Good morning, ladies and gentlemen. Welcome to the eleventh annual general meeting of NEXTDC Limited. My name is Doug Flynn, and I am the Chairman of NEXTDC. Thank you for attending today's meeting. As this format of the meeting may be new for some, let me take a moment to outline today's proceedings. Firstly, let me assure you that you will have the opportunity to participate today as you would at a physical meeting. A platform will allow you to ask questions via either the website or the dial-in facility and to vote using the electronic voting card. I'll provide some more details on that later in the meeting. I would also encourage you to download the online portal guide from the NEXTDC website if you have not already done so.
Links to the guide can also be found in the AGM notice letter, in the notice of meeting, or you can also go directly to the investor section of the NEXTDC website. The link can also be found in the portal you are now viewing. If we experience technical issues that have an impact on the meeting, I'll assess the circumstances and communicate further with you. If it's not possible, you'll be emailed instructions on how and when to rejoin the meeting. I've been informed that a quorum is present. Accordingly, I declare the meeting open. Let me introduce you to my fellow directors. Here with me in Sydney are Mr Stuart Davis, Dr Greg Clark, Ms Jennifer Lambert, and Dr Eileen Doyle. Joining us from the United States is Mr Steve Smith. Our CEO, Mr Craig Scroggie, joins us from our Brisbane office.
Our Company Secretary and Chief Legal Officer, Mr Michael Helmer, is also joining us in Sydney today. He will manage the shareholder questions on the web interface, so I'll refer to him when it comes time to answer any questions the shareholders have submitted. On your screen, you will also see the names and faces of our leadership team, and each of these are joining the AGM by audio today also. The notice of meeting was made available and communicated to all shareholders on the 8th of October, 2021, and I will take it as read. I can confirm that holders of approximately 288 million ordinary shares, or 62.91% of the company's total shares outstanding, have submitted their proxies for the purpose of this AGM.
The annual financial statements of the company and its controlled entities, as well as the reports of the directors and auditors for the year ending June 30, 2021, have been published and distributed to shareholders. They can also be accessed at our website at nextdc.com. Our auditor, Mr. Michael Shewan from PricewaterhouseCoopers, is also present on the call. Mike is available to answer questions relating to the conduct of the audit and the audit report and accounting policies and the preparation of financial statements. The auditor's report is in our annual report, which is also available at our website. Now today, I intend to provide a broad overview of our performance over the past financial year. Then you will hear from our CEO, Craig Scroggie, who will update you on business activities.
After that, we will turn to the formal business of the meeting and the resolutions set out in the notice of meeting. As part of receiving the financial statements and reports, we will also take any general questions in relation to the board, management, or the auditor at that time. We'd encourage you to submit your questions now, or at least prior to receiving those reports. Because we are conducting today's meeting in a virtual environment, I'll spend the next few minutes explaining the process to ensure all participants are clear on how to use the platform, how to vote, and ask questions. Voting on the resolutions will be conducted by a poll using the electronic voting card you receive after clicking the Get a Voting Card button.
Our shareholders can submit written questions on general issues or specific resolutions during the meeting by clicking on the Ask a Question button. I do encourage shareholders who have questions to submit them as soon as possible. Now, this year we've introduced a new functionality to allow shareholders to dial in and ask questions by voice. To utilize this teleconference facility, shareholders must use their unique PIN provided to them by Link Market Services. If you don't have a phone PIN and would like to ask a question via the phone, please contact Link on 1-800-990-363 now to get your PIN. When you dial in online, you will be asked to mute your online sound and listen to the meeting by phone.
If you wish to ask a question, you will need to dial star one on your keypad, and that will indicate to the moderator you wish to ask a question. The teleconference moderator will re-require your name and will introduce you, prompting you to ask your question by unmuting your line at the relevant time. If you have any trouble using the platform or dial-in facility, please check the online guide on the NEXTDC website or contact the helplines shown on the screen. I'll run through these steps again when we come to the formal part of the meeting to ensure you are clear on the process.
With that, I will now move to my address. Ladies and gentlemen, this is the eleventh time we have gathered for an annual general meeting, and once again, I'm pleased to report this past financial year represented a record period for strategic capital investment, growth, and setting new benchmarks for the company's performance. In FY 2021, we continued our focus on building our digital infrastructure platform that underpins the growth of the digital economy. We invest in our people, processes, and technology, and we aim to set new standards of excellence in safety, reliability, and customer experience. It is the company's vision to help enterprises harness the digital age, improving our society through the advancement of technology. NEXTDC's purpose is to be the leading customer-centric data center services company, delivering solutions that power, secure, and connect the world's most valuable resource, data.
Digital transformation continues to change the world in exciting and disruptive ways. Data center strategy has become central to the way today's enterprises effectively manage the surging data being generated, stored, shared, and analyzed across the economy. Our brand promise guarantee is to deliver our customers with 100% uptime for their critical infrastructure underpinning their business. This promise assures our customers that when their digital platforms are hosted in our facilities, they'll always be powered, secured, and connected to the highest standards. In FY 2021, our key performance highlights included revenue increased by 23% to AUD 246.1 million, underlying EBITDA increased by 29% to AUD 134.5 million, and contracted utilization reached 75.5 MW, up 8%.
New customer acquisition continued to accelerate and finished the year up 13% to 1,547. The ecosystem continued to flourish, now comprising more than 730 partners and over 70 networks, and interconnections strengthened, increasing 13% to 14,718. On screen, you can see the details of our growth and capital expenditure. We continue to expand at a solid rate, driven by the accelerating demand for premium data center services. A total of AUD 301 million in new capital was invested during FY 2021. FY 2021 activities included the completion of the S2 Sydney fit-out, taking total installed capacity to 30 MW. The construction of S3 Sydney is well progressed. We are targeting practical completion of stage one during the H2 of 2022, with 12 MW of initial capacity.
M2 Melbourne fit-out of an additional 9 MW of customer capacity to support customer requirements, with a further 9 MW being added in FY 2022 to support ongoing customer growth. M3 Melbourne's planned capacity was increased to 150 MW following the acquisition of adjacent properties, expanding the land size to approximately 100,000 sq m. Groundworks are now well progressed and building construction has commenced. The target for practical completion is first half of 2023, with 13.5 MW of initial capacity. S4 Sydney land has been secured, providing long-term expansion capacity for a hyperscale technology campus of up to 300 MW in the New South Wales market. As has been the case for our second and third generation data centers, our fourth generation will also be built to Uptime Institute Tier IV standards.
Both our S2 and P2 facilities were successful in achieving Tier IV certification and will also be audited for Uptime Institute Gold certification for operational sustainability. NEXTDC is still Australia's only data center provider to achieve this level of independently certified design, build, and operational excellence. From this slide, you can see that we are well capitalized for future growth with June 30, 2021 liquidity of AUD 1.7 billion, including cash and undrawn debt facilities. Subsequent to FY 2021 year-end, NEXTDC has refinanced its debt facilities, reflecting an upsize of AUD 650 million, resulting in the company now having total liquidity of approximately AUD 2.4 billion on a pro forma basis. Growth in this sector continues to present investment opportunities. Directors and management have a clear line of sight to the company's investment priorities.
