Applied Digital Corporation stock research
FY2026 Q1
Applied Digital (APLD) Gross Margin — Quarter Ended Aug 31, 2025
The current quarter's revenue exceeded cost of revenue, producing a positive gross profit and gross margin. Compared to the preceding quarter, the gross margin improved from negative to positive as both revenue and cost of revenue shifted from negative to positive values.
Gross margin takeaway
Quarter ended Aug 31, 2025 · FY2026 Q1
The current quarter's revenue exceeded cost of revenue, producing a positive gross profit and gross margin. Compared to the preceding quarter, the gross margin improved from negative to positive as both revenue and cost of revenue shifted from negative to positive values.
- The most observable driver is the relationship between cost of revenue and revenue; the current quarter's cost of revenue consumed a larger share of revenue than in the same quarter one year earlier, contributing to a lower gross margin.
- Relative to the preceding quarter, the gross margin improved substantially due to the change from negative to positive revenue and cost of revenue. Relative to the same quarter one year earlier, the gross margin weakened as revenue increased but cost of revenue grew at a faster rate.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
13.4%
Gross profit
$8.6M
Revenue
$64.2M
Cost of revenue
$55.6M
Quarter-over-quarter change
+96.9 pts
Year-over-year change
-21.3 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 |
|---|---|---|---|---|
| Nov 30, 2024 | $36.2M | $13.5M | $22.7M | 37.3% |
| Feb 28, 2025 | $52.9M | $3.8M | $49.1M | 7.1% |
| May 31, 2025 | -$33.3M | $27.8M | -$61.1M | -83.5% |
| Aug 31, 2025 | $64.2M | $8.6M | $55.6M | 13.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
May 31, 2025
+96.9 pts
Year-over-year change
Aug 31, 2024
-21.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver is the relationship between cost of revenue and revenue; the current quarter's cost of revenue consumed a larger share of revenue than in the same quarter one year earlier, contributing to a lower gross margin.
Relative to the preceding quarter, the gross margin improved substantially due to the change from negative to positive revenue and cost of revenue. Relative to the same quarter one year earlier, the gross margin weakened as revenue increased but cost of revenue grew at a faster rate.
Monitor the trend of cost of revenue relative to revenue in upcoming quarters for signs of further margin pressure.