Highlights

• Three Latitude.sh contracts carry total value of about US$685 million, with a weighted average term just over four years.

• Customer prepayments of about A$322.6 million cover most of the cash capex needed to deliver the contracts.

• Megaport lifted FY27 group revenue guidance to A$720 million to A$810 million and EBITDA margin to 42% to 44%.

• The senior secured debt facility has been upsized to A$845 million, with drawdown subject to covenants and revenue milestones.

Megaport Limited (ASX:MP1) has turned its compute business into the centre of its growth plan. On 29 September 2026, the company announced three AI infrastructure contracts signed through its Latitude.sh subsidiary, worth about US$685.0 million, or A$978.6 million, in total. Shares were trading at A$15.85 on 23 October 2026, down 6.16%.

Two of the counterparties are new customers and one is existing. One is a publicly listed enterprise running its own AI workloads. The contracts run for a weighted average of just over four years, and committed revenue applies across each fixed term regardless of how much the customer uses.

What the Contracts Add

Megaport expects the contracts to deliver about A$232.4 million of annual recurring revenue, with a full run rate targeted by the fourth quarter of FY27. Customers have prepaid about A$322.6 million, including roughly A$281.5 million from a single customer, which the company said covers most of the cash capital spending.

That spending is sizeable. Contract capex is about A$500.3 million, mainly for NVIDIA GPUs, compute, network and storage hardware. Separately, replenishing the Latitude.sh GPU pool will cost about A$360.0 million, mostly in FY27, with procurement already under way. Management expects that equipment to be deployed by the fourth quarter of FY27, with revenue ramping in the first half of FY28 and EBITDA payback of 16 to 22 months, unchanged from earlier disclosure.

The Trading Picture

The update also set out where the business stands. Network ARR reached A$302.6 million at 31 August 2026, up 29% year on year in constant currency, or 26% excluding India, and network net revenue retention was 116%. Compute ARR was A$201.4 million at 22 September 2026, up 90% since 30 June 2026. Strategic contract ARR rose to A$96.3 million from A$14.9 million at 30 June.

On a pro forma basis, group ARR is about A$1.1 billion, with more than 85% from North America. Megaport said annualised EBITDA could exceed A$650 million once all strategic contracts are billing, excluding the GPU pool.

The FY26 result, released on 20 August 2026, set the base. Revenue rose 37% to A$312.2 million and EBITDA increased to A$77.1 million from A$62.3 million. The net loss attributable to members was A$39.0 million, against A$0.3 million a year earlier, and cash at bank was A$435.4 million. No dividend was declared.

Funding and the Reset Guidance

The contracts forced a reset of FY27 guidance. Network revenue is now expected at A$325 million to A$335 million, compute revenue at A$395 million to A$475 million and group revenue at A$720 million to A$810 million. The group EBITDA margin range moves to 42% to 44% from 38% to 40%. Group capex is now A$1.78 billion to A$1.88 billion, a A$500.0 million rise that matches the equipment cost of the new contracts. Guidance excludes future strategic initiatives.

Pro forma liquidity is about A$362.2 million. Documentation for the upsized A$845 million senior secured facility has been executed, and drawdown depends on covenants and revenue milestones.

Milestones to Watch

Management said Megaport is fully funded for the updated FY27 capex, including the strategic contracts and the GPU pool replenishment. Targeted milestones are a full contract ARR run rate and deployment of the replenished GPU pool, both by the fourth quarter of FY27.