NextDC Retreats From Expansion as Power Delays Hit Melbourne Site

The Melbourne M3 site, located six miles west of the city center, hit a wall in September when local electricity distributors halted essential power upgrades due to safety concerns and community opposition. With work unlikely to resume before February, the company lost its near-term revenue projections tied to the facility. Chief Executive Craig Scroggie confirmed the company is now prioritizing only capacity already backed by customer contracts, effectively abandoning the previous timeline for the site’s expansion.

This cooling of ambition reflects broader market anxiety regarding the sustainability of debt-fueled infrastructure for artificial intelligence and cloud services. NextDC has lowered its fiscal 2027 revenue guidance to a range of A$475 million to A$500 million, down significantly from the A$615 million to A$640 million forecast issued in August. Underlying EBITDA guidance saw a similar reduction, dropping to a range of A$245 million to A$265 million. While the company intends to avoid equity raises, management is reviewing its portfolio and may look to recycle capital to maintain financial covenant compliance. Further details on the capital expenditure review are expected at the annual general meeting next month.