Full Year 2026 NEXTDC Ltd Earnings Call

August 27, 2026

Speaker #1: Thank you for standing by. Welcome to the NEXTDC Limited Financial Year 2026 Results Announcement conference call. At this time, all participants are in listen-only mode.

Operator: Thank you for standing by. Welcome to NEXTDC Limited Financial Year 2026 Results Announcement Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Mr. Craig Scroggie, Chief Executive Officer and Managing Director. Please go ahead.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To answer questions during the session, you will need to press star-one-one on your telephone.

Speaker #1: Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mr. Craig Scroggi, Chief Executive Officer and Managing Director.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Emba, and good morning, ladies and gentlemen. Welcome to the NEXTDC results presentation for FY26. I'm joined today by our CFO, Oscar Tomaszewski.

Craig Scroggie: Thank you, Emma, and good morning, ladies and gentlemen, and welcome to the NEXTDC results presentation for FY26. I'm joined today by our CFO, Oskar Tomaszewski. Our results announcement presentation and annual report were lodged with the ASX overnight. I draw your attention to the forward-looking statements disclaimer in the presentation. We're beginning on slide 4. FY26 was the largest contracting year in NEXTDC's history. Contracted utilization tripled to 740 megawatts on a pro forma basis, and we exceeded guidance on both net revenue and underlying EBITDA. Net revenue of AUD 405 million was up 16% on FY25. Underlying EBITDA of AUD 248.8 million was up 15%. Contracted utilization increased 202% to 740 megawatts. Billing utilization increased 58% to 175 megawatts. Turning to slide 5. NEXTDC's forward order book hit a new high, now 565 megawatts on the back of a record sales year where we contracted 495 megawatts.

Craig Scroggie: Thank you, Emma, and good morning, ladies and gentlemen, and welcome to the NEXTDC results presentation for FY 2026. I'm joined today by our CFO, Oskar Tomaszewski. Our results announcement presentation and annual report were lodged with the ASX overnight. I draw your attention to the forward-looking statements disclaimer in the presentation. We're beginning on slide four. FY 2026 was the largest contracting year in NEXTDC's history. Contracted utilization tripled to 740MW on a pro forma basis, and we exceeded guidance on both net revenue and underlying EBITDA. Net revenue of AUD 405 million was up 16% on FY 2025. Underlying EBITDA of AUD 248.8 million was up 15%. Contracted utilization increased 202% to 740MW. Billing utilization increased 58% to 175MW. Turning to slide five.

Speaker #2: Our results announcement presentation and annual report will be lodged with the ASX overnight. I draw your attention to the forward-looking statements disclaimer in the presentation.

Speaker #2: We're beginning on slide 4. FY26 was the largest contracting year in NEXTDC's history. Contracted utilization tripled to 740 megawatts on a pro forma basis.

Speaker #2: And we exceeded guidance on both net revenue and underlying EBITDA. Net revenue of $405 million was up 16% on FY25. Underlying EBITDA of $248.8 million was up 15%.

Speaker #2: Contracted utilization increased 202% to 740 megawatts. Billing utilization increased 58% to 175 megawatts. Turning to slide 5, NEXTDC's forward order book hit a new high.

Craig Scroggie: NEXTDC's forward order book hit a new high, now 565MW on the back of a record sales year where we contracted 495MW.

Speaker #2: We now have 565 megawatts on the back of a record sales year, where we contracted 495 megawatts. Every megawatt in that forward order book is a binding customer contract.

Craig Scroggie: Every megawatt in that forward order book is a binding customer contract. Importantly, the forward order book will ramp into faster billing growth as data halls and delivers clients quicker than at any time in the company's history. With record revenue growth in FY27, with 197 megawatts of new billing activation as multiple cloud and AI deployments ramp up. Turning to slide 6. Our strong performance was highlighted by record key operating metrics. Net revenue, which is total revenue less direct costs, grew 16%. Billing utilization grew 58% during the year to 175 megawatts, and our forward order book grew to a record 565 megawatts, which will more than quadruple billing utilization to 740 megawatts by FY30, underwriting substantial organic revenue and EBITDA growth. We remain well capitalized to support our growth plans.

Craig Scroggie: Every megawatt in that forward order book is a binding customer contract. Importantly, the forward order book will ramp into faster billing growth as data halls and delivers clients quicker than at any time in the company's history. With record revenue growth in FY 2027, with 197MW of new billing activation as multiple cloud and AI deployments ramp up. Turning to slide six. Our strong performance was highlighted by record key operating metrics. Net revenue, which is total revenue less direct costs, grew 16%. Billing utilization grew 58% during the year to 175MW, and our forward order book grew to a record 565MW, which will more than quadruple billing utilization to 740MW by FY30, underwriting substantial organic revenue and EBITDA growth. We remain well capitalized to support our growth plans.

Speaker #2: Importantly, the forward order book will ramp into faster billing growth as data hauls are delivered to clients quicker than at peak times in company history.

Speaker #2: With record revenue growth in FY27, and 197 megawatts of new billing activation as multiple cloud and AI deployments ramp up. Turning to Slide 6, our strong performance was highlighted by record key operating metrics.

Speaker #2: Net revenue, which is total revenue less direct costs, grew 16%. Billing utilization grew 58% during the year to 175 megawatts, and our forward order book grew to a record 565 megawatts. This will more than quadruple billing utilization to 740 megawatts by FY30.

Speaker #2: Underwriting substantial organic revenue and EBITDA growth, we remain well capitalized to support our growth plans. Total assets of $10.2 billion, including $5.8 billion of property, plant and equipment, as well as $3.2 billion of investment properties.

Craig Scroggie: Total assets of AUD 10.2 billion, including AUD 5.8 billion of property, plant, and equipment, as well as AUD 3.2 billion of investment properties. We have available liquidity of AUD 8.7 billion, giving us substantial balance sheet flexibility to fund our committed pipeline. Our first asset revaluations were included this year for M3 and S4, increasing reported assets and improving reported gearing. Qualifying assets will be revalued annually. Any movements may be gains or losses. Our funding and capital strategy continues to mature. We raised AUD 9.75 billion in FY26, which included senior debt upsizing of AUD 5.8 billion, subordinated notes of AUD 750 million, hybrid securities of AUD 1.7 billion, and AUD 1.5 billion of new equity.

Craig Scroggie: Total assets of AUD 10.2 billion, including AUD 5.8 billion of property, plant, and equipment, as well as AUD 3.2 billion of investment properties. We have available liquidity of AUD 8.7 billion, giving us substantial balance sheet flexibility to fund our committed pipeline. Our first asset revaluations were included this year for M3 and S4, increasing reported assets and improving reported gearing. Qualifying assets will be revalued annually. Any movements may be gains or losses. Our funding and capital strategy continues to mature. We raised AUD 9.75 billion in FY 2026, which included senior debt upsizing of AUD 5.8 billion, subordinated notes of AUD 750 million, hybrid securities of AUD 1.7 billion, and AUD 1.5 billion of new equity.

Speaker #2: We have available liquidity of $8.7 billion, giving us substantial balance sheet flexibility to fund our committed pipeline. Our first asset revaluations were included this year for M3 and S4.

Speaker #2: Increasing reported assets and improving reported gearing. Qualifying assets will be revalued annually; any movements may be gains or losses. Our funding and capital strategy continues to mature.

Speaker #2: We raised $9.75 billion in FY26, which included a senior debt upsizing of $5.8 billion, subordinated notes of $750 million, hybrid securities of $1.7 billion, and $1.5 billion of new equity.

Speaker #2: Further capital initiatives are underway, including partnerships with third-party capital through joint venture structures for S4, S7, and M5, as those projects continue to secure new customer commitments, advance through key development milestones, and are further de-risked through a growing base of contracted revenues.

Craig Scroggie: Further capital initiatives are underway, including partnerships with third-party capital through joint venture structures for S4, S7, and M5 as those projects continue to secure new customer commitments, advance through key development milestones, and are further de-risked through a growing base of contracted revenues. We had another record development year. 42 megawatts were delivered at M3, and 12 delivered at M2. S4 is on track with its first slab on ground. Kuala Lumpur One opened to foundation customers, and our Edge network builds continue in Geelong, the Sunshine Coast, and Darwin. I will now hand over to Oskar to discuss the financial results in more detail.

Craig Scroggie: Further capital initiatives are underway, including partnerships with third-party capital through joint venture structures for S4, S7, and M5 as those projects continue to secure new customer commitments, advance through key development milestones, and are further de-risked through a growing base of contracted revenues. We had another record development year. 42MW were delivered at M3, and 12 delivered at M2. S4 is on track with its first slab on ground. Kuala Lumpur One opened to foundation customers, and our Edge network builds continue in Geelong, the Sunshine Coast, and Darwin. I will now hand over to Oskar to discuss the financial results in more detail.

Speaker #2: We had another record development year. Forty-two megawatts were delivered at M3, and twelve at M2. S4 is on track, with its first slab on ground.

Speaker #2: Kuala Lumpur One opened to foundation customers, and our edge network builds continue in Geelong, the Sunshine Coast, and Darwin. I'll now hand over to Oscar to discuss the financial results in more detail.

Speaker #3: Thank you, Craig. Let's now turn to slide 8, which provides a summary of our profit and loss for the year. The statutory results reflect total revenue of $496.5 million, up 16% on FY25, and net profit after tax of $82.1 million, which includes a $129 million fair value gain on investment properties, as well as the recognition of previously unrecognized tax losses.

Oskar Tomaszewski: Thank you, Craig. Let us now turn to slide 8, which provides a summary of our profit and loss for the year. The statutory results reflect total revenue of AUD 496.5 million, up 16% on FY25, and net profit after tax of AUD 82.1 million, which includes AUD 129 million fair value gain on investment properties, as well as the recognition of previously unrecognized tax losses. Our non-statutory highlights include net revenue, which was up 16% to AUD 405 million. Direct costs and power pass-through revenues rose in line with customer consumption. Our facility costs grew AUD 11.3 million or 17%, with targeted investments ahead of record capacity expansion, including land acquisitions, headcounts across new and expanded facilities, as well as maintenance costs across capacity additions and expansions.

Oskar Tomaszewski: Thank you, Craig. Let us now turn to slide 8, which provides a summary of our profit and loss for the year. The statutory results reflect total revenue of AUD 496.5 million, up 16% on FY 2025, and net profit after tax of AUD 82.1 million, which includes AUD 129 million fair value gain on investment properties, as well as the recognition of previously unrecognized tax losses. Our non-statutory highlights include net revenue, which was up 16% to AUD 405 million. Direct costs and power pass-through revenues rose in line with customer consumption. Our facility costs grew AUD 11.3 million or 17%, with targeted investments ahead of record capacity expansion, including land acquisitions, headcounts across new and expanded facilities, as well as maintenance costs across capacity additions and expansions.

Speaker #3: Our non-statutory highlights include net revenue, which was up 16% to $405 million. Direct costs and power pass-through revenues rose in line with customer consumption. Our facility costs grew $11.3 million, or 17%, with targeted investments ahead of record capacity expansion, including land acquisitions, headcount across new and expanded facilities, as well as maintenance costs across capacity additions and expansions.

Speaker #3: Our corporate costs increased by $11.1 million, or 17%, as we invest in systems and people to support new site expansion and accelerating customer deployments.

Oskar Tomaszewski: Our corporate costs increased by AUD 11.1 million or 17% as we invest in systems and people to support new site expansion and accelerating customer deployments with over 400 megawatts of build capacity growth expected across FY27 and 28. Underlying EBITDA was up 15% to AUD 248.8 million, almost 4% above the top end of the guidance range. This year, resulting from two of our material customer contract wins, we have an accounting reclassification and a measurement policy change, which we will talk to later in the presentation. On to slide 9. Net revenue growth accelerated in the second half, with strong growth expected to continue to FY27 and beyond. Underlying EBITDA growth also accelerated with the company's core operating platform now ready to deliver operating leverage and record earnings growth. Slide 10 sets out our revenue per unit metrics.

Oskar Tomaszewski: Our corporate costs increased by AUD 11.1 million or 17% as we invest in systems and people to support new site expansion and accelerating customer deployments with over 400MW of build capacity growth expected across FY 2027 and 28. Underlying EBITDA was up 15% to AUD 248.8 million, almost 4% above the top end of the guidance range. This year, resulting from two of our material customer contract wins, we have an accounting reclassification and a measurement policy change, which we will talk to later in the presentation. On to slide 9. Net revenue growth accelerated in the second half, with strong growth expected to continue to FY 2027 and beyond. Underlying EBITDA growth also accelerated with the company's core operating platform now ready to deliver operating leverage and record earnings growth. Slide 10 sets out our revenue per unit metrics.

Speaker #3: With over 400 megawatts of build capacity growth expected across FY27 and FY28, underlying EBITDA was up 15% to $248.8 million, almost 4% above the top end of the guidance range.

Speaker #3: This year, resulting from two of our material customer contract wins, we have an accounting reclassification and a measurement policy change, which we'll talk to later in the presentation.

Speaker #3: On to slide 9. Net revenue growth accelerated in the second half, with strong growth expected to continue to FY27 and beyond. Underlying EBITDA growth also accelerated, with the company's core operating platform now ready to deliver operating leverage and record earnings growth.

Speaker #3: Slide 10 sets out our revenue per unit metrics. The blended rate per megawatt reflects a deliberate shift to more efficient hyperscale and AI deployments.

Oskar Tomaszewski: The blended rate per megawatt reflects a deliberate shift to more efficient hyperscale and AI deployments. These reflect a lower annual per megawatt rate on a 10 to 15 year initial contract term with extension options up to 35 years. Rapid growth in billing from high-density hyperscale is rapidly changing the revenue mix, with more than 70% of billing capacity now coming from hyperscale workloads. Our new and existing facility expansions are increasingly using highly efficient cooling technologies, including liquid to chip, which is driving down the cost per megawatt to deliver capacity. And higher power volumes with more efficient cost structures are driving returns, with new hyperscale and AI deployments targeting over 10% yield on cost. Slide 11 summarizes our balance sheet and liquidity position.

Speaker #3: These reflect a lower annual per-megawatt rate on a 10- to 15-year initial contract term, with extension options out to up to 35 years.

Speaker #3: Rapid growth in billing from high-density hyperscale is rapidly changing the revenue mix, with more than 70% of billing capacity now coming from hyperscale workloads.

Speaker #3: Our new and existing facility expansions are increasingly using highly efficient cooling technologies, including liquid-to-chip, which is driving down the cost per megawatt to deliver capacity.

Speaker #3: Higher power volumes with more efficient cost structures are driving returns, with new hyperscale and AI deployments targeting over 10% yield on cost. Slide 11 summarizes our balance sheet and liquidity position.

Speaker #3: At 30 June, NEXTDC had property, plant, and equipment with a carrying value of $5.8 billion, as well as investment properties with a carrying value of $3.2 billion.

