The Sims Lifecycle Services (SLS) business is now a core driver of Sims Ltd (ASX: SGM) earnings growth, making up around 40% of group EBIT in the first half of FY26 and reflecting rapid growth as hyperscaler partners increase demand.
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What did Sims Group report?
- SLS contributed approximately 40% of Sims Group's underlying EBIT in H1 FY26 (A$49 million out of A$121.1 million)
- Group underlying EBIT rose to A$121.1 million in H1 FY26, up from A$73.0 million in H1 FY25
- FY26 SLS underlying EBIT is forecast in the range of A$165–185 million
- FY26 Memory GB Sold forecast is 65–70 million, using new volume metric
- Resale gross margin from Memory GB Sold sits at approximately 30%–35%
- SLS has a capital-light, diversified revenue model with strong secondary market access
What else do investors need to know?
SLS is embedded in key hyperscaler decommissioning cycles, working with major cloud infrastructure players and capturing structural demand growth as hyperscalers invest in new data centres. The business continues to serve both hyperscaler and enterprise clients, combining secure execution, quality service and the ability to ramp up capacity quickly.
The newly introduced "Memory GB Sold" metric now gives a clearer picture of SLS's growth drivers, connecting volumes directly to revenue and reflecting the business's evolving role as a global leader in circular cloud solutions. SLS has also announced an expansion in Ireland, expected to be operational from July 2026, supporting future European growth.
What did Sims Group management say?
Sims Group CEO & Managing Director Stephen Mikkelsen said:
SLS is already a material earnings driver for Sims and is uniquely positioned at the intersection of structural growth trends in technology. Our capital-light business model and strong partner relationships set us up well for the next phase.
What's next for Sims Group?
SLS will continue to focus on expanding volumes with existing hyperscaler partners while onboarding new clients and growing its footprint in key regions like Ireland. The business is scaling up capacity and automation, supporting both DDR4 and next-generation DDR5 memory markets.
Management expects structural tailwinds in cloud and memory markets to drive strong demand over the coming years. SLS targets 15 million Memory GB Sold in Ireland by FY29 and aims to expand adjacent services, such as cloud migration, for enterprise clients.
Sims Group share price snapshot
Over the past 12 months, Sims Group shares have risen 39%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.
