Macquarie Technology Posts 5.5% Revenue Growth and $115.9 Million EBITDA in FY26

Steady EBITDA Growth Masks Profit Pressure

Macquarie Technology Group (ASX:MAQ) has chalked up its twelfth consecutive year of EBITDA growth, delivering $115.9 million in FY26, a 2% increase on the prior year. Revenue rose 5.5% to $390 million, supported by a strong recurring revenue base where 95% of income is contracted monthly. However, net profit after tax slipped 7.8% to $32.1 million, reflecting increased financing and depreciation charges tied to aggressive capital expenditure.

Operating cash flow remained robust at $94.6 million, with an impressive 108% cash conversion rate. Earnings per share declined 8% to 124.6 cents, impacted by the substantial investments underpinning the company’s growth strategy.

Data Centre Expansion Accelerates with $240 Million Land Purchase

The highlight of Macquarie’s FY26 was the strategic acquisition of a 34,200sqm site in Macquarie Park for $240 million, setting the stage for a new ~200MW Macquarie Engineering & Technology Campus (METC). This acquisition, completed in August 2026, will expand Macquarie Data Centres’ total capacity to an estimated 268MW, predominantly located in Sydney’s Tier 1 Northern Zone.

The company plans to develop the campus with advanced air-cooling technology designed to minimise water usage, continuing its successful campus-style approach. Initial construction is targeted for late 2029, subject to planning and regulatory approvals. The campus will integrate with Macquarie University to support research and provide hands-on learning opportunities involving the latest in data centre, cybersecurity, AI, and cloud technologies, alongside community amenities such as a public park and outdoor art gallery.

This move builds on Macquarie’s existing IC3 SuperWest project, where phase 1 (6MW) is on track for completion by September 2026, with an expedited phase 2 (13MW) expected by June 2027 to meet growing customer demand for larger capacity and faster delivery. The IC3 SuperWest facility is designed to support high-density AI and cloud workloads, featuring flexible cooling solutions including direct-to-chip liquid cooling.

Government Backing and Diversified Capital Structure

In a significant vote of confidence, the Australian Government, through the National Reconstruction Fund Corporation (NRFC), invested $200 million in Macquarie Technology via perpetual, callable, subordinated, unsecured hybrid securities. The first $100 million tranche was drawn in June 2026, with the second tranche available until March 2027. This non-dilutive capital enhances the Group’s balance sheet flexibility to fund sovereign digital infrastructure and cybersecurity initiatives.

Complementing this, Macquarie increased its debt facility to $500 million in February 2026, with $496.5 million undrawn at year-end, alongside $100 million in Hybrid Securities Series 2, positioning the company well for its capital-intensive expansion.

Segment Performance and Strategic Focus

Macquarie’s Cloud Services & Government segment grew revenue 11.2% to $235.6 million, maintaining margins around 23.7%, driven by sovereign private cloud and cybersecurity services. The Data Centres segment saw revenue rise 8.9% to $87 million, with EBITDA up 9.3% to $40 million, despite margin pressures from development costs and increased hyperscaler power consumption.

Telecom revenue declined 6.6% to $105.2 million, with EBITDA falling 16.7% to $20 million, reflecting structural shifts such as NBN pricing reductions and declining traditional voice services. The company is pivoting Telecom towards growth in secure networking solutions, including SD-WAN and multi-vendor security offerings.

Outlook and Investment in AI and Cybersecurity

Looking ahead to FY27, Macquarie expects modest EBITDA growth, assuming IC3 SuperWest Phase 1 revenue begins in the second half. Capital expenditure is forecast between $485 million and $506 million, including substantial investments in IC3 SuperWest completion and METC development.

The company is investing heavily in AI-ready infrastructure and customer solutions, aiming to support clients navigating the cost and security complexities of AI-embedded environments. Macquarie Government continues to enhance cybersecurity offerings aligned with the Essential 8 framework, addressing increasingly sophisticated threats amplified by AI.

While Telecom EBITDA is expected to decline by $2 million to $3 million due to industry trends, the segment remains a critical channel for securing Cloud Services & Government business.

Governance, Remuneration, and ESG Commitments

Macquarie Technology’s governance framework is robust, with a majority of independent non-executive directors and a focus on diversity, including 40% female board representation. Executive remuneration aligns with performance metrics including EBITDA growth, sales, and customer satisfaction, with recent enhancements introducing malus and clawback provisions.

The Group’s ESG initiatives prioritise energy efficiency, with new data centres designed for low Power Usage Effectiveness (PUE) and sustainable cooling technologies. The Canberra data centre operates on 100% renewable electricity, and the company actively manages climate-related risks in preparation for upcoming disclosure requirements.

PricewaterhouseCoopers audited the financial statements, issuing an unqualified opinion.

What to Watch Next

Investors should monitor the progress of IC3 SuperWest’s ramp-up and the development trajectory of the Macquarie Engineering & Technology Campus, particularly planning approvals and customer contract finalisations. The impact of sustained capital expenditure on profitability metrics and the evolving competitive landscape for sovereign digital infrastructure amid AI adoption will also be key themes in the coming years.

Macquarie’s ability to translate government backing and capital flexibility into profitable growth will be a critical test as it navigates a capital-intensive phase focused on AI and cybersecurity infrastructure.