We are forecasting capital expenditure for FY 2022 in the range of AUD 480 million-AUD 540 million as our program of expansion continues at S3 Sydney, M2, and M3 Melbourne in particular. In the medium term, we continue to map the opportunities and commencing designs for the newly acquired land for our S4 site in Sydney, as well as future planning of an M4 site in Melbourne. The board and management are confident that the company will continue generating strong returns through our investment choices. We have the fiscal capacity and flexibility to respond to new opportunities as they emerge remains an important part of delivering on that promise. NEXTDC continues to deliver strong year-on-year growth, both in customers and connectivity services. Our diverse enterprise and government footprint continues to attract multiple cloud service providers.
During FY2021, we set new benchmarks for growth, adding 183 new customers and 1,667 new network interconnections. Connectivity is the enabler of the cloud. With customers needing to interconnect with multiple environments, this degree of service aggregation delivers enormous opportunities for NEXTDC to facilitate a new generation of agile connectivity platforms. Our partners and customers have a need to interconnect with a thriving ecosystem that is secure, private, and direct. NEXTDC is at the center of that need to enable agile, flexible, and resilient connectivity as a service. NEXTDC is now the most connected data center provider in the country with more than 70 networks and a total of more than 730 specialist ICT organizations providing a range of telecommunication, cloud, systems integration, and IT services.
NEXTDC has built a service delivery model that is reliable, secure, and energy efficient. With a strong focus on energy efficiency and the use of renewable energy sources, we strive to achieve aggressive sustainability targets. This work is enabled by continued focus on improving our operational efficiency, achieving minimum water usage, and continuing to improve our recycling efforts through zero waste management initiatives. Today, data centers are responsible for 2% of global electricity consumption. As more are built to support future requirements of customers, we're very aware that power consumption will continue to grow. This translates into a significant social responsibility for NEXTDC. In FY2021, NEXTDC maintained its industry-leading efficiency ratings driven by innovative designs, engineering, and operational excellence. We embrace changing community and stakeholder sentiments on climate change to make our data centers the most power efficient and sustainable facilities in Australia.
NEXTDC data centers run at the lowest power utilization efficiency, as PUE ratings, in the country, a critical factor in creating a direct bottom line impact as digital transformation accelerates. It also represents a significant competitive differentiator. We use a range of innovative data hall management tools and processes to tune our facilities in real time. This includes using machine learning to tune facilities with adjustments to variables such as fan speeds, water usage, and temperature monitoring to take advantage of free airside cooling and recycled air supply. Our sustainability difference extends to investing in renewable energy resources to reduce our overall need to use power from the grid. We also offset 100% of the carbon we emit for our corporate operations through our Climate Active accredited carbon offset program. The carbon offsets we procure fund critical environmental projects.
These projects include replanting native vegetation in critical wetlands as part of the Great Barrier Reef Restoration Project and indigenous fire abatement projects in West Arnhem Land. During FY2021, we launched a game-changing initiative called NEXTneutral. This is an opt-in program that enables our customers to offset the carbon created from their IT footprint, a first-in-market carbon offset program accredited under the Australian Federal Government Climate Active Program. Our commitment to sustainability extends our ongoing legacy in pioneering environmental initiatives in our industry. Our M1 and S1 data centers remain the only data centers in Australia to achieve NABERS five-star rating for energy efficiency. Both facilities have installed large, privately funded solar arrays on their rooftops. We've also been a principal partner in the Melbourne Renewable Energy Project since its inception in 2014.
FY2021 was another remarkable year for the business on so many fronts. With a global pandemic impacting markets and communities across the planet, there were many hurdles to negotiate, not the least being the additional work required to keep our staff, customers, and contractors safe when they visited our sites. We've also seen a surge in demand as businesses scale to deal with COVID-driven disruption. I'm very proud of the way the team continues to thrive in challenging times while maintaining a focus on innovation, setting new benchmarks in product design, service quality, and energy efficiency. NEXTDC is managing risk in this time of great change while simultaneously continuing to drive growth and revenues as well as improvements in productivity and customer service. In just 11 years, we have grown from a startup to an ASX 100 company.
Our achievements so far have been extraordinary, and the solid foundations we have laid will enable us to continue accelerating towards our future ambitions. Now, to finish, I'd like to thank my fellow directors, our management team, and all our employees across the country, who are capably led by our CEO, Craig Scroggie. On behalf of NEXTDC, we thank you, our shareholders, for your ongoing support. It's now my pleasure to hand over to our Chief Executive Officer, Craig Scroggie, who will provide you some further detail on the state of the industry and strategic direction of the company.
Thank you, Doug. FY 2021 represented another year of strong growth and outstanding accomplishments for NEXTDC. Over the past 12 months, the way we live and work has continued to evolve. Organizations have largely adapted to surviving, and many are thriving in a COVID-19 world. Though full of challenges, it's also brought positive tailwinds to the adoption of digital platforms and services. From a NEXTDC perspective, COVID-19 has ushered in the world's single largest work-from-home experiment and continues to challenge and reshape our world. How we connect today has dramatically accelerated the world's digital transformation journey. As we emerge from COVID-19 in a largely vaccinated world, so too will a return to the office and travel drive further accelerated change in a post-COVID society. Digital infrastructure is now intrinsic, not only to commerce, but also education, communities, and lifestyle.
Work has become an activity we do, not necessarily somewhere we go. The company was well-prepared for this rapid evolution and continues to respond and deliver the level of security, business continuity, and disaster preparedness our customers expect. Importantly for our investors, we were also able to deliver on the guidance we provided for 2021. Today, we're optimistic for a digitally led economic resurgence post-COVID, and also confident about the financial guidance we're providing for FY 2022. As far as our FY 2021 performance is concerned, there was also a lot of good news in the set of numbers shown earlier by Doug, and now expanded upon in this FY 2021 highlight slide. Data center services billing increased by 23%. Contracted utilization was up by 8%. Interconnection revenue continued to climb.
Connectivity services growth is particularly pleasing as this is ecosystem enhancing, high margin, recurring monthly revenue. Meanwhile, EBITDA rose by 29%, and operating cash flow grew by a healthy 148%, underscoring the inherent operating leverage in the business. These are strong numbers landing well above the guidelines forecast at the start of FY 2021. Some significant contract wins in New South Wales and Victoria were celebrated during the reporting period. At the same time, our new record billings were grounded in our ability to achieve our capital works program despite challenging circumstances. We also continue to meet our objectives in relation to capital management and network expansion. Having recently refinanced the company's senior debt facility to a new aggregate limit of AUD 2.5 billion.
NEXTDC has access to total liquidity of approximately AUD 2.4 billion on a pro forma basis, including cash of more than AUD 650 million at June 30, 2021. Net drawn cash of AUD 300 million and undrawn debt of AUD 1.4 billion. Delivering 17 MW of expansion capacity across S2 and M2 during 2021 was a wonderful achievement. S3 and M3 construction programs are planned for practical completions in 2H 2022 and H1 2023 respectively. These growth opportunities become even more exciting when we start to look a little further down the development pipeline at S4, a site in Sydney's west that will add up to a further 300 MW of additional capacity. We are poised to take full advantage of future growth opportunities as new technologies and cloud platforms continue to drive exponential growth.
