

Recent Developments

Additional Issuance under the A&R UPA

As described above, on October 3, 2025, the Company, TopCo 1, APLD HPC TopCo 2 LLC, an indirect wholly-owned subsidiary of the Company (the “Subsidiary Issuer”), and MIP HPC Holdings, LLC (formerly, MIP VI HPC Holdings, LLC) (the “Purchaser”) entered into an Amended and Restated Unit Purchase Agreement (the “A&R UPA”).

DevCo Facility

On December 18, 2025 (the “Closing Date”), APLD DevCo LLC (the “Borrower”), our subsidiary, entered into an ongoing credit arrangement with Macquarie Equipment Capital, Inc., a Delaware corporation (the “Lender”), for the purposes of funding the initial sourcing, planning, development and construction costs associated with a new data center project (the “DevCo Facility”) and other potential projects.

The DevCo Facility is evidenced by, among other documents, a promissory note (the “Promissory Note”) executed by the Borrower in favor of the Lender.

The Promissory Note provides for a principal sum of (a) $45 million (the “First Draw”), which was drawn on the Closing Date, plus (b) $55 million (the “Second Draw,” and, together with the First Draw, each, a “Draw” and, collectively, the “Initial Loan”), to be funded upon the Borrower’s request at any time after the Closing Date

subject to satisfaction of or waiver by the Lender of certain conditions precedent on or prior to the Second Draw, plus (c) the principal sum of any Additional Loans (as defined below, and, together with the Initial Loan, the “Loan”), if applicable, made by the Lender (at the mutual consent of the Borrower and the Lender).

In addition, the Promissory Note provides for, upon request of the Borrower occurring prior to the Maturity Date (as defined below), (a) rolling over of the outstanding principal balance of the Loan from time to time into one or more loans for one or more new projects (such rollovers, the “Rollover Loans”), or (b) increasing the size of the existing Loan by advancing new loans to the Borrower (such loans, the “Additional Loans”), in either case, for the purpose of financing development activities at new or existing data center projects at direct or indirect, wholly owned domestic subsidiaries of the Borrower, each of which shall become a guarantor with respect to such Additional Loans or Rollover Loans, as applicable, subject to the prior written approval of the Lender (in its sole discretion) and the satisfaction of the conditions specified by the Lender

The First Draw is fully committed, but the Second Draw and any Additional Loans or Rollover Loans made by the Lender under the Promissory Note would be on an uncommitted, discretionary basis (with no specified maximum borrowing limit for any Additional Loans or Rollover Loans).

On December 18, 2025, APLD DevCo LLC (the “Borrower”), a subsidiary of the Company, entered into an ongoing credit arrangement with MEC, for the purposes of funding the initial sourcing, planning, development and construction costs associated with a new data center project (the “DevCo Facility”) and other potential projects.

The DevCo Facility is evidenced by, among other documents, that certain Promissory Note, dated as of December 18, 2025 (such date, the “Initial Closing Date”) (as amended and restated by that certain Amendment No.

1 to Promissory Note dated as of February 24, 2026 and as may be further amended, restated, amended and restated, supplemented, or otherwise modified from time to time, the “Promissory Note”) executed by the Borrower in favor of MEC.

The Promissory Note provides for a principal sum of (a) $45 million (the “First Draw”), which was drawn on the Initial Closing Date, plus (b) $40 million (the “Second Draw”) which was drawn on February 24, 2026, plus (c) $15 million (the “Third Draw,” and, together with the First Draw and the Second Draw, the “Initial Loan,” and each, individually, a “Draw”) with the Third Draw to be funded upon the Borrower’s request at any time after the Initial Closing Date subject to satisfaction of or waiver by MEC of certain conditions precedent on or prior to the Third Draw, plus (d) the principal sum of any Additional Loans (as defined below, and, together with the Initial Loan, the “Loan”), if applicable, made by MEC (at the mutual consent of the Borrower and MEC).

In addition, the Promissory Note provides for, upon request of the Borrower occurring prior to the Maturity Date (as defined below), (a) rolling over of the outstanding principal balance of the Loan from time to time into one or more loans for one or more new projects (such rollovers, the “Rollover Loans”), or (b) increasing the size of the existing Loan by advancing new loans to the Borrower (such loans, the “Additional Loans”), in either case, for the purpose of financing development activities at new or existing data center projects at direct or indirect, wholly owned domestic subsidiaries of the Borrower, each of which shall become a guarantor with respect to such Additional Loans or Rollover Loans, as applicable, subject to the prior written approval of MEC (in its sole discretion) and the satisfaction of the conditions specified by MEC.

Each Draw is fully committed, but any Additional Loans or Rollover Loans made by MEC under the Promissory Note would be on an uncommitted, discretionary basis (with no specified maximum borrowing limit for any Additional Loans or Rollover Loans).

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Proceeds from the Loan will be used, in part, to (i) pay transaction expenses, and (ii) fund the purchase, development and improvement of, and the purchase of equipment for, our latest new project under development.

In connection with the Loan, (i) the Borrower, APLD Intermediate HoldCo LLC (“Intermediate Holdings”), a Delaware limited liability company, as parent of the Borrower, and the Borrower’s subsidiaries have entered into a guarantee and collateral agreement, as grantors thereunder, in favor of the Lender (the “Guarantee and Collateral Agreement”).

Cummins Award

On January 6, 2026 (the “Grant Date”), our Board of Directors (the “Board”), based on the recommendation of the Compensation Committee of the Board (the “Compensation Committee”), unanimously approved the grant of 4,500,000 performance stock units (“PSUs”) and 1,500,000 restricted stock units (the “RSUs”) to Wes Cummins, Chairman and Chief Executive Officer of the Company, under the Company’s 2024 Omnibus Equity Incentive Plan (as amended from time to time, the “Plan”).

Each PSU and RSU represents a right to receive one share of the Company’s common stock upon vesting, subject to the terms and conditions described below.

RSUs are subject to time based vesting conditions as further described in “Note 18 – Subsequent Events” of our unaudited condensed consolidated financial statements, and the PSUs are eligible to vest based on achievement of certain stock price hurdles, measured based on the average closing price per share of our common stock over a 90 consecutive day period, as further described in “Note 18 – Subsequent Events.”

In connection with the Loan, (i) APLD Intermediate as direct parent of the Borrower, and the Borrower’s subsidiaries (the “Note Parties”) have entered into a guarantee and collateral agreement, as grantors thereunder, in favor of MEC (the “Guarantee and Collateral Agreement”), and (ii) the Company has entered into a parent guarantee in favor of MEC to guarantee the obligations of the Note Parties under the Promissory Note.

Recent Developments

2031 Senior Secured Notes

On March 10, 2026, our subsidiary APLD ComputeCo 2 LLC, closed a $2.15 billion offering (the “2031 Notes Offering”) of 6.750% senior secured notes due 2031 (the “2031 Notes”) at an issue price of 98.000% of par.

The 2031 Notes were issued and sold in a private offering to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended, and outside the United States to non-U.S.

persons in reliance on Regulation S under the Securities Act.

The 2031 Notes are senior secured obligations of APLD ComputeCo 2 LLC and bear interest at a rate of 6.750% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2026.

The principal amount of the 2031 Notes will amortize on a semi-annual basis on March 15 and September 15 of each year, in amounts set forth in the Indenture.

The 2031 Notes will mature on March 15, 2031, unless earlier redeemed or repurchased in accordance with their terms.

The 2031 Notes are fully and unconditionally guaranteed by the subsidiary guarantors, all of which are wholly owned subsidiaries of APLD ComputeCo 2.

The Company provided a customary completion guarantee for the 2031 Notes Offering.

The gross proceeds from the 2031 Notes Offering were deposited into a segregated escrow account pending the execution of an electric service agreement with certain providers on the terms and conditions of a related escrow agreement.

