Megaport Limited (ASX:MP1): FY26 Results, AI Contracts and Updated FY27 Guidance

Aditi Sarkar

23 October 2026 12:29 AM AEDT

Megaport Limited (ASX:MP1): FY26 Results, AI Contracts and Updated FY27 Guidance

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Highlights

Megaport Limited (ASX:MP1) reported FY26 group revenue of AUD 312.2 million, up 37% year on year.
Group annual recurring revenue reached AUD 395.2 million at 30 June 2026, an increase of 62%.
Three September 2026 AI infrastructure agreements carried approximately AUD 978.6 million in combined contract value.
The September update raised FY27 revenue guidance to AUD 720 million–810 million and EBITDA margin guidance to 42%–44%.

Megaport Limited (ASX:MP1) operates a global digital infrastructure platform connecting businesses to cloud, data centre, network and computing services. Its August FY26 accounts and September 2026 contract announcement describe a business expanding beyond network connectivity into dedicated compute and storage infrastructure. Shares in Megaport Limited (ASX:MP1) were quoted at AUD 15.85 for 23 October 2026,

Company Business

Megaport Limited (ASX:MP1) provides software-defined network connectivity that allows customers to establish and manage connections between infrastructure locations, cloud providers and other businesses. Its Network services include ports, virtual cross connects, cloud routing and virtual edge connectivity. The business generates recurring charges for subscriptions and connectivity capacity rather than relying solely on one-off equipment sales.

The acquisition of Latitude.sh added dedicated GPU and CPU computing resources, alongside storage services. Extreme IX extended the group’s network activities into India. These operations have changed the balance of the business: compute infrastructure involves equipment procurement, physical data centre capacity, power access and deployment commitments, while network services depend on customer retention and utilisation of the installed network.

Recent Development

In September 2026, Megaport Limited (ASX:MP1) announced three additional AI infrastructure contracts with a combined total contract value of approximately AUD 978.6 million. The agreements involve compute, network and storage resources for AI workloads and are accompanied by customer prepayments of about AUD 322.6 million. The company stated that strategic contracts announced since April 2026 had a combined contract value of approximately AUD 2.3 billion.

Megaport said the contracts would add approximately AUD 232.4 million in annual recurring revenue at their full run-rate, subject to deployment. It expects the associated infrastructure to begin contributing through the third quarter of FY27 and reach the full contracted annualised level by the fourth quarter. These are prospective delivery milestones, not FY26 realised revenue.

Financial Performance and Sector Context

For the year ended 30 June 2026, Megaport Limited (ASX:MP1) reported group revenue of AUD 312.2 million, a 37% increase year on year. Network revenue was AUD 268.3 million, with Compute contributing AUD 43.9 million. Group annual recurring revenue reached AUD 395.2 million, increasing 62%, while Network annual recurring revenue was AUD 289.6 million. The company reported an EBITDA margin of 25% for FY26.

Network customer logos numbered 3,206 at 30 June 2026, compared with 2,873 a year earlier. Total Network services increased to 40,735 from 33,894, while Network net revenue retention reached 114%. These measures provide additional context on subscription activity, expansion by existing customers and the operating base underpinning recurring income.

In its September trading update, Network annual recurring revenue reached AUD 302.6 million as at August 2026, up 29% on a constant-currency basis from the comparable period. Compute annual recurring revenue was AUD 201.4 million as at 22 September. The company stated that group annual recurring revenue currently billing exceeded AUD 500 million, while pro forma annual recurring revenue, including unbilled committed strategic contracts, reached about AUD 1.1 billion. The distinction matters: contracted pro forma amounts are not yet wholly recognised billings.

Risks to Consider

Expansion into AI compute increases equipment, installation, electricity, counterparty and execution exposure. Megaport Limited (ASX:MP1) lifted FY27 capital expenditure guidance to AUD 1.78 billion–1.88 billion, compared with the earlier AUD 1.28 billion–1.38 billion range. Delays in hardware deliveries, customer acceptance or data centre readiness could shift billing milestones. The company also faces foreign exchange movements, competition, borrowing obligations and reliance on customer contract performance.

What to Watch Next

Updated FY27 guidance calls for group revenue of AUD 720 million–810 million, versus the prior AUD 620 million–730 million range, and an EBITDA margin of 42%–44%, up from 38%–40%. Monitoring priorities include contracted GPU and CPU installations, receipts of customer prepayments, capital expenditure against plan, network retention and the timing at which contracted compute revenue becomes billable. The group stated that pro forma liquidity was approximately AUD 362.2 million following its funding arrangements.

Key Insights

Megaport Limited (ASX:MP1) entered FY27 with increased compute commitments following FY26 revenue growth and acquisitions. September disclosures raised the financial guidance range but also materially increased expected capital requirements. The relationship between infrastructure deployment, recurring billings, operating margin and cash funding remains central to subsequent company reporting.

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