Our extensive enterprise and government footprint continues to attract new cloud on-ramps to our metropolitan locations. The addition of new cloud on-ramps allows our customers, in turn, to take advantage of our low latency access to the cloud environments. This dynamic is reflected in our FY 2021 results, where we added 183 new local and international enterprise and government customers. The company continues to capitalize on this with our second generation developments, and we will be in a leadership position again to cater for the future wave of data when our even larger third generation campuses come online. Digital transformation continues to change the world in exciting and disruptive ways. With customers increasingly interconnecting to multiple clouds, there is a need for a new generation of elastic connectivity platforms.
Our network partnerships with the world's leading technology companies such as Amazon Web Services, Microsoft, Google, IBM, Oracle, Alibaba, and OVHcloud continue to flourish. When combined with our cloud center partner ecosystem of over 730 of Australia's ICT and digital service providers, enabled by our AXON interconnection platform, we are very well positioned to deliver the customers the widest range of premium multi-cloud architectures in the market. NEXTDC is the most cloud-connected digital infrastructure platform in the country, housing the largest footprint of direct on-ramps to public cloud platforms, which continues to grow every year.
In FY 2021, new on-ramps were provisioned for Google Cloud in Brisbane and Melbourne, with the B2 point of presence being Google's first ever in Queensland and the second in Melbourne, delivering customers 0 latency capability to a new availability zone. There are many reasons why we can all be confident that demand for colocation data center services will continue to accelerate. Importantly, we have the capital to continue building the digital infrastructure needed to support the growth of the digital economy, and we house Australia's largest and most active digital ecosystem. Data volumes continue to compound at exponential rates, a phenomenon that continues to double approximately every two years. That data, gathered from literally billions of sources every second of every day, has to be migrated to and then ultimately reside in hosted infrastructure that is increasingly being provisioned under infrastructure as a service delivery models.
Gartner forecasts that worldwide public cloud spend will grow 23.1% in 2021 to $332.3 billion. In Australia, Gartner forecasts organizations will spend AUD 10.6 billion on public cloud this year, an increase of 18.4% from 2020. The survey also found that almost 70% of organizations using cloud services today plan to increase their cloud spending. Gartner also forecasts software as a service to reach AUD 5.7 billion in Australia in 2021. These are trends that have colocation data centers and complex cloud interconnection services such as those provided by NEXTDC at their heart. No business can accurately predict where the next disruption is going to come from. The cloud allows them a flexible solution that is both responsive and scalable.
Today, 92% of organizations report they're adopting a multi-cloud strategy, with each now accessing an average of 2.6 public and 2.7 private cloud environments. In the past 12 months, 9 MW of new capacity was commissioned on time and on budget in M2, despite challenging construction conditions caused by COVID-19. A further 9 MW of capacity is currently underway, which will support further customer expansion at M2, which is scheduled for delivery during Q4 2022. This additional 80 MW of long-term capacity is just the beginning of our growth plans in Australia's second-largest city. During FY 2021, we also received development approval for M3 Melbourne in West Footscray, which is now under construction.
Having secured expansion land adjacent to the original holding, the M3 site will comprise a 150 MW technology campus upon completion, supporting hyperscale, government, and enterprise customers, as well as offering a new operations center for NEXTDC mission-critical operation space for our customers and partners. NEXTDC's ethos is that safety is everybody's responsibility. The health and safety of our customers, suppliers, and staff are our highest priority. NEXTDC fosters a safety-first culture with hazard identification, incident prevention, and the active management of all WHS issues forming key cultural cornerstones. NEXTDC is 100% committed to its goal of achieving zero injuries across the business, and we continue to commit the resources necessary to achieve this goal. In FY 2021, we completed the rigorous process of ISO 45001 certification for workplace health and safety.
We're also implementing an industry-leading five-point PPE standard across all construction activities and engaged independent safety consultants to conduct inspections at all of our sites. The results of all this work, led by our head of safety, are perhaps best demonstrated by the fact that we have managed to complete over 500,000 capital works hours in 2021 without a single lost time injury. Safety is firmly embedded across our business as an ever-evolving critical priority. We continuously review and improve our systems while working closely with our people, customers, and suppliers to achieve our goal of zero injuries. In FY 2021, NEXTDC continued to be recognized for global leadership in data center engineering, customer experience, and energy efficiency.
We continue to invest in maintaining our Uptime Institute Tier 3 certification for our first-generation facilities and Tier 4 certification for the design, construction, and operation of our second generation of sites. Both S1 and B1 completed their recertification of Uptime Institute Gold Operational Sustainability, with both receiving improved audit performances under the Tier 3 Gold assessment regime. B2 and M2 are Tier Four Gold certified, the only colocation facilities in the Southern Hemisphere to achieve this level of independent certification. P2 and S2 both also achieved Tier Four certification for built environments, undergoing a first-of-its-kind rigorous remote assessment carried out by the Uptime Institute. These achievements are testament to the operational, engineering, and supply chain excellence of our sites and demonstrates why we're the only data center provider in the country who are verified to being able to offer a 100% uptime guarantee.
The industry continues to recognize the focus we have on innovation, engineering, and operational excellence. In April of 2021, NEXTDC was recognized as Australia's most reliable data center operator at the APAC Business Awards based on our well-demonstrated expertise within the data center industry, our dedication to customer service, and our commitment to excellence. In September, NEXTDC were recognized by Frost & Sullivan as the Australian Data Center Company of the Year for our continued dedication to quality, service excellence, and delivering true customer value. During FY 2021, we were also thrilled to be recognized for our sustainability leadership after being announced as the winner in the sustainability category of the Australian Business Awards. NEXTDC maintains its commitment to delivering the highest levels of energy efficiency driven by innovative design, engineering, and operational excellence.
As computing loads continue to grow. Sustainable business practice drives a focus on operating in a carbon neutral world. Minimizing environmental impact is a critical success factor for all organizations. For NEXTDC, that means energy efficiency and commitment to ongoing carbon reduction will be a differentiator in our industry. Australian businesses continue to take positive action on climate change and are making conscious decisions to choose solutions that make a positive difference. Our customers are looking for a responsible and ethical partner they can trust to help them reach their own sustainability goals. We are the only data center provider in Australia to receive carbon neutral certification for our corporate operations under the Commonwealth's Climate Active program. With the commitment to driving global leadership in energy efficiency and sustainability, NEXTDC's data centers are achieving energy efficiency performance at levels not previously achieved in Australia.
New design innovations at S2, our first multi-story development, are already delivering the long-term energy efficiency benchmarks promised by its design. S2 is on track to achieve its targeted annualized PUE of 1.29 in FY 2022. Our average PUE across the national fleet during 2021 was 1.4. These are outstanding results, well ahead of the Australian industry average of around 1.7. Our focus on sustainability starts with designing, building and operating data centers that use the lowest amount of power and perform at the highest level of efficiency. Our approach extends to investing in renewables such as wind and solar, and is further supplemented by offsetting the carbon emissions that cannot yet be avoided. NEXTDC is also the only data center provider to achieve a NABERS five-star rating for energy efficiency.
