NextDC rallies on earnings beat amid tech sector carnage

NextDC (ASX: NXT) smashed analyst expectations in the first-half, delivering a net profit of $10.2m compared to Bell Potter and Citi forecasts of $4.6m. 

NextDC shares have done the seemingly impossible, up 3% on a day where the S&P/ASX 200 Info Tech Index is down -5.4%. 

Financials at glance 

• Revenue of $144.5m, up 19% 

• Net profit of $10.3m versus -$17.8m a year ago 

• Earnings margins of 57%, up 3 percentage points 

• Operating cashflow of $69.5m, up 9% 

• Liquidity (cash and undrawn facilities) of $2.1bn 

FY22 guidance upgrade

“As a result of the strong 1H22 performance, the Company is able to upgrade its FY22 Guidance as well as accelerate project investments in 2H22,” said CEO Craig Scroggie. 

“With liquidity of over $2 billion, combined with record operating cashflow, NextDC is in an outstanding position to take advantage of current and future customer opportunities and to press its advantage into new regions and edge locations.”

Data centre services revenue is now expected to be in the range of $290-295m, up from $285-295m). This represents 18-20% growth compared to FY21. 

Capital expenditure was lifted to the range of $530-580m, up from $480-540m.

By comparison, FY21 capex was $301m.

Initial broker views

NextDC's first-half results topped Citi expectations.

Earnings were boosted by faster billing and greater operating leverage, according to the broker. 

Citi held its Buy rating and $15.40 target price (45% upside).

NextDC 12-month share price chart