SKS Technologies has upgraded its FY26 profit guidance to $34 million, an 18% increase from the $28.8 million forecast issued in November 2025. The revision follows $60 million in new contract awards across data centre and commercial projects, lifting revenue expectations from $320 million to $340 million and expanding the NPBT margin from 9% to 10%. Work on hand has reached a record $325 million, providing substantial earnings visibility into FY27.
SKS Technologies lifts FY26 profit guidance to $34 million after $60 million contract haul
The SKS Technologies FY26 Profit Upgrade reflects contract momentum accelerating faster than management anticipated three months ago. Revenue guidance has increased by 6.3% to $340 million, whilst the NPBT margin improvement to 10% demonstrates simultaneous revenue growth and margin expansion. This combination indicates the business is capturing economies of scale as project volumes increase.
The $60 million in new contracts spans two major projects: the NEXTDC M3 Stage 4 data centre expansion and Ernst and Young’s Melbourne office fit-out. These awards have pushed work on hand to $325 million, the highest level in the company’s history.
Chief Executive Officer Matthew Jinks attributed the upgrade to “a combination of new contract awards, a further record level of $325 million of work on hand, and a realistic confidence in future conversions from pipeline to contract award.”
| Metric | Previous Guidance (Nov 2025) | Revised Guidance (Feb 2026) | Change |
|---|---|---|---|
| Revenue | $320 million | $340 million | +6.3% |
| NPBT Margin | 9% | 10% | +100bps |
| Profit Before Tax | $28.8 million | $34 million | +18% |
The profit upgrade arrives within three months of the prior forecast, suggesting the contract pipeline is converting faster than conservative internal projections. This pace of revision typically indicates strengthening market conditions or execution capability exceeding management’s earlier expectations.
What drives earnings upgrades and why investors watch them
An earnings upgrade occurs when a company increases its profit forecast for a financial year, typically driven by stronger revenue, improved margins, or both. SKS Technologies has achieved both simultaneously, lifting revenue expectations by 6.3% whilst expanding margins by 100 basis points.
The work on hand figure of $325 million represents contracted revenue yet to be recognised in financial statements. This backlog acts as a leading indicator of future earnings, providing visibility into revenue conversion over coming quarters. When work on hand reaches record levels alongside margin expansion, it signals the business is securing contracts at improving commercial terms whilst scaling operations efficiently.
Earnings upgrades are closely monitored by investors because they often indicate management’s forecasting has been overtaken by operational reality. When upgrades occur shortly after prior guidance, as in this case, it suggests accelerating momentum rather than gradual outperformance.
NEXTDC M3 expansion underpins data centre growth
The NEXTDC M3 Stage 4 contract, awarded by Kapitol Group, involves expanding the West Footscray hyperscale campus to support rapidly growing AI and cloud computing demand. The 150MW Tier IV facility is designed to deliver high-density, fault-tolerant infrastructure, critical for clients requiring maximum uptime and reliability.
Tier IV classification represents the highest level of data centre infrastructure, featuring fully redundant systems that can sustain any single failure without impacting operations. This technical specification reflects the mission-critical nature of the workloads the facility will support, particularly AI model training and inference operations that require uninterrupted power delivery.
The contract endorses SKS Technologies’ position as a provider of critical electrical solutions within the data centre sector. Management noted the company achieved a 94% repeat business rate in FY25, indicating clients return for subsequent projects once initial work demonstrates capability and reliability. High repeat business rates reduce customer acquisition costs and support more predictable revenue streams.
Matthew Jinks, Chief Executive Officer
“The strong visibility of future earnings indicates the sustainable operating platform that the business has built as its work on hand has burgeoned, juggling growth and consolidation concurrently so as to harness the immediacy of opportunity in the data centre sector.”
Ernst and Young fit-out extends commercial diversification
The Ernst and Young Melbourne office project at 111 Bourke Street was awarded by Shape Australia and requires a fully integrated solution across audio visual, communications, and electrical systems. The 20-level tower project demonstrates SKS Technologies is not solely reliant on data centre contracts, maintaining capabilities across its traditional commercial sectors.
The contract covers the full suite of SKS Technologies services, requiring coordination across three service lines to deliver an integrated workplace solution. This breadth of capability positions the company to capture larger project scopes rather than competing for individual service components, potentially improving both win rates and margin realisation.
Management described the award as evidence of the company’s “continued and unwavering pursuit of work across all of its traditional sectors,” signalling intentional portfolio diversification despite the strength of data centre demand. This approach reduces sector concentration risk whilst allowing the business to leverage existing client relationships across multiple property types.
Record work on hand provides earnings visibility into FY27
The $325 million work on hand represents contracted future revenue yet to be recognised in financial statements. This figure has reached record levels, providing visibility beyond the current financial year and supporting the case for sustained earnings growth into FY27.
Jinks stated the revised outlook reflects “realistic confidence in future conversions from pipeline to contract award,” indicating the backlog is supplemented by additional opportunities yet to be formalised. This pipeline visibility allows management to forecast with greater confidence whilst maintaining capacity to secure additional work as projects convert.
The company has balanced growth with operational consolidation, managing capacity expansion alongside increased project volumes. This approach aims to capture near-term opportunities in the data centre sector without overextending operational resources or compromising project delivery quality.
What this means for investors
The (ASX: SKS) profit upgrade presents several investment considerations following the guidance revision:
-
Margin expansion alongside revenue growth indicates operating leverage is improving as the business scales, a characteristic of infrastructure services businesses that can spread fixed costs across larger project volumes.
-
Record work on hand of $325 million provides earnings visibility extending into FY27, reducing forecasting uncertainty and supporting confidence in the sustainability of current growth rates.
-
Data centre sector tailwinds driven by AI and cloud computing demand are translating into contracted revenue for SKS Technologies, positioning the business to benefit from structural shifts in digital infrastructure investment.
-
Diversified client base across data centres and commercial projects reduces sector concentration risk whilst the 94% repeat business rate demonstrates client retention and relationship strength.
The SKS Technologies FY26 Profit Upgrade arrives as hyperscale data centre construction accelerates to meet AI workload requirements, a trend expected to sustain infrastructure investment over multiple years. The company’s ability to deliver both revenue growth and margin expansion simultaneously suggests it is capturing market share whilst improving operational efficiency.
Don’t Miss the Next Tech Sector Breakout
Join 20,000+ investors getting FREE breaking ASX news delivered to your inbox within minutes of release, complete with in-depth analysis. Click the “Free Alerts” button at StockWire X to receive real-time alerts the moment market-moving announcements hit the ASX.