This level of efficiency allows us to deliver customers the lowest total cost of operation in Australia. Since FY 2018, NEXTDC's corporate operations have been carbon neutral, complying annually with Climate Active requirements. During 2021, NEXTDC became the first data center services company to have our product Climate Active certified, resulting in NEXTDC becoming the only data center operator to offer a Climate Active certified carbon offset program direct to our customers. Through NEXTneutral, our customers can offset 100% of the carbon footprint from their IT infrastructure that's housed in our facilities. It is an uncomplicated way for customers to make significant inroads towards meeting their sustainability goals, which continues to escalate in urgency. Waste management continues to play an increasingly important role in our sustainability strategy.
We recycle all cardboard, fluorescent light tubes, and manage e-waste from our own operations and for our clients at our facilities. We've set achievable targets for zero waste with the facilities management and central operations teams who are working diligently on the processes and infrastructure that needs to be put in place to achieve this. It's not any one action, rather a combination of many actions that will continue to create positive momentum in our commitment to achieving sustainable operations. NEXTDC has long felt that our people should feel empowered to build a strong sense of connection to their local communities. Our Live to Give corporate social responsibility program continues to be an important pillar of working at NEXTDC, particularly as the world grapples with a pandemic, creating hardship on an unprecedented level. Live to Give encourages and empowers our teams and the company to be socially conscious.
In 2021, we made the decision to triple the number of volunteer days granted to our teams. This represents paid leave for every employee to volunteer at established charities or community organizations that are important to them as individuals. Based on employee feedback, we also added two new charities to our list of workplace giving partners, Australian Red Cross and SolarBuddy, an organization that provides solar-powered lights to remote and developing communities that are in energy poverty. We match dollar for dollar every donation our employees pledge to these charities, plus the four that have been in the program from the beginning: The Smith Family, Cancer Council, Beyond Blue, and UN Women. NEXTDC also supports employees who currently give their time to the RFS and other emergency and disaster relief services by providing up to four weeks paid emergency management leave each year.
Diversity and inclusion are things that NEXTDC remains committed to. Approximately 33% of staff are female, and since August 2021, NEXTDC has been a signatory to 40:40 Vision, committing to have a minimum of 40% of women in executive roles. With diversity comes an injection of fresh thinking. When teamed with other important workplace benefits we offer, such as leading practice parental leave, which now includes paid benefits for employees tragically impacted by newborn death, stillbirth or miscarriage. Our Live to Give program and paid volunteer days will remain a strong foothold as we are preferred Australian employer. One of our corporate values is customer first. It's a value our team embrace with dedication and passion. The tireless attention we pay to listening to our customers and delivering outcomes that exceed expectations is a true differentiator for NEXTDC.
Putting our customers first spans all facets of our business, from sales, marketing, product and delivery, through to our front of house and facilities management staff who are driven to go above and beyond every hour of every day. We dedicate ourselves to ensuring our customers' experiences are frictionless, with a firm focus on ensuring we partner strategically to create best-case outcomes to the challenges our customers face. When we started 11 years ago, few could have predicted how the IT landscape would change. One can only imagine where the industry will be a decade from now. Whatever happens, NEXTDC is positioned to retain its leadership in innovation and the rigorous management of risk and opportunity. We have secured critical expansion capacity for the next decade of growth.
Our single largest land holding to date was secured in Western Sydney for S4 during FY 2021. This site in Horsley Park will be the location for a new technology campus with a target capacity of 300 MW. During 2021, we also received development approval for M3 Melbourne and secured expansion land for that 150 MW campus located in West Footscray. These hyperscale technology campuses will be the homes for the next generation of critical hyperscale cloud environments. Fundamentally, we're scaling our platform in Australia's two largest markets to meet the future needs of our customers. Meanwhile, we're also accelerating digital growth opportunities in Western Australia. Our P2 Perth facility opened to customers in Q1 2021. It's our second-generation facility in this market and represents the premier digital infrastructure platform on the edge of the CBD.
Connected by subsea cable to Sydney and Singapore, P2 is certified as a Tier IV for design and construction and is generating significant early resonance with the booming resources sector. Demand for data center and interconnectivity services in WA is growing strongly, and our resilience, security, and ecosystem leadership is making P2 a critical piece of infrastructure in the local mining, freight, civic, and state government activities. It's providing an unprecedented opportunity for local, national, and global enterprises to expand their digital footprint. In 2021, we continued to review emerging market opportunities across Asia-Pacific and Japan. Traveling across Asia has proven to be challenging during COVID-19. With travel starting to return for the vaccinated, our team is now actively reviewing expansion opportunities in the world's fastest-growing regions. A major priority is securing land in key markets that will drive our next decade of growth in Asia.
Like all activities the company undertakes, we view these opportunities as transformative in nature and remind ourselves that people frequently overestimate what they can achieve in one year and underestimate what can be built in a decade. Data is the world's most valuable commodity, playing a core role at the heart of commerce, government, and community. Its rise is best demonstrated by the outstanding success of companies like Amazon, Netflix, Google, Microsoft, Apple, and Atlassian, to name a few. We can be sure there will also be new startups and innovations that will rise as rapidly as these front runners. The beauty of building an infrastructure platform with the geodiversity and scalability that we have is that it caters to all.
When it comes to real-time intelligence, our customers are looking for self-service and automation in data centers that help to cut down complexity, reduce friction, and speed up interactions. The way we enable this is through our customer experience software-as-a-service offering, ONEDC. During 2021, our in-house ONEDC development team continued to extend critical reporting capabilities, including new self-service reporting features. ONEDC also now includes the tick-a-box option for customers opting into our NEXTneutral carbon offset program, as well as placing a service order to activate NEXTDC's free e-waste disposal service on decommissioned equipment. As shareholders, you will be pleased to hear that we've experienced a strong start to FY 2022. The guidance we provided for the FY 2022 financial period reflects the company's expectation for further solid data center services revenue growth of between 16% and 20% over that seen in 2021.
We expect EBITDA to rise between 19%-23% and capital expenditure to be in a rate of, in the range of AUD 480 million-AUD 540 million. We currently have inventory available across all markets to drive further enterprise and network opportunities, including providing dual availability zone solutions across two sites in major metropolitan centers. It's an important feature of increasing our total addressable market in each major metro. As the company continues its growth trajectory, we remain focused on developing our people, systems, and processes, ensuring we're well-positioned to take advantage of the exponential opportunities ahead. We continue to expand our digital infrastructure platform into new capital city locations in Australia.
Further to that, we're well progressed with our regional expansion plans as we diversify our portfolio and push our digital edge infrastructure in regional communities where demand is expected to continue surging over many years to come. We've recently announced a new regional development in partnership with the Northern Territory government to develop our first data center in Darwin. In closing, I'd like to thank our board for its continued support and ongoing commitment to driving excellence and good governance at NEXTDC. I'd like to thank my executive team for its leadership and dedication in building this extraordinary digital infrastructure platform, as well as every team member for their commitment and passionate contribution as we continue to work towards achieving our long-term goals. Finally, I'd like to thank you, our shareholders, for your continued support.
