Key Highlights

• The summary records a combined total contract value of about A$978.6 million, taking total strategic contract value since April 2026 to about A$2.3 billion.

• The summary shows Revenue of A$312.2 million, up 37% on the prior year, although another summary cites 40% Operating Revenue growth, so the exact comparison should be checked.

• Capex of A$1.78 billion to A$1.88 billion against pro forma Liquidity of about A$362 million means the company depends on customer prepayments, Debt availability and timely contract delivery.

• On 29 September 2026 Megaport announced three new AI infrastructure contracts.

How is Megaport Ltd. (ASX:MP1) paying for a rapid shift from interconnection services towards AI compute infrastructure, and what does it mean for shareholders? In summary, the company has signed a series of AI infrastructure contracts since April 2026, backed by customer prepayments and an enlarged debt facility, and it has guided to FY27 revenue far above FY26 but with a much heavier Capital programme.

The central development: new AI infrastructure contracts

On 29 September 2026 Megaport announced three new AI infrastructure contracts. The summary records a combined total contract value of about A$978.6 million, taking total strategic contract value since April 2026 to about A$2.3 billion. Customer prepayments were about A$322.6 million. The contracts are expected to add about A$232.4 million of annual Recurring Revenue (ARR) by the fourth quarter of FY27, lifting pro forma group ARR to about A$1.1 billion, with more than 85% from North America.

The capital demands are large. The summary shows required capex of about A$500.3 million for these contracts, including about A$360.0 million to replenish the pool of graphics processing units (GPUs) in FY27. Pro forma liquidity was about A$362.2 million and the debt Facility was upsized to A$845 million. Compute ARR was A$201.4 million at 22 September 2026, up 90% since 30 June 2026, while network ARR was A$302.6 million at 31 August 2026, up 29% year on year in constant currency, with network net revenue retention of 116%.

FY27 guidance, as summarised, is group revenue of A$720 million to A$810 million, an EBITDA Margin of 42% to 44% and capex of A$1.78 billion to A$1.88 billion. These are guidance figures, not results. The scale of capex relative to revenue is the crux of the story: growth is being bought with substantial up-front investment.

Business model and revenue drivers

Megaport has historically sold software-defined network connectivity, letting customers link data centres and cloud providers on demand. Network revenue is recurring and depends on the number of services, ports and customers, and the network figures above point to continued growth plus customers expanding their spend. The newer compute Business rents GPU capacity under contracts. On 20 August 2026 the company announced additional contracts worth US$359.4 million, with about US$91.7 million of expected ARR, and about US$207.2 million to be invested in Nvidia GPU, compute, network and storage hardware, funded from available liquidity and a new debt facility, with a financial effect expected by the end of the third quarter of FY27.

Compute contracts differ from network services: they involve large hardware purchases, customer prepayments and fixed contract terms, so returns depend on contract duration, counterparty strength and hardware life.

Recent results

Megaport reported FY26 results on 20 August 2026. The summary shows revenue of A$312.2 million, up 37% on the prior year, although another summary cites 40% operating revenue growth, so the exact comparison should be checked. EBITDA was A$77.1 million, and one summary gives a margin of about 25%. The company recorded a net loss after tax of about A$39 million. It added 155 data centres, completed acquisitions of Latitude.sh and Extreme IX, and secured a new A$825 million debt facility. Total Equity was A$1,001.4 million, and the summary notes no dividends in the last five financial years.

The gap between a FY26 revenue of A$312.2 million and guided FY27 revenue of A$720 million to A$810 million is wide. It implies that the compute contracts must be deployed and begin billing on schedule.

Sector and competitive position

Megaport competes in network interconnection with other software-defined networking and data centre interconnection providers, and in compute with a much larger group of GPU cloud and hosting companies, from specialist providers to hyperscalers. Its advantage, on the evidence retrieved, is an existing network presence across many data centres (155 were added in FY26), which may help it win and serve customers. The AI compute market is capital intensive, and Demand for GPU capacity can shift with hardware generations, customer financing and the pace of AI model investment.

Risks and developments to monitor

The main risks are funding and execution. Capex of A$1.78 billion to A$1.88 billion against pro forma liquidity of about A$362 million means the company depends on customer prepayments, debt availability and timely contract delivery. Debt raises interest costs and covenant exposure. Customer concentration, GPU price and supply, power and data centre availability, and technology obsolescence are further risks, as are currency movements given the more than 85% North American share of pro forma ARR.

Reported figures also Warrant careful reading, because the summaries differ on growth rates and the pro forma liquidity measure may not capture later spending. Items to watch include conversion of contract value into billed revenue, movement in compute and network ARR, further contract announcements, the Annual General Meeting following the notice lodged on 19 October 2026, several substantial holder notices lodged in October 2026, and the first-half FY27 result, which should show how much of the guided revenue ramp is already being delivered and how capex tracks against the guided range.