Nextdc Ltd (ASX: NXT) shares are halted so the business can carry out a $1.5 billion capital raising to fund significant growth.
Nextdc is one of the largest data centre operators in Australia, with a few locations internationally across Asia and New Zealand.
$2.2 billion growth plan
Nextdc announced a “transformational” update in the company’s contracted utilisation, with pro forma contracted utilisation at 31 March 2026 increasing by 60% (250MW) since December 2025 to 667MW.
The data centre business also said that its pro forma order book as at 31 March 2026 has increased by 83% (247MW) to 544MW over the same period.
In response to this big change in contracted utilisation and the accelerated deployment of the S4 data centre in Sydney, it’s going to do a capital raising of approximately $1.5 billion.
The capital raising will be a fully underwritten 1 for 5.4 pro-rata accelerated non-renounceable entitlement offer of new Nextdc shares. The offer price will be $12.70, representing a sizeable discount to the recent trading price.
It also said it would increase its hybrid securities offer by $700 million through a new delayed draw tranche which is designed to provide additional capital flexibility. Nextdc said La Caisse has made a binding commitment of A$1.7 billion to the hybrid securities offer.
Acceleration of Western Sydney developments
Nextdc said that Australian data centre demand continues to grow rapidly, underpinned by strong demand from hyperscale and AI customers.
S4 is expected to capture this growth opportunity and Nextdc is seekign to maximise value creation for Nextdc shareholders.
The development of S7 will follow in due course, with the goal of de-risking both projects ahead of any potential joint venture transactions with private capital partners from 2027.
What will this do for the company’s financials?
The business said that contracted EBITDA (EBITDA explained) is expected to be more than A$1 billion from existing contracts. That’s four times the mid-point of the FY26 EBITDA guidance of A$235 million. In other words, significant growth is expected. But, that’s EBITDA growth not net profit growth. Depreciation will be a big factor in its earnings.
Nextdc said it’s currently in discussions with various existing and potential customers, which are at various stages of progression.
The company said its FY26 capital expenditure has been increased to between A$2.7 billion to A3 billion, up from A$2.4 billion to A$2.7 billion.
Elevated capital expenditure is expected to be sustained in FY27 as well. It’s currently forecast to be A$5 billion.
Final thoughts on Nextdc shares
Overall, things are looking positive for the business. However, the business is investing heavily and I’m not sure how much net profit it will make in three years, five years and ten years from now.
For me, there are other ASX growth shares that could be better picks that aren’t having to invest billions to drive growth. Capital expenditure is still cash leaving through the door, it just takes a while for the profit statement to show that cost.