It's an exciting opportunity for all of us to be in such a strong position after just 11 years in business. We are in an incredible position to sustain that success going forward as NEXTDC continues to enable the growth of the digital economy in Australia and beyond. We hope you will continue to share this journey with us. I look forward to answering your questions later in the proceedings. Thank you.
Thank you, Craig. Before proceeding with the business of the meeting, I'd like to just remind you of today's procedures. Link Market Services have been appointed Returning Officer for this meeting. I'm satisfied as to their independence. We'll be conducting all voting on the agenda items by poll. On a poll, every member present, in person or by a representative attorney or proxy, is entitled to one vote for each share held. You can cast your vote using the electronic voting card received after you register to get a voting card. To register, you'll be asked to enter your security holder reference number, SRN, plus postcode if in Australia or country if you're outside Australia. Then to cast your vote, click on the Submit Vote button. The proxy votes already received for each resolution will be viewable on the platform as we move through the resolutions.
These will be current as at the proxy voting deadline, which was 11:00 AM. Sydney time on Wednesday, seventeenth of November 2021. Any undirected proxies in my favor as chairman will be voted in favor of the relevant resolution. Now, following discussions on all items of business, I will close the poll 5 minutes after the meeting ends. As the results of the poll will take a little while, they'll be announced to the ASX this afternoon. Shareholders can submit questions during the meeting by clicking on the Ask a Question button. To ensure questions reach us in time, I ask that you submit them now if you have not already done so. Again, general shareholder questions submitted online during or before the meeting will be addressed after receiving the financial statements.
If we're not able to get through all of them today or if there are specific questions that we better addressed on an individual basis, we'll respond to them after the meeting. If we receive multiple questions that are the same, we'll try to amalgamate them into one, or we'll choose to answer the broadest question which covers off the others. Our first item on the agenda deals with the receipt and consideration of the financial reports and the reports of the directors and auditor for the financial year ended June 30, 2021. No shareholder vote is required in relation to this item of business. However, shareholders now have the opportunity to ask questions or have discussion on these matters.
NEXTDC's financial report, directors' report, and auditor's report for the year to June 30, 2021 are incorporated in the 2021 annual report, which has been sent to all shareholders who have requested the report and which is available on the company's website. I would encourage any shareholder who has a question on these reports or on our business in general to raise them now. This is also an appropriate time to raise any questions you may have of the auditor, which are relevant to the conduct of the audit and the preparation and content of the audit report. Michael, are there any shareholders online who wish to ask general questions or make comments on the management of the company?
Yes, Chairman. The first question is from Mike Sackett with the Australian Shareholders' Association. In FY 2021, contracted customer utilization at 79% was the lowest in the past five years. How do you see the utilization rates developing in FY 2022 and beyond?
Let me give the short answer, and then I'll pass to Craig. The fact of the matter is that new contracts come in in a quite lumpy way, and it's not a linear progression by any means. At the same time, we also had quite strong expansion of our capacity, which is the other impact on customer utilization. Given the forecast that you saw earlier together with all the discussions we're having in the market, we're very confident of the capacity demand going forward. Let me pass to Craig, who can embellish upon that.
Thanks, Doug. Thank you, Mike, for the question. Appreciate that. The percentage referenced there is simply reflective of the amount of inventory that we have available to sell at this time. In the course of developing the business during 2021, we had our single largest delivery year of inventory in the company's history, despite the challenging COVID-19 environment. Two of our largest historical developments ever in delivering M2 and S2. Those developments mean that we have available inventory to sell, and not just in those key markets, but in all available markets. The other point that I would make in relation to inventory management is that our policy for the company is still the same, and that is that we ensure that we are very disciplined in how we invest the capital.
We don't invest large amounts of capital that is uncommitted to customers. Our hyperscale inventory management is still we build based on customer demand. That percentage is related to the single largest capital delivery year that we've had in the company's history. Thanks for the question.
Are there any further questions, Michael?
Yes, Chairman. Of NEXTDC's nine operational data centers, only two have the solar arrays on the roof. Do you plan to change the situation?
I'll pass that question to Craig.
Yeah. Thank you. Again, the commitment to sustainability, and importantly, renewable energy is one of the company's most important priorities. Today, we have invested in solar arrays on the rooftop of our M1 and S1 data centers, and largely because those base buildings are completely established. Where we are able to deploy solar efficiently, we have made a commitment to do in every major market. As our second generation of facilities are built out over time, and once the roof infrastructure is in place, we will then deploy solar on top of those buildings once they're complete. The campus developments take a little longer to build out. But once those campuses have become established, we will deploy further solar infrastructure behind the meter. It's important to the company, and it's a commitment to our long-term sustainability strategy.
Are there further questions, Michael?
Yes, Chair. The next question comes from Nick Harris. First question is: Are you able to make any comments on megawatts contracted in FY 2022 to date, please?
It's a nicely operational question. I'll pass that to Craig.
Yes. As we always do in the ordinary course, we'll make further disclosure at the half year results. At this point in time, we're on track for our revenue and EBITDA guide. Same in relation to new sales. We'll provide an update for that at the half year.
Thank you. Next question, Michael.
The next question is also from Nick Harris. Question is: This week, one of the large cloud service providers announced a plan to invest AUD 1 billion in Australia. Does this have any relevance for NEXTDC?
Craig.
Yeah, thanks for the question, Nick. As we have seen historically in the U.S., the largest providers of cloud computing build some of their own internal capacity over time. That has been the case in Australia for many years now. We expect that that will continue to be a feature. Importantly for us, colocation data centers are very different to in-house data centers, and customers are looking for a multiplicity of service providers. They wanna house their legacy and private cloud compute, which you wouldn't do in a public cloud computing data center. The data center's role and function in the industry is quite different. The fact that we see those investments being made only gives us further confidence that the industry has significant future growth potential yet to come.
Thank you. Next question, Michael.
Yes, Chair. There's one final question from Nick Harris. Question is: There are lots of supply chain challenges in the world at the moment. Is this having any impact on your capacity to build? Noting you didn't change practical completion dates for new facilities.
Thank you, Nick. Craig, could you respond to that one?
Thanks, Nick. The global supply chain issues are obviously well discussed across multiple industries. If I broke those down into a couple of elements, the long lead time items we obviously develop in partnership with our key suppliers, our intellectual property. Many of our designs are unique for generators and chillers and other core pieces of our mech and elec. So long lead times mean that we've had orders in place for, in many cases, in excess of 12 months. We don't anticipate at this point in time any delays to the long lead time items that have been in place for our current developments. As it relates to current circumstances, obviously, you know, raw materials and other things are seeing interruptions. We're also witnessing interruptions to chip availability for semiconductor manufacturers and others.
