Forensic Analysis · Software & SaaS · as of Nov 9, 2026
Applied Digital Corp. (APLD)
A forensic read on Applied Digital Corp. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Grey Zone
Financial health
2.2
Distress distance
Watch
Earnings quality
6
Forensic signals
-16.9%
ROE
167.5%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Applied Digital Corp. earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads 2.2, placing it in the Grey zone. 6 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of NOA).
What the filings flag
+109.8%
FY2025→FY2026
Accruals ratio (% of NOA).Net operating assets grew +109.8% relative to their own average in FY2026 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building sharply — a large slice of profit sits in operating assets, not cash. An accrual is a claim that still has to be collected or written down, so the gap resolves in a later period whichever way it goes. Net operating assets also rose $56.9M through acquisitions (shares issued for businesses); that purchase is investing and is excluded from this ratio. The build is led by receivables up +724% against revenue +167% and PP&E up +238% against revenue +167%. A cash-flow measure on the same base disagrees: reported earnings ran behind operating cash by 20% of net operating assets, against an accruals ratio of 109.8%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.Accruals ratio: the year-over-year change in net operating assets, relative to their own average.NOA (net operating assets): the money tied up in running the business, operating assets minus operating liabilities.
-4.4%
FY2026
Return on invested capital.Return on invested capital is -4.4% in the latest fiscal year and rising across FY2024–FY2026 from -37.8%. After-tax operating profit was ($78M) in FY2024 and ($187M) in FY2026, with operating income at -59.4% of revenue in FY2024, -31.6% in FY2025 and -38.7% in FY2026. The capital base behind it grew +1969% across FY2024–FY2026, from $205M to $4.3B, and the return did not fall doing it, so the dollars added over that window earned at least the -37.8% the older base was already earning.
+55.3%/yr
FY2024–FY2026
Share-count dilution.Diluted share count changed +141% over the last 2 years to FY2026 (+55.3%/yr). The count is growing — 114.1M shares in FY2024, 275.2M in FY2026: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~55.3% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2024 has been diluted ~59%.
stopped
FY2025→FY2026
Shareholder returns — halted.Capital returns have STOPPED — $31M of buybacks + dividends in FY2025, but ~$0 in FY2026. A halt usually means the company is conserving cash.
34d DSO
FY2025→FY2026
Receivables vs revenue.Days sales outstanding moved from 11 to 34 days FY2025→FY2026 (receivables +724% vs revenue +167%). Across FY2024–FY2026 the day count ran 8 → 11 → 34 days, so the latest reading sits on top of a record that was flat or falling before it — one year's move, not a direction the business has been travelling in. Receivables grew, but deferred revenue grew +30% over the same period too — rising alongside rising unearned revenue reads as upfront billing on multi-period contracts, not slipping collections. Both figures are measured on period-end balances rather than the beginning-plus-ending average, because averaging needs the balance a year before every reading — FY2025's opening balance is on file, but across the 3 fiscal years read here (FY2024–FY2026) the average yields only 2 day counts (1 step), too few to tell a climb from one year's move.DSO (days sales outstanding): the average days the company waits to collect cash after a sale.
36% of rev
FY2026
Stock-based comp load.Stock-based compensation ran 36% of revenue in FY2026 — about $0.80 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 55.3% a year across FY2024–FY2026, and the rate is falling. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
Key fundamentals
Latest Revenue$611.3M
Revenue Growth YoY+167.5%
Revenue CAGR (2yr)+92.1%
Net Margin-30.6%
Free Cash Flow-$2.78B
Return on Equity-16.9%
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Applied Digital Corp.'s actual 10-K/10-Q/8-K filings?