Once the escrow release condition thereunder is satisfied, the escrowed funds will be released into the project accounts to fund the development and construction of the facilities.

If the escrow release condition is not satisfied on or prior to June 30, 2026, or is deemed incapable of being satisfied by such date, the 2031 Notes will be subject to a special mandatory redemption at a price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest.

B&W Guarantee

On February 26, 2026, the Company entered into a Guarantee (the “Guarantee”) in favor of The Babcock & Wilcox Company (“B&W”), pursuant to which Applied Digital has agreed to unconditionally and irrevocably guarantee the full and timely performance by Base Electron, Inc., a Nevada corporation (“Base Electron”), of its obligations under that certain Design-Build Agreement, dated February 26, 2026, by and between Base Electron and B&W (the “Design-Build Agreement”).

The Design-Build Agreement contemplates the engineering, procurement, construction and commissioning of a power generation facility with an expected nameplate capacity of approximately 1.2 GW anticipated to expand power and capacity supplied to the grid and utility customers in the Midcontinent Independent System Operator (“MISO”) region.

The Company’s obligations under the Guarantee are absolute and unconditional and continue until all obligations under the Design-Build Agreement have been fully performed or otherwise discharged.

However, the Company may, in its sole discretion, terminate the Guarantee and all of its existing and future obligations thereunder upon the occurrence of any one of the following events, (i) the listing of Base Electron’s equity securities on a national securities exchange, (ii) the consummation by Base Electron of a financing transaction resulting in gross proceeds of at least $50 million (provided that Base Electron is current in its payments to B&W), or (iii) the payment by the Company of a termination fee equal to either $50 million (if paid by August 1, 2026 and Base Electron is current in its payments to B&W) or $100 million.

On November 4, 2025, the Company and Babcock & Wilcox Enterprises, Inc.

(“BWE”), B&W’s parent, entered into an agreement under which the Company contributed $2.0 million to BWE in exchange for 500,000 shares of BWE’s common stock and warrants to purchase 2,600,000 shares of BWE’s common stock with an exercise price of $4.11 (the “Initial Warrants”).

Additionally, under the agreement, to incentivize the Company to execute a definitive agreement with B&W related to B&W designing and installing natural gas technology that will provide on gigawatt of efficient energy for an APLD AI data center, BWE agreed to issue additional warrants to purchase 7,860,000 shares of common stock for $4.11 per share (the “Additional Warrants”) to the Company upon execution of such a definitive agreement between B&W and the Company.

As described in Note 5 - Related Party Transaction and Note 8 - Derivative Assets, on February 26, 2026 a definitive agreement was executed between Base Electron and B&W, with the Company as the guarantor.

Subsequent to the end of the quarter, the Company entered into an Assignment and Assumption Agreement, by and among the Company, Base Electron, BWE and B&W, pursuant to which the Company partially assigned its rights with respect to the Additional Warrants (such partial assignment representing the right to purchase up to 5,230,000 shares of BWE common stock) to Base Electron.

The warrants were assigned by the Company to Base Electron in connection with Base Electron’s entry into a Design-Build Agreement with B&W.

On March 18, 2026, the Company received the remaining Additional Warrants (representing the right to purchase up to 2,630,000 shares of BWE common stock).

Base Electron is an independent power producer owned and managed by a combination of third parties, as well as certain officers and directors of the Company

acting in their individual capacities, for the purpose of developing stabilized power generation and infrastructure to support the broader AI industry.

CoreWeave Restructuring Agreements

On March 30, 2026, the Company and CoreWeave amended the lease for Building 2 (the “ELN-02 Parent Lease”) to suspend the term for two of the four data halls covered by the lease (the “ELN-02 Parent Lease Amendment”) and the Company entered into a new data center lease with CoreWeave Compute Acquisition Co.

VIII, LLC (“CoreWeave SPV”), a wholly owned subsidiary of CoreWeave, for those same two data halls on substantially the same terms as the ELN-02 Parent Lease (the “ELN-02 SPV Lease”).

The ELN-02 SPV Lease is conterminous with the initial term of the ELN-02 Parent Lease.

Upon the expiration or earlier termination of the ELN-02 SPV Lease, the suspended term under the ELN-02 Parent Lease will resume and all four data halls of Building 2 will once again be governed by the ELN-02 Parent Lease.

As further credit enhancement, CoreWeave delivered to APLD ELN-02 LLC an Unconditional Springing Guaranty of Payment and Performance (the “ELN-02 Guaranty”) in connection with CoreWeave SPV’s obligations under the ELN-02 SPV Lease.

CoreWeave is obligated to provide a letter of credit in the amount of $50,000,000 to secure obligations under the ELN-02 Parent Lease within 30 days of March 30, 2026.

In addition, on March 30, 2026, CoreWeave entered into an Assignment, Assumption and Consent Agreement with CoreWeave SPV and APLD ELN-03 LLC (the “Assignment Agreement”), assigning all of CoreWeave’s rights and obligations under its lease with the Company for Building 3 (the “ELN-03 Parent Lease”) to CoreWeave SPV for the remaining term of the ELN-03 Parent Lease and releasing CoreWeave from the ELN-03 Parent Lease.

In addition, CoreWeave also provided an Unconditional Springing Guaranty of Payment and Performance in connection with CoreWeave SPV’s obligations under the ELN-03 Parent Lease (the “ELN-03 Guaranty”), similar to the ELN-02 Guaranty.

Results of Operations

Comparative Results for the Three and Six Months Ended November 30, 2025 and November 30, 2024:

The following table sets forth key components of the results of operations (in thousands) during the three and six months ended November 30, 2025 and November 30, 2024.

Three Months Ended Six Months Ended

November 30, 2025 November 30, 2024 November 30, 2025 November 30, 2024

Comparative Results for the Three and Nine Months Ended February 28, 2026 and February 28, 2025:

The following table sets forth key components of the results of operations (in thousands) during the three and nine months ended February 28, 2026 and February 28, 2025.

Three Months Ended Nine Months Ended

February 28, 2026 February 28, 2025 February 28, 2026 February 28, 2025

Revenue $ 126,637 $ 52,921 $ 352,562 $ 175,567

3 unchanged sentences

Cost of revenues (1)

72,832 49,141 235,398 162,562

Selling, general and administrative (2) (3)

4 unchanged sentences

Total costs and expenses 212,304 71,864 464,205 205,567

Operating (loss) income (30,957) (12,805) (53,249) 12,489

Interest expense, net

11,484 2,929 15,431 5,888

Gain on change in fair value of derivative

(13,126) — (13,126) —

Operating loss (85,667) (18,943) (111,643) (28,074)

Interest (income) expense, net (2,387) 8,897 18,883 23,687

Gain on change in fair value of derivatives (9,417) — (22,543) —

Gain on change in fair value of investment (5)

1 unchanged sentence

Loss on conversion of debt

— 25,410 — 33,612

Loss on change in fair value of debt — — — 85,439

Net loss from continuing operations before income tax expense

(26,548) (128,362) (52,787) (112,450)

Income tax expense 15 1 23 1

Net loss from continuing operations (26,563) (128,363) (52,810) (112,451)

Net (loss) income from discontinued operations

12,113 (10,363) 21,434 (30,522)

Loss on extinguishment of debt — 1,177 — 1,177

Loss on change in fair value of warrants

— 6,421 — 6,421

Net loss attributable to noncontrolling interest (3,061) — (3,061) —

Net loss before income tax expense (70,558) (35,438) (101,911) (178,410)

Income tax (benefit) expense (2) 117 21 118

Net loss (70,556) (35,555) (101,932) (178,528)

Net loss attributable to redeemable noncontrolling interest (28,747) — (31,910) —

Preferred dividends (1,558) (540) (4,705) (1,213)