We don't have any short-term interruptions to our current program. We do intend to obviously bring our new flagship facility in Sydney, S3, online in the new year. At this point in time, we don't anticipate any direct interruptions as a result of some of the machinations that are currently taking place in global supply chains.
Thanks, Craig. Next question, Michael.
The next question is from Sophia Fowler. The question is: Good to see we have set a target to be powered entirely by renewable energy by 2030. My question is: How are we planning to meet the target, and will this involve phasing out the use of carbon offsets over time? I ask this in light of increased scrutiny on the problems with carbon offsetting schemes.
Craig.
Look, that's a wonderful question. By circumstance, I was only having this conversation with the CEO of Greenpeace just last week. 100% renewable, we have set ourselves a target by 2030 to find a path to 100% renewable energy. That is not simple to do today. The reality of our circumstances is that we are a significant base load customer, 24 hours a day, seven days a week. Whilst we have solar, we have invested in PPAs in wind. We're a partner for the Melbourne Renewable Energy Project, and a key foundation partner there. We invest in kinetic flywheels and other technology. We see the journey on renewables as critically important to the industry.
Today, we are going to have to make an orderly transition that is to continue to invest in the development of renewable technologies, continue signing PPAs where we can acquire energy and support the development of further renewable energy in Australia. As battery technology further develops, we will be able to store and use more energy when the sun is not shining or the wind is not blowing. As it relates to carbon offsets, specifically, it's actually an important piece of the strategy because much carbon cannot be avoided, particularly when you look at the building materials and other things. We're starting to look very closely into the development aspect of the facilities and how to avoid carbon in the actual development of the sites themselves.
Carbon that cannot be avoided should be offset, and we have made a commitment to do everything that we can to offset the carbon that is unavoidable in our own development and operation. We've created a unique program that is certified by the Australian government, and we are encouraging our customers to opt into that program to support our goal of carbon neutrality.
Thanks, Craig. Michael?
Yes, Chair. The next question is from Stephen Mayne. Did any of the five main proxy advisors in the Australian market, ACSI, ASA, Ownership Matters, Glass Lewis, and ISS, recommend a vote against any of today's resolutions? Which of the proxy advisors are covering us, and has there been a material protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions if there have been any protest votes?
It's a long question. Firstly, there were no recommendations against any of today's resolutions by any proxy advisor. That's ACSI, ASA, Ownership Matters, Glass Lewis, or ISS. Secondly, there's been no material proxy protest vote against. In fact, there's been no proxy protest vote against any of today's resolutions. Thirdly, we will be seeing the voting that's come in before at the time we go to each resolution. Michael?
Yes, Chairman. The next question is from Marsden Holdings. The question is: At what stage is the company likely to commence paying dividends?
We covered our dividend policy in the annual report. The company is continuing to consume capital to invest in the future development of the company. We continue to have significant retained losses in the company from the development of the company, and therefore do not have a positive franked dividend balance. It doesn't make any sense to pay dividends out of unfranked earnings in the company, because it's simply the equivalent of a return of capital in a very tax inefficient way for most of our shareholders. We have not paid a dividend in 2020, and it would not be our expectation to be paying dividends for the next couple of years. Michael?
Chairman, there's one further question from Steven Main. The question is: Staying with capital management, thanks for last year's share purchase plan, which attracted AUD 190 million in applications from retail with no scale back. A contrast with the vast amount of companies which raised capital last year. The participation rate was an impressive 51% as the company embraced best practice disclosure by revealing 8,684 of the 17,015 eligible shareholders applied. The 2020 to 2021 annual report now says you have 41,000 shareholders. Wow. What has driven this remarkable growth? Was the generous SPP treatment a factor?
Craig, do you wanna have a go at that?
I'm more than happy to take that question. Thanks, Doug. Thanks, Steven, for the question and actually thank you for your feedback. At the time, we had at the board level, when we were considering the opportunity to continue to further invest in the company and raise capital, the retail participation was an important point that the board discussed. We did, as you highlighted, make the decision to allow to support those retail applications not to be scaled back. We're very pleased with the support and response from retail shareholders, as we are obviously with the performance of the business. What has driven the growth in the number of shareholders?
Given that that SPP was specific to current shareholders at the time, that wasn't a factor in of itself for continuing to drive growth in the company's shareholder base. I think the transition from the ASX 200 into the ASX 100 continued to grow the focus and digital services growth in the industry. Certainly during the COVID-19 period, digital infrastructure services got significant focus in the market as important investment opportunities where many in retail or other physical services were struggling during that time. I think, Steven, there were many factors that continued to drive interest and support for the company. We also appreciate the feedback that you gave us at the time. It was a good outcome overall.
Thank you.
Michael, next question.
Chair, the next question is also from Stephenn Maine. The question is: Last year's AUD 672 million placement at AUD 7.80 was controversial because it was 25% of shares on issue making use of emergency relief even though the statement reason was to pursue growth initiatives. The offer was pitched at a 15% discount to the previous close, and with the stock now at AUD 12.58, this deal was dilutive. There was a backlash from some instos which claimed they were being diluted due to the company handpicking who got stock. Could Craig and the Chair comment on whether they'd do anything different if they had their time again?
I think there's two issues here. One is, this matter was very well dealt with last year. This is now an event that's in the prior financial year. And what we do and it's easy to forget the circumstance that we were in then. We had seen the market fall off the edge of a cliff just prior to this, and we were unsure quite what the future held at that stage. It's pretty easy to go back with the gift of 20/20 hindsight and talk about the circumstance with that lens. The fact of the matter is that this allowed us to put in place the capital that we needed, going forward.
We had significant short sellers in the stock for pretty much the entire prior year. As I said, this is almost ancient history. Now, the last part of the question, could Craig and the Chair comment on whether they'd do anything different? I think the answer is yes, because we wouldn't be expecting quite the same circumstance. What we did at the time, I believe was correct. We moved forward. Our preference would be always to make sure that all shareholders were treated in exactly the same way, but the placement opportunity was appropriate at the time. What else can I say? Craig, do you want to add anything to that?
Yeah. I would simply add that, obviously the total performance of the company since we raised money, I'm not aware of any shareholders that aren't pleased that the share prices that are significantly higher position today than at which time we raised money. The commentary in relation to handpicking who got the stock, the board, the management team, and advisors all took great care with the allocation of stock at the time, because the company had quite a you know high short position at the time. We ensured that to the best of our ability, working with the advisors and the joint lead managers, that we avoided giving any stock to those who were shorting the company. Overall, I thought that it was well managed at the time.
I think the position of the company today as a result of the action that we took is significantly enhanced. I'm pleased overall with the outcome where we are today. There will always be lessons to be learned from anything that we do, and I think that the post-incident review and reflection and opportunities to improve are certainly there for any point in time in the future for us as an organization to learn from.
Michael, are there any further questions?
Yes, Chair. There's one more question from Stephen Maine. The question is: Treasury Wine Estates has voluntarily moved to annual elections for directors in line with best practice that occurs in both the U.S. and the U.K. Dual-listed companies like News Corp, BHP, and Rio Tinto all do this due to the laws in the U.S. and the U.K. The Chair spent more than a decade in senior roles in the U.K., including as CEO of Rentokil, where annual elections now occur. What does he think about NEXTDC voluntarily adopting this model at the 2022 AGM, so that all directors can be more regularly accountable to shareholders?