Oskar Tomaszewski: At 30 June, NEXTDC had property, plant, and equipment with a carrying value of AUD 5.8 billion, as well as investment properties with a carrying value of AUD 3.2 billion. The investment property values come from revaluing our M3 and S4 data center assets. We will now have periodic property valuations for qualifying assets going forward, with those assets revalued at least annually. The change to investment property accounting also reduces depreciation and introduces straight-line revenue recognition for the relevant sites going forward. We have included significant detail on the accounting policy changes and the valuation process and governance in today's results materials. Our net assets stand at approximately AUD 6.1 billion, and NEXTDC has approximately AUD 8.7 billion of liquidity as we completed several capital initiatives during FY26, including those previously mentioned by Craig. Slide 12 details our debt funding profile.

Oskar Tomaszewski: At 30 June, NEXTDC had property, plant, and equipment with a carrying value of AUD 5.8 billion, as well as investment properties with a carrying value of AUD 3.2 billion. The investment property values come from revaluing our M3 and S4 data center assets. We will now have periodic property valuations for qualifying assets going forward, with those assets revalued at least annually. The change to investment property accounting also reduces depreciation and introduces straight-line revenue recognition for the relevant sites going forward. We have included significant detail on the accounting policy changes and the valuation process and governance in today's results materials. Our net assets stand at approximately AUD 6.1 billion, and NEXTDC has approximately AUD 8.7 billion of liquidity as we completed several capital initiatives during FY 2026, including those previously mentioned by Craig. Slide 12 details our debt funding profile.

Speaker #3: The investment property values come from revaluing our M3 and S4 data center assets. We will now have periodic property valuations for qualifying assets going forward, with those assets revalued at least annually.

Speaker #3: The change to investment property accounting also reduces depreciation and introduces straight-line revenue recognition for the relevant sites going forward. We have included significant detail on the accounting policy changes, as well as the valuation process and governance, in today's results materials.

Speaker #3: On net assets, we stand at approximately $6.1 billion, and NEXTDC has approximately $8.7 billion of liquidity, as we completed several capital initiatives during FY26, including those previously mentioned by Craig.

Speaker #3: Slide 12 details our debt funding profile. This slide illustrates our evolving capital structure, detailing where the $8.7 billion of available liquidity comes from, and confirming all drawn senior debt at 30 June and subordinated capital is fully hedged.

Oskar Tomaszewski: This slide illustrates our evolving capital structure, detailing where the AUD 8.7 billion of available liquidity comes from and confirming all drawn senior debt at 32 and subordinated capital is fully hedged. Importantly, due to the company's credit standing, it is no longer subject to any leverage ratio covenants. Our debt facilities are currently subject to a gearing ratio and an interest cover ratio, where contracted revenues, not yet billing, are included in EBITDA for covenant testing purposes. Slide 13 details our debt funding maturity profile. Across our diversified debt capital stack, our facilities have a weighted average maturity of approximately five years, with no debt maturities until FY30 and a staggered maturity profile beyond that year. Slide 14 details our disciplined approach to capital.

Speaker #3: Importantly, due to the company's credit standing, it is no longer subject to any leverage ratio covenants. Our debt facilities are currently subject to a gearing ratio and an interest cover ratio, where contracted revenues not yet billed are included in EBITDA for covenant testing purposes.

Speaker #3: Slide 13 details our debt funding maturity profile. Across our diversified debt capital stack, our facilities have a weighted average maturity of approximately five years, with no debt maturities until FY30, and a staggered maturity profile beyond that year.

Speaker #3: Slide 14 details our disciplined approach to capital. In the second half, NEXTDC has completed a $2.3 billion senior debt upsizing, and issuance of hybrid securities with $1.7 billion of face value, providing flexible long-term capital to support growth.

Oskar Tomaszewski: In the second half, NEXTDC has completed a AUD 2.3 billion senior debt upsizing, issuance of hybrid securities with AUD 1.7 billion of face value, providing flexible long-term capital to support growth, subordinated notes of AUD 750 million, broadening the capital stack to include a new pool of investors, and completed a pro-rata entitlement offer of AUD 1.5 billion, which was extremely well-supported. Additional capital initiatives are underway, including, but not limited to, project financing, where S4 and S7 are expected to transition to a ring-fenced asset-level debt structure over time ahead of formation of JVCo. JVCo itself, where we continue to evaluate capital partnership options across our development portfolio.

Speaker #3: Subordinated notes of $750 million, broadening the capital stack to include a new pool of investors, and completed a pro-rata entitlement offer of $1.5 billion, which was extremely well supported.

Speaker #3: Additional capital initiatives are underway, including but not limited to project financing, where S4 and S7 are expected to transition to a ring-fenced, asset-level debt structure over time ahead of the formation of JV Co, and JV Co itself, where we continue to evaluate capital partnership options across our development portfolio.

Speaker #3: We believe the combination of existing liquidity, additional debt and hybrid capacity as financing options in flight, as well as selective asset capital recycling initiatives, provides us with multiple pathways to fund the contracted pipeline while protecting shareholder value.

Oskar Tomaszewski: We believe the combination of existing liquidity, additional debt and hybrid capacity, other financing options in flight, as well as selective asset capital recycling initiatives, provides us with multiple pathways to fund the contracted pipeline while protecting shareholder value. I will now hand you back across to Craig to go through our business performance and outlook for the 2027 financial year.

Speaker #3: I'll now hand you back across to Craig to go through our business performance and outlook for the 2027 financial year.

Speaker #2: Thank you, Oscar. Turning now to slide 16. Customers have now contracted 740 megawatts. We have built 288. Demand is running 2.5 times ahead of everything we have ever delivered.

Craig Scroggie: Thank you, Oskar. Turning now to slide 16. Customers have now contracted 740 megawatts. We have built 288. Demand is running 2.5 times ahead of everything we have ever delivered, and less than a quarter of what is contracted in billing today. That gap is not options or reservations. It is signed customer contracts, and it converts to revenue as we deliver. Billing utilization grew 58% to 175 megawatts this year, and the contracts already signed take it to 740 by FY-30. Billing more than quadruples from here. Turning to slide 17, our non-financial metrics. The breakdown of contracted capacity by customer category shows 95% of our capacity is now contracted across multiple key cloud and AI customers. These customers are the key driver of density and scale, delivering operational and cost efficiency and improving returns.

Craig Scroggie: Thank you, Oskar. Turning now to slide 16. Customers have now contracted 740MW. We have built 288. Demand is running 2.5 times ahead of everything we have ever delivered, and less than a quarter of what is contracted in billing today. That gap is not options or reservations. It is signed customer contracts, and it converts to revenue as we deliver. Billing utilization grew 58% to 175MW this year, and the contracts already signed take it to 740 by FY-30. Billing more than quadruples from here. Turning to slide 17, our non-financial metrics. The breakdown of contracted capacity by customer category shows 95% of our capacity is now contracted across multiple key cloud and AI customers. These customers are the key driver of density and scale, delivering operational and cost efficiency and improving returns.

Speaker #2: Unless than a quarter of what is contracted in billing today. That gap is not options or reservations—it is signed customer contracts, and it converts to revenue as we deliver.

Speaker #2: Billing utilization grew 58% to 175 megawatts this year, and the contracts already signed take it to 740 by FY30. Billing more than quadruples from here.

Speaker #2: Turning to slide 17, our non-financial metrics. The breakdown of contracted capacity by customer category shows that 95% of our capacity is now contracted across multiple key cloud and AI customers.

Speaker #2: These customers are the key driver of density and scale, delivering operational and cost efficiency and improving returns. Interconnection by customer category shows the ecosystem is built on key network and provider partners, as well as enterprise and government customers.

Craig Scroggie: Interconnection by customer category shows the ecosystem is built on key network and provider partners, as well as enterprise and government customers, with ICT providers leveraging AI and cloud to deliver critical services to the enterprise. Slide 18 sets out our capacity and utilization. We now have a total planned capacity of over 3 gigawatts across our land bank portfolio of facilities that are either open, in development, or development ready, subject to development approval. S4 had another capacity upgrade this H1 to 365 megawatts of IT load. As customers are contracting higher density deployments, often for artificial intelligence, we now expect to deliver more billable IT power in the same size footprint. AI is also accelerating the speed of customer deployments, significantly shortening the time to cash and cash generation, supporting a faster pace of growth in the business.

Craig Scroggie: Interconnection by customer category shows the ecosystem is built on key network and provider partners, as well as enterprise and government customers, with ICT providers leveraging AI and cloud to deliver critical services to the enterprise. Slide 18 sets out our capacity and utilization. We now have a total planned capacity of over 3 gigawatts across our land bank portfolio of facilities that are either open, in development, or development ready, subject to development approval. S4 had another capacity upgrade this H1 to 365MW of IT load. As customers are contracting higher density deployments, often for artificial intelligence, we now expect to deliver more billable IT power in the same size footprint. AI is also accelerating the speed of customer deployments, significantly shortening the time to cash and cash generation, supporting a faster pace of growth in the business.

Speaker #2: With ICT providers leveraging AI and cloud to deliver critical services to the enterprise, slide 18 sets out our capacity and utilization. We now have a total planned capacity of over 3 gigawatts across our land bank portfolio of facilities that are either open, in development, or development ready, subject to development approval.

Speaker #2: S4 had another capacity upgrade this half to 365 megawatts of IT load. As customers are contracting higher-density deployments, often for artificial intelligence, we now expect to deliver more billable IT power in the same size footprint.

Speaker #2: AI is also accelerating the speed of climate deployments, significantly built in the time and cash generation—supporting a faster pace of growth in the business.

Speaker #2: Our construction activity is matching the faster pace of customer deployments. Five hundred thirty-seven megawatts of built capacity is currently in progress, and a further 130 megawatts is in plan.

Craig Scroggie: Construction activity is matching the faster pace of customer deployments. 537 megawatts of built capacity is currently in progress, and a further 130 megawatts is in plan. In New South Wales, we added 16 megawatts at S3, the last 12 megawatts for S3, 10.8 megawatts for S6, and the first 250 megawatts for S4 is now under construction. In Victoria, we added 12 megawatts at M2 and 42 megawatts at M3. Both facilities have their remaining capacity to complete now in progress. M4's early works have commenced with 10 megawatts in progress. Expansion works are in progress across key metro and edge locations backed by key customer wins, including material enterprise and government customers, as well as strategic network cable landing station infrastructure and satellite partners. KL1 opened to a foundation customer this year with 10 megawatts.

Craig Scroggie: Construction activity is matching the faster pace of customer deployments. 537MW of built capacity is currently in progress, and a further 130MW is in plan. In New South Wales, we added 16MW at S3, the last 12MW for S3, 10.8MW for S6, and the first 250MW for S4 is now under construction. In Victoria, we added 12MW at M2 and 42MW at M3. Both facilities have their remaining capacity to complete now in progress. M4's early works have commenced with 10MW in progress. Expansion works are in progress across key metro and edge locations backed by key customer wins, including material enterprise and government customers, as well as strategic network cable landing station infrastructure and satellite partners. KL1 opened to a foundation customer this year with 10MW.

Speaker #2: In New South Wales, we added 16 megawatts at S3—the last 12 megawatts for S3, 10.8 megawatts for S6, and the first 250 megawatts for S4 is now under construction.

Speaker #2: In Victoria, we added 12 megawatts at M2 and 42 megawatts at M3. Both facilities have their remaining capacity to complete now in progress. M4's early works have commenced, with 10 megawatts in progress.

Speaker #2: Expansion works are in progress across key metro and edge locations, backed by key customer wins—including material enterprise and government customers—as well as strategic network, cable landing station infrastructure, and satellite partners.

Speaker #2: KL1 opened to a foundation customer this year with 10 megawatts. It has a further 15 megawatts in progress, and another 15 in plan. In Japan, Tokyo 1's construction works have commenced, with early excavation and retaining construction development underway.

Craig Scroggie: It has a further 15 megawatts in progress and another 15 in plan. In Japan, Tokyo 1's construction works have commenced with early excavation and retaining construction development underway. Disciplined site selection activities continue for additional sites across Asia. On slide 20, we provide a summary of our ESG highlights. As the data center landscape continues to grow as a major feature in our landscape, our focus on sustainability is crucial. With cloud and AI demand exploding, powering digital infrastructure growth sustainably is critical. This year, we published our first sustainability report under AASB S2. S2 Sydney received the Uptime Institute Sustainability Assessment Award. M3 is running 27% below its embodied carbon baseline, and our construction partners achieved waste diversion of 94.7% at M3. On slide 21, we provide a summary on our safety highlights.

Craig Scroggie: It has a further 15MW in progress and another 15 in plan. In Japan, Tokyo 1's construction works have commenced with early excavation and retaining construction development underway. Disciplined site selection activities continue for additional sites across Asia. On slide 20, we provide a summary of our ESG highlights. As the data center landscape continues to grow as a major feature in our landscape, our focus on sustainability is crucial. With cloud and AI demand exploding, powering digital infrastructure growth sustainably is critical. This year, we published our first sustainability report under AASB S2. S2 Sydney received the Uptime Institute Sustainability Assessment Award. M3 is running 27% below its embodied carbon baseline, and our construction partners achieved waste diversion of 94.7% at M3. On slide 21, we provide a summary on our safety highlights.

Speaker #2: Discipline site selection activities continue for additional sites across Asia. On slide 20, we provide a summary of our ESG highlights. As the data center landscape continues to grow as a major feature in our landscape, our focus on sustainability is crucial.

Speaker #2: With cloud and AI demand exploding, powering digital infrastructure growth sustainably is critical. This year, we published our first sustainability report under AASB S2. S2 Sydney received the UPCHIME Institute Sustainability Assessment Award. M3 is running 27% below its embodied carbon baseline, and our construction partners achieved waste diversion of 94.7% at M3.

Speaker #2: On slide 21, we provide a summary of our safety highlights. As our national fleet of mission-critical infrastructure assets continues to grow in size, so too does the importance of keeping our workforce safe.

Craig Scroggie: As our national fleet of mission-critical infrastructure assets continues to grow in size, so too does the importance of keeping our workforce safe. Across a record construction program, we delivered a construction LTIFR of 0.3 and an operational LTIFR of 2.2, both well below industry benchmarks. On slide 23, before I turn to guidance, a comment on the proposed energy reforms in New South Wales and at the federal government level. These proposals apply at the point of new grid connection and planning approval. Our operating portfolio and the entire 565-megawatt forward order book are unaffected. We have written confirmation from Transgrid that its new capacity allocation policy does not apply to S4. None of these proposals are law yet, and we are engaged in every consultation, including chairing the industry's energy policy and technical committee.

Speaker #2: Across our record construction program, we've delivered a construction LTIFA of 0.3 and an operational LTIFA of 2.2, both well below industry benchmarks. On slide 23, before I turn to guidance, a comment on the proposed energy reforms in New South Wales and at the federal government level.

