What Does NEXTDC Do? The Contracted-Capacity Model in Australia
NEXTDC builds and runs data centres in Australia, with Kuala Lumpur open and Tokyo and Auckland in development. At 30 June 2026 it had 740.1 MW contracted on a pro forma basis but was billing for only 175.0 MW, and it guides 197 MW to start billing in FY27.
NEXTDC builds and runs data centres across Australia, with Kuala Lumpur open and Tokyo and Auckland in development. At 30 June 2026 it had 740.1 MW contracted on a pro forma basis, but was billing for only 175.0 MW. It guides 197 MW to start billing in FY27, funded by A$5.25–5.75 billion of capital spending.
AI DATA CENTERS · Data as at 27 Aug 2026 · Next update: NEXTDC's next ASX update on billing MW
Affects: AI Data Centers · Australia · Malaysia · Japan · Hyperscalers
NEXTDC is the Australia and Asia-Pacific build-and-operate angle on the AI Data Centers layer. Read What Is an AI Data Center? first. Then compare it with the finished-halls trust Keppel DC REIT, the large landlords Digital Realty and Equinix, and the US build-for-tenants model of Applied Digital.
In short: NEXTDC signs customers for capacity first, builds the halls, and bills once each customer's megawatts are switched on. At 30 June 2026 it had 740.1 MW contracted, 175.0 MW billing, and a 565.1 MW forward order book of binding contracts. FY26 net revenue was A$405.0m. It guides FY27 net revenue to A$615–640m. The model works if delivery keeps pace with signatures. A contract earns nothing until the hall is live.
Education only, not advice to buy or sell any security. Figures are from NEXTDC's FY26 results release to the ASX (year to 30 June 2026), dated as shown. All A$ figures are Australian dollars. Contracted figures are on a pro forma basis, as NEXTDC discloses them.
Numbers that matter
Contracted vs billing
740.1 MW → 175.0 MW
About 4.2 times contracted over billing (our arithmetic) · 30 Jun 2026
Stuck
Forward order book
565.1 MW
Binding contracts only; 3.2 times billing utilisation · pro forma, 27 Aug 2026
Booked
Billing set to start in FY27
197 MW
Then a further 221 MW in FY28 · company guidance, 27 Aug 2026
Named
FY26 net revenue
A$405.0m
+16%; underlying EBITDA A$248.8m (+15%) · year to 30 Jun 2026
Paid
FY27 capital spending plan
A$5.25–5.75bn
Largest programme in its history, mostly for capacity already contracted · 27 Aug 2026
Spend
Pro forma liquidity
A$8.7bn
Cash plus committed and undrawn debt, pro forma · 30 Jun 2026
Funded
Status chips are Second Order's read. NEXTDC does not name its customers in the results release. We do not guess them.
What does NEXTDC actually do?
Three steps, in order.
Contract. Build. Bill.
- It signs customers for capacity. Contracted utilisation rose 495.3 MW, or 202%, to 740.1 MW on a pro forma basis during FY26. It says it was the largest contracting year in its history. Customer types it lists are cloud, hyperscalers, neoclouds, enterprise and partners.
- It builds the halls. Built capacity was 287.9 MW at 30 June 2026, up 80.0 MW in the year: 16 MW at S3 Sydney, 12 MW at M2 Melbourne, 42 MW at M3 Melbourne and 10 MW at KL1 Kuala Lumpur. Further capacity under way includes 250 MW at S4 Sydney (365 MW in total there) and 165 MW at M3 Melbourne. It bought the site for M5 Melbourne, with planning for up to 1.2 GW of IT capacity.
- It bills when the hall is switched on. Billing utilisation was 175.0 MW, up 64.1 MW or 58%. Billing starts as each customer's contracted megawatts become live, which is why contracted capacity runs ahead of billing capacity.
| Step | What it means | Where the risk sits |
|---|---|---|
| Contract | Binding customer contracts for megawatts, some years ahead | Customers can ask for more later; they do not pay yet |
| Build | Halls in Sydney, Melbourne and elsewhere, plus Kuala Lumpur, Tokyo and Auckland sites | Delivery dates, power connections, and the cost of capex |
| Bill | Revenue and EBITDA rise as megawatts switch on | The gap between 175.0 MW billing and 740.1 MW contracted |
Outside Australia it is early. KL1 Kuala Lumpur added 10 MW in FY26 and opened to its foundation customer in May 2026, with 15 MW still progressing and a further 15 MW in plan. At TK1 Tokyo, excavation and retaining works have started. For AK1 Auckland, the resource consent application has been lodged. See our Malaysia note and Australia note.
Its network edge matters too: it is building at Geelong, Sunshine Coast and Darwin to hold cable landing stations and critical network equipment. It also pitches its national metro footprint for distributed AI inference, where workloads sit close to enterprise and government data.
