Highlights

  • FY26 Revenue increased 37% to AUD 312.2 million, while EBITDA reached AUD 77.1 million.
  • The statutory net loss widened to AUD 39.0 million from AUD 0.3 million.
  • Group annualised Recurring Revenue reached AUD 395.2 million, including AUD 105.6 million from Compute.
  • FY27 guidance includes AUD 1.28–1.38 billion of capital expenditure.

Megaport Ltd (ASX:MP1) provides on-demand network connectivity between businesses, data centres and cloud platforms, and has expanded into dedicated compute infrastructure. Its FY26 results show the contrast between growth in contracted activity and the cost of building a larger business. Revenue rose 37% to AUD 312.2 million and EBITDA reached AUD 77.1 million, compared with AUD 62.3 million a year earlier. The statutory net loss nevertheless widened to AUD 39.0 million from AUD 0.3 million. The shift toward GPU-based computing changes the group's capital requirements and makes equipment deployment and customer delivery increasingly important to future results.

Network business: customers and recurring revenue

The established Network operation sells virtual connections, ports, routing and related services that allow customers to change connectivity without installing dedicated physical links for each route. Excluding India, Megaport Ltd (ASX:MP1) ended FY26 with 40,735 services, an increase of 20%, and 3,206 customer logos, up 12%. Network annualised recurring revenue reached AUD 289.6 million, a 19% increase. Net revenue retention by customer logo was 114%, indicating that expansion among retained customers exceeded reductions in their spending over the measurement period. The network reached 1,138 data centres after adding 155 net new locations. These figures describe the existing service platform, whose growth profile differs from the newer Compute business. Customer additions and increased use of connections both affect the recurring revenue base.

Compute contracts and delivery requirements

Megaport Ltd (ASX:MP1) acquired Latitude.sh in 2025 and reported Compute annualised recurring revenue of AUD 105.6 million at FY26 year-end. Management said this was 72% higher than at acquisition, or 48% excluding strategic customer contracts. Eight multiyear infrastructure agreements had an announced total contract value of AUD 747.8 million. Contract value is not the same as cash received or revenue recognised in FY26: the amount ultimately recorded depends on equipment availability, deployment and fulfilment of customer commitments. The company has described GPU procurement and deployment as a process that can take six to nine months, followed by a three-to-six-month ramp. Megaport also reported Supply constraints affecting two agreements announced in June 2026, underscoring the delivery exposure associated with its compute strategy.

Capital spending and Earnings measures

FY27 group revenue guidance is AUD 620 million to AUD 730 million, comprising AUD 315 million to AUD 325 million for Network and AUD 305 million to AUD 405 million for Compute. Megaport Ltd (ASX:MP1) guided to an EBITDA Margin of 38% to 40%, alongside Capital Expenditure of AUD 1.28 billion to AUD 1.38 billion. The projected Investment is substantially greater than FY26 revenue and reflects a more capital-intensive model than network connectivity alone. The company raised Equity during FY26 and completed the retail portion of a further entitlement offer in July 2026. Closing FY26 cash was AUD 435.4 million and reported net cash was AUD 406.9 million. EBITDA excludes costs that affect statutory profit, including Depreciation and certain employee remuneration expenses, so growth in EBITDA does not automatically translate into net profit.

Customer concentration and execution risks

The Compute expansion increases exposure to large individual customers, GPU supply, financing arrangements and the useful lives of computing equipment. Megaport Ltd (ASX:MP1) also has foreign-exchange exposure because contracts and expenses span multiple currencies; FY27 guidance assumes an AUD/USD Exchange Rate of 0.70. Contingent consideration associated with the Latitude.sh Acquisition adds another potential cash requirement if agreed milestones are achieved. Network customer retention remains relevant, but near-term results may be driven more heavily by when compute hardware becomes available and starts generating contracted revenue. A delay in deployment could change the timing of sales without necessarily changing the headline contract value. The next reporting periods should clarify capital expenditure, contract activation and the relationship between EBITDA and statutory earnings.

Key Insights

Megaport Ltd (ASX:MP1) reported growth in network usage and recurring revenue, but its compute expansion involves materially higher investment and execution requirements. FY27 guidance depends on timely GPU procurement, customer deployment and contract performance, while statutory profitability remains distinct from the company's EBITDA targets.