NEXTDC Posts $82.1M Profit on Contracted Utilisation Surge and $3.4B Capex

Accounting Shift Boosts Profit Amid Explosive Contract Growth

NEXTDC Limited (ASX:NXT) reported a remarkable turnaround in FY26, posting a statutory profit after tax of $82.1 million compared to a $60.5 million loss the previous year. This swing was significantly influenced by a change in accounting policy, reclassifying certain data centre contracts as operating leases under AASB 16 and the underlying assets as investment properties under AASB 140. The resulting fair value gain of $128.8 million materially padded earnings, reflecting the revaluation of data centres like M3 Melbourne and S4 Sydney.

While this accounting adjustment contributed to the profit, operational metrics also showed robust growth. Contracted utilisation exploded by 202% to 740.1MW on a pro forma basis, a figure that dwarfs the 244.8MW at the end of FY25. This surge was underpinned by a record Forward Order Book of 565MW, more than triple the billing utilisation of 175MW, signaling strong future revenue streams.

Capital Expenditure and International Expansion Accelerate

NEXTDC invested heavily in FY26, with capital expenditure reaching $3.4 billion, well above the initial guidance range of $2.7 to $3 billion. This investment funded the expansion of existing Australian data centres and the opening of KL1 Kuala Lumpur, the company’s first fully operational facility outside Australia, delivering 65MW of AI-ready capacity. Development also commenced on TK1 Tokyo and planning activities advanced in Auckland, reflecting NEXTDC’s strategic push into Asia-Pacific markets.

Built capacity grew 38% to 287.9MW, with 80MW added during the year across key Australian markets and internationally. The company’s development pipeline is extensive, with over 537MW under construction and more than 3GW in planning, positioning NEXTDC to meet soaring demand driven by AI, cloud, and hyperscale workloads.

Strong Financial Position and Funding Strategy

The balance sheet remains robust, with total assets reaching $10.2 billion, supported by $5.8 billion in property, plant and equipment and $3.2 billion in investment properties. NEXTDC’s net debt increased to $2.47 billion, reflecting the capital-intensive growth phase, but gearing remains manageable at 28.8%.

Liquidity improved significantly, with pro forma available liquidity of $8.7 billion as of 30 June 2026, comprising $876 million in cash, $4.8 billion in undrawn senior debt, $700 million in undrawn hybrid securities, and an additional $2.3 billion in senior debt facilities secured post-year-end. This diversified funding structure, including subordinated notes and hybrid securities, is designed to support the company’s aggressive expansion while managing cost of capital.

Governance, Sustainability, and Talent Retention in Focus

Governance was bolstered with the appointments of Deborah Page AM and Jamaludin Ibrahim to the Board, bringing expertise in Asian markets and digital infrastructure investment. Sustainability remains a core pillar, with NEXTDC committing to net zero Scope 1 and 2 emissions by 2050 and publishing its first Sustainability Report under the Australian Sustainability Reporting Standard (AASB S2).

Talent retention is a critical focus amid intense competition in the data centre sector, particularly for executives skilled in AI infrastructure. NEXTDC introduced a one-off, fully at-risk Growth Incentive Plan (GIP) for senior management to align remuneration with long-term shareholder value and counteract poaching risks. The remuneration report details a 7% increase in fixed pay for senior executives and a 5% increase planned for FY27, reflecting the growing complexity and scale of the business.

FY27 Guidance Points to Sustained Growth

Looking ahead, NEXTDC forecasts net revenue of $615 million to $640 million and underlying EBITDA of $385 million to $410 million for FY27, representing growth of more than 50%. Billing utilisation is expected to nearly triple with 197MW converting in FY27 alone from the Forward Order Book, which underwrites substantial organic growth through FY30. Capital expenditure is guided between $5.25 billion and $5.75 billion, reflecting the largest capital program in the company’s history to meet contracted customer commitments.

Operational leverage is expected to accelerate as new capacity comes online, while regulatory reforms around energy use and grid connections in New South Wales and nationally are being closely monitored. NEXTDC’s scale, funding, and mature energy capabilities position it well to navigate these changes.

With a fortified balance sheet, diversified funding, and a record pipeline, NEXTDC is strategically positioned to capitalize on the surging demand for sovereign, AI-ready digital infrastructure across Australia and Asia-Pacific.

Investors should watch how NEXTDC executes its expansion, manages the transition to new accounting standards, and delivers on its ambitious growth incentive plan amid evolving market and regulatory dynamics.