Applied Digital (APLD) Revenue Surge Tests Bullish High‑Growth Narratives Against Persistent EPS Loss
Applied Digital (APLD) reported Q2 2026 revenue of US$126.6 million with a basic EPS loss of US$0.11, alongside earnings from discontinued operations of US$12.1 million and net income excluding extra items showing a loss of US$31.2 million. Over the past three quarters, the company has seen revenue move from US$38.0 million in Q4 2025 to US$64.2 million in Q1 2026 and then to US$126.6 million in Q2 2026. Over the same period, basic EPS moved from a loss of US$0.12 in Q4 2025 to a loss of US$0.11 in Q2 2026, setting up a results season where investors are weighing growth in the top line against still pressured margins.
See our full analysis for Applied Digital.With the headline numbers on the table, the next step is to see how this mix of rapid revenue gains and ongoing losses lines up with the widely followed growth and risk narratives around Applied Digital.
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US$263.99m trailing revenue against US$106.84m yearly loss
- On a trailing twelve month basis to Q2 2026, Applied Digital booked US$263.99m in revenue while recording a net income loss excluding extra items of US$106.84m, so the business is still firmly in investment mode rather than profit making.
- Analysts' consensus view leans bullish on this trade off between growth and losses, pointing to long term AI and HPC contracts and a growing hyperscaler pipeline as support. However, those expectations sit against five years of widening losses at about 54.9% per year and a current trailing EPS loss of US$0.44, which means the path from revenue growth to actual profitability is still unproven in the reported numbers.
High P/S multiple versus US IT peers
- Applied Digital is priced on a P/S of 34.6x compared with about 2.4x for the broader US IT industry and 4.7x for peers, so the share price of US$31.94 already embeds a lot of optimism about future revenue and margin improvement.
- Critics highlight this valuation as a bearish point, arguing that such a premium multiple leaves little room for error when the company is unprofitable and has trailing twelve month net losses of US$106.84m. Those concerns are reinforced by recent shareholder dilution and insider selling, which both add extra supply of shares while the business still depends on forecasts rather than current profits to justify that multiple.
Rapid top line climb alongside continued EPS losses
- Quarterly revenue moved from US$38.01m in Q4 2025 to US$64.22m in Q1 2026 and then to US$126.59m in Q2 2026, yet basic EPS over the same stretch stayed in loss making territory between US$0.12 and US$0.11 per share and net income excluding extra items was a Q2 loss of US$31.20m.
- Supporters of the bullish narrative point to long term AI hyperscaler contracts and expectations for roughly 42% yearly revenue growth and about 95.52% yearly earnings growth. These forecasts are directionally consistent with the strong revenue ramp shown in the last three reported quarters, but the fact that EPS remains negative and trailing twelve month losses total US$106.84m means the numbers so far mostly back the growth part of the story rather than the profitability part.
Next Steps
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Applied Digital on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
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A great starting point for your Applied Digital research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
See What Else Is Out There
Applied Digital couples rapid revenue gains with a trailing twelve month net loss of US$106.84m, ongoing EPS losses and shareholder dilution, so profitability and valuation remain key pressure points.
If you want ideas where the price tag leans more toward value than hope, check out these 881 undervalued stocks based on cash flows and compare companies that already trade on more modest expectations.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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