Net loss attributable to common stockholders $ (100,861) $ (36,095) $ (138,547) $ (179,741)

Net (loss) income attributable to common stockholders

Continuing operations $ (31,195) $ (128,992) $ (59,017) $ (113,124)

Discontinued operations 12,113 (10,363) 21,434 (30,522)

Net loss $ (19,082) $ (139,355) $ (37,583) $ (143,646)

Basic and diluted net loss per share attributable to common stockholders $ (0.36) $ (0.16) $ (0.51) $ (0.93)

Continuing operations $ (0.11) $ (0.61) $ (0.22) $ (0.63)

Discontinued operations 0.04 (0.05) 0.08 (0.17)

Basic and diluted net loss per share $ (0.07) $ (0.66) $ (0.14) $ (0.80)

Basic and diluted weighted average number of shares outstanding 281,982,553 222,454,578 271,670,830 193,405,721

Adjusted Amounts (6)

Adjusted revenue

$ 108,550 $ 35,167 $ 299,355 $ 106,180

Adjusted operating income $ 25,615 $ 1,883 $ 33,614 $ 5,462

Adjusted operating margin

Adjusted net income (loss) from continuing operations $ 115 $ (1,515) $ (7,455) $ (2,310)

Adjusted net income (loss) from continuing operations per diluted share $ — $ (0.01) $ (0.03) $ (0.01)

24 % 5 % 11 % 5 %

Adjusted net income (loss) $ 33,156 $ (2,590) $ 22,607 $ (4,899)

Diluted weighted average number of shares outstanding

382,306,393 222,454,578 371,994,670 193,405,721

Adjusted net income (loss) per diluted share $ 0.09 $ (0.01) $ 0.07 $ (0.03)

Other Financial Data (6)

EBITDA $ (2,227) $ (11,858) $ (26,846) $ (109,565)

as a percentage of revenues (5) % (334) % (13) % (138) %

as a percentage of adjusted revenue

(2) % (34) % (9) % (103) %

Adjusted EBITDA $ 44,139 $ 6,258 $ 64,877 $ 18,647

as a percentage of revenues 16 % 17 % 11 % 17 %

(1) Includes related party selling, general and administrative expense of $0.1 million for each of the three months ended November 30, 2025 and November 30, 2024, and for each of the six months ended November 30, 2025 and November 30, 2024, respectively.

as a percentage of adjusted revenue

41 % 18 % 22 % 18 %

(1) Includes depreciation and amortization of $19.5 million and $17.5 million for the three months ended February 28, 2026 and February 28, 2025, and $30.4 million and $75.4 million for the nine months ended February 28, 2026 and February 28, 2025, respectively.

(2) Includes depreciation and amortization of $1.3 million and $1.2 million for the three months ended February 28, 2026 and February 28, 2025, and $3.1 million and $4.1 million for the nine months ended February 28, 2026 and February 28, 2025, respectively.

(3) Includes related party selling, general and administrative expense of $0.1 million for each of the three months ended February 28, 2026 and February 28, 2025, and $0.2 million for each of the nine months ended February 28, 2026 and February 28, 2025, respectively.

See Note 5 - Related Party Transactions for further discussion of related party transactions.

(2) Includes $25 million received in connection with the sale of our Garden City facility once conditional approval requirements were met and escrowed funds were released during the six months ended November 30, 2024.

(4) Includes $25 million received in connection with the sale of our Garden City facility once conditional approval requirements were met and escrowed funds were released during the nine months ended February 28, 2025.

(5) Includes related party gain on change in fair value of investment of $2.0 million for each of the three and nine months ended February 28, 2026.

See Note 5 - Related Party Transactions for further discussion of related party transactions.

(6) Adjusted Amounts and Other Financial Data are non-GAAP performance measures.

These non-GAAP measures exclude the results of the Cloud Services Business.

A reconciliation of reported amounts to adjusted amounts can be found in the "Non-GAAP Measures and Reconciliation" section of Management’s Discussion and Analysis.

Commentary on Results of Operations Comparative Results for the Three Months Ended November 30, 2025 compared to the Three Months Ended November 30, 2024

Revenue increased $90.4 million, or 250%, from $36.2 million for the three months ended November 30, 2024 to $126.6 million for the three months ended November 30, 2025.

Approximately $85.0 million of the increase was due to revenue generated related to our HPC Hosting Business, with approximately $73.0 million related to tenant fit-out services and $12.0 million related to rental revenues as ELN-02 at Polaris Forge 1 fully energized during the current quarter.

The remaining $5.4 million increase in revenue is related to the Data Center Hosting Business and is due to performance improvements compared to the three months ended November 30, 2024.

Commentary on Results of Operations Comparative Results for the Three Months Ended February 28, 2026 compared to the Three Months Ended February 28, 2025

Revenue increased $73.7 million, or 139%, from $52.9 million for the three months ended February 28, 2025 to $126.6 million for the three months ended February 28, 2026.

Approximately $71.0 million of the increase was due to revenue generated related to our HPC Hosting Business, with approximately $44.1 million related to base rent, $18.9 million related to tenant fit-out services and $8.1 million related to power pass through arrangements and other ancillary revenue streams as our first HPC data center at our Polaris Forge 1 campus was fully operating during the current quarter.

The remaining increase in revenue was due to performance improvements in our other segments during the three months ended February 28, 2026 compared to the three months ended February 28, 2025.

Cost of revenues

Cost of revenues increased $77.9 million, or 344%, from $22.7 million for the three months ended November 30, 2024 to $100.6 million for the three months ended November 30, 2025.

The increase was primarily driven by an increase of $69.5 million in expenses associated with tenant fit-out services for our HPC Hosting Business, an increase of $3.2 million in energy costs associated with our Data Center Hosting Business, and an increase of $5.2 million in other expenses directly attributable to generating revenue.

Cost of revenues increased $23.7 million, or 48%, from $49.1 million for the three months ended February 28, 2025 to $72.8 million for the three months ended February 28, 2026.

The increase in cost of revenues was categorized as follows:

• approximately $18.0 million increase in expenses associated with tenant fit-out services for our HPC Hosting Business;

• approximately $4.8 million increase in personnel expenses due to the increases in headcount as well as other related costs directly supporting revenue;

• approximately $4.1 million increase in energy costs associated with our Data Center Hosting Business;

• approximately $2.0 million increase in depreciation and amortization expense due to an increase in owned and leased assets in-service directly supporting revenue.

These increases were partially offset by a decrease of $5.2 million in lease and lease related expenses due to the renegotiations of certain of our leases during fiscal year 2026.

Selling, general and administrative expense

Selling, general and administrative expense increased $31.0 million, or 119%, from $26.0 million for the three months ended November 30, 2024 to $57.0 million for the three months ended November 30, 2025.

The change in selling, general and administrative expense is categorized as follows:

• approximately $23.8 million increase in stock based compensation primarily due to an increase in shares awarded related to the increase in headcount during the three months ended November 30, 2025 compared to the three months ended November 30, 2024;

Selling, general and administrative expense increased $57.0 million, or 251%, from $22.7 million for the three months ended February 28, 2025 to $79.7 million for the three months ended February 28, 2026.

The change in selling, general and administrative expense was categorized as follows:

• approximately $39.3 million increase in stock based compensation primarily due to an increase in shares awarded related to the increase in headcount and performance stock awards granted during the three months ended February 28, 2026 compared to the three months ended February 28, 2025;

• approximately $8.6 million increase in professional service expense primarily related to legal services provided on discrete transactions and projects, as well as general support of the business;

• approximately $2.5 million increase in personnel expenses for employee costs and other costs attributable to supporting the growth of the business.

Interest expense, net

Interest expense, net increased $8.6 million, or 292%, from $2.9 million for the three months ended November 30, 2024, to $11.5 million for the three months ended November 30, 2025.

