Highlights

  • A US-listed neo-cloud customer intends to cancel DXN's maiden A$8.8 million AI HPC modular data centre contract.
  • DXN expects about A$4.2 million for costs incurred and committed, with most recognised in the December quarter.
  • Backlog rose to about A$30.8 million at 30 September 2026, from A$23.5 million at 30 June.
  • Quarterly Revenue reached about A$3.4 million, and management expects H1 FY27 revenue of A$11.0 million.

DXN (ASX:DXN) ended the September 2026 quarter with a larger order book even after losing its first artificial intelligence computing contract. The modular data centre manufacturer reported a Backlog of about A$30.8 million at 30 September 2026, up from A$23.5 million three months earlier, after removing about A$8.6 million linked to the maiden AI HPC contract that its customer now intends to cancel.

The A$8.8 million contract, announced on 3 June 2026, was with a US-listed neo-cloud operator. The cancellation is not yet final.

What the Cancellation Means for DXN

DXN expects to receive about A$4.2 million, or 48% of the contract value, covering costs incurred and committed, which the customer has not disputed. Most of that amount, including a final payment of A$1.1 million, is expected to be recognised in the December 2026 quarter. The company also considers it unlikely that the customer will pursue a larger follow-on campus opportunity.

In August 2026, DXN signed a second AI HPC contract worth about A$12.2 million for a 2MW turnkey modular data centre for an AI compute operator. Construction has started in New South Wales, with delivery targeted for early calendar 2027.

Revenue Rises but Delayed Receipts Weigh on Cash

Revenue for the Sep-2026 quarter was about A$3.4 million, up from A$0.7 million in the prior corresponding period, excluding the divested Hobart operations. Customer receipts were A$3.69 million, but net Operating Cash Flow was an outflow of A$4.71 million, which management said would have been an inflow of about A$2.2 million had scheduled receipts arrived on time.

Cash fell to A$6.36 million at 30 September 2026 from A$10.99 million at 30 June, then recovered to about A$11.1 million by 28 October as delayed payments were received. A A$7.0 million iPartners Loan is fully drawn and matures in November 2027.

Contract Wins Across Airports and Subsea Cables

Other recent awards include a A$4.1 million edge data centre for Melbourne Airport, a A$1.2 million cable landing station in the Solomon Islands, a A$1.0 million cable landing station in American Samoa and a A$1.6 million variation on its Globalstar contract. The pipeline stood at 93 projects, with AI deals representing 28% of pipeline value.

Capacity Expansion and H1 FY27 Expectations

Management expects H1 FY27 revenue of A$11.0 million, including the termination payment, compared with A$2.7 million in H1 FY26. A temporary Manufacturing Facility at Seven Hills in New South Wales is operating from the December quarter, a factory Lease in Johor, Malaysia, was signed in September with production targeted for the December quarter, and the company is seeking a permanent site in southern New South Wales. Together with a Jakarta joint venture, these sites are targeted to be fully operational by the end of the March 2027 quarter, lifting capacity to roughly six times current Western Australian levels.

Shares were priced at A$0.125 on 2 November 2026, down 10.71% on the day, with a Market Capitalisation of A$47.1 million and a 12-month gain of 131.48%.