NEXTDC has reported a robust first half of FY26, with strong revenue and earnings growth underpinned by a surging forward order book and expanded capital expenditure plans.
- Net revenue up 13% to A$189.2 million in 1H26
- Contracted utilisation soars 137% to 416.6MW
- Forward order book of 297MW supports growth through FY29
- Underlying EBITDA rises 9% to A$115.3 million
- Capital expenditure guidance increased to A$2.4-2.7 billion
Strong Financial Momentum
Data centre operator NEXTDC Limited (ASX: NXT) has delivered a solid first half performance for FY26, reporting net revenue growth of 13% to A$189.2 million and a 9% increase in underlying EBITDA to A$115.3 million. This growth reflects the company’s expanding footprint and accelerating demand for data centre capacity across Australia and the Asia-Pacific region.
The company’s contracted utilisation surged by 137% to 416.6 megawatts (MW), a clear indicator of robust customer demand. Billing utilisation also increased 29% to 119.8MW, while the forward order book; representing contracted but not yet billed capacity; stands at a substantial 297MW. This forward order book is expected to drive a significant uplift in revenue and earnings through to FY29, underpinning NEXTDC’s confident growth outlook.
Capital Investment and Expansion
Reflecting the strong demand environment, NEXTDC has increased its capital expenditure guidance for FY26 to between A$2.4 billion and A$2.7 billion, up from the previous range of A$2.2 billion to A$2.4 billion. Investments are focused on expanding existing facilities and developing new data centres across key markets including Sydney, Melbourne, Kuala Lumpur, and Tokyo.
Notable projects underway include the completion of S3 Sydney’s 80MW capacity, expansions at Melbourne’s M3 site to 225MW, and the Kuala Lumpur KL1 facility targeting practical completion in the second half of FY26. Early works have also commenced on the TK1 Tokyo site, marking NEXTDC’s first development in Japan. The company is actively progressing development approvals for additional sites such as S4 Sydney (upgraded to 350MW) and M4 Melbourne (150MW), alongside strategic edge data centre projects supporting national network infrastructure.
Robust Balance Sheet and Funding Strategy
NEXTDC’s balance sheet remains strong with total assets of A$7.0 billion, anchored by A$3.6 billion in owned land and buildings. The company holds A$4.2 billion in liquidity, comprising A$278 million in cash and A$3.94 billion in undrawn debt facilities maturing between FY30 and FY33. This financial strength provides a substantial runway to fund ongoing development and expansion.
To support its growth ambitions, NEXTDC plans to launch a subordinated notes offering, subject to market conditions, aimed at optimising its capital structure and funding its expanding contracted capacity pipeline. Additionally, the company is exploring joint venture partnerships (JVCo) for key projects S4 and S7, which would enable capital recycling while maintaining operational control and long-term economic participation.
Sustainability and Safety Initiatives
On the environmental, social, and governance (ESG) front, NEXTDC is advancing its climate reporting in line with Australian Sustainability Reporting Standards and has received recognition from the Uptime Institute for sustainability efforts. The company continues to integrate low-carbon materials in construction and is progressing its net zero roadmap.
Workplace health and safety (WHS) performance remains strong, with low injury frequency rates and ongoing programs to enhance safety culture across construction and operational sites. Mental health initiatives and diversity commitments also feature prominently in NEXTDC’s corporate responsibility agenda.
Outlook and Guidance
For the full FY26 year, NEXTDC maintains guidance for net revenue between A$390 million and A$400 million and underlying EBITDA in the range of A$230 million to A$240 million. The company anticipates accelerating billing conversion of its forward order book, with 152MW expected to convert to billings in FY27, driving a material uplift in earnings.
With a record pipeline of contracts and a disciplined capital strategy, NEXTDC is well positioned to capitalise on the growing demand for hyperscale and colocation data centre services, particularly driven by AI, cloud, and enterprise deployments.
Bottom Line?
NEXTDC’s expanding contracted base and strategic capital initiatives set the stage for accelerated growth, but execution risks and market conditions will be key to watch.
Questions in the middle?
- How will NEXTDC’s subordinated notes offering be received in current market conditions?
- What impact will JVCo partnerships have on NEXTDC’s long-term earnings and control?
- How quickly will the 297MW forward order book convert to billings amid evolving customer demand?