Applied Blockchain’s Path to Profitability Bolstered by Major Contract and Soaring Revenue

Shares of Applied Blockchain, a specialist in data centers for artificial intelligence workloads, are finding strong support following a quarterly earnings report that shattered expectations and the announcement of a transformative, long-term agreement. The company's latest results highlight a dramatic revenue surge and a clear trajectory toward sustained profitability.

A cornerstone of the bullish outlook is a recently secured master lease agreement with an investment-grade U.S. hyperscaler. This 15-year contract, centered on the under-construction "Polaris Forge 2" campus, commits 200 megawatts of AI and high-performance computing (HPC) capacity. Analysts estimate the total revenue value of this deal to be approximately $5 billion over its full term. Capacity deployment is scheduled to commence in early 2026, with full operational capacity expected by 2027, providing significant long-term cash flow visibility.

Financially, the company is demonstrating rapid improvement. For its second fiscal quarter of 2026, Applied Blockchain posted revenue of $126.6 million. This figure represents a staggering 250% year-over-year increase and substantially exceeded the analyst consensus estimate of $86.67 million. Driving this growth was the HPC segment, which contributed $85 million in quarterly revenue.

Operational Progress and Strategic Separation

On the operational front, a key milestone was achieved with the full commissioning of Building ELN-02 at the "Polaris Forge 1" campus. This facility, designed for intensive AI workloads, brings the site to its full 100-megawatt capacity.

Should investors sell immediately? Or is it worth buying Applied Blockchain?

Concurrently, management is advancing a strategic corporate separation. The company plans to spin off its cloud division, which will then merge with EKSO Bionics Holdings to form a new entity named ChronoScale. Applied Blockchain is expected to retain a controlling stake of over 80% in the combined company. This move, targeted for the first half of 2026, is designed to separate the capital-intensive data center business from the asset-light, high-growth GPU-as-a-Service operations.

Earnings Quality Shows Marked Improvement

The path to profitability is becoming increasingly evident. While the company still reported a net loss, it narrowed considerably to $31.2 million—a 76% reduction compared to the loss in the same quarter last year. A critical financial breakthrough was achieved at the level of adjusted EBITDA, which turned positive for the first time, coming in at $20.2 million.

In response to these developments, investment firm Craig-Hallum has reaffirmed its Buy rating on Applied Blockchain shares and raised its price target to $40.00.

Key Data Summary:
* Quarterly Revenue: $126.6 million (+250% YoY)
* Adjusted EBITDA: $20.2 million
* Major Contract: 15-year, 200 MW lease with an estimated $5 billion value
* Operational Milestone: 100 MW at Polaris Forge 1 site now fully operational