Australian (ASX) Stock Market Forum

NXT - NEXTDC Limited

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growthgauge said:
I have put together two articles in last week about NextDc
Click to expand...

Aside from the errors re profits/losses in your writeup, the narrative speculation is doing a lot of heavy lifting.

Also being so enthusiastic for the dilution of shareholders to fund a loss making business is an odd position to hold!
 
peter2 said:
@growthgauge NXT made a loss of 25.6M in FY23, not a profit as shown in your charts (your 1st NXT report).

View attachment 174868
And now they've lost another 22M in the 1H24.

View attachment 174869

It seems that NXT is growing the business while also growing the losses. Is there any possibility that they'll make a profit one day?
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Thank you. I will correct it ( while inputting data i missed out on negative sign - user error). However, NextDC isn't the type of company where net profit will come straight away. I think free cash flow or EBITDA is the right measure.. which i believe is the leading indicators.
 
FCF has been negative for the last 13 years, EBITDA is called Bullsh*t earnings for a reason, its the metric you use when your business is unprofitable and doesnt produce FCF. Its an instant red flag for me when a company focusses on EBITDA, especially if they avoid talking about NPAT, EPS and FCF!
 
galumay said:
Aside from the errors re profits/losses in your writeup, the narrative speculation is doing a lot of heavy lifting.

Also being so enthusiastic for the dilution of shareholders to fund a loss making business is an odd position to hold!
Click to expand...
Thanks for the feedback. I kind of agree with you. That being my first article- probably i have carried away little bit...but love the feedback, btw, i have updated profit error. I will try and polish the article as time oermits so narrative doesn't do heavy lifting...trust me it is my newness to writing and not the intention.
 
galumay said:
FCF has been negative for the last 13 years, EBITDA is called Bullsh*t earnings for a reason, its the metric you use when your business is unprofitable and doesnt produce FCF. Its an instant red flag for me when a company focusses on EBITDA, especially if they avoid talking about NPAT, EPS and FCF!
Click to expand...
I agree with you in this one. But the business model is such that investment upfront is necessary. If you remove new investment than their existing DCs are generating cash. Although not enough to self fund atm.
 
galumay said:
Sure, but trouble is the upfront investment has been going on for 13 years!! Its a REIT dressed up as a tech business, and priced like its a SaaS model!
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I also believe there is not much IP in such a business, basically, as indicated before: REIT + bunch of A/C and racks of servers:
internationally noncompetitive due to our power cost and RE costs, but able to focus on the niche market of Australian based cloud: for speed or legal reasons.
Anyone with a couple of billions can replicate, and the only reason google or amazon Nicrosoft are not self hosting is: because it is better to have it run below costs by people like NextDC and de facto get subsidized by shareholders:
NextDC ownership is a ticket to subsidize the FANGS......paradox isn't it..but as anything, it can be traded with profit
 
qldfrog said:
so bad news for nextDC , they were maybe trying to make a profit on business ..how competitive can you be against some of these giants with purchasing power for hardware, politician access for RE and tax deals and cut and copy systems /architecture..
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totally agree .. A quick look at AWS ,... and who moves the desirable work which way, in-house ?
 
The "narrative speculation" still drives NXT and MAQ to new highs. Onward and upward until the air thins out.

nxt6.PNG


Still holding NXT with oximeter nearby.
 
That's harsh. Your comment would be better placed in the Magnis Energy Technologies (MNS) thread.

NXT is building a business that many others are in too also (DUG, MAQ, GMG, Amazon-AWS, MSFT, Google . . .).

Data-centres require huge capital to build and huge power requirements when operating. I agree it's hard to know if NXT and many others will be profitable in the future. It may end up like ABC Learning. Enron was blatant fraud.
 
peter2 said:
NXT is building a business that many others are in too also (DUG, MAQ, GMG, Amazon-AWS, MSFT, Google . . .).

Data-centres require huge capital to build and huge power requirements when operating. I agree it's hard to know if NXT and many others will be profitable in the future....
Click to expand...
don't forget Blackstone - I think they're a coal company? Or Onyx miner?