The increase was primarily driven by a $10.8 million increase in loan interest due to loan activity during the three months ended November 30, 2025.

These increases were partially offset by a $2.3 million increase in interest income due to an increase in funds held in money market accounts.

Gain on change in fair value of derivative

Gain on change in fair value of derivative was $13.1 million for the three months ended November 30, 2025, due to the change in fair value of our Babcock & Wilcox Enterprises, Inc.

(“B&W”) common stock warrant.

• approximately $5.1 million increase in personnel expenses related to the increase in headcount;

• approximately $8.0 million increase in other selling, general, and administrative expense such as travel, computer and software expenses.

These increases were partially offset by a decrease of $3.9 million in lease and lease related expense due to the renegotiations of certain of our leases during fiscal year 2026.

Loss on classification as held for sale

Loss on classification of held for sale was $59.7 million for the three months ended February 28, 2026, due to the write down of the Cloud Services Business assets to their carrying value as of February 15, 2026 when it no longer qualified as held for sale.

See further discussion above.

There was no such loss recorded in the prior year comparative period.

Loss on abandonment of assets

Loss on abandonment of assets was $0.1 million for the three months ended February 28, 2026, driven by the write down of assets to their fair value upon disposal.

There was no such loss recorded in the prior year comparative period.

Interest (income) expense, net

Interest (income) expense, net decreased $11.3 million, or 127%, from interest expense, net of $8.9 million for the three months ended February 28, 2025, to interest income, net of $2.4 million for the three months ended February 28, 2026.

The change was due to an increase of $19.3 million in interest income due to an increase in funds held in interest-bearing demand deposit accounts and a decrease of $3.0 million in finance lease interest associated with the renegotiation of the majority of our finance leases during the three months ended February 28, 2026.

This decrease was partially offset by increases of $9.9 million in loan interest expense and $1.1 million in issuance costs amortization as we entered into more debt arrangements during the three months ended February 28, 2026.

Gain on change in fair value of derivatives

Gain on the change in fair value of derivatives was $9.4 million for the three months ended February 28, 2026, due an increase of $6.1 million in the fair value of our Babcock & Wilcox Enterprises, Inc.

(“B&W”) common stock warrant and an increase of $3.3 million in the fair value of the derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2’s noncontrolling interest.

There was no such gain recorded in the prior year comparative period.

Gain on change in fair value of investment

Gain on change in fair value of investment was $2.8 million for the three months ended November 30, 2025, due to the change in fair value of our investment in B&W common stock.

Gain on change in fair value of investment was $3.3 million for the three months ended February 28, 2026, due to an increase of $1.3 million in the fair value of our investment in B&W common stock and an increase of $2.0 million in fair value of our investment in Base Electron, a related party.

There was no such gain recorded in the prior year comparative period.

Net (loss) income from discontinued operations

Net loss (income) from discontinued operations decreased $22.5 million, or 217%, from a net loss of $10.4 million for the three months ended November 30, 2024 to a net income of $12.1 million for the three months ended November 30, 2025 and represents the income statement activity related to the Cloud Services Business.

The increase in net income from the Cloud Services Business was the result of an increase of $20.6 million in operating income for the comparative periods and a decrease in interest expense of $1.9 million for the comparative periods.

Commentary on Results of Operations Comparative Results for the Six Months Ended November 30, 2025 compared to the Six Months Ended November 30, 2024

Revenue increased $121.7 million, or 176%, from $69.1 million for the six months ended November 30, 2024 to $190.8 million for the six months ended November 30, 2025.

Approximately $111.3 million of the increase was due to revenue generated related to our HPC Hosting Business, with approximately $99.3 million related to tenant fit-out services and $12.0 million related to rental revenues as ELN-02 at Polaris Forge 1 fully energized during the six months ended November 30, 2025.

The remaining $8.5 million increase in revenue is related to the Data Center Hosting Business and is due to performance improvements compared to the six months ended November 30, 2024.

Commentary on Results of Operations Comparative Results for the Nine Months Ended February 28, 2026 compared to the Nine Months Ended February 28, 2025

Revenue increased $177.0 million, or 101%, from $175.6 million for the nine months ended February 28, 2025 to $352.6 million for the nine months ended February 28, 2026.

Our HPC Hosting Business commenced operations at our first HPC data center at our Polaris Forge 1 campus resulting in the recognition of approximately $182.3 million, with

approximately $118.2 million related to tenant fit-out services, $55.7 million related to base rent and $8.4 million related to power pass through arrangements and other ancillary revenue streams as our first HPC data center at our Polaris Forge 1 campus became fully operational during the current fiscal year.

Additionally, there was an increase of $12.8 million in revenue generated by our Data Center Hosting Business due to performance improvements compared to the nine months ended February 28, 2025.

These increases were offset by a decrease of $18.1 million in revenue from our Cloud Services Business during the nine months ended February 28, 2026 due to a decrease in the fixed rate per GPU compared to the nine months ended February 28, 2025.

Cost of revenues

Cost of revenues increased by $110.8 million, or 244%, from $45.4 million for the six months ended November 30, 2024 to $156.2 million for the six months ended November 30, 2025.

The increase was primarily driven by the growth in the business as more facilities were energized and more services were provided to customers compared to the six months ended November 30, 2024, which resulted in an increase of $94.5 million in expenses associated with tenant fit-out services for our HPC Hosting Business, an increase of $10.4 million in energy costs associated with our Data Center Hosting Business, and an increase of $5.8 million in other expenses directly attributable to generating revenue.

Cost of revenues increased by $72.8 million, or 45%, from $162.6 million for the nine months ended February 28, 2025 to $235.4 million for the nine months ended February 28, 2026.

The increase was primarily driven by the growth in the business as more facilities were energized and more services were provided to customers compared to the nine months ended February 28, 2025.

The increase in cost of revenues was categorized as follows:

• approximately $112.5 million increase in expenses associated with tenant fit-out services for our HPC Hosting Business which we began providing during the current fiscal year;

• approximately $14.3 million increase in energy costs associated with our Data Center Hosting Business;

• approximately $5.7 million increase in other expenses such as personnel expenses directly attributable to generating revenue.

These increases were partially offset by a decrease of $45.0 million in depreciation and amortization expense and a decrease of $14.7 million in lease and related expenses for the nine months ended February 28, 2026 compared to the nine months ended February 28, 2025, primarily due to the Cloud Services Business being classified as held for sale until February 15, 2026, as well as due to the renegotiations of certain of our leases during fiscal year 2026.

Selling, general and administrative expense

Selling, general and administrative expense increased by $49.2 million, or 133%, from $37.0 million for the six months ended November 30, 2024 to $86.1 million for the six months ended November 30, 2025.

Selling, general and administrative expense increased by $100.0 million, or 150%, from $66.9 million for the nine months ended February 28, 2025 to $166.8 million for the nine months ended February 28, 2026.

The increase was primarily due to the overall growth in the business.

The change in selling, general and administrative expense is categorized as follows:

• approximately $40.4 million increase in stock based compensation primarily due to an increase in shares awarded related to the increase in headcount during the six months ended November 30, 2025 compared to the six months ended November 30, 2024 as well as the lack of PSU cancellations during the six months ended November 30, 2025 compared to the six months ended November 30, 2024;

• approximately $2.8 million increase in personnel expenses, related to an increase in salaries, wages and bonuses associated with the increase in headcount period over period;

• approximately $6.0 million increase in other selling, general, and administrative expense such as professional service expenses, travel, computer and software expenses.

The change in selling, general and administrative expense was categorized as follows:

• approximately $81.5 million increase in stock based compensation primarily due to an increase in shares awarded related to the increase in headcount and performance stock awards granted during the nine months ended February 28, 2026 compared to the nine months ended February 28, 2025 as well as the lack of PSU cancellations during the nine months ended February 28, 2026 compared to the nine months ended February 28, 2025;

• approximately $11.6 million increase in other selling, general, and administrative expense such as travel, computer and software expenses;

• approximately $10.4 million increase in professional service expense primarily related to legal services provided on discrete transactions and projects, as well as general support of the business;

• approximately $8.1 million increase in personnel expenses, related to the increase in headcount period over period.

