NEXTDC (ASX: NXT) – M3 Melbourne Power Delay Revises FY27 Guidance

NEXTDC has significantly lowered its financial guidance for the year ending 30 June 2027, citing delays to third-party electricity network works that will defer revenue recognition and cash flow from its flagship Melbourne data centre expansion. The company’s net revenue guidance has been cut by approximately A$140 million to A$475-500 million, down from the A$615-640 million previously provided, while Underlying EBITDA has been reduced by a similar magnitude to A$245-265 million from A$385-410 million.

The revision stems entirely from delays to Jemena Electricity Networks’ augmentation works that supply power to NEXTDC’s M3 Melbourne facility. Jemena suspended portions of the 66kV line upgrade project in September 2026 following community opposition and lack of local council consent, and has indicated work will not resume before February 2027. The company now expects the next increase in grid supply to occur during FY28 rather than FY27, pushing the delivery and billing of contracted customer capacity into the following financial year. The affected contracts represent the A$140 million revenue and earnings impact noted in the earlier August guidance.

The timing could extend further given planning headwinds. NEXTDC’s application for approval of M3 Stages 6 and 7, lodged in February 2026, faces delays as the Victorian Government enters caretaker conventions before the 28 November state election. The company no longer expects a planning decision until 2027, after the election result is known. Separately, upstream transmission projects at Brooklyn Terminal Station that are required for later capacity increases at M3 are now expected to take longer than previously anticipated.

The company’s exposure extends to customer contract risks. The affected M3 customer agreements contain service level credit provisions where capacity is delivered late or not fully powered and, in certain circumstances, provide termination rights. NEXTDC is assessing whether force majeure protections in those contracts will shield it from the full financial impact. The company has excluded these affected contracts entirely from its revised guidance pending clarity on its potential obligations and the customer’s intentions.

NEXTDC is responding by reducing capital expenditure by A$750 million to A$4,500-5,000 million and suspending all new development projects and land acquisitions in the foreseeable future. Management has signalled it will evaluate selling selected development sites not required in the near term. The company retains A$8,675 million of liquidity comprising A$1,275 million cash and A$7,400 million of undrawn debt facilities and hybrid securities, and remains in compliance with its financial covenants. The company has committed to detailing the outcome of its capital expenditure review by its Annual General Meeting on 20 November 2026.

Investors should monitor progress on Jemena’s works resumption, the Victorian planning decision, and any announcements regarding service level credits or customer contract renegotiations. The company will provide further updates at its investor briefing on 21 October 2026. This announcement is price sensitive and has been flagged as material by the ASX.

View the full ASX announcement (PDF)

About NEXTDC Limited (ASX: NXT)

NEXTDC Limited develops and operates data centers in Australia and the Asia-Pacific region. The company offers data center colocation solutions, high-performance computing, disaster recovery services, and various digital infrastructure solutions to enterprise clients, government agencies, and cloud providers. Headquartered in Brisbane, Australia, NEXTDC provides critical connectivity and infrastructure services across its network of facilities.

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