How does NEXTDC make money?
It gets paid by customers for the megawatts that are billing, plus related service fees, and it keeps what is left after direct costs. Company guidance gives the clearest map:
- Billing megawatts — the core driver. 175.0 MW at 30 June 2026, with 197 MW guided to start billing in FY27 and a further 221 MW in FY28.
- Net revenue — total revenue less direct costs: A$405.0m in FY26 against A$350.2m in FY25, and guided to A$615–640m in FY27.
- Underlying EBITDA — A$248.8m in FY26, guided to A$385–410m in FY27.
- Contracted EBITDA — management says contracted capacity will support more than A$1.0bn of EBITDA once it is all billing. That is its own estimate and excludes new wins.
Our arithmetic. Contracted capacity is 257% of built capacity (740.1 ÷ 287.9), so most of what customers have signed for is still to be built. The forward order book of 565.1 MW is 3.2 times billing (565.1 ÷ 175.0). The company says 74% of it converts within two years: (197 + 221) ÷ 565.1 = 0.74. FY27 billing conversion of 197 MW is about three times FY26's 64.1 MW (197 ÷ 64.1 = 3.07). On the guidance mid-points, FY27 capex of A$5.5bn is about 8.8 times FY27 net revenue of A$627.5m. It is also about 63% of the A$8.7bn of pro forma liquidity (5,500 ÷ 8,676). Management's more-than-A$1.0bn contracted EBITDA over 740.1 MW is at least about A$1.35m per megawatt a year (1,000 ÷ 740.1), if it all converts.
Funding is the other half. NEXTDC says it raised A$9.75bn of new capital since August 2025: A$5.8bn of senior debt facilities, A$750m of subordinated notes, A$1.7bn of hybrid securities and A$1.5bn of equity (5,800 + 750 + 1,700 + 1,500 = 9,750). At 30 June it had drawn A$1.6bn of senior debt and A$1.75bn of subordinated capital. FY26 statutory profit after tax was A$82.1m, against a loss of A$60.5m a year earlier.
Who gets paid. NEXTDC, as megawatts switch on. Builders and equipment suppliers, as it spends A$5.25–5.75bn. Lenders and holders of the debt and hybrid securities. Who pays. Cloud, hyperscaler, neocloud, enterprise and partner customers. Money sticks when a customer's megawatts are billing, not when a contract is signed.
What limits it?
Delivery first. Power and rules second. Funding third.
- A contract earns nothing until the hall is live. 565.1 MW is signed and not yet billing. NEXTDC has built 80.0 MW in a year and now guides 197 MW to start billing in FY27. FY26 capex was A$397m above the top of guidance, which NEXTDC attributes partly to speeding up construction for contracted customers.
- New grid and planning rules are coming. New South Wales proposed reforms on data-centre grid connections and energy use, and its consultation closed on 14 September 2026. National recommendations would phase in from 2027. NEXTDC says its operating portfolio and the 565 MW book are unaffected, and that Transgrid confirmed in writing its new capacity allocation policy does not apply to S4 Sydney. Future sites would face the new rules at the point of grid connection.
- Customers may have to bring their own clean power. NEXTDC says parts of the proposals, renewables and firming in particular, may be handled by customers as part of their global energy buying. That depends on customers.
- The spending is very large against current revenue. FY27 capex mid-point is about 8.8 times FY27 guided net revenue (our arithmetic). That is only fine if billing arrives on time.
The honest uncertainty is timing and customer identity. The release does not name customers or give a date for each hall, so we do not draw a dated line from 175.0 MW to 740.1 MW beyond the FY27 and FY28 guidance.
Who else does this?
Roles, not a league table.
| Company | What it does | What makes it different |
|---|---|---|
| NEXTDC | Builds and runs data centres in Australia and Asia-Pacific | 740.1 MW contracted, 175.0 MW billing; 565.1 MW forward order book |
| Keppel DC REIT | Owns finished halls, mostly Singapore | 62.8% of assets in Singapore; about 95% of power capacity contracted |
| Digital Realty | Leases 310 data centres | $1.9bn backlog; 90.2% occupied |
| Equinix | Rents space and connections to many customers | $2.625bn Q2 revenue; Asia-Pacific 20% of it |
| Applied Digital | Builds AI campuses for a few large tenants in the US | 1.41 GW leased, 250 MW live |
What separates them is who funds the build and when the cash arrives. NEXTDC and Applied Digital both build ahead of billing, with contracted capacity running well ahead of live capacity. Keppel DC REIT, Digital Realty and Equinix mostly collect rent on halls that are already live.
What would change this view?
The read on the model weakens if:
- The 197 MW guided to start billing in FY27 slips materially, while capex stays at A$5.25–5.75bn.