These increases were partially offset by a decrease of $10.7 million in lease and related expenses and a decrease of $1.0 million in depreciation and amortization expense for the nine months ended February 28, 2026 compared to the nine months ended February 28, 2025, primarily due to the Cloud Services Business being classified as held for sale until February 15, 2026, which resulted in decreased depreciation and amortization recorded as well as due to the renegotiations of certain of our leases during fiscal year 2026.

Loss (gain) on classification of held for sale

Loss (gain) on classification of held for sale changed by $84.3 million, or 342%, from a gain of $24.6 million for the nine months ended February 28, 2025 to a loss of $59.7 million for the nine months ended February 28, 2026.

The loss during the nine months ended February 28, 2026 was due to the write down of the Cloud Services Business assets to their carrying value as of February 15, 2026 when it no longer qualified as held for sale.

See further discussion above.

Comparatively, the gain during the nine months ended February 28, 2025 was due to the receipt of $25.0 million of funds received in

connection with the sale of our Garden City facility as conditional approval requirements were met and escrowed funds were released.

Loss on abandonment of assets

Loss on abandonment of assets increased by $1.0 million, or 128%, from $0.8 million for the six months ended November 30, 2024 to $1.8 million for the six months ended November 30, 2025, driven by the write down of assets to their fair value upon disposal.

Loss on abandonment of assets increased by $1.6 million, or 205%, from $0.8 million for the nine months ended February 28, 2025 to $2.3 million for the nine months ended February 28, 2026, driven by the write down of assets to their fair value upon disposal.

Interest expense, net

Interest expense, net increased $9.5 million, or 162%, from $5.9 million for the six months ended November 30, 2024 to $15.4 million for the six months ended November 30, 2025.

The increase was primarily driven by a $12.3 million increase in loan interest due to loan activity in the six months ended November 30, 2025.

These increases were partially offset by a $2.8 million increase in interest income due to an increase in funds held in money market accounts.

Gain on change in fair value of derivative

Gain on change in fair value of derivative was $13.1 million for the six months ended November 30, 2025, due to the change in fair value of our Babcock & Wilcox Enterprises, Inc.

(“B&W”) common stock warrant.

Interest expense, net decreased $4.8 million, or 20%, from $23.7 million for the nine months ended February 28, 2025 to $18.9 million for the nine months ended February 28, 2026.

The decrease was primarily driven by a $22.1 million increase in interest income due to an increase in funds held in interest-bearing demand deposit accounts and a decrease of $6.0 million in finance lease interest due to renegotiations of certain of our leases during the fiscal year 2026.

This decrease was partially offset by increases of $21.4 million in loan interest expense and $1.9 million in issuance costs amortization as we entered into more debt arrangements during the nine months ended February 28, 2026.

Gain on change in fair value of derivatives

Gain on change in fair value of derivatives was $22.5 million for the nine months ended February 28, 2026, due an increase of $19.2 million in fair value of our Babcock & Wilcox Enterprises, Inc.

(“B&W”) common stock warrant and an increase of $3.3 million in fair value of the derivative assets related to the preferred units and corresponding common units held by APLD HPC TopCo 2’s noncontrolling interest.

There was no such gain recorded in the prior year comparative period.

Gain on change in fair value of investment

Gain on change in fair value of investment was $2.8 million for the six months ended November 30, 2025, due to the change in fair value of our investment in B&W common stock.

Gain on change in fair value of investment was $6.1 million for the nine months ended February 28, 2026, due to an increase of $4.1 million in fair value of our investment in B&W common stock and an increase of $2.0 million in fair value of our investment in Base Electron, a related party.

There was no such gain recorded in the prior year comparative period.

Net (loss) income from discontinued operations

Net (loss) income from discontinued operations decreased $52.0 million, or 170%, from a net loss of $30.5 million for the six months ended November 30, 2024 to a net income of $21.4 million for the six months ended November 30, 2025 and represents the income statement activity related to the Cloud Services Business.

The increase in net income from the Cloud Services Business was the result of an increase of $48.9 million in operating income for the comparative periods as well as a decrease in interest expense of $3.1 million for the comparative periods.

Comparative Segment Data for the Three and Six Months Ended November 30, 2025 and November 30, 2024:

The following table sets forth our operating profit (loss) for each of our segments for the three and six months ended November 30, 2025 and November 30, 2024 (in thousands):

Three Months Ended Six Months Ended

November 30, 2025 November 30, 2024 November 30, 2025 November 30, 2024

Segment profit (loss)

Comparative Segment Data for the Three and Nine Months Ended February 28, 2026 and February 28, 2025:

The following table sets forth the operating (loss) profit for each of our segments for the three and nine months ended February 28, 2026 and February 28, 2025 (in thousands):

Three Months Ended Nine Months Ended

February 28, 2026 February 28, 2025 February 28, 2026 February 28, 2025

Segment (loss) profit

Data Center Hosting Business

$ 13,859 $ 8,780 $ 35,852 $ 57,181

Cloud Services Business

(52,194) (10,308) (24,919) (31,928)

HPC Hosting Business

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Total segment (loss) profit $ (20,770) $ (1,750) $ 23,879 $ 16,231

Commentary on Segment Data Comparative Results for the Three Months Ended November 30, 2025 compared to the Three Months Ended November 30, 2024

Commentary on Segment Data Comparative Results for the Three Months Ended February 28, 2026 compared to the Three Months Ended February 28, 2025

Data Center Hosting Business

Operating Profit

Data Center Hosting Business operating profit increased $3.4 million, or 27%, from a profit of $12.5 million for the three months ended November 30, 2024 to a profit of $16.0 million for the three months ended November 30, 2025.

This increase was primarily due to site performance improvements for the three months ended November 30, 2025 compared to the three months ended November 30, 2024.

Additionally, for the three months ended November 30, 2025, there was a decrease of $0.3 million in selling, general and administrative expenses when compared to the to the three months ended November 30, 2024 and no loss on classification of held for sale and no loss on abandonment of assets for the three months ended November 30, 2025.

HPC Hosting Business

Data Center Hosting Business operating profit increased $5.1 million, or 58%, from $8.8 million for the three months ended February 28, 2025 to $13.9 million for the three months ended February 28, 2026 primarily due to site performance improvements.

Additionally, for the three months ended February 28, 2026, there was a decrease of $2.7 million in cost of revenues due to more advantageous power pricing when compared to the to the three months ended February 28, 2025.

Cloud Services Business

Operating Loss

HPC Hosting Business operating loss decreased $3.2 million, or 56%, from a loss of $5.8 million for the three months ended November 30, 2024 to a loss of $2.6 million for the three months ended November 30, 2025.

The change is primarily due to revenue generated related to tenant fit-out services, net of expenses, as well as rental revenues from ELN-02 at Polaris Forge 1 as it fully energized during the three months ended November 30, 2025.

Commentary on Segment Data Comparative Results for the Six Months Ended November 30, 2025 compared to the Six Months Ended November 30, 2024

Cloud Services Business operating loss increased $41.9 million, or 406%, from $10.3 million for the three months ended February 28, 2025 to $52.2 million for the three months ended February 28, 2026.

This increase was primarily due to the write down of the Cloud Services Business assets to their carrying value as of February 15, 2026 when it no longer qualified as held for sale.

HPC Hosting Business

Operating Profit

HPC Hosting Business operating profit increased $17.8 million, or 8012%, from a loss of $0.2 million for the three months ended February 28, 2025 to a profit of $17.6 million for the three months ended February 28, 2026.

