NextDC will invest around $900 million this financial year to accommodate expanding customer demand for cloud computing.
As the data centre developer and operator maps out how much digital infrastructure will be necessary for the looming wave of artificial intelligence.
The Brisbane-based company told shareholders that revenues grew 25 per cent to $362.4 million for the 12 months to June 30 and reported an after tax loss of $25.6 million compared with a $9.1 million profit a year earlier.
Throughout the year, capital expenditure grew 14 per cent to $690.4 million and NextDC expects it will need to spend from $850 million to $900 million.
This year to sustain the 13 data centres it operates and another nine facilities that are in development.
NextDC plans nearly $1b
NextDC chief executive Craig Scroggie said that scale of investment was essential. To meet the demand for cloud computing adoption from key customers such as Google.
Microsoft and Amazon, as well as to support regional growth in the Sunshine Coast, Darwin and Adelaide.
“There’s just so much digital infrastructure that needs to be built to support the growth of cloud and artificial intelligence,”
Mr Scroggie said, adding that NextDC was just starting to work with customers. To plan their infrastructure needs for generative AI, which were not include in the company’s forecasts.
The amount of new digital infrastructure that will need to be construct annually in Australia in order to support. The development of AI is only now beginning to become clear.
According to Mr. Scroggie. We believe that over time, the demand for digital infrastructure driven by the AI wave could grow. To be at least as huge as the cloud and possibly one, two, or even three times greater.
On Monday morning, shares of NextDC fell 6% to $12.81 before rising at lunch to $13.21. The company’s shares have increased by 47% so far this year.
One of the few ASX-listed businesses that investors.
Believe could profit from the rise in demand for the processing power and data storage needed to handle AI workloads is NextDC.
In the 12 months leading up to June 30, according to Mr. Scroggie, NextDC inked the most new contracts in company history, with customer counts rising 13% to 1820 and contracted utilisation up 47% to 122.2 megawatts.
For fiscal year, the company anticipates revenue in the $400 million to $415 million range and expects margins to grow beginning in the second half. As negotiated price increases filter through and power costs decline.
While Australian facility expenditures NextDC plans nearly $1b are anticipate to rise to between $12 million and $16 million. As a result of increases in labour numbers and investments.
Land bank sites for potential future development, underlying EBITDA is anticipate to be between $190 million and $200 million.
The earnings projection was lower than the market anticipated. Capital expenditure was greater, according to E&P Capital analyst Paul Mason. In a note to his clients, Mr. Mason continued.
The reasons for this are probably fine.
significantly higher start-up costs this year to build out a huge number of new facilities. As well as build-out the sales team further for Asian expansion.
Before the market has had a chance to process the figures, “we would anticipate the stock to possibly experience a little bit of immediate pressure from them.
We would anticipate that the stock would NextDC plans nearly $1b increase as soon as the market realised what it was looking at.
In order to build its first data centres in New Zealand and Malaysia. The firm purchased land in Auckland and Kuala Lumpur throughout the financial year.
Also, it expanded into new regional markets in Adelaide, Darwin, and Port Hedland.
In addition to its largest facility to date, M3, in Melbourne and a data center in the Pilbara to accommodate. Mining clients like BHP, NextDC opened its third Sydney data centre, S3, in October.