Speaker #2: These proposals apply at the point of new grid connection and planning approval. Our operating portfolio and the entire 565-megawatt forward order book are unaffected.

Speaker #2: And we have written confirmation from Transgrid that its new capacity allocation policy does not apply to S4. None of these proposals are law yet, and we are engaged in every consultation, including chairing the industry's energy policy and technical committee.

Speaker #2: We expect these reforms to play to our strengths, and our FY27 capital expenditure guidance allows for these matters. Turning to slide 23, and our FY27 guidance.

Craig Scroggie: We expect these reforms to play to our strengths, and our FY27 capital expenditure guidance allows for these matters. Turning to slide 23 and our FY27 guidance. We are pleased to provide our revenue and earnings guidance for FY27 with net revenue of AUD 615 to AUD 640 million, reflecting annual growth of more than 50%. The forward order book of 565 megawatts is now accelerating its billing ramp with 197 megawatts of billing conversion in FY27 and a further 221 megawatts in FY28. NEXTDC's national metro footprint positions us for AI imprinting capability, where sovereignty and data gravity require workloads to colocate with enterprise and government. Underlying EBITDA of AUD 385 to AUD 410 million as we make key investments deliver a record increase in data center capacity in line with contracted customer commitments.

Craig Scroggie: We expect these reforms to play to our strengths, and our FY 2027 capital expenditure guidance allows for these matters. Turning to slide 23 and our FY 2027 guidance. We are pleased to provide our revenue and earnings guidance for FY 2027 with net revenue of AUD 615 to AUD 640 million, reflecting annual growth of more than 50%. The forward order book of 565MW is now accelerating its billing ramp with 197MW of billing conversion in FY 2027 and a further 221MW in FY28. NEXTDC's national metro footprint positions us for AI imprinting capability, where sovereignty and data gravity require workloads to colocate with enterprise and government. Underlying EBITDA of AUD 385 to AUD 410 million as we make key investments deliver a record increase in data center capacity in line with contracted customer commitments.

Speaker #2: We are pleased to provide our revenue and earnings guidance for FY27, with net revenue of $615 to $640 million, reflecting annual growth of more than 50%.

Speaker #2: The forward order book of 565 megawatts is now accelerating its billing ramp, with 197 megawatts of billing conversion in FY27, and a further 221 megawatts in FY28.

Speaker #2: NEXTDC's national metro footprint positions us for AI inferencing capability, where sovereignty and data gravity require workloads to co-locate with enterprise and government. Underlying EBITDA of $385 to $410 million, as we make key investments to deliver a record increase in data center capacity in line with contracted customer commitments.

Speaker #2: Operating leverage expected in FY27 is accelerating in line with the conversion of the forward order book, driving rapid near-term earnings growth. Total capital expenditure for the year is expected to be between $5.25 and $5.75 billion, as we accelerate investment following 495 megawatts of new contract wins in FY26.

Craig Scroggie: Operating leverage expected in FY27 is accelerating in line with the conversion of the forward order book, driving rapid near-term earnings growth. Total capital expenditure for the year is expected to be between AUD 5.25 and AUD 5.75 billion, as we accelerate investment following 495 megawatts of new contract wins in FY26. Important to note, inside this capital expenditure forecast, we estimate AUD 500 million of reimbursable customer fit out. 537 megawatts of built capacity is under development, in line with contracted capacity. Accelerated expansion works for M2, M3, KL1, and S4 are all on schedule. Early works for M4 are in progress, and S5 is expected to commence construction in FY27. Strategic metro and edge development continues across all our sites, supporting enterprise, government, and critical national network infrastructure with colocation, inferencing, satellite, and cable landing station capability featuring strongly.

Craig Scroggie: Operating leverage expected in FY 2027 is accelerating in line with the conversion of the forward order book, driving rapid near-term earnings growth. Total capital expenditure for the year is expected to be between AUD 5.25 and AUD 5.75 billion, as we accelerate investment following 495MW of new contract wins in FY 2026. Important to note, inside this capital expenditure forecast, we estimate AUD 500 million of reimbursable customer fit out. 537MW of built capacity is under development, in line with contracted capacity. Accelerated expansion works for M2, M3, KL1, and S4 are all on schedule. Early works for M4 are in progress, and S5 is expected to commence construction in FY 2027. Strategic metro and edge development continues across all our sites, supporting enterprise, government, and critical national network infrastructure with colocation, inferencing, satellite, and cable landing station capability featuring strongly.

Speaker #2: It's important to note, inside this capital expenditure forecast, we estimate $500 million of reimbursable customer fit-out. 537 megawatts of built capacity is under development, in line with contracted capacity.

Speaker #2: Accelerated expansion works for M2, M3, KL1, and S4 are all on schedule. Early works for M4 are in progress, and S5 is expected to commence construction in FY27.

Speaker #2: Strategic metro and edge development continues across all our sites, supporting enterprise, government, and critical national network infrastructure with co-location, inferencing, satellite, and cable landing station capability featuring strongly.

Speaker #2: In FY27, we signed record contracts, setting us up for record revenue and earnings growth. The operating platform is now in place, and it positions the company to scale materially through '28 and beyond.

Craig Scroggie: In FY27, we signed record contracts, setting us up for a record revenue and earnings growth. The operating platform is now in place, and it positions the company to scale materially through 2028 and beyond. Demand from both established hyperscale and emerging AI customers continues at a scale and pace that creates an enormous opportunity for the business. As AI adoption moves from experimentation into production, demand is no longer the question. Demand is shifting towards inference. That inference needs to sit close to the enterprise and government data it draws on. NEXTDC's metro presence positions us for that shift. The infrastructure being built today underpins the next decade of productivity growth, and NEXTDC is proud to be building that platform at scale, at speed, safely, securely and sustainably. Amber, we can now open the line for questions.

Craig Scroggie: In FY 2027, we signed record contracts, setting us up for a record revenue and earnings growth. The operating platform is now in place, and it positions the company to scale materially through 2028 and beyond. Demand from both established hyperscale and emerging AI customers continues at a scale and pace that creates an enormous opportunity for the business. As AI adoption moves from experimentation into production, demand is no longer the question. Demand is shifting towards inference. That inference needs to sit close to the enterprise and government data it draws on. NEXTDC's metro presence positions us for that shift. The infrastructure being built today underpins the next decade of productivity growth, and NEXTDC is proud to be building that platform at scale, at speed, safely, securely and sustainably. Amber, we can now open the line for questions.

Speaker #2: Demand from both established hyperscale and emerging AI customers continues at a scale and pace that creates an enormous opportunity for the business. As AI adoption moves from experimentation into production, demand is no longer the question.

Speaker #2: Demand is shifting towards inference. That inference needs to sit close to the enterprise and government data it draws on, and NEXTDC's metro presence positions us for that shift.

Speaker #2: The infrastructure being built today underpins the next decade of productivity growth, and NEXTDC is proud to be building that platform—at scale, at speed, safely, securely, and sustainably.

Speaker #2: Ember, we can now open the line for questions.

Speaker #3: Thank you. As a reminder, to use our suggestion, you will need to press star 11 on your telephone. If you would like to cancel your request, please press star 11 again.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. If you would like to cancel your request, please press star one one again. Please stand by while we compile the Q&A roster. A moment for our first question. Our first question comes from the line of Eric Choi from Barrenjoey. Please ask your question, Eric. Your line is open.

Speaker #3: Please stand by while we compile the Q&A roster. A moment for our first question. And our first question comes from the line of Eric Choi from Barrenjoey.

Speaker #3: Please ask your question, Eric. Your line is open.

Speaker #4: Oh, hey. Good morning, team. I heard a few questions. Thanks very much. The first one: I'm trying to use the new info you've given us to work out what the true value of the $9.2 billion that you've historically spent on land, building, and fit-out is.

Eric Choi: Oh, hey. Good morning, team. I had a few questions. Thanks very much. The first one, I am just going to use the new info you have given us to work out what the true value of the AUD 9.2 billion that you have historically spent on land building and fit out is. Specifically, you have said your hyperscale yield on cost is 10% plus. DC cap rates are usually 6% to 7%. So if I put my REIT hat on, it sort of suggests you are generating a 1.5 times development spread on every dollar that you deploy. So again, just for a REIT investor lens, the value of what you have already spent, that could be AUD 14 billion before I add future builds and the value of the new platform. So maybe for Oskar or Craig, is that broadly correct?

Speaker #4: And specifically, you've said your hyperscale yield on cost is 10% plus. Data center cap rates are usually 6% to 7%. So if I put my REIT hat on, it sort of suggests you're generating a 1.5 times development spread on every dollar that you deploy.

Speaker #4: So again, just from a REIT investor lens, the value of what you have already spent—that could be $14 billion—before I add future builds and the value of the platform.

Speaker #4: So maybe for Oscar or Craig, is that broadly correct? Because I'm also conscious I might be undercooking that development spread, because you've got some other historic projects like S1 and M1 in that base as well.

Eric Choi: Because I am also conscious I might be undercooking that development spread because you have got some other historic projects like S1 and M1 in that base as well. So that is the first one.

Speaker #4: So that's the first one.

Speaker #2: Thanks, Eric. As you've pointed out, those numbers, I think, are directionally right. I think that math is reasonable. I would just note that the yield on cost is a forward-looking estimate, so it won't include, obviously, the higher-yielding historical co-location business, but is focused on our expectations as it relates to the entire development for these hyperscale and AI deployments in the future.

Craig Scroggie: Thanks, Eric. As you pointed out, those numbers, I think, are directionally right. I think that math is reasonable. I would just note that the yield on cost is a forward-looking estimate, so it will not include, obviously, the higher-yielding historical colocation business, but is focused on our expectations as it relates to the entire development for these hyperscale and AI deployments in the future.

Speaker #4: Awesome. Can I take it one step further? Craig, obviously, that excludes the value of your pipeline. If I just hone in on the S4 and S7 portion of that pipeline, you're going to spend $15 billion of CapEx on that. Some rough math suggests that project could be worth $23 billion once complete.

Eric Choi: Awesome. Can I take it one step further, Craig? Obviously, that excludes the value of your pipeline. If I just hone in on the S4 and S7 portion of that pipeline, you are going to spend AUD 15 billion of CapEx on that. Same rough math suggests that project could be worth AUD 23 billion once complete. I think you previously said you are going to have AUD 10 billion of debt for that. If you take AUD 10 billion of debt off, assuming you guys have a 20% piece of the residual equity, it suggests those projects could be worth AUD 2 billion to AUD 3 billion for you guys, pre any management fees, obviously a future value. Sorry, can I just check that is broadly in the zone?

Speaker #4: So I think you've previously said you're going to have $10 billion of debt for that. But if you take $10 billion of debt off, assuming you guys have a 20% piece of the residual equity, it suggests those projects could be worth $2 to $3 billion for you guys.

Speaker #4: Pre any management fees, obviously, a future value—sorry, can I just check that broadly? In the zone.

Speaker #2: I think your comments, Eric, on S4 and S7 capital requirements are reasonable. The one thing I would make clear is that we have made no final decisions in relation to the structure of JV Co, so the commentary regarding 20% is not decided.

Craig Scroggie: I think your comments, Eric, on S4 and S7 capital requirements are reasonable. The one thing I would make clear is that we have made no final decision in relation to the structure of JVCo. The commentary regarding 20% is not decided based on the conversations with the partners that we continue to undertake. There are many and varied structures that range from a number of different percentages. I would just caution you to note that whilst 20% may be one end of the spectrum, there are plenty of other options and alternatives as it relates to the considerations on JVCo. I think that your S4 and S7 commentary is reasonable, but I would just note that no decisions on the final equity or management structure in relation to JVCo have been made, and they remain under negotiation as part of our JVCo review at this point in time.

Speaker #2: Based on the conversations with the partners that we continue to undertake, there are many and varied structures that range from a number of different percentages.

Speaker #2: So, I would just caution you to note that, whilst 20% may be one end of the spectrum, there are plenty of other options and alternatives as it relates to the considerations on JV Co.

Speaker #2: So, I think that your S4 and S7 commentary is reasonable, but I would just note that no decisions on the final relation to JV Co have been made, and they remain under negotiation as part of our JV Co review at this point in time.

Craig Scroggie: I think that your S4 and S7 commentary is reasonable, but I would just note that no decisions on the final equity or management structure in relation to JVCo have been made, and they remain under negotiation as part of our JVCo review at this point in time.

Speaker #4: Thanks so much for being helpful, Craig. While I'm annoying you with so many numbers, can I just fire you one last one, which is on slide five? You're explicitly guiding to about $400 million of EBITDA in FY27.

Eric Choi: Thanks so much for being helpful, Craig. While I am annoying you with so many numbers, can I just fire you one last one, which is-

Craig Scroggie: Sure

Eric Choi: on slide 5. You're explicitly guiding to about AUD 400 million of EBITDA in FY27. If I just take slide 5 and assume you're adding megawatts at, I don't know, 1.5 to 2 million, is that kind of implying a AUD 700 to 800 million outcome in '28 and then maybe close to AUD 1 billion in FY29? Just ballpark.

Eric Choi: on slide 5. You're explicitly guiding to about AUD 400 million of EBITDA in FY 2027. If I just take slide 5 and assume you're addingMW at, I don't know, 1.5 to 2 million, is that kind of implying a AUD 700 to 800 million outcome in '28 and then maybe close to AUD 1 billion in FY29? Just ballpark.

Speaker #4: If I just take slide five and assume you're adding megawatts at, I don't know, $1.5 to $2 million, is that kind of implying a $700 to $800 million outcome in '28 and then maybe close to a billion in FY29?

Speaker #4: Just ballpark.

Craig Scroggie: Again, I won't endorse your number, but I will say that I think it's directionally right. The key thing to watch will be the shape of the slope and how quickly revenue is activated in '27 and '28. So whilst we have an extremely high degree of certainty over the '27 forecast and revenue and the CapEx that will flow to support it, the '28 number, we deliberately don't give out years because as the program develops, if we see the opportunity to accelerate the delivery program, that may mean that we can activate capacity earlier, depending on the progress of the site development. Again, I think your numbers are directionally reasonable. Difficult for us to give a firm number on '28 because it is subject to how fast the construction program is able to progress in FY27. One year is a very long time in our business year.

Craig Scroggie: Again, I won't endorse your number, but I will say that I think it's directionally right. The key thing to watch will be the shape of the slope and how quickly revenue is activated in '27 and '28. So whilst we have an extremely high degree of certainty over the '27 forecast and revenue and the CapEx that will flow to support it, the '28 number, we deliberately don't give out years because as the program develops, if we see the opportunity to accelerate the delivery program, that may mean that we can activate capacity earlier, depending on the progress of the site development. Again, I think your numbers are directionally reasonable. Difficult for us to give a firm number on '28 because it is subject to how fast the construction program is able to progress in FY 2027. One year is a very long time in our business year.

