Key Highlights

• Revenue for FY26 was A$312.2 million, up 37 per cent from A$227.1 million.

• EBITDA was A$77.1 million, up 24 per cent from A$62.3 million.

• By my arithmetic that is an EBITDA Margin of roughly 24.7 per cent, which sits just above the 21 to 24 per cent range the company guided to at the half-year.

• Megaport reported a net loss of A$39.0 million, no Dividend was declared, and the company ended the year with A$435.4 million of cash and equivalents.

What does Megaport (ASX:MP1) become if the AI boom turns a network specialist into a broader infrastructure provider? That is the question raised by the company's FY26 result, reported in August 2026 for the year to 30 June. Revenue grew encouragingly and the Business signed large multi-year contracts, but it also recorded a net loss, raised more than a billion dollars of Capital and took on acquisitions that add complexity. The picture is one of rapid expansion funded by investors, with execution now the central test.

The FY26 numbers

Revenue for FY26 was A$312.2 million, up 37 per cent from A$227.1 million. EBITDA was A$77.1 million, up 24 per cent from A$62.3 million. By my arithmetic that is an EBITDA margin of roughly 24.7 per cent, which sits just above the 21 to 24 per cent range the company guided to at the half-year.

The Bottom Line was weaker. Megaport reported a net loss of A$39.0 million, no dividend was declared, and the company ended the year with A$435.4 million of cash and equivalents. Group annualised recurring revenue, a measure of the run-rate of contracted subscription income, reached A$395.2 million, up 62 per cent.

What Megaport does

Megaport sells software-defined networking. Customers use its platform to connect cloud providers, data centres and enterprises through a global footprint of network points of presence, buying services such as ports, virtual routers and internet exchange access on flexible terms. Revenue is largely recurring and is driven by the number of services, the size of customers and how much they expand over time.

At the half-year, Megaport reported 37,077 services, 3,040 customer logos and 676 large customers. Logo net revenue retention was 111 per cent, meaning existing customers were spending more than a year earlier. Gross margin was 72 per cent, up two percentage points. Those are the operating indicators investors typically watch to judge whether the core network business is healthy.

The shift towards compute and AI

The strategic change is that Megaport no longer describes itself only as a network. During FY26 it acquired Latitude.sh, a compute platform, and Extreme IX, an internet exchange in India. It also disclosed eight multi-year infrastructure contracts worth A$747.8 million linked to AI workloads, and plans to launch an on-demand GPU pool. Management says it intends to invest where Demand is clear and returns are encouraging, and to unify compute, network and storage through software.

Funding that ambition required capital. Across FY26 the company raised more than A$1 billion, including an A$218 million raise referred to in the half-year result, to support large contracts and the GPU pool. It also added 155 data centres to its footprint during the year, with build-out continuing in the United States and India.

Regional and half-year detail

The half-year to December 2025 offers more granular evidence. Revenue was A$134.9 million, up 26 per cent, with the Americas contributing A$81.2 million, up 34 per cent, Asia-Pacific A$32.1 million, up 13 per cent, and Europe A$21.6 million, up 23 per cent. EBITDA was A$35.3 million, a 26 per cent margin. Network annualised Recurring Revenue was A$263.4 million, up 16 per cent.

The half-year statutory loss after tax was A$19.1 million, including A$15.8 million of acquisition-related costs.

Funding and dilution

The year-end cash balance of A$435.4 million gives the company room to fund its commitments, but the contracted build-out and the GPU pool will absorb capital as they are delivered.

Sector conditions and competition

Demand for data centre capacity and low-latency connectivity has risen as companies run more workloads across multiple clouds and as AI Training and inference expand. Megaport competes with other interconnection and network-as-a-service providers, as well as with the large cloud platforms' own offerings, and increasingly with specialist GPU and compute providers now that it has entered that field.

Its advantage has been neutrality and reach: customers can connect to many clouds from one platform. Moving into compute, however, means competing with better-capitalised players on different economics, which is a very different proposition from selling network ports.

Material risks

Several risks stand out. The first is integration. Latitude.sh was loss-making in the first half and contributed A$5.8 million of revenue after acquisition. About A$200 million of contingent consideration, payable in cash or shares, is tied to Latitude.sh meeting certain hurdles.

The second is Balance Sheet quality. Roughly half of total Assets are intangibles, which can be hard to value externally and could be written down if assumptions change.

The third is delivery. The AI-linked contracts are large relative to the business, and delivering them efficiently will determine whether they add profit or merely add revenue and capital intensity. The fourth is that management has prioritised reinvestment over near-term profitability, so Earnings may remain volatile. Currency movements were also cited as a headwind in the half-year commentary.

Finally, the broader strategy is more complex than it was. A business that once sold a single category of service now spans network, compute and storage, which makes it harder to analyse and harder to execute.

What to watch next

The company's stated priorities for FY27 are integrating the acquisitions, delivering contracted infrastructure, launching the GPU pool and sustaining network momentum. Investors will likely look for continued retention above 100 per cent, evidence that the AI contracts convert into recognised revenue, and progress towards statutory profitability.

Megaport's FY26 result therefore reads as a growth story with a clear opportunity and clear execution risk. Whether the expansion into AI infrastructure strengthens or dilutes the network Franchise is the question that later results should help answer.