Key Highlights

  • FY26 Revenue increased 37 per cent to AUD 312.2 million.
  • Annualised Recurring Revenue reached AUD 395.2 million at the end of FY26.
  • Megaport is expanding from network connectivity into compute infrastructure for AI workloads.
  • The strategy requires materially higher Capital Expenditure and careful execution.

Megaport Limited (ASX:MP1) provides network-as-a-service connectivity that allows enterprises to connect to cloud platforms and data centres on demand. In FY26, the company reported revenue of AUD 312.2 million, up 37 per cent, while annualised recurring revenue reached AUD 395.2 million. Megaport is also expanding its platform into compute infrastructure for artificial-intelligence workloads, changing the capital requirements and operating profile of the business.

FY26 Results and Compute Expansion

Megaport reported EBITDA of AUD 77.1 million for FY26. Alongside its established connectivity operations, the company has signed contracts covering GPU and CPU compute, networking and storage capacity for customers in the United States. The expansion is intended to use Megaport’s existing network footprint to provide customers with access to computing capacity as well as connectivity.

The strategy represents a shift from a comparatively asset-light connectivity model toward infrastructure that requires larger upfront investment. Management’s FY27 plans include substantially higher capital expenditure as the compute platform is deployed. Revenue growth therefore needs to be considered alongside hardware utilisation, contract delivery and the timing of customer demand.

Company Business

Megaport operates a software-defined network connecting enterprises, cloud providers and data centres across multiple countries. Customers use the platform to establish private connections between locations and cloud environments without relying solely on the public internet. The compute initiative broadens that offering into access to processing infrastructure for AI and other workloads.

Sector Context

Demand for cloud connectivity continues to develop alongside growth in data-centre capacity and AI computing. Providers operating in this market must balance network reach, hardware availability, power requirements and customer utilisation. Competition includes cloud platforms, data-centre operators and specialised infrastructure providers.

Risks to Consider

The compute expansion increases capital intensity and exposes Megaport to hardware Depreciation and utilisation risk. Large contracts can create customer concentration, while deployment delays may affect the timing of revenue. Funding requirements, competition and changes in AI infrastructure Demand could also influence returns from the programme.

What to Watch Next

Key areas include delivery against FY27 revenue and expenditure plans, utilisation of deployed compute capacity, recurring-revenue growth and cash generation. Further contract wins and evidence that the network and compute businesses can operate together at the expected Economics will also be relevant.