Key Highlights

  • A TradingView screener recorded MP1 near AUD 18.25, down roughly 3.7 per cent, but the reading is unverified and a second snapshot said 3.4 per cent; no confirmed company-specific catalyst was found.
  • H1 FY26 showed revenue of AUD 134.9 million, group ARR of AUD 338 million, a 72 per cent gross margin and EBITDA of AUD 35.3 million, with core network ARR up 16 per cent.
  • A June 2026 entitlement offer reported at about AUD 827.3 million at AUD 14.30 a share funds a GPU pool and four AI contracts, shifting Megaport from capital-light NaaS toward capital-intensive compute.
  • The strategy shifts Megaport towards a more capital-intensive model, increasing the importance of contract economics and utilisation.

The Brisbane interconnection group has raised heavily, bought compute and committed to a GPU pool, all inside eight months. With shares easing on an unverified screener reading and FY26 results due on 20 August, the market is pricing a business it has not yet seen report.

Why the stock is in focus

Megaport Limited has spent a decade selling elastic connectivity between data centres and clouds. In eight months it has bolted a compute business, an Indian internet exchange, a storage product and a planned pool of Nvidia graphics processors onto that network. The company now describes chief executive Michael Reid as leading a shift from Network as a Service to a distributed AI infrastructure platform.

That is a different proposition from the capital-light interconnection story many holders originally bought, and the market must price it weeks before FY26 results, due 20 August 2026.

The share-price movement

A TradingView screener of Australian decliners recorded ASX:MP1 at around AUD 18.25, down roughly 3.7 per cent in a single session. That figure is a point-in-time screener reading rather than a verified closing price, and Kalkine has not been able to independently confirm it against official ASX market data. A second snapshot put the decline nearer 3.4 per cent, a reason to treat any single-session figure as indicative.

Megaport's ASX platform shows nothing lodged between the quotation of new shares on 3 July 2026 and late July. No single confirmed company-specific catalyst was identified for the share-price movement. The securities remain quoted, with no sign of suspension or ticker change.

Latest announcement or development

The pivotal disclosure came on 3 June 2026, when Megaport emerged from a two-day trading halt with a price-sensitive release titled Creation of GPU Pool, New Contracts and Entitlement Offer. The ASX-hosted PDF sits behind a terms-of-access gate we could not read.

Trade publication DatacenterDynamics reported four AI-related contracts worth AUD 458.9 million, requiring about AUD 369.5 million of capex on Nvidia GPUs, networking and storage, plus a AUD 350 million on-demand GPU pool, funded by an entitlement offer of roughly AUD 827.3 million at AUD 14.30 a share. Those figures are third-party reporting we could not check against the filing. The ASX record confirms an institutional leg completed 5 June and a retail leg 2 July.

Recent financial and operational performance

For the December 2025 half, revenue was AUD 134.9 million, up 26 per cent, and group annual recurring revenue AUD 338 million, a 49 per cent jump flattered by acquisitions. Core network ARR was AUD 263.4 million, up 16 per cent, or 19 per cent in constant currency. Gross margin improved to 72 per cent and EBITDA rose 28 per cent to AUD 35.3 million.

Operating metrics were solid rather than spectacular. Network services reached 37,077, up 17 per cent, customer logos 3,040, and accounts billing above AUD 100,000 of ARR numbered 676. Net revenue retention by logo improved to 111 per cent from 108. Partner commissions held at 11 per cent of revenue, so the channel is scaling with the business, not reshaping it.

Guidance history warrants attention. FY25 revenue of AUD 227.1 million landed in the lower half of the AUD 225 million to AUD 235 million range set a year earlier, and EBITDA of AUD 62.3 million sat at the bottom of its guide. At the half year management lifted only the low end of network-only FY26 guidance, to AUD 264 million to AUD 270 million, and set combined group guidance of AUD 302 million to AUD 317 million at a 21 to 24 per cent EBITDA margin, well below FY25's 27 per cent. That step-down is framed as reinvestment, not a downgrade.

Business model and principal assets

The core asset is a software-defined network reaching more than 1,100 enabled data centres across 185-plus cities in 30 countries, with 344 cloud on-ramps. Customers buy a Port, then layer Virtual Cross Connects, Megaport Cloud Router and Megaport Virtual Edge on top, provisioned in minutes and billed monthly with no set-up fee, turning usage into monthly recurring revenue.

Around two-thirds of connections terminate at hyperscalers, among them AWS, Microsoft Azure, Google Cloud and Oracle, and in December 2025 Megaport was named a provider for AWS Interconnect last mile. Latitude.sh adds bare-metal CPU and GPU capacity across 20 markets, and Extreme IX roughly 40 Indian data centres.

Growth opportunities

Three vectors matter. Interconnection demand from AI inference workloads is the first, with management framing Megaport as picks and shovels for AI rather than a bet on model winners. Product attach is the second: more than 30 per cent of ARR growth in the December half came from newer products, and storage has since launched, with Wasabi named in July 2026 as the object-storage layer.

Geography is the third: India via Extreme IX, and the Americas, where network ARR grew 24 per cent. Whether rented GPU capacity earns network-like returns is unresolved.

Balance sheet, funding and cash flow

Megaport closed December 2025 with AUD 206.3 million of cash, AUD 177.0 million net. Operating cash flow was AUD 36.0 million against capex of AUD 38.7 million. On the company's own definition free cash flow is EBITDA less capex, which was near break-even.

The entitlement offer reported at roughly AUD 827.3 million changes that picture entirely, but it is dilutive and was struck at AUD 14.30, below the screener price cited above. FY26 group capex guidance of AUD 90 million to AUD 100 million predates the GPU commitment.

Principal risks

The central risk is that Megaport is trading a capital-light annuity for a capital-hungry one. GPUs depreciate quickly in a tight supply market, and contracted revenue of the reported scale sits with four counterparties whose identities are not public, so credit and renewal exposure is genuine.

Competition is not standing still. Equinix Fabric offers software-defined interconnection to the same hyperscalers and is adding AI-driven automation, while PacketFabric and carrier-owned platforms press the same self-service promise. Management also flagged that a five-cent rise in the Australian dollar cuts revenue by roughly AUD 9 million.

Valuation and investor expectations

The unverified screener reading implies a market capitalisation near AUD 4.35 billion. Against FY26 combined revenue guidance of AUD 302 million to AUD 317 million, that is broadly 13 to 14 times sales on our own arithmetic, a multiple assuming the compute expansion succeeds. The same screener showed earnings per share of about negative AUD 0.11.

Megaport did not disclose a statutory bottom line in its half-year presentation and we could not reach the accounts, so that EPS figure is unconfirmed. The gap between AUD 35.3 million of half-year EBITDA and a statutory loss is bridged by heavy depreciation and amortisation on network and leased assets, acquisition accounting, financing costs and tax. A price-to-earnings multiple is not meaningful while the statutory line is negative, pushing attention to EV/EBITDA, EV/sales and cash conversion. Prices and multiples change continuously.

Outlook

FY26 results on 20 August 2026 are the first hard test of the reshaped business: whether network ARR compounds in the mid-to-high teens as guided, whether the margin step-down is contained, and what the GPU build costs before it earns. Investors will also want FY27 framing, since the June contracts and the capital raised sit beyond the current year. Until then, one session's move on an unverified screener price says little.