- The proposed NSW or national rules reach the 565 MW book, or change how new sites are connected and charged.
- Net revenue lands below A$615m while billing conversion looks on track, which would mean pricing, not delivery, is the issue.
- The cost of funding the build rises sharply against a plan that relies on A$8.7bn of liquidity.
It stays intact while billing megawatts keep rising on the guided path, the order book stays binding, and funding stays ahead of the build.
Practical takeaways
- NEXTDC's model is Contract → Build → Bill: sign megawatts, build the halls, collect once each hall is live.
- At 30 Jun 2026: 740.1 MW contracted (pro forma), 175.0 MW billing, 565.1 MW forward order book, 287.9 MW built.
- Our arithmetic: contracted is about 4.2 times billing; FY27 capex mid-point is about 8.8 times FY27 guided net revenue.
- Guidance (27 Aug): 197 MW converts to billing in FY27, 221 MW in FY28; net revenue A$615–640m in FY27.
- The stuck step is delivery: contracted megawatts earn nothing until they are billing.
FAQ
What does NEXTDC do?
NEXTDC builds and runs data centres in Australia, with Kuala Lumpur open and Tokyo and Auckland in development. Customers rent power, space and cooling, and connect to each other and to networks inside its buildings.
How does NEXTDC make money?
It bills customers for the megawatts that are switched on, and keeps what is left after direct costs. In FY26 net revenue was A$405.0m and underlying EBITDA was A$248.8m. It guides FY27 net revenue to A$615–640m.
What is billing utilisation?
It is the amount of capacity, in megawatts, that customers are actually being charged for. NEXTDC's was 175.0 MW at 30 June 2026, against 740.1 MW contracted on a pro forma basis.
What is a forward order book?
It is capacity customers have contracted for that is not yet billing. NEXTDC's was 565.1 MW at 30 June 2026 on a pro forma basis, and it says it holds binding contracts only, with no options or letters of intent.
How is NEXTDC different from Keppel DC REIT?
NEXTDC builds, funds and operates its halls and keeps the growth. Keppel DC REIT owns finished halls, mostly in Singapore, and pays most of the rent on as distributions. NEXTDC's capex plan is A$5.25–5.75bn for FY27.
Is NEXTDC a good investment?
We do not make buy or sell calls, and nothing here is a recommendation. We can tell you what it does, how it gets paid and which numbers would change the picture. The decision is yours.
Keep reading on the map
- The layer: AI Data Centers
- The term: What Is an AI Data Center?
- Peers: What Does Keppel DC REIT Do? · What Does Digital Realty Do? · What Does Equinix Do?
- A build-first campus: What Does Applied Digital Do?
- Where it happens: Australia · Malaysia · Singapore
The members cut on a stuck step is already live: When utilities bill data centers before power, where does cash stick?. This page stays the free Stack read of the NEXTDC model.
Sean
Writes Second Order by TKN — a plain-English map of AI infrastructure. Who gets paid, where money sticks, which step is stuck. Not investment advice.
Author page → · Editorial standards →
How we check this
Figures come from NEXTDC's FY26 results release to the ASX on 27 August 2026 and from the peer releases listed below, each dated. Contracted and order-book figures are on the pro forma basis NEXTDC discloses, which includes contracts signed after 30 June 2026 and disclosed on 21 July 2026. Where we work something out ourselves, the arithmetic is shown in full. The release does not name customers, so we do not.
Last reviewed: 11 Oct 2026 · Next review: after NEXTDC's next ASX update on billing megawatts
Spot an error? Tell us and we will correct it and note the change here.
Our editorial standards →
References
- NEXTDC, FY26 Record Results and Record FY27 Growth Guidance (ASX release) (company, ASX filing), 27 Aug 2026 — contracted and billing MW, forward order book, FY27 guidance, capex, liquidity, power position
- Keppel DC REIT, Unaudited results for the first half year ended 30 June 2026 (media release) (company, SGX filing), 23 Jul 2026 — distributable income, DPU, occupancy, WALE, leverage, cost of debt
- Digital Realty, Second Quarter 2026 Financial Supplement and earnings release (company, SEC exhibit 99.1), 23 Jul 2026 — bookings, backlog, 310 data centres, 2,799 MW occupied of 3,102 MW, Northern Virginia stake, debt
- Equinix, Equinix Reports Second-Quarter Results, Raises 2026 Guidance and Long-Term Outlook (company, SEC exhibit 99.1), 29 Jul 2026 — revenue by line and region, adjusted EBITDA, debt, 2026 guidance, 2027–2029 outlook
- Applied Digital, Applied Digital Reports Fiscal First Quarter 2027 Results (company), 7 Oct 2026 — 1.41 GW leased, 250 MW live, about $36bn contracted, HPC and hosting revenue, debt and cash