The change is primarily due to revenue generated related to tenant fit-out services, net of expenses, as well as rental revenues at our first HPC data center at our Polaris Forge 1 campus as it was fully operational during the three months ended February 28, 2026.

Commentary on Segment Data Comparative Results for the Nine Months Ended February 28, 2026 compared to the Nine Months Ended February 28, 2025

Data Center Hosting Business

Operating Profit

Data Center Hosting Business operating profit decreased $26.4 million, or 55%, from a profit of $48.4 million for the six months ended November 30, 2024 to a profit of $22.0 million for the six months ended November 30, 2025.

This decrease in operating profit is primarily due to the recognition of a $25.0 million gain on classification of held for sale due to the release of escrowed funds related to the sale of the Garden City facility during the six months ended November 30, 2024 as there was no such gain recorded during the six months ended November 30, 2025.

Also contributing to the decrease in operating profit was a larger increase in cost of revenues compared to revenue.

HPC Hosting Business

Data Center Hosting Business operating profit decreased $21.3 million, or 37%, from $57.2 million for the nine months ended February 28, 2025 to $35.9 million for the nine months ended February 28, 2026.

This decrease in operating profit is primarily due to the recognition of a $25.0 million gain on classification of held for sale during the nine months ended February 28, 2025 due to the release of escrowed funds related to the sale of the Garden City facility.

There was no such gain recorded during the nine months ended February 28, 2026.

Cloud Services Business

Operating Loss

HPC Hosting Business operating loss decreased $4.2 million, or 47% , from a loss of $8.8 million for the six months ended November 30, 2024 to a loss of $4.6 million for the six months ended November 30, 2025.

Cloud Services Business operating loss decreased $7.0 million, or 22%, from $31.9 million for the nine months ended February 28, 2025 to $24.9 million for the nine months ended February 28, 2026.

This decrease in operating loss is primarily due to a decrease in finance lease amortization expense as we renegotiated the duration of the lease agreements during fiscal year 2026.

HPC Hosting Business

Operating Profit

HPC Hosting Business operating profit increased $22.0 million, or 243% , from a loss of $9.0 million for the nine months ended February 28, 2025 to a profit of $12.9 million for the nine months ended February 28, 2026.

The change is primarily due to revenue generated related to tenant fit-out services, net of expenses, as well as rental revenues from our first HPC data center at our first HPC data center at our Polaris Forge 1 campus as it became fully operational during the nine months ended February 28, 2026.

Non-GAAP Measures

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We utilize these measures in the business planning process to understand expected operating performance and to evaluate results against those expectations.

We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results regarding factors and trends affecting our business and provide a reasonable basis for comparing our ongoing results of operations .

We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our core business operating results regarding factors and trends affecting our business and provide a reasonable basis for comparing our ongoing results of operations .

Management considers the Data Center Hosting Business and the HPC Hosting Business to be its core operations for long-run strategic and performance evaluation purposes.

Accordingly, these non-GAAP financial measures exclude the results of our Cloud Services Business.

The Cloud Services Business is included in our consolidated financial statements and results of continuing operations.

Due to its strategic role relative to

the Company’s core business, Management believes the Cloud Services Business results may obscure underlying trends in the performance of core operations when included in certain non-GAAP measures.

These non-GAAP financial measures are provided as supplemental measures to our performance measures calculated in accordance with GAAP and therefore, are not intended to be considered in isolation or as a substitute for comparable GAAP measures.

Excluding the results of the Cloud Services Business in our non-GAAP financial measures removes revenues and expenses that are part of the Company’s consolidated results and continuing operations and should not be viewed as measures or reflections of liquidity or profitability in accordance with U.S.

Further, these non-GAAP financial measures have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles.

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Investors should review the non-GAAP reconciliations provided below and not rely on any single financial measure to evaluate our business.

Adjusted Operating Income, Adjusted Net Income (Loss) from Continuing Operations, and Adjusted Net Income (Loss) from Continuing Operations per Diluted Share

“Adjusted Operating Income” and “Adjusted net income (loss) from continuing operations” are non-GAAP financial measures that represent operating (loss) income and net loss from continuing operations, respectively.

Adjusted Operating Income is Operating (loss) income excluding stock-based compensation, non-recurring repair expenses, diligence,

acquisition, disposition and integration expenses, litigation expenses, loss on abandonment of assets, loss (gain) on classification of held for sale, accelerated depreciation and amortization, restructuring expenses and other non-recurring expenses that Management believes are not representative of the Company’s expected ongoing costs.

Adjusted net income (loss) from continuing operations is Adjusted Operating Income further adjusted for gain on change in fair value of derivative, gain on change in fair value of investment, loss on conversion of debt and loss on change in fair value of debt.

We define “Adjusted net income (loss) from continuing operations per diluted share” as Adjusted net income (loss) from continuing operations divided by weighted average diluted share count.

Adjusted Revenue

“Adjusted revenue” is a non-GAAP financial measure that represents revenue excluding the Cloud Services Business.

Adjusted revenue is Total Revenue excluding Total Revenue from the Cloud Services Business.

Adjusted Operating Income, Adjusted Net Income (Loss), and Adjusted Net Income (Loss) per Diluted Share

“Adjusted operating income” and “Adjusted net income (loss)” are non-GAAP financial measures that represent operating income (loss) and net income (loss) from operations excluding the Cloud Services Business, respectively.

Adjusted operating income (loss) is Operating income (loss) excluding operating income (loss) from the Cloud Services Business, and stock-based compensation, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, (gain) loss on abandonment of assets, gain on classification of held for sale, accelerated depreciation and amortization, restructuring expenses and other non-recurring expenses that Management believes are not representative of our expected ongoing costs.

Adjusted net income (loss) is Adjusted operating income further adjusted for interest expense directly attributable to the Cloud Services Business, gain on change in fair value of derivative, gain on change in fair value of investment, loss on change in fair value of warrants, loss on conversion of debt, loss on change in fair value of debt, loss on extinguishment of related party debt and interest expense on convertible debt.

We define “Adjusted net income (loss) per diluted share” as Adjusted net income (loss) divided by weighted average diluted share count.

EBITDA and Adjusted EBITDA

“EBITDA” is defined as earnings before interest expense, net, income tax expense, and depreciation and amortization.

“Adjusted EBITDA” is defined as EBITDA adjusted for stock-based compensation, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, loss (gain) on classification of held for sale, gain on change in fair value of derivative, gain on change in fair value of investment, loss on abandonment of assets, loss on conversion of debt, loss on change in fair value of debt, restructuring expenses and other non-recurring expenses that Management believes are not representative of our expected ongoing costs.

“EBITDA” is defined as earnings before interest expense, net, income tax expense, and depreciation and amortization and excluding results of the Cloud Services Business.

“Adjusted EBITDA” also excludes results of the Cloud Services Business and is defined as EBITDA adjusted for stock-based compensation, non-recurring repair expenses, diligence, acquisition, disposition and integration expenses, litigation expenses, gain on classification of held for sale, gain on change in fair value of derivative, gain on change in fair value of investment, (gain) loss on abandonment of assets, loss on conversion of debt, loss on change in fair value of debt, loss on change in fair value of warrants, loss on extinguishment of related party debt, restructuring expenses and other non-recurring expenses that Management believes are not representative of our expected ongoing costs.

