NEXTDC's Pivot to Hyperscale Build-to-Suit: From Colo to Capital Recycling
FY26 record contracting and guidance set the stage for a new capital-light, JV-driven growth model.
NXT.AX · Earnings Call · 2026-08-27
The Year of Scaling the Platform
NEXTDC's FY26 results mark a decisive inflection point. The company's contracted utilization tripled to 740 MW, billing utilization grew 58% to 175 MW, and the forward order book hit a record 565 MW — every megawatt a binding customer contract. As CEO Craig Scroggie put it, “FY '26 was the largest contracting year in NEXTDC's history. Contracted utilization tripled to 740 megawatts on a pro forma basis, and we exceeded guidance on both net revenue and underlying EBITDA.” — Craig Scroggie, Chief Executive Officer and Managing Director · 2026-08-27 Net revenue rose 16% to $405M, and underlying EBITDA rose 15% to $248.8M. Guidance for FY27 points to over 50% revenue growth and a 55%+ jump in EBITDA, underpinned by 197 MW of new billing activation — the fastest ramp in company history.From Colocation to Build-to-Suit at Scale
The most significant change is the strategic pivot away from the traditional colocation model toward hyperscale build-to-suit development with a target yield on cost of greater than 10%. Scroggie articulated why the economics are now locked: “The key point of difference when you are doing build-to-suit at scale and you go from doing 10 or 20 or 50 megawatts to doing 250 or 500 or even potentially 1,000, the economics essentially are locked at the contract point.” — Craig Scroggie, Chief Executive Officer and Managing Director · 2026-08-27 This shift is underpinned by a 1 GW-scale reference architecture, single-story construction, and a manufacturing-style approach that could cut delivery times to ~9 months. It also brings a new capital strategy: the company is actively exploring JV structures for S4, S7, and M5, and has adopted investment property accounting for qualifying assets — a move that introduces annual revaluations and straight-line revenue recognition. CFO Oskar Tomaszewski confirmed, “We'll continue to assess sites on a case-by-case basis. I think it is likely that we will have further data center sites that are accounted for under lease and investment property accounting.” — Oskar Tomaszewski, Chief Financial Officer · 2026-08-27Capital Stack and Credit Quality
The company raised $9.75B in FY26, ending with $8.7B of liquidity and no debt maturities until FY30. It is now leveraging project finance and JV partners to recycle capital, with a clear sequencing logic. Scroggie explained, “It's in our best interest and the best interest of our shareholders for us to sell the balance of S4 at the highest possible rate of return to have then fully completed a 365-megawatt site to AA or better credit quality counterparts.” — Craig Scroggie, Chief Executive Officer and Managing Director · 2026-08-27 The credit quality of customers is a central theme — most of the contracted capacity is with AA-or-better rated counterparties or backstopped by NVIDIA. The AI deployments in Australia are primarily inference-oriented, and the company is positioning its metro footprint to capture that shifting demand.The contracts are signed and the capital is raised, and our job in FY '27 is execution. That is where our focus is.