Macquarie boosts profit as Sydney data centre spend rises

Macquarie Technology Group reported a 3% rise in half-year EBITDA to AUD $57.9 million, extending its profit growth streak to 22 consecutive halves, as it continued heavy investment in new data centre capacity in Sydney.

Results for the six months to 31 December 2025 were in line with guidance. Operating cash flow was AUD $42.2 million and cash conversion was 109%.

Recurring contracted revenue remained a core feature of the business, with 95% of revenue across its data centres, cloud, cyber security, government and telecoms operations coming from contracted monthly recurring revenue.

Data centre build

Capital expenditure totalled AUD $142.1 million in the half, driven by growth investment. Growth capex was AUD $123.7 million, including AUD $120.9 million spent on IC3 Super West. Customer growth capex was AUD $11.4 million and maintenance capex was AUD $7.0 million.

IC3 Super West is the group's largest data centre project and is located at Macquarie Park in Sydney. Construction remains on track and on budget.

The group also highlighted additional funding for the build programme, securing a new AUD $50 million incremental debt facility. This will allow Macquarie Data Centres to bring forward capacity delivery beyond the initial 6MW of IC3 Super West.

As at 31 December 2025, Macquarie had AUD $393 million of undrawn debt facilities available. Total undrawn debt facilities were AUD $443 million including the new AUD $50 million incremental facility. Cash and deposits were about AUD $12 million.

Guidance range

For FY26, group EBITDA is expected to be approximately AUD $114 million to AUD $117 million, comprising CS&G EBITDA of AUD $55 million to AUD $56 million, Macquarie Data Centres EBITDA of AUD $40 million to AUD $41 million, and Macquarie Telecom EBITDA of AUD $19 million to AUD $20 million.

Phase 1 of IC3 Super West, covering 6MW, is expected to be completed by September 2026. The group described this as the next major step-up in Macquarie Data Centres capacity.

The AUD $50 million facility will fund the acquisition of long lead-time equipment to support planned capacity of 19MW out of a total 47MW at IC3 Super West.

Chairman Peter James described the group's portfolio as a mix of cloud, cyber security, telecoms and data centre operations.

"Macquarie Technology Group is pleased to announce its 22nd consecutive half of EBITDA growth. The Company continues to grow and evolve and sees ongoing opportunities to scale its digital infrastructure. The combination of our diversified cloud, cyber security, telecom and data centre strategies means that the company is well placed to take advantage of the growth opportunities in technology," James said.

Funding options

Beyond IC3 Super West, the group flagged a broader expansion pipeline in Sydney. It has secured a put and call option for a new 150MW-plus Sydney campus and expects to exercise the option by the end of FY26.

Construction of new data centres on the campus is expected "in a few years". Over that period, the group said it would consider funding alternatives, including project finance and new longer-term infrastructure investors in its data centres.

Macquarie has aligned its data centre assets into a new corporate structure, describing the change as a way to facilitate future growth and external funding opportunities.

Business lines

In its CS&G unit, the group is growing revenue in products that are less capital intensive and carry a lower EBITDA margin. CS&G is also planning new growth products in cyber and AI for "sovereign, secure customer workloads", including Australian Government and defence industry supply chain requirements.

In telecoms, revenue and EBITDA margins are expected to be "materially maintained" from the first half into the second half of FY26.

The group also set out its capex expectations for FY26. Total capex excluding IC3 Super West is expected to be between AUD $42 million and AUD $48 million, including customer growth capex of AUD $18 million to AUD $20 million, growth capex of AUD $8 million to AUD $10 million, and maintenance capex of AUD $16 million to AUD $18 million.

For IC3 Super West, FY26 capex is expected to be between AUD $180 million and AUD $190 million. Depreciation and amortisation for FY26 is expected to be AUD $56 million to AUD $59 million.

Chief Executive David Tudehope linked the group's earnings run to operational priorities across the business.

"Macquarie's focus on world class customer experience and people engagement is the foundation of our consistent track record of profit growth over the last 22 consecutive halves," Tudehope said.