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Highlights

  • Macquarie Research rates NEXTDC as “Outperform” with a target price of AUD 22.10, implying a 54.11% upside.

  • Recent customer wins add 16MW to contracted utilisation, pushing the forward order book to a record 135MW.

  • Pro forma contracted utilisation rises to 244MW, underpinned by strong demand at the KL1 facility in Malaysia.

NEXTDC Limited (ASX:NXT), Australia’s leading data centre operator, has received a BUY rating from Macquarie Research, supported by a target price of AUD 22.10. This valuation represents a substantial 54.11% upside from the company’s last traded price of AUD 14.26. 

Customer Contract Wins Drive Capacity Expansion

As of 31 May 2025, NEXTDC’s pro forma contracted utilisation increased by 16 megawatts (MW), a 7% rise since its last update earlier in May. This lifted the company’s total contracted utilisation to 244MW, a new high. A major contributor to this growth is the company’s Kuala Lumpur-based KL1 facility, currently under development, which now accounts for 10MW in customer commitments — about 15% of its planned capacity.

The KL1 data centre is designed to meet Tier IV Certification standards from the Uptime Institute for both design and construction, placing it among the most resilient and fault-tolerant facilities globally. The project is scheduled to go live in early calendar 2026, with customer ramp-up expected across FY27, and full revenue impact likely from FY28 onwards.

As a result, NEXTDC’s forward order book has surged to a record 135MW, providing a long-term runway for revenue growth and cash flow visibility.

1H FY2025 Results

In its 1H FY2025 results, NEXTDC reported a 13% year-on-year increase in net revenue, reaching AUD 167.8 million, while underlying EBITDA climbed 3% to AUD 105.4 million. Though total revenue declined slightly to AUD 205.5 million, the underlying figures signal its operational foundation and the scalability of the business.

The company also recorded an 18% increase in contracted utilisation, adding 27MW to its portfolio. With AUD 1.003 billion invested in capital development during the half — including the AUD 353 million land acquisition for its S7 facility in Western Sydney.

With a liquidity buffer of AUD 2.5 billion as of 31 December 2024, NEXTDC can fund its growth pipeline, including upcoming launches and global expansion projects.