The NEXTDC Ltd (ASX: NXT) share price is in focus after the company confirmed it remains well within its financial covenants, with a pro forma interest cover ratio of 5.91x and healthy liquidity of $8.7 billion at 30 September 2026.
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What did NEXTDC report?
- Complied with both financial covenants at 30 June 2026
- Pro forma Interest Cover Ratio (ICR): 5.91x (minimum required: 1.5x)
- Gearing ratio: 8.2% (maximum allowed: 60%)
- Pro forma Covenant EBITDA: $706.0 million
- Liquidity of $8.7 billion at 30 September 2026 (including $1.3 billion in cash and $7.4 billion in undrawn facilities and hybrids)
What else do investors need to know?
NEXTDC has proactively excluded contracted EBITDA from affected M3 Melbourne customer contracts due to ongoing power delays, reducing any potential uncertainty about its reported compliance position. The company's strong liquidity is backed by undrawn senior debt facilities and subordinated capital, and there are currently no maintenance covenants on its subordinated debt.
NEXTDC's financial covenant ratios are tested twice yearly, and the next review is set for 31 December 2026. While the affected M3 contracts are delayed, the company says its other M3 Melbourne contracts remain fully operational and unaffected.
What's next for NEXTDC?
NEXTDC notes it continues to expect compliance with its financial covenants at the next test date. The company is closely monitoring the effects of the M3 Melbourne grid supply delays but expects billing for the additional contracted utilisation to commence in the second half of FY27, supporting future covenant compliance.
With robust liquidity, a committed customer pipeline, and a disciplined approach to managing its debt headroom, NEXTDC remains focused on delivering long-term infrastructure for Australia's digital economy.
NEXTDC share price snapshot
Over the past 12 months, NEXTDC shares have declined 64%, trailing the S&P/ASX 200 Index (ASX: XJO), which has fallen 2% over the same period.
