NEXTDC Limited (ASX: NXT)
NEXTDC Limited (ASX: NXT) is at the forefront of the AI and cloud computing revolution, capitalizing on powerful megatrends transforming industries and economies. The surge in AI adoption, with generative AI usage increasing by nearly 700%, highlights its transformative potential, especially in driving innovation and productivity. To support this growth, AI and cloud technologies are central to the future of business, with substantial investments pouring into AI-ready data centres. These developments underscore the need for resilient, scalable digital infrastructure to meet the demands of AI, which is poised to contribute nearly US$19.9 trillion to the global economy by 2030. NEXTDC is strategically positioned in Australia and the Asia-Pacific region, offering rapid scaling of infrastructure to support this burgeoning market.
As AI continues to evolve, the need for robust infrastructure becomes even more critical. NEXTDC’s hyperscale data centres and interconnection services are designed to meet the increasing demand for high-performance computing, low latency, and secure connectivity essential for AI applications. With innovations such as liquid cooling technology and advanced network platforms like AXON, NEXTDC is enabling real-time data exchange across AI systems, clouds, and enterprise ecosystems. These solutions help businesses scale and adapt quickly in an AI-powered world, ensuring operational certainty for AI-driven innovations. The company’s strategic alliances, including being the first Australian data centre operator certified by NVIDIA’s DGX "AI Factory" standard, position it as a leader in AI infrastructure.
NEXTDC is poised to drive the transformation of the digital economy. The global data centre market is set to reach $1 trillion by 2030, with Australia’s AI market projected to grow significantly. NEXTDC is leading the way in meeting this demand, having recently been honored with the 2024 Frost & Sullivan Best Practice Award for Australian Data Centre Services Company of the Year. As the company expands its AI-ready capabilities and infrastructure, it is well-positioned to support the rapid digital acceleration and unlock new business models in the coming decade, cementing its role in the Fourth Industrial Revolution.
Corporate Travel Management Ltd (ASX: CTD)
Corporate Travel Management Ltd (ASX: CTD) delivered record results in FY24, with revenue increasing 9% and EBITDA growing 21% to $201.7m. The company’s decision to report Europe separately from Rest of World (RoW) highlights regional dynamics. Europe saw revenue growth of 18% and a 16% rise in EBITDA to $97.7m, though 2H24 results were impacted by a decline in one-off project work. Conversely, RoW revenue grew 6%, while EBITDA rose 21% to $122.5m, driven by 2H24 EBITDA margin expansion from 20% to 23%, signalling strategic progress in North America and ANZ. For FY25, CTM is targeting 10% revenue growth, and an EBITDA margin increase to 27.5% for RoW (excluding UK), reflecting strong performance in its largest regions. While the travel industry has been impacted by ticket price deflation, CTM’s transaction-based revenue model has proven resilient, with lower ticket prices allowing clients to stretch their budgets. The Asian wholesale segment has faced challenges, but these have been offset by strong results in North America and ANZ.
Europe is in a transition year, cycling off significant non-recurring project work from FY24. While 1H25 revenue and profit are expected to decline, CTM’s strategy to balance its client mix by leveraging its advanced technology stack is yielding results. New client wins in Europe have exceeded $0.4bn YTD, setting a record. Additionally, CTM secured a three-plus-one-year extension for its UK Government travel management contract, now exclusive to CTM. While potential risks from UK Government opex budget reductions exist, essential travel and long-term contractual arrangements mitigate impact.
Key strategic priorities for FY25 include market share growth, higher revenue per transaction (supported by CTM’s accommodation platform, Sleep Space), and increased productivity through automation. The company has also made early inroads into the US Federal Government market and crisis management services, positioning itself for future growth. Capital management remains disciplined, with flat-to-declining capex, controlled group costs, and minimal non-recurring adjustments expected. These initiatives align with CTM’s five-year strategy to double FY24 EPS, supported by robust execution and a focus on sustainable profit growth. Early FY25 results reaffirm CTM’s trajectory toward achieving its long-term goals.
Source: Company’s Report
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