We have no current consideration of going down this path, but that doesn't mean that we won't. It just has been a matter we haven't considered to date. Are there any further questions, Michael?
There are no further questions on the line.
Are there any questions on the phone line?
Thank you. We do have a question from Wayne William Arthur. Please go ahead, Wayne.
This is a question for the board. What is the company's Weighted Average Cost of Capital?
I would normally pass this to our finance director to give you a considered answer. He is indisposed, and I don't think he can answer it. Craig.
We don't publish our WACC. However, the 18 banks that cover NEXTDC all provide an estimate of our weighted average cost of capital. Any of the current analysts that cover NEXTDC stock would give you an estimate of the current weighted average cost of capital.
Any further questions, online, operator?
Thank you. There are no further questions on the phone line.
Thanks very much. If there are no further questions, let us now move to the formal motions of the meeting. Resolution one, I refer you to resolution one of the notice of meeting in respect of the adoption of the remuneration report of the company. This is a non-binding resolution. The company's remuneration report is set out in the 2021 annual report. No votes may be cast on this resolution by or on behalf of a member of the company's key management personnel, including the chairman and other directors or their closely related parties.
If you do not provide proxy voting directions to me as Chairman, and you're not a prohibited voter, you'll be taken to have authorized me to vote all available proxies in favor of the resolution, even though this resolution is connected directly or indirectly with the remuneration of the key management personnel. You can see the details of the valid proxies lodged on the screen. Before opening the discussion, I would like to mention that the NEXTDC board unanimously recommends that you vote in favor of this resolution to adopt the Remuneration Report of the company. Are there any shareholders online who wish to ask questions or make comments on this resolution?
Chairman, there are no questions on the portal.
Operator, are there any questions on the phone line?
Thank you. We do have a question from Wayne William Arthur. Please go ahead, Wayne.
This question really relates to the last question that the CEO answered. I wanted to know what the consensus of analysts say is the weighted average cost of capital. I didn't get a chance to ask that because I was cut off. The company's return on capital is less than 2%, and I would have thought the weighted average cost of capital was considerably more than that. Is the board concerned that the return on capital is significantly less than the weighted average cost of capital?
Craig, are you there?
I am. Thanks, Doug. Thanks, Wayne. A very simple answer to that question is that we are still in growth mode. Today, the question in relation to weighted average cost of capital is not something that we publish because it goes to competitive advantage. Obviously, many in the industry would like to know exactly what our return benchmark and our cost of funding is so that they can price just below that in order to find the point at which we would not compete. The simple answer is that over time we expect, the board expects, and the company expect that our returns will be in excess of our weighted average cost of capital.
Thanks, Craig. Are there any further questions from the operator?
Thank you. There are no further questions on the phone line.
Okay. I think we've got one further one from online here. No? Next one. Okay. If there are no further questions, I now put the motion to the meeting to adopt the remuneration report of the company and for the financial year ended June 30, 2021. Please cast your vote. For this next item, I will pass proceedings to my fellow director, the chair of the Remuneration and Nominations Committee, Mr. Stuart Davis.
Thanks, Doug. I now refer you to resolution two of the notice of meeting in respect of the reelection of Mr. Douglas Flynn as a director of the company. Mr. Flynn was appointed to the board in September 2013 as an independent non-executive director, and was subsequently elected as Chairman in April 2014. In accordance with Article 58 of the company's constitution, he has retired by rotation and offers himself for reelection as a director. The explanatory memorandum accompanying the notice of meeting sets out a brief description of his experience and qualifications. You can now see the details of the valid proxies lodged on the interface. The NEXTDC Board, other than Mr. Flynn, unanimously recommend that you vote in favor of the resolution. Michael, are there any shareholders online who wish to ask questions or make comments on this resolution?
Yes, Chairman. The first question is from Stephenn Maine. The question is: Could Doug please advise his age, and also whether this will be his last three-year term on the board, given that he has been chair for seven years already? In terms of succession management, does he believe that the NEXTDC chair is currently sitting on the board?
I am 72 years of age, and quite possibly this will be my last three-year term. However, that is a subject that will be under discussion with our board over the course of the next three years. We'll determine that at the time. In terms of succession management, that's a subject for discussion by the directors of this company, and probably not one we'd want to canvass now.
Michael, any further questions?
Yes, one further question from Stephen Maine. The question is: When professional directors present for reelection, their performance on other ASX-listed company boards is relevant. Performance and CVs do matter, including the world of NEDs. Does Doug agree that with the benefit of hindsight, he was wrong to back the AUD 4.1 acquisition of Seven Television and Magazine business in 2011 when he was an independent director of WA News? If he had his time again, would he have rejected that related party transaction which benefited billionaire Kerry Stokes but hurt minorities at WA News?
Hindsight is a fantastic gift, and I don't think that it's particularly helpful to go down that path. We've had some great experiences and some great deals over the years, and every now and then you look back and perhaps that wasn't one you should have pulled the trigger on.
Next question, Michael.
Other questions on the platform, Stuart?
Okay. Operator, are there any questions on the phone line?
Thank you. We do have a question from Wayne William Arthur. Please go ahead.
This question really has two parts. The first part is, if you are reelected, do you intend to continue as chair? The second part of the question is, given that the company's made losses for the last three years, and your address to shareholders for this meeting gives no indication that the company is likely to become profitable, do you think it's time for someone else to have a go as chair?
Thanks for that question. My expectation would be that directors would like me to continue as chair. The company can move towards profit simply by ceasing to invest and simply milking the assets that we have now. Every piece of analysis suggests that that isn't a sensible course. All incremental investment is done on the basis of forecast earnings that are well in excess of weighted cost of capital, which has been the basis of your earlier questions. This is a work in progress. It's not a completed story.
Operator, are there any further questions?
Thank you. There are no further questions on the phone line.
Okay. Well, thank you for those questions. If there's no further discussion, I now put the motion to approve the reelection of Mr. Douglas Flynn as a director of the company. Please cast your vote. At this point, I will pass proceedings back to our chairman.
If we now refer to resolution three of the notice of meeting in respect of the approval of the grant of performance rights to Mr. Scroggie, Craig Scroggie. ASX Listing Rule 10.14 requires the approval to be sought where the company intends to issue securities under an employee incentive scheme to a related party. Mr. Scroggie is considered a related party under the listing rules. The proposed issue of performance rights constitutes the giving of a financial benefit. We also seek shareholder approval in accordance with the Corporations Act. In his role as CEO, Craig is a key executive and plays an important role in the growth of the company's business and strategic objectives.
A summary of the main terms of the proposed grant of incentive rights, the vesting conditions and the valuation of the rights is included in the explanatory memorandum, which accompanies the notice of meeting. You can see the details of the valid proxies lodged on the screen. A NEXTDC board other than Mr. Scroggie unanimously recommends you vote in favor of resolution three. Given his interest in resolution three, Mr. Scroggie makes no recommendation to shareholders with respect to this resolution and is precluded from casting his vote on this matter. Are there any shareholders online who wish to ask questions or make comments on resolution three?
