NextDC slips as total revenue flattish red; overall loss deepens

Australia’s best-known (perhaps because its infrastructure is most visible) data centre stock NextDC (ASX:NXT) has slipped 4% on Monday as revenue was proven to be -2% vs pcp, and as its overall loss deepened to $42.6 million.

That’s compared to a loss of only $21.5 million in the company’s 1HFY24 result.

As for where that $21.5M hole in the company’s pocket has come from? “The Group [entered] into a new $2.9 billion syndicated debt agreement during the half-year under a new common terms platform to refinance its existing debt arrangement,” NextDC wrote on Monday.

The new facilities provide significant benefits, including additional flexibility for the Company to fund its longer-term growth ambitions through both the bank and bond markets, as well as material pricing reductions resulting in a significant improvement in the overall cost of funds.”

To sate investors’ appetite for a good news story, the company highlighted on Monday that net tangible assets per ordinary share have climbed to $6.46/sh in 1HFY25 compared to $3.50/sh vs pcp.

But clearly, bond market and bank funding flexibility aside, some investors would have preferred to have seen a profit. Or, at least, a paring of losses as opposed to a deepening.

Still, given NextDC’s forefront at the hottest thematic on the market (data-centre-linked-AI), it’s worth noting the sell-off hasn’t been too dramatic with shares still hovering just above $14/sh. They closed on Friday just above $14.50/sh.

Also worth noting is that NextDC managed to stay firm against shorters following the DeepSeek scare (something I discussed with our digital editor Isaac McIntyre in last week’s HotCopper Market Watch podcast).

Also worth noting is the company invested $1B across 1HFY25 building out data centres in Adelaide, Darwin and a sixth buildout in Sydney. It also acquired land for a seventh development in the latter jurisdiction.

Meanwhile, NextDC continues to develop infrastructure in Auckland and Kuala Lumpur.

As for sales, contracted utilisation jumped by 27MW over the 2024 calendar year to a total of 176MW – some 93% of installed capacity now contracted.

Among its customers are Amazon Web Services, Google Cloud, Azure, and even investment bank UBS. That’s not an exhaustive list either; it also holds some more on the mysterious side of things defence contracts.

Net revenue jumped 13%, but total revenue actually declined -2%. more or less flattish red on 1HFY24.

So when will NextDC be profitable? No strong word was given on Monday.

“As the adoption of technologies like generative AI accelerates, NEXTDC is uniquely positioned to meet the growing demands of the Hyperscalers, our ICT partners and our Enterprise and Government customers,” NXT CEO Craig Scroggie said.

NXT last traded at $14.03.

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