Speaker #2: Again, I won't endorse your number, but I will say that I think it's directionally right. The key thing to watch will be the shape of the slope and how quickly revenue is activated in '27 and '28.

Speaker #2: So, whilst we have an extremely high degree of certainty over the '27 forecast and revenue, and the CapEx that will flow to support it, the '28 number—we deliberately don't give out years—because as the program develops, if we see the opportunity to accelerate the delivery program, that may mean that we can activate capacity earlier depending on the progress of the site development.

Speaker #2: So again, I think your numbers are directionally reasonable. It's difficult for us to give a firm number on '28 because it is subject to how fast the construction program is able to progress in FY27.

Speaker #2: One year is a very, very long time in our business year. And now, every year that moves forward, the overall speed at which we develop, deploy, activate, and convert into cash is significantly accelerating.

Craig Scroggie: Now every year that moves forward, the overall speed at which we develop, deploy, activate, and convert into cash is significantly accelerating.

Speaker #4: Thanks for the detail, Craig.

Eric Choi: Thanks for the detail, Craig.

Speaker #1: Thank you. We will now take our next question. Our next question comes from the line of Paul Mason from EMP. Please ask your question, Paul.

Operator: Thank you. We will now take our next question. Our next question comes from the line of Paul Mason from E&P. Please ask your question. Paul, your line is open.

Speaker #1: Your line is open.

Speaker #4: Hi, Tim. First one from me—just, you've given pretty explicit guidance on greater than 10% time on cost for these hyperscale deals. In private, that gets talked about in the industry, but we've never really had anyone talk about these things in public before.

Paul Mason: Hey, team, a couple from me. First one, you have given pretty explicit guidance on greater than 10% return on cost for these large-scale deals. In private, that gets talked about within the industry, but we have not heard you talk about these things in public before. You have probably been a little bit hesitant to discuss things explicitly on calls before. Can you tell us, what has changed that means that you are able to be as open as this now?

Speaker #4: You've probably been a little bit hesitant to discuss things explicitly on calls before. So, can you tell us what's changed that means your answer can be as open as this now?

Speaker #2: Thanks, Paul. Your line was a little hard to hear, but I think I got the gist of your question. What's changed is that when you considered the historical co-location business, while the numbers were small and the returns were pretty significant, the time at which we would sell and over what period of time, and what period the facilities would fill, was really the uncertain or unanswered question.

Craig Scroggie: Thanks, Paul. Your line was a little hard to hear, but I think I got the gist of your question. What has changed is that when you considered the historical colocation business, whilst the numbers were small and the returns were pretty significant, the time at which we would sell and over what period of time and what period the facilities would fill was really the uncertain or unanswered question. We were designing facilities for an unknown future. The key point of difference when you are doing build to suit at scale, and you go from doing 10 or 20 or 50 megawatts to doing 250 or 500 or even potentially 1,000, the economics essentially are locked at the contract point.

Craig Scroggie: Thanks, Paul. Your line was a little hard to hear, but I think I got the gist of your question. What has changed is that when you considered the historical colocation business, whilst the numbers were small and the returns were pretty significant, the time at which we would sell and over what period of time and what period the facilities would fill was really the uncertain or unanswered question. We were designing facilities for an unknown future. The key point of difference when you are doing build to suit at scale, and you go from doing 10 or 20 or 50MW to doing 250 or 500 or even potentially 1,000, the economics essentially are locked at the contract point.

Speaker #2: And we were designing facilities for an unknown future. The key point of difference when you are doing build-to-suit at scale and you go from doing 10, 20, or 50 megawatts to doing 250, 500, or even potentially 1,000—the economics, essentially, are locked at the contract point.

Speaker #2: The costs on the estimate for the development, the long lead time items, the bulk procurement, the negotiation with the general contractor—all of those variables are certain on day one at the outset.

Craig Scroggie: The costs on the estimate for the development, the long lead time items, the bulk procurement, the negotiation with the general contractor, all of those variables are certain on day one at the outset. As we start to think about a more mature financial position for the company, those conversations with joint venture partners show us that whilst the returns in the scale business in deploying tens of billions of capital may be lower than the traditional or historical colocation business, they are absolutely certain. That gives us a high degree of confidence to be able to take a more mature approach and have a higher degree of certainty over what the returns will look like on these scale projects.

Speaker #2: And so, as we start to think about a more mature financial position for the company, those conversations with joint venture partners show us that, while the returns in the scale business—deploying tens of billions of capital—may be lower than the traditional or historical co-location business, they are absolutely certain.

Speaker #2: And that gives us a high degree of confidence to be able to take a more mature approach and have a higher degree of certainty over what the returns will look like on these scale projects.

Speaker #2: So that's the key change for us in communicating what our return expectations are, is that once we have negotiated the contract with the customer and have the build cost in place, we have a high degree of certainty over the return.

Craig Scroggie: That is the key change for us in communicating what our return expectations are, is that once we have negotiated the contract with the customer and have the build cost in place, we have a high degree of certainty over return.

Speaker #4: Okay, great. And just the second one, just on your comments on Eric's question about potentially being able to move things forward depending on the pace of development on your sites—maybe just, as a customer contract, actually framed in a way where there's not a fixed billing date, but you're actually able to start billing as soon as you hand things over? Or is there a change to sort of normal contracting that's gone on there to enable that?

Paul Mason: Okay, great. Just for the second one, just on your comments on Eric Choi's question about potentially being able to move things forward, depending on the pace of development on your sites. Are the customer contracts actually framed in a way where there is not a fixed billing date, but you are actually able to start billing as soon as you hand things over, or is there a change to normal contracting that has gone on there to enable that? What is the difference there versus previously when you would have a fixed date?

Speaker #4: Yeah, yeah. So what's the difference there versus previously, when you'd have a fixed date?

Speaker #2: A couple of comments, Paul. First one, obviously for Dave Gentschel and the commercial organisation, this year was a record year. Selling half a gigawatt was a really great result.

Craig Scroggie: A couple of comments, Paul Mason. First one, obviously for David Dzienciol and the commercial organization, this year was a record year. Selling half a gigawatt was a really great result. I think it was probably four or five years in the making, land bank, preparing for those scale sites to be putting us in a position to take advantage of that. It was not one year's worth of work. The team did an extraordinary job on the execution side, but there is probably four or five years of historical work gone into putting us in a position to be successful. As it relates to then delivering those, almost every customer would take the capacity as early as we can deliver it.

Speaker #2: I think it was probably four or five years in the making, land bank preparing for those scale sites to be putting us in a position to take advantage of that.

Speaker #2: So it wasn't one year's worth of work. I mean, the team did an extraordinary job on the execution side, but there's probably four or five years of historical work gone into putting us in a position to be successful.

Speaker #2: As it relates to then delivering those, almost every customer would take the capacity as early as we can deliver it. Now, there are a number of factors that come into play when we are doing BTS that are different to doing colo and preparing shells, because largely the delivery program is just fit-out.

Craig Scroggie: Now, there are a number of factors that come into play when we are doing BTS that are different to doing colocation and preparing shelves, because largely the delivery program is just fit out. The reason you cannot build 250 megawatts of inventory is that every hyperscaler or foundational model player or Neocloud has a different design requirement. Given the significant variability of those designs and the sheer speed at which the GPU architecture itself is continuing to change, just this year was the first time that we had locked a gigawatt scale reference architecture. Designing single sites for more than 1,000 megawatts of capacity, the reference architecture for those designs did not exist before that.

Craig Scroggie: Now, there are a number of factors that come into play when we are doing BTS that are different to doing colocation and preparing shelves, because largely the delivery program is just fit out. The reason you cannot build 250MW of inventory is that every hyperscaler or foundational model player or Neocloud has a different design requirement. Given the significant variability of those designs and the sheer speed at which the GPU architecture itself is continuing to change, just this year was the first time that we had locked a gigawatt scale reference architecture. Designing single sites for more than 1,000MW of capacity, the reference architecture for those designs did not exist before that.

Speaker #2: The reason you can't build 250 megawatts of inventory is that every hyperscaler, or foundational model player, or neocloud has a different design requirement. And, given the significant variability of those designs and the sheer speed at which the GPU architecture itself is continuing to change, just this year was the first time that we had locked a gigawatt-scale reference architecture.

Speaker #2: So, designing single sites for more than 1,000 megawatts of capacity—the reference architecture for those designs didn't exist before that. And so now, as we enter this new age and we are required to plan for the development of these multiple-hundred-megawatt single buildings—and over a campus there may be many of those—it does mean that we can speed up the development if we're able to largely produce a manufacturing style of methodology for deploying the site. So, off-site containerisation, manufacturing, and the preparation of the transmission infrastructure for scale power.

Craig Scroggie: Now, as we enter this new age and we are required to plan for the development of these multiple hundred megawatt single buildings, and over a campus, there may be many of those. It does mean that we can speed up the development if we are able to largely produce a manufacturing style of methodology for deploying the site. Offsite containerization manufacturing, the preparation of the transmission infrastructure for scale power, and then the delivery of those which would speed up our time to activation. There is a very good chance that as we are improving the manufacturing methodology of containerizing the development of the sites at up to 1,000 megawatts or greater, we will be able to very significantly increase the time to cash by simplifying the construction methodology and playing a larger assembly on the site style of role.

Craig Scroggie: Now, as we enter this new age and we are required to plan for the development of these multiple hundred megawatt single buildings, and over a campus, there may be many of those. It does mean that we can speed up the development if we are able to largely produce a manufacturing style of methodology for deploying the site. Offsite containerization manufacturing, the preparation of the transmission infrastructure for scale power, and then the delivery of those which would speed up our time to activation. There is a very good chance that as we are improving the manufacturing methodology of containerizing the development of the sites at up to 1,000MW or greater, we will be able to very significantly increase the time to cash by simplifying the construction methodology and playing a larger assembly on the site style of role.

Speaker #2: And then the delivery of those would speed up our time to activation. So there is a very, very good chance that, as we are improving the manufacturing methodology of containerising the development of the sites at up to 1,000 megawatts or greater, we will be able to very significantly increase the time to cash by simplifying the methodology and playing a larger assembly-on-the-site style of role.

Speaker #2: So Paul, it does mean that my expectation is, over time, whilst we haven't started a construction program, given the variability of design requirements, historically it may have taken us 18 months to build capacity and deliver it.

Craig Scroggie: Paul, it does mean that my expectation is over time. Whilst we haven't started a construction program, given the variability of design requirements, historically, it may have taken us 18 months to build capacity and deliver it. My expectation now is that we can go from ground to fully operating facility within approximately nine months.

Speaker #2: My expectation now is that we can go from ground to a fully operating facility within approximately nine months.

Speaker #4: Wow. Yeah. All right. I've taken up a bit of time here, so I'll let somebody else have a turn, but I'll jump back in the queue.

Paul Mason: Wow. Yeah. All right. I've taken up a bit of time here, so I'll let somebody else have a turn, but I'll jump back in the queue. Thank you.

Speaker #4: Thank you.

Speaker #1: Thank you. We will now take our next question, which comes from the line of Jonathan Ekin from RBC Capital Markets. Please ask your question, Jonathan.

Operator: Thank you. We will now take our next question, and the question comes from the line of Jonathan Aitken from RBC Capital Markets. Please ask your question, Jonathan. Your line is open.

Operator: Thank you. We will now take our next question, and the question comes from the line of Jonathan Atkin from RBC Capital Markets. Please ask your question, Jonathan. Your line is open.

Speaker #1: Your line is open.

Speaker #5: Thank you, and good morning. So, a question about slide 17: is there any way to unpack the composition of the order book? You give kind of 'cloud' and 'AI,' but is there any way to kind of think about notionally the mix of traditional cloud operators versus neoclouds, versus LLMs and other types of AI startups?

Jonathan Aitken: Thank you, and good morning. A question about slide 17, is there any way to unpack the composition of the order book you give cloud and AI, but any way to think about notionally the mix of traditional cloud operators versus Neocloud versus LLMs and other types of AI startups? Then I have a follow-up. Thanks.

Jonathan Atkin: Thank you, and good morning. A question about slide 17, is there any way to unpack the composition of the order book you give cloud and AI, but any way to think about notionally the mix of traditional cloud operators versus Neocloud versus LLMs and other types of AI startups? Then I have a follow-up. Thanks.

Speaker #5: And then I have a follow-up. Thanks.

Speaker #2: Thanks, John. We haven't split it out. I'll probably just give you one comment. As it stands today, all of that business is, largely, the majority of it, double-A credit-rated counterparties or better.

Craig Scroggie: Thanks, John. We haven't split it out. Probably just give you one comment. As it stands today, all of that business is largely, the majority of it is double A credit-rated counterparties or better. While we do have some Neocloud customers, in addition to the traditional hyperscale customers, those Neocloud customers are backstopped in contract by NVIDIA for a decade or more. So where we have minimum decade to 15-year long contract agreements with up to 35-year options for our hyperscale customers, we are very pleased with the outcome of NVIDIA's role in financially backstopping our AI cloud customers in that category. Today, I wouldn't necessarily need to split out the number, because in Australia all of the AI deployments are for inferencing, not for training. The regulation hasn't changed. The regulatory environment in relation to training of models has not changed.

Craig Scroggie: Thanks, Jon. We haven't split it out. Probably just give you one comment. As it stands today, all of that business is largely, the majority of it is double A credit-rated counterparties or better. While we do have some Neocloud customers, in addition to the traditional hyperscale customers, those Neocloud customers are backstopped in contract by NVIDIA for a decade or more. So where we have minimum decade to 15-year long contract agreements with up to 35-year options for our hyperscale customers, we are very pleased with the outcome of NVIDIA's role in financially backstopping our AI cloud customers in that category. Today, I wouldn't necessarily need to split out the number, because in Australia all of the AI deployments are for inferencing, not for training. The regulation hasn't changed. The regulatory environment in relation to training of models has not changed.

Speaker #2: So, whilst we do have some NeoCloud customers in addition to the traditional hyperscale customers, those NeoCloud customers are backstopped in contract by Nvidia for a decade or more.

Speaker #2: So, where we have minimum decade- to 15-year-long contract agreements, with up to 35-year options for our hyperscale customers, we are very pleased with the outcome of Nvidia's role in financially backstopping our AI cloud customers in that category.

Speaker #2: So today, I wouldn't necessarily need to split out the number, because in Australia, all of the AI deployments are for inferencing, not for training.

Speaker #2: The regulation hasn't changed. The regulatory environment in relation to training of models has not changed. That...

Speaker #1: It may change at some point in the future, but there's certainly no indication on whether that will happen or what time frame that could occur. So all deployments today are hyperscale or backstopped by Nvidia, of scale on 10- or 15-year minimum agreements, with up to 35-year options.

