NextDC (NXT) Shares Fall 39.5% After Cutting 2027 Revenue to A$475-500M

NextDC (NXT), an Australian data center operator, saw its shares drop 39.5% following a significant cut to its fiscal 2027 earnings forecast. The company lowered its revenue guidance to between A$475 million and A$500 million, down from an earlier forecast of A$615 million to A$640 million. It also reduced its underlying EBITDA (earnings before interest, taxes, depreciation, and amortization) estimate to A$245 million to A$265 million from A$385 million to A$410 million.

The earnings downgrade stems from delayed power supply upgrades at NextDC's M3 data center in Melbourne, caused by local community opposition and stakeholder concerns. Electricity distributor Jemena, responsible for infrastructure upgrades, does not expect to resume work before February 2027 due to safety issues, restricted site access, and lack of local council consent pending further consultation. Citi noted these delays could impact earnings beyond fiscal 2027 because of postponed approvals and slow transformer upgrades.

The Australian government is responding to broader concerns about data center developments’ local impact by working on national standards. Treasurer Jim Chalmers emphasized welcoming investment in data centers and artificial intelligence infrastructure if aligned with national interest, while finalizing investment standards to address AI deployment concerns. NextDC shares have fallen for seven consecutive weeks and are set for an eighth week of decline. This matters for investors because the power supply delays directly reduce NextDC's revenue and earnings capacity for fiscal 2027, affecting expected returns.