Positioning for the coming megatrends, with three standing out:
  • demand for data centres amid an explosion in digitisation;
  • the increasingly urgent global energy transition; and
  • a boom in private credit due to changing bank regulations.
And, after just over 12 months into the generative artificial intelligence revolution, these themes are coming together.

Blackstone is at the forefront of a global data centre boom that has been turbocharged by AI. The firm’s investment three years ago in US data centre operator QTS has been a huge winner, and late last year it set up a joint venture with another US group, Digital Realty, to build hyperscale data centres in Europe and North America.

Data centres and energy companies will require long duration finance that matches up with the standard data centre lease of 15 to 20 years, and they might be unable to access capital from banks or public markets, creating opportunity for private capital providers.

In Blackstone speak, this is three key investment neighbourhoods smashing into each other in a unique and potentially profitable way.

“The digitisation neighbourhood is colliding with the green energy neighbourhood, and it’s also colliding with the private credit area", said Blackstone
 
peter2 said:
That's harsh. Your comment would be better placed in the Magnis Energy Technologies (MNS) thread.

NXT is building a business that many others are in too also (DUG, MAQ, GMG, Amazon-AWS, MSFT, Google . . .).

Data-centres require huge capital to build and huge power requirements when operating. I agree it's hard to know if NXT and many others will be profitable in the future. It may end up like ABC Learning. Enron was blatant fraud.
Click to expand...
They are not alone sure, but they are now very big.
Have they ever made a profit yet?
Anyway, I see them linked to AI...
Like bhp, the problem is when you have inner knowledge of a business
But I traded them in recent past etc. as I would any code..
As long as I do not call this investment,I am ok
 
traveling sideways
.
▪ Total revenue increased A$42.0m (12%) to A$404.3m (FY24 Guidance: A$400m – A$415m)
▪ Net revenue2 grew A$28.5m (10%) to A$307.9m (FY24 Guidance: A$296m – A$304m)
▪ Record annual sales of 50.5MW in FY24, with contracted utilisation increasing 41% to 172.6MW
▪ Interconnection revenues increased A$3.0m (12%) to $28.3m, representing 9.2% of net revenue (FY23: 9.0%)

RECORD EARNINGS RESULT
▪ Underlying EBITDA increased A$10.6m (5%) to A$204.3m (FY24 Guidance: A$190m – A$200m)
▪ Billing utilisation increased 8.3MW (11%) to 86.0MW
▪ Record forward order book of 86.6MW5 to ramp into billing across FY25 to FY29, underpinning future growth in revenues and earnings
▪ Completed an Entitlement Offer of A$1.3bn to accelerate the development and fit out of NEXTDC’s digital infrastructure platform
▪ Strong liquidity of A$2.7bn at the end of June 2024, including cash of A$1.2bn and undrawn debt facilities of A$1.5bn
▪ Best-in-class data centres in prime metropolitan locations across major capital cities underpin approximately A$5.2bn of total assets
– Includes A$2.4bn of property (land and buildings)

NETWORK EXPANSION CONTINUES
▪ Strategic focus on development activity and asset positioning for accelerated growth with ~A$1.0bn of capex invested in FY24
▪ 32MW of built capacity added across Australia with an additional 72MW of fit-out in progress globally
▪ D1 Darwin & NE1 Newman facilities operational, S6 Sydney fit-out on track for 1HFY25 completion, A1 Adelaide opening on 4 Sept 2024
▪ International expansion continues with early works commenced for KL1 Kuala Lumpur and AK1 Auckland planning works well advanced
 
qldfrog said:
Like bhp, the problem is when you have inner knowledge of a business
Click to expand...
Its insulting to BHP to compare it to Nextdc. BHP is a cash generating machine and any problems BHP has had have been caused by incompetent management rather than the nature of the business itself.

I wouldn't touch NextDC with a barge pole. It will be a long time (if ever) before it spits out decent free cash flow.
 
I dont understand why anyone would risk capital on this dog. Billions of capital spent over the last 8 years, for no return at all, just accumulated losses of many millions of $'s. Of course its possible that one day it may make some returns, but the risk is just massively asymmetric, much more likely the torching of shareholder capital continues unabated.
 
earwig oh again

NextDC has a 4.9 per cent fall to $16.97 following the completion of a $550m placement as part of a $750m raising.
 

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