Yes, Chairman. There's a question from Stephen Maine. Given the interesting discussion across a range of topics today, including this LTI grant, could the Chair undertake to make an archive copy of the webcast plus a full transcript of proceedings available on the company's website? Nine Entertainment Chairman Peter Costello, who appreciates the benefit of a parliamentary Hansard transcript where MPs don't have to scroll through old videos to find out what was said, made this change last week and had a full transcript of Nine's AGM online before the end of the day.
I don't think we are planning to put the whole transcript up. Appreciate the reference to Peter Costello, but that's not the plan. Are there any further questions?
There are no further questions.
Are there any questions on the phone line?
Operator, any further questions?
Thank you. We do have a question from Wayne William Arthur. Please go ahead.
I wanted to ask you about the performance hurdles for the grant of performance rights. Now, as I read the explanatory memorandum, the performance hurdle is based on total shareholder return. Total shareholder return seems to be made up of two parts. One is the share price, vis-à-vis other companies, and the other end is dividends paid. Now, this company hasn't ever paid a dividend, and from your comments earlier, it doesn't look like it will pay any dividends in the future. That in the end, these performance rights are based on the share price. Now, as we all know, share prices go up, and share prices go down. If in fact, the share price goes up a lot, the CEO benefits. If the share price is in the doldrums, the CEO loses out.
The share price may not be a very good proxy for the CEO's efforts in managing the company. I wanna float with the board a couple of possible alternative ways of measuring performance. One way might be to have performance hurdles based on return on capital, perhaps returns of 10%,15%, 20%. Another way of having performance hurdles might be based on increases in earnings per share of, say, 10, 20 or 30%. If the board is minded to grant performance rights next financial year, will the board move to a regime which actually establishes serious criteria for the CEO to be judged by, but which at the same time aligns with the interests of shareholders?
Mr. Arthur, that's a very good question, and it's certainly been the objective of the company to introduce a second metric apart from share price. The problem with it is that because we're continuing to invest new capital, some of that capital is being brought onto the books from a depreciation perspective, and some of it is still in the process of deployment. Even when it's brought immediately onto the books for the purpose of depreciation and therefore a usable operating asset, it's still always, you know, behind the eight ball in terms of revenue and earnings against that capital.
It's been quite difficult to put in place an ROI or similar type metric. At this stage, although we continue to look at it, we have not come up with a better, a good second metric, though sooner or later we intend to do that. You're right, it is also a little bit of a casino for senior executives in terms of the share price, and they have to continue to deliver in terms of the metrics that they have more clearly under their control of revenue and at least earnings at the EBITDA level and then ultimately at the NPAT level. I'll turn to Stuart, our Chair of Remuneration.
Yes.
Would you like to add to that?
Yes. Thanks for the suggestion. Certainly those metrics would be something which we would consider if the organization was much more mature. The reality is NEXTDC is a growth company, and certainly the feedback we get from our large shareholders is, and also from the analysts, is that the key thing they look at is EBITDA and EBITDA growth. Because that is what drives the share price. That's the reason why revenue and EBITDA growth are important parts of the STI and are also part of what drives the share price of the company. It may be that we will reach a time when the industry matures and we would consider such metrics.
Certainly, there's we expect the company to be in the growth phase for some time yet.
Are there any further questions from the operator?
Thank you. There are no further questions on the phone lines.
Well, thank you for those questions. If there's no further discussion, we have one more question on the platform, I believe.
Yes, Chairman. Just one last late question from Paul Wiebusch. His question is: Incremental investment does not result in operational losses if you have an appropriate capitalization and depreciation policy. Overinvestment in capacity ahead of customer demand does destroy shareholder value. Given that the company has incurred over AUD 75 million of NPAT losses, why is the CEO's performance metric based on EBITDA rather than NPAT?
Well, the first part of the statement there is absolutely correct. Overinvestment in capacity ahead of customer demand does destroy shareholder value, but it's very hard to win customers without any capacity. We certainly don't believe we're investing to such an extent that we're gonna destroy shareholder value. Now, why is the company CEO's performance metric based on EBITDA rather than NPAT? Again, because this company is still very significantly in growth phase, and certainly in future years, we would expect that metric could be changed to NPAT at some point in the future. Are there any further questions?
There's no further questions on the platform, Chairman.
Thank you. If there's no further discussion, I now put the motion to approve the grant of performance rights to Mr. Scroggie. Please cast your vote. Now, resolution three was the final resolution, and so that concludes the formal business of the meeting. We'd now like to take the time to address any final questions that have been asked by shareholders. Are there any shareholders online who wish to ask any final questions or make comment?
Chairman, there's no further questions at the portal.
Are there any further questions on the phone line?
Thank you. We do have a question from Wayne William Arthur. Please go ahead, Wayne.
This is a question for Stephen Smith, the director in the United States. Stephen, you were previously the CEO of Equinix, one of the world's largest data center companies from 2007 to 2018. From my looking at their results, they made profits every year. You've been a director now of this company for two years, so I suppose you've had a pretty good chance to have a look at how it's operating. Do you have any insight as to why Equinix, which you ran, was consistently profitable, whereas NEXTDC has been unprofitable, at least for the two years that you've been on the board?
Is Steve able to answer that question?
Can you hear me, Doug?
Yes, go ahead.
Yeah. A good question. Thanks, Wayne, for the question. I would tell you that the playbook that's been described today by Doug and Craig is exactly the playbook that we ran for quite a few years at Equinix. I would tell you that you never wanna go dark in a market to the questions around capacity and amount of capital we're putting into the ground. If the demand is as high as it is in the world, and it hasn't changed, it's just increasing, you always wanna have capacity available. Investing money back into the ground versus a dividend or a share repurchase was always the model at Equinix for the early stages when we're at the same point that Craig and the business is here.
I would tell you that the playbook that's been followed here is exactly the playbook that was followed at Equinix and at Digital Realty until they hit a juncture at a point in time when, you know, both of those companies, one was a REIT, one converted to a REIT at some point. The stability of the assets and the investment of capital into staying in front of demand is exactly where you want the capital to go now. Because, as Doug said, you're at the early stages of the growth story here. At some point, this thing will become stabilized. Today you wanna keep investing that capital into the ground. It's exactly what Equinix did in the early stages.
Thanks, Steve. Thank you for those questions. Just finally, there's no further questions on the platform, no further questions on online, on the phone. Ladies and gentlemen, that brings us to the closure of our annual general meeting. If you intend to vote on the formal business of the meeting, you should now finalize and submit your votes, as voting will close in five minutes time. As mentioned earlier, the results of the vote will be published on the ASX later today once all the votes cast in this meeting have been counted. Now, with sincere thanks to all our shareholders for attending, I now declare the meeting closed. Let us hope that next year we can all meet in person and have the opportunity to also chat informally.
To finish, we would like to share a short video with you on our NEXTneutral product and how we are empowering our customers to reduce their carbon footprint. Thank you very much.