Craig Scroggie: That may change at some point in the future, but certainly no indication on whether that will or what timeframe that could happen. All deployments today are hyperscale or backstopped by NVIDIA of scale, on 10 or 15 minimum year agreements with up to 35-year options. The credit quality question for us is the primary one that we need to consider. When that credit quality for the large majority of all of the half a gigawatt we signed in FY26 is double A or better, that would be how I would answer your question.

Craig Scroggie: That may change at some point in the future, but certainly no indication on whether that will or what timeframe that could happen. All deployments today are hyperscale or backstopped by NVIDIA of scale, on 10 or 15 minimum year agreements with up to 35-year options. The credit quality question for us is the primary one that we need to consider. When that credit quality for the large majority of all of the half a gigawatt we signed in FY 2026 is double A or better, that would be how I would answer your question.

Speaker #1: So the credit quality question for us is the primary one that we need to consider. And when that credit quality for the large majority of all of the half a gigawatt we signed in FY26 is double A or better.

Speaker #1: That would be how I would answer your question.

Speaker #2: That's very clear . And you answered most of my second question . But but when you get to say the non double A or better category , that is backstopped , what do you think about kind of yield .

Jonathan Aitken: That's very clear, and you answered most of my second question. But when you get to, say, the non-double A or better category that is backstopped, what do you think about yield? You've talked about 10%, but for you, is there an opportunity for yield enhancement by dealing a little more with that latter category? How do you think about target development yields for the latter category versus the former category, in other words?

Jonathan Atkin: That's very clear, and you answered most of my second question. But when you get to, say, the non-double A or better category that is backstopped, what do you think about yield? You've talked about 10%, but for you, is there an opportunity for yield enhancement by dealing a little more with that latter category? How do you think about target development yields for the latter category versus the former category, in other words?

Speaker #2: You've talked about 10%, but to you, is there, you know, an opportunity for yield enhancement by doing a little bit more with that latter category?

Speaker #2: How do you think about target development yields for the latter category versus the former category? In other words,

Speaker #1: John, the forecast we've given is obviously a conservative one. Anytime you make these commitments, you need to carefully consider that we are 100% certain that we can deliver on those promises.

Craig Scroggie: John, the forecast we have given is obviously a conservative one. Anytime you make these commitments, you need to carefully consider that we are 100% certain that we can deliver on those promises. And whilst they are forward-looking statements, we have a very high degree of confidence that that will be the minimum expectation. Where that starts to lean into upside is based on the scale of the deployments. What I can tell you, based on the S4 site today, we have made those estimates on a 365-megawatt site at the minimum yield on cost.

Craig Scroggie: Jon, the forecast we have given is obviously a conservative one. Anytime you make these commitments, you need to carefully consider that we are 100% certain that we can deliver on those promises. And whilst they are forward-looking statements, we have a very high degree of confidence that that will be the minimum expectation. Where that starts to lean into upside is based on the scale of the deployments. What I can tell you, based on the S4 site today, we have made those estimates on a 365-megawatt site at the minimum yield on cost.

Speaker #1: And whilst they are forward-looking statements, we have a very high degree of confidence that that will be the minimum expectation. Where that starts to lean into upside is based on the scale of the deployments.

Speaker #1: And so what I can tell you, based on the S4 site today, is we've made those estimates on a 365-megawatt site at the minimum yield on cost.

Speaker #1: But as you start to consider sites like S7 at 650 MW, or even the recently acquired Melbourne M5 site at 1,200 MW of IT load, there are substantial opportunities to improve yield on cost, given the sheer volume of containerization and the manufacturing style of methodology and approach that we're taking to the construction of the sites. And very often...

Craig Scroggie: But as you start to consider sites like S7 at 650 megawatts, or even the recently acquired Melbourne M5 site at 1,200 megawatts of IT load, there are substantial opportunities to improve yield on cost, given the sheer volume of containerization and the manufacturing style of methodology and approach that we are taking to the construction of the sites. The other key engineering point of difference for us, outside of the actual manufacturing-led approach to the construction, is that those build-to-suit hyperscale campuses for a 1-gigawatt DSX reference architecture will be single-story buildings. So once you have slab on ground and in-ground services activated, the timeline is quite certain because we are not building up, we are not exposed to weather and other things, as much as you would be in a multi-story development.

Craig Scroggie: But as you start to consider sites like S7 at 650MW, or even the recently acquired Melbourne M5 site at 1,200MW of IT load, there are substantial opportunities to improve yield on cost, given the sheer volume of containerization and the manufacturing style of methodology and approach that we are taking to the construction of the sites. The other key engineering point of difference for us, outside of the actual manufacturing-led approach to the construction, is that those build-to-suit hyperscale campuses for a 1-gigawatt DSX reference architecture will be single-story buildings. So once you have slab on ground and in-ground services activated, the timeline is quite certain because we are not building up, we are not exposed to weather and other things, as much as you would be in a multi-story development.

Speaker #1: But the other key engineering point of difference for us outside of the actual manufacturing led approach to the construction , is that those build to suit hyperscale campuses for a one gigawatt DS reference architecture will be single storey buildings .

Speaker #1: So once you have slab on ground and in-ground services activated, the timeline is quite certain because we're not building up, we're not exposed to weather and other things.

Speaker #1: As much as you would be in a multi-story development. So, single-story developments of 1,000 MW or greater certainly have an opportunity to improve on our minimum yield-on-cost return expectations for a site like S4 at 365 MW.

Craig Scroggie: Single-story developments of 1,000 megawatts or greater, certainly have an opportunity to improve on our minimum yield on cost return expectations for a site like S4 at 365 megawatts. So yes, I do believe that that opportunity exists, John.

Craig Scroggie: Single-story developments of 1,000MW or greater, certainly have an opportunity to improve on our minimum yield on cost return expectations for a site like S4 at 365MW. So yes, I do believe that that opportunity exists, Jon.

Speaker #1: So yes, I do believe that that opportunity exists. John.

Speaker #2: Thank you

Jonathan Aitken: Thank you.

Jonathan Atkin: Thank you.

Speaker #3: Thank you. We will now take our next question from the line of Tim Plumb from UBS. Please ask your question, Tim.

Operator: Thank you. We will now take our next question from the line of Tim Plumbe from UBS. Please ask your question, Tim. Your line is open.

Speaker #3: Your line is open .

Speaker #4: Hi , guys . Two questions for me . First of all , please . Apologies . But going back to that activation profile , I guess the 73 megawatt announcement that you guys did at the end of July was kind of the newest bit of news that we've had the least a bit out of information on .

Tim Plumbe: Hi, guys. Two questions from me, if possible, please. Apologies, but going back to that activation profile, I guess the 73 megawatt announcement that you guys did at the end of July is the newest bit of news that we've had the least bit amount of information on. Craig, I've just conservatively assumed that it's pretty back-end weighted, and you mentioned there might be scope to accelerate that. But is that just fair to assume that like all the other AI contracts, once it does deploy, it basically accelerates and is fully deployed relatively rapidly? Then when you mentioned site development, et cetera, are there any other constraints that we have to think about in terms of availability of gear, ability to be able to unlock and draw down on the power? Or is it purely just how quickly you can build the site?

Speaker #4: Craig , I've just conservatively assumed that it's pretty back end weighted . And you mentioned there might be scope to accelerate that , but is that just fair to assume that , like all the other AI contracts , once it does deploy , it is basically accelerates and is fully deployed relatively rapidly .

Speaker #4: And then, when you mentioned slight development, etc., are there any other constraints that you have to think about in terms of availability of gear, ability to be able to unlock and draw down on the power?

Speaker #4: Or is it purely just how quickly you can build the site?

Speaker #1: Thanks, Tim. As it relates to the 73 MW that we announced most recently, obviously that Nvidia deal and having Nvidia as a partner on that was a really important strategic piece of business, because that will continue to grow.

Craig Scroggie: Thanks, Tim. As it relates to the 73 megawatts that we announced most recently, obviously that NVIDIA deal, and having NVIDIA obviously as a partner on that, was a really important strategic piece of business because that will continue to grow. That 73 megawatts is under construction, will be delivered in record time. Obviously, we're already forecasting a relatively short activation period. So I think that the FY27 number is clear, but it is back-ended, so your observation is correct, and that is that yes, it will activate quickly, but it will be back-ended for the timeframe for that to turn on. But it will all turn on largely at one time. So the activation schedule itself doesn't have the type of ramp that you would have traditionally associated with a cloud style of deployment that would have been ramped or grown into.

Craig Scroggie: Thanks, Tim. As it relates to the 73MW that we announced most recently, obviously that NVIDIA deal, and having NVIDIA obviously as a partner on that, was a really important strategic piece of business because that will continue to grow. That 73MW is under construction, will be delivered in record time. Obviously, we're already forecasting a relatively short activation period. So I think that the FY 2027 number is clear, but it is back-ended, so your observation is correct, and that is that yes, it will activate quickly, but it will be back-ended for the timeframe for that to turn on. But it will all turn on largely at one time. So the activation schedule itself doesn't have the type of ramp that you would have traditionally associated with a cloud style of deployment that would have been ramped or grown into.

Speaker #1: That 73 MW is under construction and will be delivered in record time. Obviously, we're already forecasting a relatively short activation period, so I think that the FY is clear, but it is back-ended.

Speaker #1: So you're observation is correct . And that is that . Yes it will activate quickly , but it will be back ended . So the time frame for that to turn on .

Speaker #1: But it will all turn on largely at one time. So the activation schedule itself doesn't have the type of ramp that you would have traditionally associated with a cloud style of deployment.

Speaker #1: That would have been ramped, or grown into. As it relates to your question on constraints, there are many in the long lead time category.

Craig Scroggie: As it relates to your question on constraints, there are many in the long lead time category. One of the benefits of scale that play to our advantage as a company, versus many that are entering the industry, don't have the history or the balance sheet, or the existing supplier relationships is, when you're securing hundreds of generators, you can deploy them depending on where you need them at any given time. I think our size, scale, financial capability, puts us in a very strong position to manage those constraints effectively. As we move to more a manufacturing style of construction methodology, it does allow the Lego pieces to be moved around the construction program depending on the time requirements.

Speaker #1: One of the benefits of scale that play to our advantage as a company, versus many that are entering the industry, is that they don't have the history or the balance sheet or the existing supplier relationships.

Speaker #1: Is when you're securing hundreds of generators , you can deploy them depending on where you need them at any given time . I think our size , scale , financial capability puts us in a very strong position to manage those constraints effectively .

Speaker #1: And as we move to a more manufacturing style of construction methodology, it does allow the Lego pieces to be moved around the construction program depending on the time requirements.

Speaker #1: The third point that you asked in relation to power , of course , as we have made very clear as it relates to the existing development program , certainly the half a gigawatt that we have contracted in FY 26 , we have all of the certainty required in order to deliver those programs and the power that's required .

Craig Scroggie: The third point that you asked in relation to power, of course, as we have made very clear as it relates to the existing development program, certainly the half a gigawatt that we have contracted in FY26, we have all of the certainty required in order to deliver those programs and the power that is required. We did put a reasonably succinct summary of the current legislative issues into the pack in order to help people understand what is certain and what is uncertain as it relates to federal and state government changes on the regulatory requirements, and capital contributions and augmentation costs further upstream in the energy system that would be potentially required to be paid. I would just add to that, Tim, that none of those things are certain for the future developments for us as a company and for the industry broadly.

Craig Scroggie: The third point that you asked in relation to power, of course, as we have made very clear as it relates to the existing development program, certainly the half a gigawatt that we have contracted in FY 2026, we have all of the certainty required in order to deliver those programs and the power that is required. We did put a reasonably succinct summary of the current legislative issues into the pack in order to help people understand what is certain and what is uncertain as it relates to federal and state government changes on the regulatory requirements, and capital contributions and augmentation costs further upstream in the energy system that would be potentially required to be paid. I would just add to that, Tim, that none of those things are certain for the future developments for us as a company and for the industry broadly.

Speaker #1: We did put a reasonably succinct summary of the current legislative issues into the pack in order to help people understand what is certain and what is uncertain as it relates to federal and state government changes on the regulatory requirements, and capital contributions and augmentation costs further upstream in the energy system.

Speaker #1: That would be potentially required to be paid. So I would just add to that, Tim, that none of those things are certain for the future.

Speaker #1: Developments for us as a company, and for the industry broadly, there are no clear outcomes as a result of those determinations, but they certainly don't change the degree of confidence that we have over the existing program.

Craig Scroggie: There are no clear outcomes as a result of those determinations. But they certainly do not change the degree of confidence that we have over the existing program. They will be considered as it relates to all of the future program outside of things that we have currently contracted.

Speaker #1: They will be considered, as it relates to all of the future program, outside of things that we have currently contracted.

Speaker #4: Right. I had another question but recognize there are a few points there, so I'll leave it to other people to jump back in the queue.

Tim Plumbe: Great. I had another question, but recognize there are a few sub-points there, so I will leave it to other people to go and I will jump back in with you. Thanks, guys.

Speaker #4: Thanks , guys .

Speaker #1: Thanks , Tim .

Craig Scroggie: Thanks, Tim.

Speaker #3: Thank you . We will now move to our next question . And the next question comes from Andrew Gillies from Macquarie . Please ask your question , Andrew , please .

Operator: Thank you. We will now move to our next question. The next question comes from Andrew Giles from Macquarie. Please ask your question. Andrew, your line is open.

Operator: Thank you. We will now move to our next question. The next question comes from Andrew Gillies from Macquarie. Please ask your question. Andrew, your line is open.

Speaker #3: Your line is open .

Speaker #2: Good morning guys . Just a quick one on debt like high level unlisted assets could comfortably run Lvrs sort of above 60% . You obviously made some changes to the accounting for these hyperscale only or built to suit assets .

Andrew Giles: Morning, guys. Just a quick one on debt. High level unlisted assets could comfortably run LVRs above 60%. You obviously made some changes to the accounting for these hyperscale-only or build-to-suit assets. It would suggest that financiers are quite comfortable with higher gearing levels, especially relative to how the equity market might think about it. Can you just give us a bit of a steer on how you think about reported group level metrics, and maybe why the way that we would look at things might not reflect how your financiers are thinking about it? Just really interested in the cadence, given you're talking about project financing and eventually JVCo, which sounds like it's closer as well. That would be great.

Andrew Gillies: Morning, guys. Just a quick one on debt. High level unlisted assets could comfortably run LVRs above 60%. You obviously made some changes to the accounting for these hyperscale-only or build-to-suit assets. It would suggest that financiers are quite comfortable with higher gearing levels, especially relative to how the equity market might think about it. Can you just give us a bit of a steer on how you think about reported group level metrics, and maybe why the way that we would look at things might not reflect how your financiers are thinking about it? Just really interested in the cadence, given you're talking about project financing and eventually JVCo, which sounds like it's closer as well. That would be great.

