Megaport’s US$150M Latitude.sh Deal Boosts FY25 Revenue by 20%+

Strategic Acquisition to Expand Compute-as-a-Service

Megaport Limited (ASX, MP1) has unveiled plans to acquire Latitude.sh Holdings LLC and Latitude.sh S.A, a rapidly growing global Compute-as-a-Service platform, for an upfront consideration of US$150 million. The transaction includes up to US$150 million in contingent consideration tied to ambitious revenue and integration milestones over the next two years. This move marks a significant step in Megaport’s evolution, broadening its portfolio beyond network-as-a-service into high-performance compute infrastructure.

Latitude.sh offers automated, scalable compute services with a strong presence across North America, Latin America, Europe, and Asia-Pacific, boasting over 1,150 customers and US$43.1 million in annual recurring revenue as of September 2025. The acquisition is expected to be accretive to Megaport’s financial metrics, with pro forma FY25 revenue and adjusted EBITDA increasing by more than 20% and 40%, respectively.

Equity Raising to Fuel Growth and Integration

To finance the acquisition and support accelerated growth initiatives, Megaport is conducting a fully underwritten institutional placement to raise approximately A$200 million, complemented by a non-underwritten share purchase plan targeting up to A$20 million. The placement shares will be issued at A$14.30 per share, representing a 6.5% discount to the prior closing price. Proceeds will cover the upfront cash component of the acquisition, transaction costs, and a strategic investment to accelerate Megaport’s network expansion in India.

Megaport plans to establish a new Compute Division, with Latitude.sh’s CEO appointed as its head, reporting directly to Megaport’s CEO. Integration efforts are already underway, focusing on aligning sales teams, systems, and product roadmaps to unlock synergies and expand market reach.

Accelerated India Expansion

In parallel with the acquisition, Megaport is investing approximately A$43 million to fast-track its entry into the Indian market. This includes acquiring a leading local network operator with around 400 active customers and infrastructure across 40 data centres in six major cities. The investment aims to retrofit these sites with Megaport-grade infrastructure, enabling the sale of its full product suite and capitalizing on India’s growing cloud adoption and demand for low-latency connectivity.

Robust Financial Outlook and Risks

Megaport’s FY26 guidance remains unchanged, with expected revenue between A$260 million and A$270 million and EBITDA margins of 18-20%. The company anticipates net revenue retention improving to 109%, reflecting strong customer engagement. However, the acquisition carries risks including integration complexities, reliance on contingent payments tied to future revenue targets, currency exposure to USD and Brazilian Real, and regulatory compliance across multiple jurisdictions.

Megaport has secured underwriting agreements with Merrill Lynch Equities and UBS Securities Australia to mitigate funding risks. The acquisition is expected to complete by 31 December 2025, subject to customary conditions and approvals.

Positioning for Future Growth

This acquisition and capital raise position Megaport to capitalize on the expanding Compute-as-a-Service market, estimated to grow at over 20% annually, and to accelerate its footprint in high-growth regions like India. The integration of Latitude.sh’s automated platform complements Megaport’s existing network services, creating a more comprehensive cloud infrastructure offering aimed at enterprise and emerging technology customers.