At a glance
NEXTDC cut its FY27 net revenue guidance to A$475 million to A$500 million on 21 October 2026, down from A$615 million to A$640 million.
Underlying EBITDA guidance fell to A$245 million to A$265 million, from A$385 million to A$410 million, with the affected contracts at NEXTDC M3 left out.
Jemena does not expect to restart its suspended network works for M3 Melbourne before February 2027, so the next increase in grid supply moves to FY28.
The M3 capacity remains under contract, subject to the customer's rights, and construction of the data halls is continuing.
NEXTDC has put new development projects and land acquisitions on hold, and will report the outcome of a capital review by its 20 November AGM.
NEXTDC has cut its FY27 guidance after delays to electricity network works pushed the next power increase at NEXTDC M3, its Melbourne data centre, into FY28. The ASX-listed operator released the update on 21 October 2026, ending the trading halt it entered on 19 October.
NEXTDC shares fell about 40 per cent when trading resumed on 21 October, to A$5.56 at 10:24am Sydney time from A$9.18 before the halt, according to ASX data.
The release confirms the cause Citi pointed to on 20 October. Jemena, the electricity distributor that supplies M3, suspended parts of its 66kV line works in Melbourne's inner west in September 2026. It has notified NEXTDC that it does not expect to restart them before February 2027.
M3's capacity remains under contract and its data halls are still being built. The grid works now set the date NEXTDC can power them and bill for them.
NEXTDC took about A$140 million out of each guidance line
The August guidance included about A$140 million of net revenue and the same amount of underlying EBITDA from the affected M3 contracts. NEXTDC has taken those contracts out of FY27 guidance until it can reliably estimate their contribution. That exclusion is the main reason for both cuts.
At the midpoints, net revenue guidance falls 22.3 per cent and underlying EBITDA guidance falls 35.8 per cent, by Certified Strategic's calculation. The revised ranges leave out M3 capacity that is already billing too. Existing grid supply at M3 cannot be relied on to carry the full contracted power ramp in halls already delivered, according to the release.
FY27 guidance | 27 August 2026 | 21 October 2026 | Change at midpoint |
|---|---|---|---|
Net revenue | A$615m to A$640m | A$475m to A$500m | Down 22.3% |
Underlying EBITDA | A$385m to A$410m | A$245m to A$265m | Down 35.8% |
Capital expenditure | A$5,250m to A$5,750m | A$4,500m to A$5,000m | Down A$750m |
Source: NEXTDC ASX release, 21 October 2026. Midpoint changes calculated by Certified Strategic. The revised capital expenditure range includes about A$230 million of capitalised interest, which the August range left out.
NEXTDC's actual FY27 results will include whatever the M3 contracts contribute. The contracts provide for service level credits when capacity is late or not fully powered, and those credits could take underlying EBITDA below the revised range, NEXTDC said. In some circumstances the contracts give the customer rights to terminate. NEXTDC is assessing whether force majeure and other provisions give it relief, and is working with the customer on a revised power ramp.
M3 was 70 per cent of NEXTDC's Victorian build in progress
M3 in West Footscray is planned at 225MW. At 30 June 2026, 60MW was built and 165MW was in progress, according to NEXTDC's FY26 results presentation. That 165MW was 70 per cent of the 236MW NEXTDC had in progress across Victoria. NEXTDC's results describe M3 as leased, or expected to be leased, to a single customer, which the Australian Financial Review described on 21 October as an unnamed hyperscaler.
Two later steps at M3 are now running behind. Further grid increases depend on new transformers at the Brooklyn Terminal Station, and NEXTDC expects the first of those projects to finish later than planned. NEXTDC lodged its permit application for M3 Stages 6 and 7 in February 2026 under the Victorian Government's Development Facilitation Program. It now expects a decision in 2027, because the government enters caretaker mode on 3 November ahead of the state election on 28 November.
Data centres pay up front for network upgrades, industry body says
Jemena paused the pole works in early September after residents in Yarraville, West Footscray and Tottenham raised concerns, Star Weekly reported. The works replace 7-metre wooden poles with 15-metre poles rated for 66,000 volts, the ABC's 7.30 reported on 27 September. The AFR put the tallest of the new concrete poles at up to 22 metres.
Large load users including data centres pay 100 per cent of their connection costs up front under the National Electricity Rules, according to the industry body Data Centres Australia. That covers "any augmentations required to connect their site to the network", 7.30 reported. Jemena told the program the new poles fall within that scope.
Demand for power in Melbourne's west is set out in Jemena's own planning. A consultation by Jemena and Powercor in August 2026 counted more than eight recent major data centre connection requests in the area fed from the Altona and Brooklyn terminal stations. Victoria's data centres are concentrated around the city's west, as the Melbourne data centre map shows, and four new campuses are planned across the city.
NEXTDC is putting its capital behind contracted capacity
NEXTDC has put all new development projects and land acquisitions on hold for the foreseeable future. "With M3 revenue deferred, we have paused projects not backed by customer contracts and put that capital behind the capacity our customers have already contracted," chief executive Craig Scroggie said.
Revised capital expenditure guidance of A$4.5 billion to A$5 billion covers contracted capacity due in the next 12 to 18 months and works close to completion. On a like-for-like basis, before capitalised interest, the cut is about A$980 million, or 17 to 19 per cent. The board will look at selling selected development sites that are not needed in the near term.
NEXTDC had A$8,675 million of liquidity at 30 September 2026, including A$1,275 million of cash. It is in compliance with its financial covenants and expects to comply at the next test date of 31 December 2026, according to the release. Drawing all A$6,700 million of its undrawn senior debt depends on the billing profiles of new contracts, and NEXTDC named the M3 grid delays as a possible change to those profiles.
More on the operator is on the NEXTDC profile.
What to watch
Caretaker period. The Victorian Government enters caretaker mode on 3 November 2026, which holds the M3 Stages 6 and 7 permit decision until 2027.
The capital review. NEXTDC has committed to announcing the outcome of its capital expenditure review by its annual general meeting on 20 November 2026.
Jemena's restart. Jemena is consulting the community and seeking the approvals it needs to restart the works safely. Its timing will set when M3's next power increase can begin.
The half-year result. NEXTDC will report any change in the fair value of its investment properties in its results for the half year to 31 December 2026.