NEXTDC (ASX: NXT) Announces 71MW in New Contracts, Boosting Forward Order Book by 53%

In a significant investor update, NEXTDC Limited (ASX: NXT) has announced substantial progress in its customer pipeline, adding 71MW to its contracted utilisation requirements following recent contract wins. This represents a 29% increase, bringing total contracted utilisation to 316MW since 30 June 2025. These developments highlight accelerating momentum for Australia’s largest premium data centre operator and provide clear visibility into the company’s medium-term revenue growth, underpinning its NEXTDC Contracted Utilisation Capex strategy.

Within just five months of the FY25 year-end, NEXTDC has secured customer commitments that significantly expand its forward order book. These contracts validate strong market demand for Australian data centre capacity, driven by cloud adoption, digital transformation initiatives, and emerging AI infrastructure requirements across enterprise and hyperscale customers.

The company’s billing utilisation stood at 111MW as of June 2025. Consequently, the gap between contracted capacity and billing utilisation has created a forward order book of 205MW—representing nearly twice the current billing base. This forward pipeline provides substantial revenue visibility through to FY29.

These contract wins demonstrate NEXTDC’s ability to secure long-term customer relationships within Australia’s highest-quality data centre infrastructure. With 205MW of contracted-but-not-yet-billing capacity, the company has established a clear pathway to revenue growth extending through the end of the decade.

For investors, this ASX announcement carries significant implications. The contracted nature of this capacity reduces execution risk compared to speculative development, whilst the substantial increase in the forward order book provides confidence in multi-year revenue expansion.

How has NEXTDC’s forward order book expanded by 53%?

NEXTDC’s forward order book has increased by 53% since June 2025, now standing at 205MW. This metric represents contracted capacity that has been committed by customers but is not yet generating recurring monthly revenue for the company.

In the data centre sector, the forward order book measures the gap between contracts signed and services commencing. Although customers have made formal commitments, NEXTDC must complete infrastructure build-out and deployment before billing can begin. This lag between contract signature and revenue recognition is standard industry practice.

The 205MW forward order book will convert to billing and revenue progressively over the period from FY26 through to FY29 as capacity comes online. This provides three to four years of revenue visibility beyond the existing billing base, creating a transparent growth trajectory for stakeholders.

For context, the forward order book represents nearly 2x NEXTDC’s current billing utilisation of 111MW. As infrastructure deployment accelerates through the company’s capital expenditure programme, contracted customers will progressively commence operations and convert to monthly recurring revenue streams.

Understanding Data Centre Forward Order Book:

• Definition: Contracted capacity committed by customers but not yet generating recurring revenue.
• Strategic importance: A leading indicator of future revenue growth that validates sales pipeline strength and customer demand.
• Conversion process: NEXTDC builds capacity → deploys infrastructure → the customer commences operations → monthly billing begins.

For investors analysing NEXTDC Contracted Utilisation Capex decisions, this forward order book provides confidence in multi-year revenue growth. The contracted nature of these commitments substantially reduces execution risk compared to speculative capacity expansion undertaken without secured tenants.

How does NEXTDC’s Capex increase support revenue growth?

NEXTDC has increased its FY26 capital expenditure guidance by $400M to accommodate accelerated capacity deployment for the newly secured customer contracts. This adjustment directly relates to the NEXTDC Contracted Utilisation Capex requirements driven by confirmed customer demand.

The updated guidance range of $2,200M – $2,400M represents a 20-25% increase from the previous $1,800M – $2,000M guidance issued in August 2025. This substantial uplift reflects the company’s response to contractual commitments rather than speculative capacity building.

This approach differs fundamentally from speculative development, where operators build capacity and subsequently seek tenants. In contrast, NEXTDC is deploying capital with revenue visibility through contractual commitments already in place. This contract-first methodology is more conservative and aligns capital deployment with confirmed customer demand.

The $400M increase enables accelerated deployment to meet customer requirements on compressed timelines. Rather than waiting for the organic deployment schedule originally planned, NEXTDC is building capacity now to honour contract commitments and potentially capture earlier revenue conversion.

For investors evaluating NEXTDC’s capital strategy, the $400M increase represents a positive signal. It demonstrates sufficient customer demand to justify accelerating infrastructure deployment, whilst the pre-contracted nature of this capacity provides contractual revenue visibility that reduces execution risk.

What is the timeline for converting the forward order book to revenue?

NEXTDC’s 205MW forward order book is expected to convert to revenue progressively over a four-year period spanning FY26 through to FY29. This extended conversion timeline reflects the operational realities of data centre deployment and customer onboarding processes.

FY26 will witness the initial conversion as accelerated NEXTDC Contracted Utilisation Capex enables earlier customer deployments. However, the majority of the order book conversion is expected during FY27-FY29 as additional capacity progressively comes online and customers complete their fit-out requirements.

NEXTDC maintained unchanged FY26 net revenue and underlying EBITDA guidance despite the new contract wins. This indicates conservative near-term revenue conversion assumptions, with the material financial impact weighted toward FY27 and beyond. The company appears to be managing expectations whilst providing transparency on its medium-term growth trajectory.

Revenue Conversion Process:

• Infrastructure build: NEXTDC constructs core data centre capacity.
• Commissioning: Systems undergo rigorous testing to meet operational standards.
• Customer fit-out: Clients install their specific equipment and configure connectivity.
• Operational commencement: Customers begin active operations, and monthly recurring billing initiates.

The contracted nature of the 205MW forward order book provides high confidence in the multi-year growth trajectory. Unlike speculative capacity, NEXTDC has already secured the customer commitments underpinning its revenue visibility through to FY29. For investors, this significantly reduces execution risk and provides a clearer path to future returns.

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