NextDC initiates growth incentive plan to keep key talent

Publicly listed data centre services provider NextDC has devised a growth incentive plan (GIP) for executives as market demand for talent intensifies. 

NextDC chairman Doug Flynn said the market was experiencing record levels of demand, characterised by hyperscale clients seeking to secure larger and longer-term capacity deals globally. 

“Our customers consider their investments on a global basis, our competitors are largely global and as a result the market for talent is now largely global as well,” Flynn said. 

“New competitors have entered and continue to enter the market and look to hire existing management expertise wherever they can. 

“This is a high capex business requiring deep expertise, close engagement and trust with customers, as well as rigorous execution at every level to deliver for customers and shareholders.”

NextDC reported a total revenue decrease of 2 per cent to $205.5 million while net profit loss increased by $21.2 million to $42.7 million for the first half of FY25. 

The loss was primarily due entering into a new $2.9 billion syndicated debt agreement during the half-year under a new common terms platform to refinance its existing debt arrangement. 

The new facilities provide significant benefits, NextDC said, including additional flexibility to fund its longer-term growth ambitions through both the bank and bond markets, as well as material pricing reductions resulting in a significant improvement in the overall cost of funds. 

As a result of the refinance, the remaining unamortised transaction costs on the existing facilities of $15.9 million was written off in December 2024, along with the remaining unamortised balance of the modification gain of $10.6 million.

NextDC saw continued growth in contracted utilisation, which grew 18 per cent to 176MW and increase in underlying earnings before tax up 3 per cent to $105.4 million. 

“We are pleased to deliver another record result in 1H25, with the business continuing to exhibit solid growth across key metrics during this reporting period,” NextDC CEO and managing director Craig Scroggie said. 

“As the adoption of technologies like generative AI accelerates, NextDC is uniquely positioned to meet the growing demands of hyperscalers, our ICTpartners and our enterprise and government customers.”

Scroggie said it was well placed to capitalise on growth opportunities and support customers’ expanding needs in FY25 with a strong forward order book of 83 MW that will continue to ramp up throughout FY25 to FY29.

During the first half, NextDC invested $1 billion towards capital development projects including $353 million to purchase land for the development of S7 in Western Sydney. 

A1 Adelaide, D1 Darwin and S6 Sydney were also opened to customers, with S3 Sydney adding 16MW of built capacity to support contracted customer requirements, with a further 24MW in progress and the final 12MW of capacity now in planning.

6MW of built capacity was also added at M2 Melbourne to support customer contracts, with 18MW in progress and a further 20 MW+ in planning. 

Building expansion works are also underway at M3 Melbourne, with 13.5MW in progress and a further 50 MW+ in planning.

International expansion continues to progress, NextDC said with construction works commencing at KL1 Kuala Lumpur and planning works progressing at AK1 Auckland, along with identifying new potential data centre sites across Asia.