Applied Digital Corporation

Good afternoon and welcome to Applied Digital's fiscal first quarter 2026 conference call. My name is Konstantin and I will be your operator for today. Before this call, Applied Digital issued its financial results for the fiscal first quarter ended August 31st, 2025 in a press release, a copy of which has been furnished in a report on a Form 8K filed with the Securities and Exchange Commission, or SEC, and will be available in the investor relations section of the company's website. Joining us on today's call are Applied Digital's Chairman and CEO, Wes Cummins, and CFO, Seydal Mohamed. Following the remarks, we will be opening the call for questions. Before we begin, Matt Glover from Gately Group will make a brief introductory statement. Mr. Glover, you may begin.

Thank you, Operator. Hello, everyone, and welcome to Applied Digital's fiscal first quarter 2026 conference call. Before management begins formal remarks, we'd like to remind everyone that some statements we're making today may be considered forward-looking statements under securities laws and involve a number of risks and uncertainties. As a result, we caution you that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially from those described in the forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures on earnings release and public filings made with the SEC. disclaim any obligation or any undertaking to update forelooking statements to reflect circumstances or events that occur after the date the forelooking statements are made, except as required by law. We also discuss non-GAAP financial metrics and encourage you to read our disclosures in the reconciliation tables, the applicable GAAP measures, and earnings release carefully as you consider these metrics. We refer you to our filings of the SEC for detailed disclosures and descriptions of our business, as well as uncertainties and other variable circumstances, including but not limited to risks and uncertainties identified with the captioned risk factors in our annual report on Form 10-K and our quarterly reports on Form 10-Q. You may access Applied Digital's SEC filing for free by visiting the SEC website at www.sec.gov. I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the investor relations section of Applied Digital's website. Now let's turn the call over to Applied Digital's Chairman and CEO, Wes Cummins.