Reconciliation of GAAP to Non-GAAP Measures

Three Months Ended Six Months Ended

$ in thousands November 30, 2025 November 30, 2024 November 30, 2025 November 30, 2024

(In thousands, except percentage data)

Three Months Ended Nine Months Ended

February 28, 2026 February 28, 2025 February 28, 2026 February 28, 2025

Adjusted revenue

Total Revenue (GAAP)

$ 126,637 $ 52,921 $ 352,562 $ 177,493

Cloud Services Business revenue (18,087) (17,754) (53,207) (71,313)

Adjusted revenue (Non-GAAP) $ 108,550 $ 35,167 $ 299,355 $ 106,180

Adjusted operating income

Operating (loss) income (GAAP) $ (30,957) $ (12,805) $ (53,249) $ 12,489

Operating loss (GAAP) $ (85,667) $ (18,943) $ (111,643) $ (28,074)

Operating loss from the Cloud Services Business

52,194 10,308 24,919 31,928

Stock-based compensation 48,946 9,035 91,444 10,935

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320 174 872 1,341

Loss on abandonment of assets — 141 1,751 769

Loss (gain) on classification of held for sale

(Gain) loss on abandonment of assets

(7) — 1,744 769

Gain on classification of held for sale

— — — (24,616)

Accelerated depreciation and amortization (4)

Loss on legal settlement

Restructuring expenses (5)

358 43 1,093 43

Other non-recurring expenses (6)

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Adjusted operating margin

Adjusted net income (loss) from continuing operations

Net loss from continuing operations (GAAP)

24 % 5 % 11 % 5 %

Adjusted net income (loss)

Net loss (GAAP) $ (70,556) $ (35,555) $ (101,932) $ (178,528)

Operating loss from the Cloud Services Business

52,194 10,308 24,919 31,928

Interest expense directly attributable to the Cloud Services Business

2,058 4,541 7,897 13,444

Stock-based compensation 48,946 9,035 91,444 10,935

5 unchanged sentences

320 174 872 1,341

Loss on abandonment of assets — 141 1,751 769

Loss (gain) on classification of held for sale

(Gain) loss on abandonment of assets

(7) — 1,744 769

Gain on classification of held for sale

— — — (24,616)

Accelerated depreciation and amortization (4)

3 unchanged sentences

(3,305) — (6,072) —

Loss on conversion of debt

Loss on change in fair value of warrants

— 6,421 — 6,421

Loss on conversion of debt

Loss on change in fair value of debt

Loss on extinguishment of debt

— 1,177 — 1,177

Restructuring expenses (5)

Other non-recurring expenses (6)

358 43 1,093 43

Adjusted net income (loss) from continuing operations (Non-GAAP)

Interest expense on convertible debt (7)

Other non-recurring expenses (6)

3,219 271 4,001 558

Adjusted net income (loss) from continuing operations per diluted share (Non-GAAP)

Adjusted net income (loss) (Non-GAAP) $ 33,156 $ (2,590) $ 22,607 $ (4,899)

Diluted weighted average number of shares outstanding (Non-GAAP) (8)

382,306,393 222,454,578 325,850,275 193,405,721

Adjusted net income (loss) per diluted share (Non-GAAP) $ 0.09 $ (0.01) $ 0.07 $ (0.03)

EBITDA and Adjusted EBITDA

Net loss from continuing operations (GAAP)

Net loss (GAAP) $ (70,556) $ (35,555) $ (101,932) $ (178,528)

Operating loss from the Cloud Services Business

52,194 10,308 24,919 31,928

Interest expense, net 11,484 2,929 15,431 5,888

Income tax expense

Interest (income) expense, net

(2,387) 8,897 18,883 23,687

Income tax (benefit) expense

(2) 117 21 118

Depreciation and amortization (4)

8 unchanged sentences

320 174 872 1,341

Loss (gain) on classification of held for sale

Gain on classification of held for sale

— — — (24,616)

Gain on change in fair value of derivative (9,417) — (22,543) —

(13,126) — (13,126) —

Gain on change in fair value of investment (3,305) — (6,072) —

(Gain) loss on abandonment of assets

(7) — 1,744 769

Loss on abandonment of assets — 141 1,751 769

Loss on conversion of debt — — — — 33,612

— 25,410 — — 33,612

Loss on change in fair value of debt — — — 85,439

Loss on change in fair value of warrants — 6,421 — 6,421

Loss on extinguishment of debt

— 1,177 — 1,177

Restructuring expenses (5)

358 43 1,093 43

Other non-recurring expenses (6)

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Adjusted EBITDA (Non-GAAP) $ 44,139 $ 6,258 $ 64,877 $ 18,647

(1) Represents costs incurred for the non-recurring repair and replacement of equipment at our Data Center Hosting facilities.

(1) Represents costs incurred for the non-recurring repair and replacement of equipment at our data center facilities.

(2) Represents legal, accounting and consulting costs incurred in association with certain discrete transactions and projects.

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(6) Represents expenses that are not representative of our expected ongoing costs.

(7) Represents interest expense excluded from the calculation of Adjusted net income (loss) per diluted share (Non-GAAP) that would occur if the Convertible Notes had been converted into stock at the beginning of the period.

This adjustment is only present in periods where its effect would be dilutive.

(8) Includes shares that would be issued upon conversion of our outstanding Convertible Notes totaling 46,144,395 shares.

Sources of Liquidity

As of November 30, 2025, we had unrestricted cash and cash equivalents of $1.9 billion and restricted cash of $382.3 million.

As of February 28, 2026, we had unrestricted cash and cash equivalents of $1.7 billion and restricted cash of $377.2 million.

Historically, we have incurred losses and have relied on equity and debt financings to fund our operations.

We have primarily generated cash in the last 12 months from the proceeds of our term loans, issuances of common stock, preferred stock, convertible promissory notes, senior unsecured convertible notes, debt facilities and the receipt of contractual deposits and revenue payments from customers.

We have primarily generated cash in the last 12 months from the proceeds of our term loans, issuances of common stock, preferred stock, convertible promissory notes, senior unsecured convertible notes, senior secured notes (issued by our subsidiaries) debt facilities and the receipt of contractual deposits and revenue payments from customers.

We believe that existing cash balances, cash flows from operations, existing debt facilities, and access to capital markets will provide sufficient liquidity to meet our debt obligations, including any repayment of debt or refinancing of debt, working capital needs, planned capital expenditures, and other contractual obligations, for at least the next twelve months.

Given the project development nature of our business, we raise capital through public and private debt and equity issuances, as well as commercial borrowings, to fund this development activity.

We are and expect to be constantly exploring, negotiating and consummating financing transactions, which may include refinancing existing capital arrangements as well as new issuances.

Recent Financing Activities

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Series G Convertible Preferred Stock

During the three and six months ended November 30, 2025, the Company issued and sold 424,050 and 604,050 shares of Series G Preferred Stock, respectively, for gross proceeds of $415.0 million and $590.0 million, respectively.

As of November 30, 2025, 43,250 shares of Series G Preferred Stock were issued and outstanding.

During the six months ended November 30, 2025, we received $80.2 million in payments for future data center hosting.

During the three and nine months ended February 28, 2026, the Company issued and sold 154,500 and 758,550 shares of Series G Preferred Stock, respectively, for gross proceeds of $150.0 million and $740.0 million, respectively.

As of February 28, 2026, no shares of Series G Preferred Stock were issued and outstanding.

During the nine months ended February 28, 2026, we received $119.3 million in payments for future data center hosting.

Promissory Note

On September 9, 2025, APLD FAR-01 LLC, our subsidiary, entered into a promissory note with Macquarie Equipment Capital, Inc., a Delaware corporation.

On September 9, 2025, APLD FAR-01 LLC, our subsidiary, entered into a promissory note with Macquarie Equipment Capital, Inc.

The Promissory Note provides for a principal sum of (a) $50 million, which was drawn on the Closing Date, plus (b) subject to the mutual consent of us and the Lender, additional loans in an aggregate principal amount not to exceed $25 million.

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On December 9, 2025, the Subsidiary Issuer sold to the Purchaser an additional 27,778 common units and 337,500 Preferred Units in the Subsidiary Issuer at a price per Preferred Unit of $1,000, for an aggregate purchase price of $337.5 million, bringing the total amount funded to date under the A&R UPA to $900.0 million.

