Government signs NextDC for $35m data centre services contract

Six-year contract with Commonwealth department

NextDC (ASX:NXT) has signed a $35 million, six year data centre services contract with the federal government.

The data centre provider has the option to extend the contract beyond six years. According to NextDC, revenue recognition will commence in the second quarter of financial year 2016.

However, due to the critical and sensitive nature of the facility, the federal government department, location and use is not being shared publicly.

NextDC opened its Canberra data centre, C1, in 2012.

The company has had a number of contract wins over the past months.

In April, US telco CenturyLink announced a partnership with the company, under which it will offer co-location and managed hosting services within Australia through NextDC's network of data centres.

Also in April, CloudFlare began rolling out its content delivery network (CDN) to NEXTDC’s Melbourne data centre M1.

Earlier this year NextDC reported its first positive earnings before interest, tax, depreciation and amortisation (EBITDA) of $3 million for the half year ended 31 December 2014.

In the first half of 2014, the data centre vendor reported an EBITDA loss of $3.4 million. For the financial year 2014, it recorded an underlying EBITDA loss of $16.1 million.

Follow Hamish Barwick on Twitter: @HamishBarwick

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