DXN Grows Revenue 47.5% as Asia-Pacific Expansion Gains Traction

Revenue Rebound and Backlog Growth

DXN Limited (ASX:DXN) reversed the revenue slump seen in the first half of FY26 with a 47.5% jump to $3.7 million in Q3, driven by resumed progress on modular data centre projects. The modular segment contributed $2.9 million, supported notably by the Globalstar and AP Telecom contracts. Overall backlog stood at $10.4 million, including a modular order book of $7.8 million, reflecting renewed client activity after earlier deferrals. The company expects to convert around 40% of this backlog into Q4 revenue, although some FY26 targets have been pushed into early FY27 due to project timing shifts.

Operating cash flow swung positive to $0.8 million for the quarter, compared to a negative $0.3 million in Q2, as milestone payments flowed in alongside project delivery. DXN’s cash balance rose to $2.0 million, bolstered by these inflows and a recent independent valuation of its Darwin data centre at approximately $10 million, underscoring the strength of its capital base.

Asia-Pacific Expansion Accelerates with JV and Manufacturing Plans

The company’s strategic joint venture formed with Super Sistem Indonesia (SSI) in January 2026 is progressing steadily, with commercial operations in Indonesia now targeted for August 2026. This JV aims to localise manufacturing and sales in one of Southeast Asia’s fastest-growing digital infrastructure markets, reducing reliance on exports which accounted for around 80% of FY25 modular revenue. DXN is also advancing plans for a Malaysian manufacturing facility, having submitted a grant application to the Department of Foreign Affairs and Trade (DFAT) under the Southeast Asia Economic Strategy to 2040 program. The outcome, expected soon, could provide critical support for this expansion.

These moves are designed to capitalise on the region’s burgeoning demand for prefabricated modular data centres, particularly from hyperscale customers. The JV has already secured two hyperscale design wins expected to convert into scalable roll-out contracts across Asia Pacific, aligning with DXN’s growth ambitions. The company’s pipeline now lists 891 identified projects, a dramatic increase from 80 projects in Q2, with 7% in verbal contracting stages, including existing hyperscale clients.

New Contract Win in Latin America

DXN kicked off Q4 with a significant contract win in Latin America, securing a ~$5.3 million Cable Landing Station project with a global internet company. This marks DXN’s first entry into the Latin American market and complements its existing subsea cable infrastructure engagements. The contract is expected to support manufacturing and commissioning efforts through early 2027, enhancing DXN’s global footprint in digital infrastructure.

This contract builds on earlier wins, including a $1.8 million modular CLS contract with AP Telecom and other modular data centre projects, reinforcing the company’s position in the niche prefabricated data centre market. The Latin American deal also reflects DXN’s ability to leverage its expertise to penetrate new geographies and customer segments.

Financial Position and Funding

DXN continues to manage its balance sheet conservatively, maintaining a $5 million secured loan facility with iPartners, maturing in November 2026 at a 9.95% interest rate, secured against its Darwin property and data centre assets. Capital expenditure for the quarter included $534,000 in property, plant, and equipment, supporting manufacturing and operational capabilities. Related party payments amounted to $225,400, reflecting executive and director remuneration timing.

Despite the inherent lumpiness of large-scale infrastructure projects and some revenue deferrals, DXN’s underlying business momentum remains intact, supported by a robust pipeline and strategic regional initiatives. The company’s focus on Asia-Pacific manufacturing localisation and expanding its Data Centre as a Service offering positions it well for sustainable growth.

DXN’s recent jump in project identification and contract wins, including the $5.3 million Cable Landing Station contract, demonstrates tangible progress following the strategic joint venture formation with Super Sistem Indonesia earlier this year. These developments suggest that the company’s pivot from an export-heavy model to regional manufacturing is gaining traction.