0001144879-25-000069
SEC filingRevenue doubled to $64.2M driven by HPC tenant fit-out, but GAAP operating loss widened on higher costs and stock compensation.
For the three months ended August 31, 2025, total revenue surged 95% to $64.2 million from $32.9 million in the prior-year period. The increase was driven by $26.3 million in tenant fit-out revenue from the HPC Hosting Business and $5.0 million from improved performance in the Data Center Hosting Business. Related-party revenue declined to zero from $1.9 million as certain contracts terminated.
Cost of revenues rose 144% to $55.6 million, outpacing revenue growth, primarily due to $25.0 million in tenant fit-out expenses and a $7.2 million increase in energy costs. Selling, general and administrative expenses increased 165% to $29.2 million, largely from $16.6 million in accelerated stock-based compensation and $3.9 million in higher personnel costs, partially offset by lower legal fees. Loss on abandonment of assets increased to $1.8 million from $0.6 million.
GAAP operating loss was $22.3 million compared to operating income of $25.3 million in the prior year, which included a $24.8 million gain on classification as held for sale. Net loss from continuing operations was $26.2 million versus income of $15.9 million, and total net loss was $16.9 million versus $4.2 million. Basic and diluted EPS was -$0.07 compared to -$0.03.
Non-GAAP adjusted operating loss was $3.6 million (margin -6%) compared to adjusted operating income of $2.2 million (margin 6%). Adjusted EBITDA was $0.5 million (1% of revenue) versus $6.3 million (18%).
Data Center Hosting Business: Segment profit decreased 83% to $6.0 million from $35.9 million. The decline was primarily due to a $24.8 million prior-year gain on classification of held for sale (Garden City facility) with no comparable gain in the current period. Additionally, cost of revenues rose approximately $8.0 million, including a 17% increase in power costs.
HPC Hosting Business: Segment loss improved 31% to $2.0 million from $2.9 million, benefiting from tenant fit-out revenue recognized during the quarter. This segment is pre-revenue from core leasing operations; meaningful revenue from the CoreWeave leases is expected once the first Polaris Forge 1 building becomes operational, anticipated in calendar 2025.
Management expects sufficient liquidity from existing cash ($73.9 million unrestricted as of August 31, 2025), operating cash flows, debt facilities, and capital markets to meet obligations for at least the next 12 months. Significant investments in property and equipment will continue through fiscal 2026 for HPC facility construction. Key milestones include initial capacity at Polaris Forge 2 in 2026 and full capacity in early 2027. The company remains focused on executing its CoreWeave leases totaling 400 MW at Polaris Forge 1 and breaking ground on the $3 billion Polaris Forge 2 campus. Recent financing activities include a $196.4 million equity offering, a $450 million Series G preferred stock program (increased to $590 million post-quarter), a $112.5 million preferred unit sale to Macquarie (with potential additional funding up to $4.9 billion), and a $50 million promissory note. The company expects meaningful HPC revenue to commence upon operational readiness of Polaris Forge 1.