Speaker #2: Like, it would sort of suggest that finance is quite comfortable with higher gearing levels, especially relative to how the equity market might think about it.

Speaker #2: Can you just give us a bit of a steer on how you think about like reported group level metrics and maybe why , you know , the way that we would look at things might not reflect how your finances are thinking about it .

Speaker #2: Just really interested in the cadence, given you’re talking about project financing and eventually JV Co, which sounds like it's closer as well.

Speaker #2: That'd be great

Speaker #1: I'm happy .

Oskar Tomaszewski: I am happy to take that one. Thanks for the question, Andrew. There are a few elements to it. To keep it brief, the way the financiers look at the capital stack is a little bit different to the way that I guess you may look at it traditionally. If you have a look at the subordinated capital, AUD 1.7 billion of hybrids and the AUD 750 million of subordinated notes, as far as senior lenders are concerned, that is subordinated to them. There is a reasonable amount of flexibility in that capital structure. So they do not look at it like equity, but they do understand that it is subordinated to them and therefore, that capital does not go directly to covenants.

Speaker #5: To take that one . Thanks for the question , Andrew . And there's a there's a few elements to it to keep it brief .

Speaker #5: The way the financing looks at the capital stack is a little bit different to the way that, I guess, you may look at it traditionally.

Speaker #5: If you have a look at the subordinated capital, $1.7 billion of hybrids and $750 million of subordinated notes, as far as senior lenders are concerned, that is subordinated to them.

Speaker #5: There is a reasonable amount of flexibility in that capital structure. So they don't look at it like equity, but they do understand that it is subordinated to them.

Speaker #5: And therefore If that capital does not Go directly to covenants . If you if you then sort of extend the question out to project finance and some of the other flexibility that we have in further financing developments , we .

Oskar Tomaszewski: If you then extend the question out to project finance and some of the other flexibility that we have in further financing developments, we have a certain percentage of our assets that are granted as security for the senior debt facilities. Within that, we have flexibility to move certain projects around. So, for example, if we wanted to, we could exclude the S4 development from the guarantor group, which would allow us flexibility to fund the development of S4 through project finance. Then we are approaching essentially project financiers, with those project financiers looking at the S4 development underpinned by very highly creditworthy counterparty under long duration contract, and have a sensible conversation with them as to how best to finance that project. Project finance is quite a healthy market. There is quite a lot of volume in that space.

Speaker #5: We have a certain percentage of our assets that are granted as as security for the for the senior debt facilities within that , we have flexibility to move certain projects around .

Speaker #5: So , for example , if we wanted to , we could exclude the S4 development from , from the guarantor group , which would allow us flexibility to fund the development of S4 through project finance .

Speaker #5: And then we're approaching, essentially, project financiers with those projects—financiers looking at the S4 development underpinned by very highly creditworthy counterparties under long-duration contracts—and have a conversation, and have a sensible conversation with them, as to how to finance that project.

Speaker #5: Project finance is quite a healthy market . There's quite a lot of volume in that space , and the nature of our counterparties , the fact that we've got a very strong track record of developing our facilities on time , on budget , gives that market a lot of confidence and appetite to to finance those sorts of projects .

Oskar Tomaszewski: The nature of our counterparties, the fact that we've got a very strong track record of developing our facilities on time, on budget, gives that market a lot of confidence and appetite to finance those sorts of projects. As far as the senior lenders are concerned, again, that project is excluded from the guarantor group, and therefore it doesn't go towards the covenants that we report and that they see. Hopefully that gives you a bit more insight into how the lenders think about funding and how they get comfortable with our funding structure.

Speaker #5: And as far as the senior lenders are concerned , again , that project is excluded from the guarantor group . And therefore it doesn't go towards the covenants that that we reported .

Speaker #5: Then they see. So hopefully that gives you a bit more insight into how the lenders think about funding and how they get comfortable with our funding structure.

Speaker #2: Yeah , certainly . And then maybe just moving to another , another quick one , Nvidia overnight , obviously started talking about the removal of revenue share agreements on antitrust concerns .

Andrew Giles: Yeah, certainly. Then maybe just moving to another quick one. NVIDIA overnight obviously started talking about the removal of revenue share agreements on antitrust concerns. I'm sure you guys have probably had some conversations there. It doesn't sound like it's affecting the capacity backstop. If you could maybe talk to NVIDIA's support for the industry remaining on that capacity backstop side, and maybe the impacts the lack of revenue share might have on these new Neocloud customers. Although I do appreciate they are a relatively small part of the contract book at the moment.

Andrew Gillies: Yeah, certainly. Then maybe just moving to another quick one. NVIDIA overnight obviously started talking about the removal of revenue share agreements on antitrust concerns. I'm sure you guys have probably had some conversations there. It doesn't sound like it's affecting the capacity backstop. If you could maybe talk to NVIDIA's support for the industry remaining on that capacity backstop side, and maybe the impacts the lack of revenue share might have on these new Neocloud customers. Although I do appreciate they are a relatively small part of the contract book at the moment.

Speaker #2: I'm sure you guys have probably had some conversations there . It doesn't sound like it's affecting the capacity backstop . But if you could maybe talk to , you know , you know , Nvidia support for the industry remaining on that capacity backstop side and maybe the impacts , you know , the lack of revenue share might have on these new neo cloud customers , although I do , I do appreciate they are a relatively small part of the contract book at the moment

Speaker #5: Thanks . Thanks , Andrew . I'll I'll take that one as well . The The credit quality of Nividia is obviously very strong .

Oskar Tomaszewski: Thanks, Andrew. I'll take that one as well. The credit quality of NVIDIA is obviously very strong. I think they're double A-rated and have provided significant support to the industry. We take a lot of comfort in the backstop that NVIDIA has put in place. The exact contractual nature of their arrangements with the NCPs or Neocloud operators, is a matter for them. We're less affected by any revenue-sharing arrangements. We just take a lot of comfort in the fact that NVIDIA is a backstop. Obviously, that significantly helps get us comfortable with those counterparties, and it also obviously helps those counterparties finance their deployments as well.

Speaker #5: I think that double A rated, and have provided significant support to the industry. We take a lot of comfort in the backstop that Sira has put in place. The exact contractual nature of their arrangements with the NC or neo cloud operators is a matter for them.

Speaker #5: We're less affected by any revenue sharing arrangements. We just take a lot of comfort in the fact that the video is a backstop, and obviously, that significantly helps get us comfortable with those counterparties.

Speaker #5: And it also, obviously, helps those counterparties finance their deployments as well.

Speaker #2: Okay, thanks, guys. We'll jump back in the queue. Thank you.

Andrew Giles: Okay, thanks guys. I'll jump back in the queue. Thank you.

Andrew Gillies: Okay, thanks guys. I'll jump back in the queue. Thank you.

Speaker #3: Thank you. We will now move to our next question, and our next question comes from Siraj Ahmed from Citi. Please ask your question.

Operator: Thank you. We will now move to our next question. Our next question comes from Siraj Ahmed from Citi. Please ask your question, Siraj. Your line is open.

Speaker #3: Siraj, your line is open.

Speaker #6: Morning, Greg and Oscar. Maybe three questions. Just the first one, Greg. 2026 was a record year, right? Close to half a gigawatt of contracting just in terms of '27.

Siraj Ahmed: Morning, Craig and Oskar. Maybe three questions. Just first one, Craig, 2026 was a record year, right? Close to half gigawatts of contracting. Just in terms of 2027, how are you thinking about it? Do you need to get the DAs for S7, especially the power allocation? How are you just thinking of contracting this year? That would be great. Thanks.

Speaker #6: Are you thinking about it? Do you need to get the DAS S7, especially the power allocation, and how you're just thinking of contracting this year?

Speaker #6: That'd be great . Thanks

Craig Scroggie: Thanks, Siraj.

Craig Scroggie: Thanks, Siraj. As it relates to 2027, we don't need to do anything that we haven't already done. So 100% of everything that we require to deliver our FY 2027 numbers is already locked in. As it relates to 2028, I would just restate my earlier comments that depending on progress during 2027, that will help us understand the activation schedule and our ability to deliver on time or potentially deliver early, in some of the 2028 components. As it relates to development approvals or power, we do not require anything in the 2027 forecast that we don't already have. But obviously, as it relates to new developments in future years, 2029 and 2030, we would like to see the development approvals for S5, S7, M5. S5 and S7 have been in the state significant development approval process for quite some time.

Speaker #1: Thanks , Siraj As it relates to 27 , we don't need to do anything that we haven't already done . So 100% of everything that we require to deliver our FY 27 numbers is already locked in as it relates to 28 .

Craig Scroggie: As it relates to 2027, we don't need to do anything that we haven't already done. So 100% of everything that we require to deliver our FY27 numbers is already locked in. As it relates to 2028, I would just restate my earlier comments that depending on progress during 2027, that will help us understand the activation schedule and our ability to deliver on time or potentially deliver early, in some of the 2028 components. As it relates to development approvals or power, we do not require anything in the 2027 forecast that we don't already have. But obviously, as it relates to new developments in future years, 2029 and 2030, we would like to see the development approvals for S5, S7, M5. S5 and S7 have been in the state significant development approval process for quite some time.

Speaker #1: I would just restate my earlier comments that, depending on progress during Q2 '27, that will help us understand the activation schedule and our ability to deliver on time, or potentially deliver early on some of the Q2 '28 components.

Speaker #1: So, as it relates to development approvals or power, we do not require anything in the '27 forecast that we don't already have.

Speaker #1: But obviously , as it relates to new developments and future years , 29 and 30 , we would like to see the development approvals for S5 , S7 , M5 , S5 and S7 have been in the state significant development approval process for quite some time , and I won't forecast how long it will take the government to make a decision , because that is their responsibility .

Craig Scroggie: I won't forecast how long it will take the government to make a decision, because that is their responsibility. But they have been in the approval process for considerable time, and we have addressed all issues that we are required to clarify in order for those development approvals to be granted. So it's my expectation that those will move forward, and we will begin construction of them as soon as we possibly can. On our side of the program, early works, ground readiness, designs, long lead time item procurement are all in place. So the moment that we receive those final development approvals, the programs to deliver S7 and S5 will immediately be undertaken.

Speaker #1: But they have been in the approval process for a considerable time, and we have addressed all issues that we are required to clarify in order for those development approvals to be granted.

Speaker #1: So it's my expectation that those will move forward, and we will begin construction of them as soon as we possibly can on our side of the program.

Speaker #1: Early works around readiness designs and long lead time item procurement are all in place. So, at the moment that we receive those final development approvals, the programs to deliver S7 and S5 will immediately be undertaken.

Speaker #6: Got it . Correct . So clarify that . Super helpful . So on S7 specifically this new wind power requirements and the transit allocation policy , you don't really expect that to hold hold .

Siraj Ahmed: Got it. Craig, so can I just clarify, that's super helpful. So on S7 specifically, this new wind power requirement and the Transgrid allocation policy, you don't really expect that to hold S7 back from a timeframe perspective?

Speaker #6: S7 back from a time perspective.

Speaker #1: Well, I think we don't know what we don't know at the moment. The government hasn't made a clear policy position, certainly in a regulatory sense.

Craig Scroggie: Well, I think we don't know what we don't know at the moment. The government haven't made a clear policy position. Certainly, in a regulatory sense, that's not law. There's a lot of policy discussion. So we will see what the final position is on cost allocation. But I guess the point I would make, I think is important, Siraj. Regardless of what happens with the cost arrangements on network augmentation, doesn't really change anything for us in so far as how those costs would have historically been dealt with. We have been required to pay transmission infrastructure costs, for as long as we've been developing data centers. Some of the further steps that the government are looking to legislate on renewable components are already undertaken by our customers.

Speaker #1: That's not law. There's a lot of policy discussion, and so we will see what the final position is on cost allocation, but I guess the point I would make, which I think is important, is…

Speaker #1: Suraj, regardless of what happens with the cost arrangements on network augmentation, it doesn't really change anything for us insofar as how those costs would have historically been dealt with.

Speaker #1: We have been required to pay transmission infrastructure costs for as long as we've been developing data centers. Some of the further steps that the government is looking to legislate on renewable components are already undertaken by our customers.

Speaker #1: So if we compartmentalize the responsibilities on the power regulatory side, the first category is the things that we have always controlled and been responsible for: the building and development of the substation.

Craig Scroggie: If we compartmentalize the responsibilities on the power regulatory side, the first category is the things that we have always controlled and been responsible for. The building and development of the substation, the funding of the transmission infrastructure in order to get the electrons to site. But our customers have always been responsible for the second category, which is the procurement of the electrons themselves. And on larger sites, that will only continue to be true. So some of the regulatory considerations as it relates to the further upstream augmentation costs that may flow into the net generating cost, that will be an output of the cost per megawatt to deliver power at the site will still be the responsibility of our customer. So I think we have a high degree of certainty over things that we have always controlled.

Speaker #1: The funding of the transmission infrastructure, in order to get the electrons to site. But our customers have always been responsible for the second category, which is the procurement of the electrons themselves.

Speaker #1: And on larger sites that will only continue to be true . And so some of the regulatory considerations as it relates to the further upstream augmentation costs that may flow into the net , generating cost that will be an output of the cost per megawatt to deliver power at the site will still be the responsibility of our customer .

Speaker #1: So I think we have a high degree of certainty over the things that we have always controlled. There is a little bit more uncertainty for our customers as far as their final net energy cost is concerned, as it relates to those energy procurement determinations.

Craig Scroggie: There is a little bit more uncertainty for our customers as far as their final net energy cost is concerned, as it relates to that energy procurement determination. But again, I'll just state that no determinations have been made and there's no current legislative proposal, and those are the things that are being reviewed at this point in time. So we will certainly continue to stay highly engaged. We're on all the relevant energy and advisory committees with government and through the industry association. I think we're well-positioned and at the table providing good advice and feedback to government on what is practical implementation, and obviously practical to support the continued growth of the industry in Australia.

Speaker #1: But again, I'll just state that no determinations have been made, and there's no current legislative proposal. And those are the things that are being reviewed at this point in time.

Speaker #1: So we will certainly continue to stay highly engaged. We're on all the relevant energy and advisory committees with government and through the association.

Speaker #1: I think we're well positioned and at the table, providing good advice and feedback to government on what is practical for implementation, and obviously practical to support the continued growth of the industry in Australia.

Speaker #6: Got it . And just last one just on M5 . That's that's a large site at 1.2GW . Doesn't sound like your your you know , future bills are being underwritten by neo clouds .

Siraj Ahmed: Got it. Just last one, just on M5, that's a large site at 1.2 gigawatts. Doesn't sound like your future builds are being underwritten by Neoclouds, right? So is there an increasing mix of frontier labs that you're seeing and that's sort of 1.2 in these new built-to-suit sites, or is it still hyperscalers that's driving your sort of pipeline? Thanks.