Revolving Credit Facility

On November 10, 2025, we entered into a loan and security agreement with First National Bank of Omaha, pursuant to which the lender agreed to make one or more revolving loans, and issue letters of credit, from time to time to the Company in an aggregate principal amount of $65 million.

As of November 30, 2025, there have been no draws on the facility.

As of February 28, 2026, approximately $61.9 million of letters of credit were issued under the revolving credit facility.

2030 Senior Secured Notes

On November 20, 2025, our subsidiary, APLD ComputeCo LLC, closed a $2.35 billion offering of 9.25% Senior Secured Notes due 2030 at an issue price of 97.0%.

The net proceeds from the Senior Secured Notes after issuance costs and repayment of the SMBC loan were approximately $1.9 billion.

The net proceeds from the 2030 Notes after issuance costs and repayment of the SMBC loan were approximately $1.9 billion.

DevCo Facility

On December 18, 2025, Borrower and MEC entered into the DevCo Facility.

The Promissory Note provides for a principal sum of (a) the First Draw, plus (b) the Second Draw, plus (c) the Third Draw, with the Third Draw to be funded upon the Borrower’s request at any time after the Initial Closing Date subject to satisfaction of or waiver by MEC of certain conditions precedent on or prior to the Third Draw, plus (d) the principal sum of any Additional Loans, if applicable.

Loans under the DevCo Facility bear interest at 8.0% per annum, unless an Event of Default (as defined therein) has occurred and is continuing, in which case, the Secured Obligations (as defined therein) shall bear interest at the sum of 8.0% per annum plus an additional 1.50% per month (the “Post-Default Rate”).

As of February 28, 2026, $85 million has been drawn.

Material Contractual Obligations

In the ordinary course of business, we enter into contractual arrangements that require future cash payments.

The following table sets forth information regarding our anticipated future cash payments under our contractual obligations as of November 30, 2025 (in thousands):

The following table sets forth information regarding our anticipated future cash payments under our contractual obligations as of February 28, 2026 (in thousands):

Payments Due by Period

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(4) Financing lease obligations include future minimum payments for our finance leases.

We have entered into various leases which are executed but not yet commenced with total minimum payments of approximately $16.6 million and terms of 1.5 years to 2.0 years.

(5) Power commitments represents our obligation related to the energy services agreement for our Jamestown, North Dakota co-hosting facility payable.

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Funding Requirements

We have experienced net losses through the period ended November 30, 2025.

We have experienced net losses through the period ended February 28, 2026.

Our transition to profitability is dependent on the successful operation of our business.

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Summary of Cash Flows

The following table provides information about our net cash flow for the six months ended November 30, 2025 and November 30, 2024, respectively.

Six Months Ended

$ in thousands November 30, 2025 November 30, 2024

The following table provides information about our net cash flow for the nine months ended February 28, 2026 and February 28, 2025, respectively.

Nine Months Ended

$ in thousands February 28, 2026 February 28, 2025

Net cash used in operating activities $ (42,860) $ (122,257)

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Net increase in cash, cash equivalents, and restricted cash 1,984,355 229,536

Cash, cash equivalents, and restricted cash at beginning of period, including cash from discontinued operations 123,318 31,688

Cash, cash equivalents, and restricted cash at end of period, including cash from discontinued operations 2,295,766 314,579

Cash, cash equivalents, and restricted cash from discontinued operations 2 14

Cash, cash equivalents, and restricted cash from continuing operations $ 2,295,764 $ 314,565

Commentary on the change in cash flows between the Six Months Ended November 30, 2025 and Six Months Ended November 30, 2024

Cash, cash equivalents, and restricted cash at beginning of period 123,318 31,688

Cash, cash equivalents, and restricted cash at end of period $ 2,107,673 $ 261,224

Commentary on the change in cash flows between the Nine Months Ended February 28, 2026 and Nine Months Ended February 28, 2025

Operating Activities

The net cash used in operating activities increased by $30.3 million, or 24%, from $128.2 million for the six months ended November 30, 2024 to $97.9 million for the six months ended November 30, 2025.

The increase was primarily driven by prior period activities which were not present in the current period, including losses on the conversion and fair value of debt and the gain on classification of held for sale, as well as a decrease in accounts payable due to the timing of payments.

Also contributing to the increase was a decrease in depreciation and amortization due to the Cloud Services Business being classified as held for sale during the six months ended November 30, 2025.

These impacts were partially offset by an increase in stock based compensation expense due to awards granted between the comparative periods and an increase in deferred revenue associated with our tenant fit-out services.

The net cash used in operating activities changed by $79.4 million, or 65%, from $122.3 million for the nine months ended February 28, 2025 to $42.9 million for the nine months ended February 28, 2026.

Activities that positively impacted operating cash flows during the nine months ended February 28, 2026 included stock-based compensation, loss on classification of held for sale and non-cash interest expense as well as a decrease in net loss between comparative periods.

These positive impacts were partially offset by prior period activities which were not present in the current period, including losses on the conversion and fair value of debt.

Other impacts included changes in operating assets and liabilities associated with energizing our first HPC data center at our Polaris Forge 1 campus during the current fiscal year.

Investing Activities

The net cash used in investing activities increased by $611.0 million, or 294%, from $207.5 million for the six months ended November 30, 2024, to $818.5 million for the six months ended November 30, 2025.

This increase was primarily due to an increase of approximately $575.6 million in investments in property and equipment during the six months ended November 30, 2025 as our payments in the current periods for construction of the Polaris Forge 1 data center facilities outpaced the comparative period construction payments as well as an increase in investments in other companies.

Additionally, there were no proceeds from sale of assets during the six months ended November 30, 2025, compared to the six months ended November 30, 2024 to offset the increase in cash used in investing activities.

The net cash used in investing activities increased by $1.1 billion, or 242%, from $465.7 million for the nine months ended February 28, 2025, to $1.6 billion for the nine months ended February 28, 2026.

This increase was primarily due to an increase of approximately $1.1 billion in investments in property and equipment during the nine months ended February 28, 2026 as our payments in the current period for construction of each of our Polaris Forge 1, Polaris Forge 2, and Delta Forge 1 campus data center facilities increased as well as an increase in investments in other companies.

Additionally, there were no proceeds from sale of assets during the nine months ended February 28, 2026, compared to the nine months ended February 28, 2025 to offset the increase in cash used in investing activities.

Financing Activities

The net cash provided by financing activities increased by $2.5 billion, or 399%, from $618.6 million for the six months ended November 30, 2024 to $3.1 billion for the six months ended November 30, 2025.

The primary reason for the change was an increase in the net borrowings of long-term debt of $1.8 billion as well as receipt of net proceeds from offerings of our common and preferred stock of approximately $526.1 million during the six months ended November 30, 2025.

contributing to the increase was a capital contribution from our noncontrolling interest partners of $562.5 million.

These increases were partially offset by a decrease of $450.0 million in borrowings under our Convertible Notes which occurred during the six months ended November 30, 2024.

The net cash provided by financing activities increased by $2.8 billion, or 343%, from $817.5 million for the nine months ended February 28, 2025 to $3.6 billion for the nine months ended February 28, 2026.

The primary reason for the change was an increase in the net borrowings of long-term debt of $1.9 billion from the issuance of our 2030 Notes as well as an increase in receipt of net proceeds from offerings of our common and preferred stock of approximately $645.6 million during the nine months ended February 28, 2026.

Also contributing to the increase was a capital contribution from our noncontrolling interest partners of $900.0 million.

These increases were partially offset by a decrease of $450.0 million in borrowings under our Convertible Notes which occurred during the nine months ended February 28, 2025 as well as an increase of $142.0 million in repayments of long-term debt during the nine months ended February 28, 2026 compared to the nine months ended February 28, 2025.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis