The S2 data centre remains under development, with critical infrastructure build-out expected to continue for at least another two years, and NextDC says revenue recognition for the new contracted commitments will ramp up during FY20, with the full run-rate impact expected to be recognised in FY21.
According to NextDC, the demand for its data centre services continues to accelerate and exceed expectations, including the S2 data centre which it says is is already half full prior to opening.
At the start of S2 construction, the site’s initial planned capacity at opening was only 6MW in phase 1, but when the company announced FY18 results, an additional 8MW of new capacity was announced to reflect what the company says was demand expectations at the time.
This will not change the company’s existing FY19 capex guidance — between $430-$470 million — as the additional capex will form part of the additional capacity to be delivered in FY20, NextDC said in a statement issued on Monday.
“We advised the market at the time of FY18 results that the company’s sales pipeline was very strong and the timing of large sales to the hyperscale cloud market would be unpredictable given the long run nature of the sales cycle. We’re very pleased to have now locked in material MW contracted commitments against these expectations,” said chief executive Craig Scroggie.
“The demand for our data centre services continues to accelerate and exceed our expectations, particularly in the Sydney market, yet requires discipline and patience as the nexus between the hyperscale capacity planning, site development, infrastructure deployment and revenue recognition can in practice be two to three years for these very large hyperscale developments. This is all part of NextDC's digital infrastructure business model, which continues to build long-term value through contracted capacity and tangible asset backing.”