Applied Digital Corporation stock research
FY2024 Q4
Applied Digital (APLD) Gross Margin — Quarter Ended May 31, 2024
In the current quarter, revenue was lower than the prior quarter, but gross profit turned positive, cost of revenue decreased significantly, and gross margin improved sharply. Compared with the same quarter last year, revenue declined while gross profit and gross margin both increased.
Gross margin takeaway
Quarter ended May 31, 2024 · FY2024 Q4
In the current quarter, revenue was lower than the prior quarter, but gross profit turned positive, cost of revenue decreased significantly, and gross margin improved sharply. Compared with the same quarter last year, revenue declined while gross profit and gross margin both increased.
- The strongest observable margin driver is the reduction in cost of revenue relative to revenue, which converted a negative gross margin in the prior quarter into a positive one.
- Compared to the immediately preceding quarter, gross margin improved from negative to positive, driven by lower cost of revenue and higher gross profit despite lower revenue. Relative to the same quarter one year earlier, gross margin and gross profit both increased, while revenue was lower and cost of revenue declined.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
68.8%
Gross profit
$10.1M
Revenue
$14.7M
Cost of revenue
$4.6M
Quarter-over-quarter change
+77.3 pts
Year-over-year change
+41.2 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Aug 31, 2023 | $36.3M | $11.1M | $25.2M | 30.6% |
| Nov 30, 2023 | $42.2M | $12.4M | $29.8M | 29.5% |
| Feb 29, 2024 | $43.3M | -$3.7M | $47.1M | -8.6% |
| May 31, 2024 | $14.7M | $10.1M | $4.6M | 68.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Feb 29, 2024
+77.3 pts
Year-over-year change
May 31, 2023
+41.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the reduction in cost of revenue relative to revenue, which converted a negative gross margin in the prior quarter into a positive one.
Compared to the immediately preceding quarter, gross margin improved from negative to positive, driven by lower cost of revenue and higher gross profit despite lower revenue. Relative to the same quarter one year earlier, gross margin and gross profit both increased, while revenue was lower and cost of revenue declined.
Monitor the company's liquidity and capital resources, as discussed in the filing, given the negative working capital and reliance on external financing.