NextDC shares plunge 42.1% after power delays force forecast cut
Key Facts
Shares in Australian data centre operator NextDC plunged 42.1% during Wednesday trading after the company cut its financial forecasts following delays to power supplies at its Melbourne facility. The stock traded at A$5.32 during the session, its lowest since January 17, 2018, according to Investing.com. The company set expected net revenue at A$475–500 million in its official filing. Its original guidance for the same financial year targeted revenue of A$615–640 million, according to its annual results announcement. The revision reflects delays to the delivery of contracted capacity and the start of billing after disruption to parts of the electricity network works required for the site.
NextDC cut its underlying earnings before interest, tax, depreciation and amortisation guidance to A$245–265 million, according to its filing. The original range for this measure was A$385–410 million in its annual results announcement. By comparison, the company reported underlying earnings of A$248.8 million in the previous financial year, placing that result within the updated forecast range. Investing.com quoted Chief Executive Craig Scroggie as saying the revised guidance excludes about A$140 million in net revenue tied to the affected Melbourne contracts. It also excludes about A$140 million in underlying earnings associated with those contracts.
The company said Jemena had halted parts of the electricity network works because of "community and stakeholder opposition," according to the official filing. The suspension delays the provision of power needed to deliver capacity to customers and begin billing. The delay also has implications for the terms of the affected contracts, which give the customer termination rights in certain circumstances. These include delays or a failure to provide the full power supply, according to NextDC's announcement. The annual results presentation shows that the affected Melbourne site is leased, or expected to be leased, to a single customer under a long-term agreement covering all or most of the site.
The forecast revision followed a financial year in which NextDC reported net revenue of A$405.0 million, according to its annual results announcement. On that basis, the updated revenue range remains above the previous year's total despite the reduction from the original estimates. The results showed that capacity for which the company had begun billing rose to 175.0 megawatts on June 30, 2026. This capacity stood at 110.9 megawatts on June 30, 2025, representing annual growth of 58%. These figures refer to capacity already being billed, while the Melbourne delay concerns the delivery of contracted capacity and the subsequent start of billing.
Alongside the revisions to its revenue and earnings forecasts, the company set expected capital expenditure at A$4,500–5,000 million, according to its official filing. The original spending range was A$5,250–5,750 million, according to its annual results announcement. NextDC suspended all new development projects and land purchases indefinitely to prioritise near-term contracted capacity. On funding, the company reported liquidity of about A$8,675 million as of September 30, 2026. This includes cash and undrawn financing facilities, giving the company funding resources beyond its existing cash balances.
The company is reviewing its capital expenditure programme and will announce the outcome by its annual general meeting scheduled for November 20, 2026. This comes as the revised timetable for the electricity works extends into the following year, according to NextDC's filing. Jemena formally notified the company that it does not expect to resume the suspended works before February 2027. The next increase in power supplies to the Melbourne facility is now expected in financial year 2028, according to Investing.com. That timing is linked to the postponement of contracted capacity delivery and the start of billing, the operational impact underpinning the company's revision of its financial forecasts.