Speaker #6: Right. So, is there an increasing mix of frontier labs that you're seeing? And that's sort of one point in these new build sites.

Speaker #6: So it's still hyperscalers that's driving your sort of pipeline. Thanks.

Speaker #1: Pipeline options reservations are at a level that historically we've never seen . Demand really is insatiable And whether it's a hyperscaler , the neo cloud or the model builder , there is an enormous amount of optionality on how we would consider selling sites of M5 size .

Craig Scroggie: Pipeline options, reservations are at a level that historically we've never seen. Demand really is insatiable. Whether it's a hyperscaler, the Neocloud or the model builder, there is an enormous amount of optionality on how we would consider selling sites of M5 sites. So at the moment, we continue to engage with customers on the M5 design and how potentially that would be sold to them, under what structure, what JV structure. So yeah, they are all live conversations. But as far as the right customer is concerned, Siraj, the right customer is the best credit quality at the best price to generate the highest return for our shareholders. So plenty of optionality in front of us right now as far as that is concerned.

Speaker #1: And so, at the moment, we continue to engage with customers on the M5 design and how, potentially, that would be sold to them, under what structure, what JV structure.

Speaker #1: So yeah , they are all live conversations . But as far as the right customer is concerned , Suraj , the right customer is the best quality at the best price to generate the highest return for our shareholders .

Speaker #1: So, plenty of optionality in front of us right now as far as that is concerned.

Speaker #6: Got it. Thanks, Rick.

Siraj Ahmed: Got it. Thanks, Matt.

Siraj Ahmed: Got it. Thanks, Craig.

Speaker #3: Thank you . We will now move to our next question and our next question comes from Roger . Samuel from Jefferies . Please ask your question .

Operator: Thank you. We will now move to our next question. Our next question comes from Roger Samuel, from Jefferies. Please ask your question, Roger. Your line is open.

Speaker #3: Roger, your line is open.

Speaker #7: Oh , hi . Morning , guys . I just got one question . So you've reclassified . The three assets into investment properties in FY 26 .

Roger Samuel: Oh, hi. Morning, guys. I have just got one question. You have reclassified the three assets into investment properties in 2026. Are you considering any further assets in the future, and does it have to be single-tenanted sites, or could it be a colocation site as well? Thanks.

Speaker #7: Is there are you considering any further assets in the future ? And does it have to be single tenanted sites or could it be a co-location site as well ?

Speaker #7: Thanks . So the

Speaker #5: Yeah . Thanks for the question , Roger . I'll take that one . We'll we'll continue to assess sites on a case by case basis .

Oskar Tomaszewski: Yeah. Thanks for the question, Roger. I will take that one. We will continue to assess sites on a case-by-case basis. I think it is likely that we will have further data center sites that are accounted for under lease and investment property accounting. S7 springs to mind. We have not made a determination on that one at this point, but that is certainly one we are keeping an eye on. It does very much depend on the nature of the underlying customer base, though. In the more traditional sites where we have got lots of smaller customers, some of who might take a quarter rack, it gets very messy if you try and apply lease accounting. If you have a look at our peers, especially here in Australia, who also use lease investment property accounting, many of them have less than 10 customers that take large chunks of capacity.

Speaker #5: I think it is likely that we will have further data center sites that are accounted for under lease and investment property accounting. S7 springs to mind.

Speaker #5: We haven't made a determination on on that one at this point , but that's certainly one we're keeping an eye on . It does very much depend on the nature of the underlying customer base , though .

Speaker #5: In the more traditional sites where we've got lots of smaller customers , some of some of who might take a quarter rack , it gets very messy .

Speaker #5: If you try and apply lease accounting . And if you have a look at our peers , especially here in Australia , who also use lease investment , property accounting , many of them have less than ten customers that take large chunks of capacity .

Speaker #5: So it's relatively straightforward to adopt that accounting treatment for that style of business, which is what you're seeing from us. So it'll very much depend on the site characteristics.

Oskar Tomaszewski: It is relatively straightforward to adopt that accounting treatment for that style of business, which is what you are seeing from us. So it will very much depend on the site characteristics. But I think it is reasonable to assume that the larger sites that are really well suited to large customer deployments, it does not have to be a single customer, it could be a small number of customers, say three, four, five customers who each take a significant portion of the overall site. I think it is reasonable to assume that type of deployment would lend itself to lease and investment property accounting.

Speaker #5: But I think it's reasonable to assume that the larger sites that are really well suited to large customer deployments—it doesn't have to be a single customer.

Speaker #5: It could be a small number of customers , say three , four , five customers to each take a significant portion of the overall site .

Speaker #5: I think it's reasonable to assume that that type of deployment would lend itself to lease and investment property accounting.

Speaker #7: Right . Okay . And maybe just to follow up as the valuation of these assets goes up , does it mean that you've got more headroom against your , your , your , your debt covenant to give you those right now ?

Roger Samuel: Right. Okay. Maybe just to follow up. As the valuation of these assets goes up, does it mean that you have got more headroom against your debt covenant?

Oskar Tomaszewski: In the short term, no. In the short term, in order to make sure that there is stability and there are not any adverse accounting policy changes either for us as the borrower or the lending group, our covenants are on a constant accounting basis. However, in the medium to longer term, as we change or replace our common terms deeds, I think it is reasonable to assume that the adoption of investment property accounting, which over time will result in higher valuations and higher balance sheet values, will result in us being able to accommodate more gearing on the balance sheet.

Speaker #5: Yeah . In , in the short term , no , in the short term , in order to make sure that there is stability and there aren't any adverse accounting policy changes either for us as the borrower or , or the lending group , our covenants are on a on a constant accounting basis .

Speaker #5: However , in the medium to longer term , as we change or replace our common terms , deed , I think it's reasonable to assume that the adoption of investment property accounting , which over time will result in higher valuations and higher balance sheet values , will will result in us being able to accommodate more gearing on the balance sheet

Speaker #7: Got it . Thank you

Roger Samuel: Got it. Thank you.

Speaker #3: Thank you. We will now take our next question from the line of Fraser McLeish from MSC. Mark, please pass your...

Operator: Thank you. We will now take our next question from the line of Fraser McLeish from MST Marquee. Fraser, your line is open.

Speaker #8: Great . Thanks . Just two quick ones from me . I'm Oscar , I think you said the cost per or cost to build has been coming down with the larger capacity builds .

Fraser McLeish: Great. Thanks. Just two quick ones from me. Oskar, I think you said the cost per or your cost to build has been coming down with the larger capacity builds. Just wondering if you could give us an update on what your kind of latest cost per megawatt for those large deployments is, please. That's the first one. Second one, just on the straight-line revenue recognition under the new accounting. I assume that means that we're going to see higher revenue per megawatt and EBITDA than we would have done otherwise under the old accounting, certainly in the early years. Thanks.

Speaker #8: Just wondering if you could give us an update on what your kind of latest cost per megawatt for those large deployments is, please.

Speaker #8: That's the first one . And second one just on the straight line . Revenue recognition under the new accounting , does . I assume that means that , you know , we're going to see higher revenue per megawatt .

Speaker #8: And EBITDA for than we would have done otherwise under the old accounting . Certainly , you know , in the in the early years .

Speaker #8: Thanks , Fraser .

Craig Scroggie: Fraser, I'm happy to do the first one. Oskar can do the second. As it relates to the larger developments and what an updated cost per megawatt may look like, it's not possible for us to put a single cost per megawatt on future developments, because every future development now for hyperscale or AI is a build to suit specific to the customer's design. So the cost per megawatt of those larger builds, in every case, will be specifically unique to the customer's design, and the requirement, the availability, the volume of liquid to chip versus air, whether the site is using recycled water or using more power specifically, because it's not using water. So there are many variables now that make the traditional colocation business cost per megawatt, not something that you can simply put one number on, as every design will be unique.

Speaker #1: I'm happy to do the first one. Oscar can do the second, as it relates to the larger developments and what an updated cost per megawatt may look like.

Speaker #1: It's not possible for us to put a single cost per megawatt on future developments, because every future development now, for hyperscale or AI, is a build-to-suit specific to the customer's design.

Speaker #1: So the cost per megawatt of those larger builds in every case will be specifically unique to the customers design and the requirement . The availability , the volume of liquid , the chip versus air , whether the site is using recycled water or using more power , specifically because it's not using water .

Speaker #1: So there are many variables now that make the traditional colo business cost per megawatt , not something that you can . Simply put , one number on , because every design will be unique .

Speaker #1: Oscar, you can do the second one.

Craig Scroggie: Oskar, you can do the second one.

Speaker #5: Sorry . Just take myself off mute . Yeah . So the the short answer is we . As we provided disclosure in relation to FY 26 and FY 27 , the impact on FY 26 of the straight line accounting treatment is less than a million .

Oskar Tomaszewski: Sorry, just taking myself off mute. Yeah. The short answer is, as we provided disclosure in relation to FY2026 and FY2027, the impact on FY2026 of the straight-line accounting treatment, is less than AUD 1 million. The impact on FY2027 is approximately AUD 10 million. So, in the first half of contract terms, we will tend to report higher revenue than we otherwise would have. Then in the second half of contract terms, we will report lower revenue than we otherwise would have. Net net, over the life of the contract, the recognized revenue and the recognized earnings are exactly the same. It's just a different way of accounting for things. The final point I would note is the lease accounting treatment, where we straight-line revenue, is entirely consistent with the sort of accounting that you see elsewhere in the industry.

Speaker #5: The impact on FY27 is approximately $10 million. So, in the first half of the contract terms, we will tend to report higher revenue than we otherwise would have.

Speaker #5: And then, in the second half of contract terms, we will report lower revenue than we otherwise would have. Net-net, over the life of the contract, the recognized revenue and the recognized earnings are exactly the same.

Speaker #5: It's just a different way of accounting for things. The final point I would note is the lease accounting treatment, where we straight-line revenue, which is entirely consistent with the sort of accounting that you see elsewhere in the industry.

Speaker #5: So, if anything, it brings us a little closer in line with some of our domestic and international peers.

Oskar Tomaszewski: So if anything, it brings us a little closer in line with some of our domestic and international peers. Thank you.

Speaker #8: Thank you

Speaker #3: Thank you. We will now take our next question from the line of Nick Harris from Morgans. Please ask your question.

Operator: Thank you. We will now take our next question from the line of Nick Harris from Morgans. Please ask your question.

Speaker #4: Hi , Craig . Thank you for taking my question . It's this one on S4 . Just given you've already signed a sizable customer contract and you're building now , which I presume is fixed price .

Nick Harris: Hi, Craig and Oskar. Thank you for taking my question. It is just one on S4. Just given you have already signed a sizable customer contract and you are building now, which I presume is fixed price, you kind of netted off the key risks on both sides of that. Are there any other key milestones NEXTDC would need to complete before you could potentially sign that JVCo or third-party funding deal? I am thinking about it in the context of S4 capital requirements, but also S7. Could you actually have this all lined up specifically with S7, if you are able to lock in a customer in construction and put it in the new vehicle ahead of actually the funding? Thank you.

Speaker #4: So you kind of netted off the key risks on both sides of that. Are there any other key milestones NEXTDC would need to complete before you could potentially sign that JV, CoE, or third party funding deal?

Speaker #4: And I'm thinking that thinking about it in in the context of S4 capital requirements , but also S7 , could you actually have this all lined up specifically with S7 if you're able to lock in a customer and construction and put it in the new vehicle ahead of actually the funding ?

Speaker #1: Thank you . Yeah . Thanks , Nick . So just to restate the question , S4 , could we move with the JV ?

Craig Scroggie: Yeah. Thanks, Nick. Just to restate the question, S4, could we move with the JVCo structure, ahead of the 115 megawatts that is still there? In order for us to get the very best return outcome for shareholders, the timing of that requires us to lock in the final 115 megawatts that we have available, that we have secured power for, to sell on the best terms that we can. It is in our best interest and the best interest of our shareholders for us to sell the balance of S4 at the highest possible rate of return to have then fully completed a 365-megawatt site to double A or better credit quality counterparts that would allow us to get the very lowest cost of funding into the S4 vehicle.

Craig Scroggie: Yeah. Thanks, Nick. Just to restate the question, S4, could we move with the JVCo structure, ahead of the 115MW that is still there? In order for us to get the very best return outcome for shareholders, the timing of that requires us to lock in the final 115MW that we have available, that we have secured power for, to sell on the best terms that we can. It is in our best interest and the best interest of our shareholders for us to sell the balance of S4 at the highest possible rate of return to have then fully completed a 365-megawatt site to double A or better credit quality counterparts that would allow us to get the very lowest cost of funding into the S4 vehicle.

Speaker #1: Co-structure ahead of the 115 MW? That's still there in order for us to get the very best return outcome for shareholders. The timing of that requires us to lock in the final 115 MW that we have available, that we have secured power for, to sell on the best terms that we can.

Speaker #1: And so it's in our best interest, and the best interest of our shareholders, for us to sell the balance of S4 at the highest possible rate of return, to have the fully 365-megawatt site to double-A or better credit quality counterparties.

Speaker #1: That would allow us to get the very lowest cost of funding into the S4 vehicle. That's partly the reason the earlier comments relating to the timing of JV see it as a ring-fenced asset financing vehicle first, and so sequencing becomes the primary driver, based on the number one priority being maximizing return for shareholders.

Craig Scroggie: That is partly the reason the earlier comments, relating to the timing of JV, see it as a ring-fenced asset financing vehicle first. Sequencing becomes the primary driver based on the number one priority being maximizing return for shareholders. It is our intention to secure a contract for the balance of 115 megawatts, then that will give us 365 megawatts fully sold and contracted that we would then undertake the capital recycling process on in the JVCo structure. That is the current plan as it relates to the sequencing of S4's joint venture program.

Craig Scroggie: That is partly the reason the earlier comments, relating to the timing of JV, see it as a ring-fenced asset financing vehicle first. Sequencing becomes the primary driver based on the number one priority being maximizing return for shareholders. It is our intention to secure a contract for the balance of 115MW, then that will give us 365MW fully sold and contracted that we would then undertake the capital recycling process on in the JVCo structure. That is the current plan as it relates to the sequencing of S4's joint venture program.

Speaker #1: And so it's our intention to secure a contract for the balance of 115 MW, and then that will give us 365 MW fully sold.

Speaker #1: And contracted that we would then undertake the capital recycling process in the JV Co structure. So that is the current plan as it relates to the sequencing of S4's joint venture program.

Speaker #4: Thank you .

Nick Harris: Thank you.

Speaker #3: Thank you. We will now move to our next question, and our next question comes from James Druce from CLSA. Please, please ask your question.

Operator: Thank you. We will now move to our next question. Our next question comes from James Drews from CLSA. Please ask your question, James. Your line is open.

Operator: Thank you. We will now move to our next question. Our next question comes from James Druce from CLSA. Please ask your question, James. Your line is open.

