0001144879-26-000006
SEC filingRevenue surged 250% driven by HPC segment; adjusted EBITDA tripled; strong financing supports construction.
Revenue for the three months ended November 30, 2025 totaled $126.6 million, a 250% increase from $36.2 million in the prior-year quarter. The surge was driven by the HPC Hosting segment, which contributed $85.0 million—$73.0 million from tenant fit-out services and $12.0 million from rental revenues as the Polaris Forge 1 facility energized. The Data Center Hosting segment added $5.4 million from performance improvements.
Cost of revenues rose to $100.6 million from $22.7 million, reflecting $69.5 million in tenant fit-out costs and higher energy expenses. Gross margin (calculated) fell to 20.6% from 37.4% due to the mix shift toward lower-margin fit-out services. Selling, general and administrative expenses increased 119% to $57.0 million, primarily from a $23.8 million rise in stock-based compensation tied to headcount growth and equity grants.
Operating loss widened to $31.0 million from $12.8 million, but net loss from continuing operations improved to $26.6 million from $128.4 million, benefiting from $13.1 million gain on derivative fair value changes and $2.8 million gain on investment. Adjusted EBITDA, a non-GAAP measure, rose to $20.2 million (16.0% margin) from $6.1 million (17.0% margin), indicating underlying operational improvement.
Data Center Hosting segment profit increased 27% to $16.0 million, driven by site performance gains and lower SG&A. The HPC Hosting segment reduced its operating loss by 56% to $2.6 million, as revenue from tenant fit-out and rental began to offset development costs. The segment mix shifted heavily toward HPC, which contributed 67% of total revenue in Q3.
Management expects sufficient liquidity from cash balances ($1.9 billion unrestricted), cash flows, debt facilities, and capital markets to fund operations and construction for at least 12 months. Key priorities include completing Polaris Forge 1 (400 MW under contract with CoreWeave), developing Polaris Forge 2 (200 MW hyperscaler lease), and executing the proposed sale of the Cloud Services Business. No specific numerical guidance was provided.
Cash and cash equivalents surged to $1.91B from $41.6M at May 31, 2025, primarily due to the $2.35B Senior Secured Notes issuance and $562.5M from noncontrolling interest contributions. Total debt rose to $2.61B, including the new Notes and $450M Convertible Notes. Restricted cash of $382.3M supports debt service reserves and letters of credit. Shareholders' equity increased to $1.45B from $497.7M, driven by proceeds from preferred stock and warrants.
The Company has a minimum energy commitment of $33.1M over the next 1.2 years for its Jamestown facility. Construction contracts are customary with cancellation provisions. Data center leases (lessor) have minimum contracted payments totaling $15.55B over their terms, but these are receivables, not commitments. No material supply purchase commitments were disclosed.
During the six months, the Company repurchased $52.7M of treasury stock (7.2M shares) and retired 9.3M treasury shares. Preferred dividends of $3.1M were paid. Net debt increased by $1.99B, with $2.42B in new borrowings (primarily Senior Secured Notes) and $430M in repayments (including the SMBC loan). Capital expenditures were $801.5M, largely for data center construction.
The HPC Hosting segment generated $85.0M in revenue, up from zero last year, but incurred a segment loss of $2.6M due to start-up costs. The Data Center Hosting segment delivered $41.6M revenue (+15% YoY) and $16.0M profit (38.4% margin). Segment assets are concentrated in HPC at $4.43B versus $131M for Data Center. No geographic breakdown was provided.