NEXTDC’s A$6.4bn Debt Facilities and JV Plans Signal Growth Risks and Opportunities

Strong Financial Momentum in FY25

NEXTDC Limited has reported a solid set of full-year results for FY25, underscoring its position as a leading data centre operator in Australia and the Asia-Pacific region. The company posted a 14% increase in net revenue to A$350.2 million, surpassing its guidance range and reflecting strong demand for its colocation and hyperscale services. Underlying EBITDA rose 6% to A$216.7 million, driven by operational efficiencies and expanding contracted utilisation.

Contracted utilisation, a key metric indicating committed data centre capacity, jumped 42% to 244.8 megawatts (MW), fueled by accelerated deployments in AI, cloud, and hyperscale infrastructure. Billing utilisation also increased by 29% to 110.9MW, signaling a healthy conversion of contracted capacity into revenue-generating activity.

Capital Expansion and Liquidity Strength

The company’s balance sheet remains robust, with total assets valued at approximately A$5.7 billion, including A$3.3 billion in property, plant, and equipment. NEXTDC has secured A$6.4 billion in debt facilities, significantly enhancing its liquidity position to a pro forma A$5.5 billion as of June 30, 2025. This financial flexibility supports ongoing and planned expansions, including accelerated construction at key sites such as M3 Melbourne and S3 Sydney.

Notably, NEXTDC is advancing a strategic joint venture to develop its S4 and S7 hyperscale data centres in Western Sydney. These campuses are expected to deliver over 850MW of IT capacity once completed, representing a transformative step in scaling the company’s infrastructure footprint. The joint venture aims to unlock capital efficiency by attracting third-party private equity, reducing the cost of capital, and enabling NEXTDC to maintain operational control while broadening its investor base.

AI and Cloud Demand Driving Growth

The surge in AI workloads is a critical growth driver, with NEXTDC positioning itself as a key enabler of the AI infrastructure revolution. The company’s facilities are designed to accommodate ultra-high-density, liquid-cooled GPU deployments, aligning with industry trends highlighted by technology leaders such as NVIDIA and major hyperscalers. NEXTDC’s forward order book of 134MW is expected to convert rapidly into billings over the next few years, underpinning strong revenue and earnings growth through FY26 and FY27.

In addition to domestic expansion, NEXTDC is progressing international projects, including the KL1 data centre in Kuala Lumpur and the TK1 site in Tokyo, further diversifying its geographic footprint and tapping into growing APAC demand.

Sustainability and Safety Commitments

Beyond financial and operational achievements, NEXTDC continues to advance its environmental, social, and governance (ESG) agenda. The company’s KL1 facility is on track for a Green Building Index Platinum rating, and multiple sites hold certifications for carbon neutrality and zero waste. Safety performance has improved markedly, with a zero lost-time injury frequency rate (LTIFR) in construction and ongoing initiatives to foster a strong safety culture across all operations.

Looking Ahead – FY26 Guidance

For FY26, NEXTDC projects net revenue between A$390 million and A$400 million and underlying EBITDA of A$230 million to A$240 million. This outlook is supported by the strong forward order book and continued investments in data centre capacity, particularly to meet accelerating AI and cloud demand. Capital expenditure is expected to rise to between A$1.8 billion and A$2 billion, reflecting ongoing development and expansion projects.

As NEXTDC navigates this growth phase, the company’s strategic joint ventures and capital management will be critical to sustaining momentum and delivering shareholder value in a rapidly evolving technology landscape.