Macquarie Technology Group H1 Profit Falls 9% as Revenue Hits $193 Million

Financial Performance Overview

Macquarie Technology Group Limited (ASX: MAQ) released its interim results for the half-year ended 31 December 2025, revealing a mixed performance. The Group’s net profit after tax fell 9% to $16.3 million, down from $17.9 million in the prior corresponding period. However, revenue grew by 5% to $193.4 million, supported by strong contributions from its Cloud Services & Government and Data Centres segments.

EBITDA rose modestly by 3% to $57.9 million, reflecting operational improvements despite some headwinds. The Group’s cash flow conversion remained robust at 109%, underscoring effective working capital management.

Segment Performance Highlights

The Cloud Services & Government segment led growth with revenue increasing 12% to $115.9 million and EBITDA up 9% to $27.9 million. This segment benefits from increasing demand for cloud infrastructure and cybersecurity services, particularly from government clients.

Data Centres also posted solid gains, with revenue rising 9% to $43.2 million and EBITDA climbing 10% to $19.9 million. This growth aligns with the Group’s ongoing investment in data centre capacity, notably the IC3 Super West project.

Conversely, the Telecom segment experienced an 8% revenue decline to $53.0 million and a 19% drop in EBITDA to $10.1 million, reflecting competitive pressures and evolving market dynamics in voice and mobile services.

Capital Investment and Debt Facility Expansion

Capital expenditure remained significant, with $56.2 million invested in non-current assets during the half, primarily related to the IC3 Super West data centre development. The Group has committed additional capital of $19.4 million for long lead-time equipment to support a planned capacity of 19MW out of a total 47MW at this flagship site.

Post-period, Macquarie Technology Group increased its debt facility by $50 million to $500 million, providing financial flexibility to accelerate capacity delivery at IC3 Super West. This move signals confidence in the data centre growth strategy amid a competitive infrastructure market.

Governance and Risk Management

The Board announced a forthcoming leadership transition with Chairman Peter James retiring and Non-Executive Director Lisa Brock appointed as Chair. This change comes at a pivotal time as the Group navigates expansion and evolving industry risks.

Key risks highlighted include reliance on technology systems, cyber security threats, regulatory changes, supply chain challenges, and climate change impacts. The Group maintains a comprehensive risk management framework to mitigate these factors, critical for sustaining operational resilience and reputation.

Dividend and Outlook

No interim dividend was declared, reflecting the Group’s focus on reinvesting cash flows into growth initiatives. Earnings per share decreased to 63.4 cents from 69.6 cents, consistent with the profit decline.

While the Telecom segment’s downturn poses a challenge, the strong momentum in cloud and data centre services, backed by expanded financial capacity, positions Macquarie Technology Group for potential growth in the medium term. Investors will be watching closely how the company leverages its infrastructure investments and manages competitive pressures.