Other 
    non-recurring 
    expenses (6)            213            (49)            251            258 
                       --------  ---   -------        --------  ---   -------  --- 
      Adjusted 
       operating 
       loss 
       (Non-GAAP)     $  (5,082)      $ (2,338)      $ (19,406)      $   (730) 
                       ========        =======        ========        ======= 
Adjusted operating 
 margin                      (8)%           (6)%           (16)%           (1)% 
 
Adjusted net loss 
attributable to 
Applied Digital 
Corporation 
------------------- 
Net loss 
 attributable to 
 Applied Digital 
 Corporation (GAAP)   $(138,726)      $(10,529)      $(142,973)      $(21,986) 
   Stock-based 
    compensation          3,308          4,799             236         10,440 
   Non-recurring 
    repair expenses 
    (1)                     139             --             170             -- 
   Diligence, 
    acquisition, 
    disposition and 
    integration 
    expenses (2)          8,780            525          11,667            535 
   Litigation 
    expenses (3)            759            195           1,167            576 
   Research and 
    development 
    expenses (4)             --             --              36            184 
   Loss/(gain) on 
    classification 
    of held for 
    sale                    192             --         (24,616)            -- 
   Accelerated 
    depreciation and 
    amortization 
    (5)                      --             24              45            177 
   Loss on 
    abandonment of 
    assets                  142             --             769             -- 
   Loss on 
    conversion of 
    debt (7)             25,410             --          33,612             -- 
   Loss on change in 
    fair value of 
    debt (8)             87,218             --          85,439             -- 
   Loss on 
    extinguishment 
    of debt                  --             --              --          2,353 
   Loss on legal 
    settlement               --             80              --          2,380 
   Other 
    non-recurring 
    expenses (6)            213            (49)            251            258 
                       --------  ---   -------        --------  ---   -------  --- 
      Adjusted net 
       loss 
       attributable 
       to Applied 
       Digital 
       Corporation 
       (Non-GAAP)     $ (12,565)      $ (4,955)      $ (34,197)      $ (5,083) 
                       ========        =======        ========        ======= 
Adjusted net loss 
 attributable to 
 Applied Digital 
 Corporation per 
 diluted share 
 (Non-GAAP)           $   (0.06)      $  (0.05)      $   (0.19)      $  (0.05) 
 
 
           APPLIED DIGITAL CORPORATION AND SUBSIDIARIES 
      Reconciliation of GAAP to Non-GAAP Measures (Unaudited) 
                             continued 
              (In thousands, except percentage data) 
 
                      Three Months Ended       Six Months Ended 
                                            ----------------------- 
                      November   November    November    November 
$ in thousands        30, 2024   30, 2023    30, 2024    30, 2023 
                     ----------  ---------  ----------  ----------- 
EBITDA and 
Adjusted EBITDA 
------------------ 
Net loss 
 attributable to 
 Applied Digital 
 Corporation 
 (GAAP)              $(138,726)  $(10,529)  $(142,973)  $(21,986) 
   Interest 
    expense, net         7,482      2,617      14,790      4,750 
   Income tax 
    expense 
    (benefit)                1         --           1         -- 
   Depreciation and 
    amortization 
    (5)                 26,445     13,448      60,806     21,460 
                      --------    -------    --------    ------- 
      EBITDA 
       (Non-GAAP)     (104,798)     5,536     (67,376)     4,224 
   Stock-based 
    compensation         3,308      4,799         236     10,440 
   Non-recurring 
    repair expenses 
    (1)                    139         --         170         -- 
   Diligence, 
    acquisition, 
    disposition and 
    integration 
    expenses (2)         8,780        525      11,667        535 
   Litigation 
    expenses (3)           759        195       1,167        576 
   Research and 
    development 
    expenses (4)            --         --          36        184 
   Loss/(gain) on 
    classification 
    of held for 
    sale                   192         --     (24,616)        -- 
   Loss on 
    abandonment of 
    assets                 142         --         769         -- 
   Loss on 
    conversion of 
    debt (7)            25,410         --      33,612         -- 
   Loss on change 
    in fair value 
    of debt (8)         87,218         --      85,439         -- 
   Loss on 
    extinguishment 
    of debt                 --         --          --      2,353 
   Loss on legal 
    settlement              --         80          --      2,380 
   Other 
    non-recurring 
    expenses (6)           213        (49)        251        258 
                      --------    -------    --------    ------- 
      Adjusted 
       EBITDA 
       (Non-GAAP)    $  21,363   $ 11,086   $  41,355   $ 20,950 
                      ========    =======    ========    ======= 
(1) Represents costs incurred in the repair and replacement 
 of equipment at the Company's Ellendale data center 
 hosting facility as a result of the previously disclosed 
 power outage. 
(2) Represents legal, accounting and consulting costs 
 incurred in association with certain discrete transactions 
 and projects. 
(3) Represents non-recurring litigation expense associated 
 with the Company's defense of class action lawsuits 
 and legal fees related to matters with certain former 
 employees. The Company does not expect to incur these 
 expenses on a regular basis. 
(4) Represents specific non-recurring research and 
 development activities related to the Company's business 
 expansion that the Company does not expect to incur 
 on a regular basis. 
(5) Represents the acceleration of expense related 
 to assets that were abandoned by the Company due to 
 operational failure or other reasons. Depreciation 
 and amortization in this amount is included in Depreciation 
 and Amortization expense within the Company's calculation 
 of EBITDA, and therefore is not added back as a management 
 adjustment in the Company's calculation of Adjusted 
 EBITDA. 
(6) Represents expenses that are not representative 
 of the Company's expected ongoing costs. 
(7) Represents loss on conversion of debt due to the 
 difference in fair value to the price at which the 
 YA Notes were converted. 
(8) Represents loss on change in fair value of debt 
 due to the adjustments to the fair value of the 2.75% 
 Convertible Senior Notes, as well as adjustments to 
 the fair value of the YA Notes. 
 

(END) Dow Jones Newswires

January 14, 2025 16:05 ET (21:05 GMT)