Wes. Thanks, Matt, and good afternoon, everyone. Thank you for joining our first quarter fiscal 2026 conference call. I'd like to begin by expressing my sincere appreciation to our employees for their continued dedication to our mission, delivering purpose-built infrastructure for the rapidly expanding artificial intelligence and high performance computing sectors. Their commitment remains foundational to our success. Before I turn the call over to our CFO, I want to highlight several key developments across the business, beginning with our HPC data center hosting segment. This quarter, we expanded our long-term lease agreements with CoreWeave, a publicly traded AI hyperscaler. Previously, we had 250 megawatts under contract at our Ellendale, North Dakota campus, Polaris Forge One. That agreement represents approximately $7 billion in contracted revenue over 15 years. CoreWeave has since exercised its option and our leases now cover the full 400 megawatts of capacity currently under construction of Polaris Forge One, increasing the total contract value to approximately $11 billion. In addition to the underlying leases, CoreWeave has engaged us to perform the tenant fit out for the first 100 megawatts of the 400 megawatt campus. This further deepens our operational integration and demonstrates the added value we bring as a strategic partner to our tenant. We will continue to invest in new technologies and continue to grow our technical expertise as we believe that we can replicate this value-added business model to other tenants. As a reminder, we believe Polaris Forge 1 has the potential to scale beyond 1 gigawatt starting in 2028 to 2030, when new transmission capabilities are expected to come online. We also broke ground on a new campus, Polaris Forge 2, near Harwood, North Dakota. where we are initially constructing two buildings totaling 300 megawatts of critical IT load. Over time, we believe this campus can scale to one gigawatt as additional generation capacity is added to the grid. We are already in early discussions with multiple parties to support that expansion. Initial funding for Polaris Forge 2 has been secured by our financial partner, Macquarie Equipment Capital, and construction is underway. We expect the first building to start coming online in late 2026 and reach full capacity in 2027. With that, the campus is designed for future expansion. The initial development cost is projected to be approximately 3 billion with the potential to increase as additional power becomes available. We remain in advanced discussions with an investment grade hyperscaler regarding a lease for this campus. We have also entered negotiations with two additional hyperscalers for two new locations. Across the industry, the scale of investment in AI infrastructure is unprecedented. Publicly traded hyperscalers are projected to invest over $350 billion in AI data centers this year alone. To put this in historical perspective, the US interstate highway system launched under President Eisenhower in 1956 cost approximately $500 billion in inflation adjusted dollars, but took 30 years to complete. The Apollo program cost roughly $150 billion to send humans to the moon and spanned more than a decade. In contrast, public hyperscalers are projected to invest over $350 billion in AI infrastructure in just a single year, an extraordinary concentration of capital that rivals the scale of America's most ambitious infrastructure efforts but compressed to a fraction of the time. This surge in demand has made speed, reliability, and readiness absolutely critical. The industry has come to recognize that the limiting factor in AI infrastructure deployment is no longer GPU availability, if lack of data centers capable of supporting those GPUs, commonly referred to as AI factories. Simply put, the supply of suitable data centers which can handle the technical requirements on most advanced AI silicon is falling short of demand. We feel Applied Digital is uniquely positioned to meet this challenge. We were among the first to break ground in 2023 on next-generation data center designs capable of supporting the advanced power and cooling requirements of modern GPUs. We secured construction crews early, assembled a team with deep expertise in power, land, and supply chain logistics, and built strong relationships with local communities through proactive engagement and education. We also recruited top-tier data center talent well before the industry recognized the limitations of legacy designs. During the construction of our first 100-megawatt data center, leading hyperscalers sent teams to evaluate our campus. working alongside us and ultimately validating our approach through what we believe was the most rigorous technical due diligence in the industry. At the same time, we cultivated relationships with major financial institutions like Macquarie Asset Management, who had a front row seat to these milestones. As a result, we built trusted partnerships with the largest buyers and users of data center infrastructure in the world. We've also demonstrated our ability to deliver scalable, power-dense facilities just as demand for our services has accelerated dramatically. While our pipeline spans multiple states and regions, I want to emphasize the strategic advantages of our northern campuses in the Dakotas. We believe these campuses have the ability to offer abundant, low-cost energy, a supportive regulatory environment, and more than 200 days of free natural cooling annually. Our proprietary design is engineered for a projected PUE of 1.18 with near zero water consumption. These innovations are not only intended to deliver efficiency for hyperscale customers, but also minimize our environmental footprint and help us ensure we grow responsibly in every community we serve. We believe that a hyperscale release for Polaris Forge 2 would be a significant milestone for Applied Digital and the state of North Dakota. We think that to anchor customers under multi-billion dollar long-term contracts would be a meaningful step toward reaching our goal of strengthening our position in the market and also establishing the region as a major hub for hyperscale infrastructure. These long-term contracts should provide our company with exceptional visibility and clear paths to long-term growth. Lastly, while availability of power has been the primary focus for the overall market, we feel it is becoming a secondary focus for us. With four gigawatts in our active development pipeline and more under review, our primary focus has become scaling, development, and construction. As I stated on our last call, we've been able to shorten our construction timeline to 12 to 14 months from 24 months, which was an important step. We have now scaled to develop multiple campuses in parallel. This has resulted in us now having 700 megawatts currently under construction. We are seeing that our proven ability to design and build at scale has resulted in an influx of power opportunities from third parties that have power and land but don't have the ability to design and build to meet the stringent demands of hyperscalers. We expect to proceed with at least one of these third-party projects this year. Turning to our blockchain hosting business, we continue to operate 286 megawatts of fully contracted capacity across our two North Dakota locations. Bitcoin prices remain strong, which is a positive indicator for our customers, and we remain optimistic about the business and its future. Next, I'd like to address our cloud services business, which provides high performance computing infrastructure for AI applications. As announced on our prior quarterly call, our board of directors initiated a strategic review of this segment, and their financial results are classified as held for sale. That process is ongoing. We will hold off on providing further updates until we have a definitive disposition plan to share with our shareholders. With that, I'll turn the call over to our CFO, Sadol Momon, for a detailed review of our financials.