Speaker #3: James, your line is open.

Speaker #7: Yeah .

James Drews: Yeah. Hi, good morning, Craig and Oskar. Just actually following up on Eric's first question. Just wanted to clarify something. If you do have a, just theoretically, you have a hyperscale lease, you have a GC signed, and you sell it to a partner in a JV fund, you have substantially transferred most of the risk of that development to the JV partner. Do you recognize a profit or development profit in underlying earnings up front at that point, or is that not going to underlying earnings?

James Druce: Yeah. Hi, good morning, Craig and Oskar. Just actually following up on Eric's first question. Just wanted to clarify something. If you do have a, just theoretically, you have a hyperscale lease, you have a GC signed, and you sell it to a partner in a JV fund, you have substantially transferred most of the risk of that development to the JV partner. Do you recognize a profit or development profit in underlying earnings up front at that point, or is that not going to underlying earnings?

Speaker #8: Hi . Good morning .

Speaker #7: , Craig .

Speaker #5: And Oscar .

Speaker #9: Just actually following up on Eric's first question . I just want to clarify something . If you do have a just theoretically have a hyperscale lease , you have a GC signed and you sell it to a partner in a JV fund .

Speaker #9: You substantially transferred most of the risk of that development to the JV partner. Are you recognizing a profit or development profit in underlying earnings up front?

Speaker #9: At that point, or is that not going to underlying earnings?

Speaker #1: I think your comment on processes and procedure is correct, Oscar. You can comment on the accounting outcome, even though the...

Craig Scroggie: I think your comment on processes, procedure is correct. Oskar, you can comment on the accounting outcome, even though I am not sure it is certain, but Oskar?

Speaker #1: I'm not sure it's certain, but Oscar, if it is.

Oskar Tomaszewski: If it is one-off in nature and not particularly certain or predictable, we normalize for it, so we strip it out of underlying EBITDA. As you would have seen, we booked some revaluation gains. We do not consider that part of our underlying EBITDA because they are somewhat unpredictable and one-off in nature. Similar to development profits, we do not expect to account for those as part of underlying EBITDA because they can be quite lumpy and one-off in nature. We would rather provide investors with visibility on the underlying profitability of the business.

Speaker #5: If it's one-off in nature and not particularly certain or predictable, we normalize for it. So we strip it out of underlying EBITDA.

Speaker #5: So, as you would have seen, we booked some revaluation gains. We don't consider that part of our underlying EBITDA because they are somewhat unpredictable.

Speaker #5: And with profits of that nature, similar to development profits, we don't expect to account for those as part of underlying EBITDA because they can be quite lumpy and one-off in nature.

Speaker #5: We'd rather provide investors with visibility on the underlying profitability of the business.

Speaker #9: Yeah , I get that . But I suppose you are rolling out a like a hyperscaler business though as well , right ? Is that fair ?

James Drews: Yeah, I get that. I suppose you are rolling out a hyperscaler business, though, as well, right? Is that fair?

James Druce: Yeah, I get that. I suppose you are rolling out a hyperscaler business, though, as well, right? Is that fair?

Speaker #5: Yeah . Look , we to the extent that there are development profits , we will obviously book them , disclose them , they'll be on the front page , front page of the PNL as part of our underlying EBITDA adjustments .

Oskar Tomaszewski: Yeah, look, to the extent that there are development profits, we will obviously book them, disclose them. They will be on the front page of the P&L. As part of our underlying EBITDA adjustments, we provide a lot of visibility and clarity in terms of what adjustments we make. To the extent that investors take a different view, it is very easy for investors to make their own adjustments as they see fit.

Speaker #5: We provide a lot of visibility and clarity in terms of what adjustments we make. To the extent that investors take a different view, it's very easy for investors to make their own adjustments as they see fit.

Speaker #9: Yeah , sure . And one more , if I may , how do we think about the binding contract risk for , say , the the 67MW in the forward order book in FY 30 ?

James Drews: Yeah, sure. One more, if I may. How do we think about the binding contract risk for, say, the 67 megawatts in the forward order book in FY30? Are you actually taking on, what construction risk are you taking on for that, for instance?

James Druce: Yeah, sure. One more, if I may. How do we think about the binding contract risk for, say, the 67MW in the forward order book in FY30? Are you actually taking on, what construction risk are you taking on for that, for instance?

Speaker #9: Actually, what construction risk are you taking on for that? For instance,

Speaker #1: Well , we take on 100% of construction risk . That is our job . And the timing in the forecast of those out years in 28 , 29 , and 30 , they are all fully contracted .

Craig Scroggie: Well, we take on 100% of the construction risk. That is our job. The timing and the forecast of those out years in 2028, 2029, and 2030, they are all fully contracted. As far as the binding nature, there are no reservations or options. Everything that has been included in the revenue ramp slide is 100% contracted and will be delivered. The entirety of those are 100% committed and contracted, and we are 100% responsible for delivering them.

Speaker #1: So, as far as the binding nature, there are no reservations or options. Everything that has been included in the revenue ramp slide is 100% contracted and will be delivered.

Speaker #1: So, the entirety of those are 100% committed and contracted, and we are 100% responsible for delivering them.

Speaker #5: What I'd what I'd also just add , sorry , what I'd also just add is the fact that the fact that these capacity deployments are booked in advance gives us , obviously , a lot of visibility and a lot of flexibility with regards to ordering long lead time equipment , different proposition .

Oskar Tomaszewski: What I'd-

James Drews: Okay.

James Druce: Okay.

Oskar Tomaszewski: What I'd also just add-

James Drews: Yeah.

James Druce: Yeah.

Oskar Tomaszewski: Sorry. What I would also just add is the fact that these capacity deployments are booked in advance gives us obviously a lot of visibility and a lot of flexibility with regards to ordering long lead time equipment. Different proposition if we were thinking about forecasting what sort of business we may do in FY30 versus having it contracted and having visibility. The fact that we have that business booked and upfront does actually help quite a bit in terms of locking and managing our costs in as we go.

Speaker #5: If we were thinking about forecasting what sort of business we might do in FY30 versus having a contract and having visibility, the fact that we have that business booked and upfront does actually help quite a bit in terms of locking in and managing our costs as we go.

Speaker #9: Okay . And can you provide a bit of a sense of the wriggle room you have on , on delivery dates for , for that capacity , say in FY 30 ?

James Drews: Okay. Can you provide a bit of a sense of the wriggle room you have on delivery dates for that capacity, say, in FY30? Is that 18 months, 12 months? How does it work?

James Druce: Okay. Can you provide a bit of a sense of the wriggle room you have on delivery dates for that capacity, say, in FY30? Is that 18 months, 12 months? How does it work?

Speaker #9: Is there, like, 18 months? Twelve months? Like, how does it work?

Speaker #1: Well , as far as the contracting schedule is , that's the we've given the dates , the contracts need to be delivered under as far as any further Timing of that , it's .

Craig Scroggie: Well, as far as the contracting schedule is, we have given the dates that the contracts need to be delivered under as far as any further timing of that. If we can deliver some of them early, we may deliver some of them early. I am not sure I understand the question exactly.

Speaker #1: If we can deliver some of them early, we may deliver some of them early. But I'm not sure I understand the question exactly.

Speaker #9: Oh , so where where I'm going at is if you look around the world like 50% of projects are running more than six months late now , Australia might be an exception to that , but obviously there's , you know , increasing risk around labor in particular .

James Drews: Where I am going at is if you look around the world, 50% of projects are running more than six months late. Australia might be an exception to that, but obviously there is increasing risk around labor, in particular. I know you guys are trying to sort of ameliorate that. I am just trying to understand that capacity that you are delivering in FY30, what asset does that pertain to? Have you started building it? Just trying to understand the actual risk around that delivery and what happens if things actually get pushed out a bit.

James Druce: Where I am going at is if you look around the world, 50% of projects are running more than six months late. Australia might be an exception to that, but obviously there is increasing risk around labor, in particular. I know you guys are trying to sort of ameliorate that. I am just trying to understand that capacity that you are delivering in FY30, what asset does that pertain to? Have you started building it? Just trying to understand the actual risk around that delivery and what happens if things actually get pushed out a bit.

Speaker #9: I know you guys are trying to sort of ameliorate that . I'm just trying to understand , you know , that that capacity that you're delivering in FY 30 , like , you know , what asset does that pertain to ?

Speaker #9: Have you started building it ? You know , just trying to understand the actual risk around that delivery and what , what happens if things actually get pushed out a bit ?

Speaker #1: Well , the delivery risk is significantly lower because if you consider that the capacity that we have sold and contracted that FY 30 component is the tail end of all of the other delivery handed over in a sequence every year .

Craig Scroggie: Well, the delivery risk is significantly lower because if you consider the capacity that we have sold and contracted, that FY30 component is the tail end of all of the other delivery handed over in a sequence every year. So we're obviously building all of that. It will be ready early, and if the customer can take it early, we may hand it over early and activate revenue early. So the risk component is materially less on the out year than it is on current year because the building will have been fully built and delivered well in advance of the tail end being handed over.

Speaker #1: So, we're obviously building all of that. It'll be ready early, and if the customer can take it early, we may hand it over early and activate revenue early.

Speaker #1: So, the risk component is materially less in the out year than it is in the current year, because the building will have been fully built and delivered well in advance of the tail end being handed over.

Speaker #9: Perfect. Okay. Thank you.

James Drews: Perfect. Okay. Thank you.

James Druce: Perfect. Okay. Thank you.

Speaker #3: Thank you . Next , we have follow up question from the line of Siraj Ahmed from Citi . Please ask your question . Siraj , your line is open .

Operator: Thank you. Next we have follow-up question from the line of Siraj Ahmed from Citi. Please ask your question, Siraj, your line is open.

Speaker #6: Just a quick question . Oscar , you mentioned that you're looking at selective asset recycling , right . Can you just maybe elaborate on that .

Siraj Ahmed: Just a quick question. Oskar, you mentioned that you're looking at selective asset recycling, right? Can you just maybe elaborate on that as to what sort of assets, how should we think about that? Thanks.

Speaker #6: And still, you know, what sort of assets—how should we think about that? Thanks.

Speaker #5: Suraj . That was that was a comment in relation to what we previously disclosed in JV co . So S4 and S7 , I think it's reasonable to assume that M5 would be another asset that we would consider doing a JD on

Craig Scroggie: Suraj, that was a comment in relation to what we previously disclosed in JVCo, so S4 and S7. I think it is reasonable to assume that M5 would be another asset that we would consider doing a JV on.

Craig Scroggie: Siraj, that was a comment in relation to what we previously disclosed in JVCo, so S4 and S7. I think it is reasonable to assume that M5 would be another asset that we would consider doing a JV on.

Speaker #4: Okay .

Siraj Ahmed: Okay, so it is just a JV comment. All right. Thank you.

Speaker #6: So, this is JB. All right. Thank you.

Speaker #5: Yeah , yep .

Craig Scroggie: Yeah. No problem.

Speaker #3: Thank you. That completes our question and answer session. I would now like to turn the conference back to Mr. Craig Scroggie for his closing remarks.

Operator: Thank you. That completes our question and answer session. I would now like to turn the conference back to Mr. Craig Scroggie for his closing remarks.

Speaker #1: Thank you, ladies and gentlemen. I appreciate you all joining us today. Before we close, a housekeeping note: we have our investor days in Sydney and Melbourne next Monday and Tuesday, and they are currently fully subscribed.

Craig Scroggie: Thank you, ladies and gentlemen, appreciate you all joining us today. Before we close, a housekeeping note. We have our investor days in Sydney and Melbourne next Monday and Tuesday, and they are currently fully subscribed. If you have registered, obviously we look forward to seeing you there. The venue is S3 Theatre in Sydney and the M2 Theatre in Melbourne. They do require security registration, so there will be no walk-ins on the day. Please ensure you have registered and secured your ticket for the event. I will be joined by our C-level leadership team, and we will have the opportunity to spend plenty of time on further Q&A with investors and analysts, so look forward to those days. There are three things to remember from today's call. FY26 was the largest contracting year in our history, with contracted utilization now at 740 MW.

Craig Scroggie: Thank you, ladies and gentlemen, appreciate you all joining us today. Before we close, a housekeeping note. We have our investor days in Sydney and Melbourne next Monday and Tuesday, and they are currently fully subscribed. If you have registered, obviously we look forward to seeing you there. The venue is S3 Theatre in Sydney and the M2 Theatre in Melbourne. They do require security registration, so there will be no walk-ins on the day. Please ensure you have registered and secured your ticket for the event. I will be joined by our C-level leadership team, and we will have the opportunity to spend plenty of time on further Q&A with investors and analysts, so look forward to those days. There are three things to remember from today's call. FY 2026 was the largest contracting year in our history, with contracted utilization now at 740 MW.

Speaker #1: So, if you have registered, obviously we look forward to seeing you there. The venue is S3 Theatre in Sydney and the M2 Theatre in Melbourne.

Speaker #1: They do require security registration, so there will be no walk-ins on the day. Please ensure you have registered and secured your ticket for the event.

Speaker #1: I will be joined by our C-level leadership team, and we'll have the opportunity to spend plenty of time on further Q&A with investors and analysts, so look forward to those days.

Speaker #1: There are three things to remember from today's call. FY26 was the largest contracting year in our history, with contracted utilization now at 740 MW. Every megawatt of the 565 MW forward order book is a binding customer contract, and it takes billing to more than four times.

Craig Scroggie: Every megawatt of the 565 MW forward order book is a binding customer contract, and it takes billing to more than four times today's level by FY30. Lastly, the capital is in place to rapidly grow our business. AUD 9.75 billion were raised, AUD 8.7 billion of liquidity and no debt maturities until FY30. The contracts are signed, the capital is raised, and our job in FY27 is execution. That is where our focus sits. Thank you for joining us today for the results call. Thank you to our customers, our dedicated team members, and to our shareholders. Bye for now.

Craig Scroggie: Every megawatt of the 565 MW forward order book is a binding customer contract, and it takes billing to more than four times today's level by FY30. Lastly, the capital is in place to rapidly grow our business. AUD 9.75 billion were raised, AUD 8.7 billion of liquidity and no debt maturities until FY30. The contracts are signed, the capital is raised, and our job in FY 2027 is execution. That is where our focus sits. Thank you for joining us today for the results call. Thank you to our customers, our dedicated team members, and to our shareholders. Bye for now.

Speaker #1: Today's level by FY 30 . Lastly , the capital is in place to rapidly grow our business . $9.75 billion were raised , $8.7 billion of liquidity and no debt maturities until FY 30 .

Speaker #1: The contracts are signed. The capital is raised, and our job in FY27 is execution. That is where our focus sits.

Speaker #1: Thank you for joining us today for the results call. Thank you to our customers, our dedicated team members, and to our shareholders.

Speaker #1: Bye for now .

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect your lines.