Megaport has posted a 37% jump in FY26 revenue to $312 million, driven by strategic acquisitions and a broadening platform across compute, network, and storage. The company raised over $1 billion to fund AI-focused contracts and infrastructure growth.
- 37% revenue increase to $312.2 million
- 62% growth in Group Annual Recurring Revenue to $395.2 million
- Acquisitions of Latitude.sh and Extreme IX expand AI infrastructure capabilities
- Raised $1 billion through placements and entitlement offers
- Announced $506 million in new AI infrastructure contracts
Record Growth Powered by Strategic Acquisitions
Megaport Limited (ASX:MP1) delivered a standout FY26 with revenue surging 37% to AUD 312.2 million and Group Annual Recurring Revenue (ARR) climbing 62% to AUD 395.2 million. This growth was underpinned by the transformative acquisitions of Latitude.sh, a Compute as a Service platform adding dedicated CPU, GPU, and storage infrastructure, and Extreme IX, India’s leading Internet Exchange operator. Together, these deals have expanded Megaport’s platform beyond its traditional network services into a full-stack AI infrastructure provider spanning compute, network, and storage.
Network ARR reached a record AUD 289.6 million, growing 27% on a constant currency basis, while Compute ARR, driven by Latitude.sh, hit USD 74.1 million (AUD equivalent), a 72% increase since acquisition. The company’s network footprint also expanded, now spanning 1,138 data centres across 31 countries, including 40 new sites in India via Extreme IX.
Capital Raising Fuels AI Infrastructure Ambitions
To support its aggressive expansion into AI and cloud infrastructure, Megaport raised over AUD 1 billion through a combination of an institutional placement, share purchase plan, and a fully underwritten entitlement offer. The entitlement offer alone brought in AUD 827.3 million, primarily funding contracted infrastructure for strategic customer deals and the build-out of an on-demand GPU pool designed to provide scalable AI compute resources globally.
Complementing equity raises, Megaport secured binding commitments for an AUD 825 million syndicated debt facility, including refinancing an existing $150 million facility. This diversified capital base positions the company to execute on its pipeline of long-term contracts and infrastructure investments.
Major AI Infrastructure Contracts Announced
Megaport’s Latitude.sh subsidiary secured eight strategic contracts worth approximately USD 359 million (AUD 506 million) in total contract value, spanning GPU, CPU, network, and storage capacity. These fixed-term deals provide committed revenue streams independent of customer usage and meet stringent internal return criteria. The contracts underpin Megaport’s vision of a globally distributed AI inference cloud, delivering compute power closer to users and applications.
In addition, previously announced contracts have been revised upward due to equipment supply constraints, resulting in an aggregate increase of USD 87 million in total contract value without materially changing annual recurring revenue or capital expenditure expectations. The total contract value of strategic deals announced since April 2026 now stands at approximately USD 900 million (AUD 1.3 billion).
Financial Performance and Operational Highlights
Gross profit rose 41% to AUD 229 million, with gross margin improving to 73%. EBITDA increased 24% to AUD 77.1 million, representing a 25% margin despite significant investment in headcount and integration costs. Operating cash flow grew 20% to AUD 82.1 million, and net cash ballooned to AUD 406.9 million, reflecting the capital raises and strong cash generation.
Megaport added 155 new data centres in FY26, a 35% increase year-on-year, and expanded network capacity with a fivefold increase in IP transit port capacity and a tripling of 100G Internet locations. The company also launched new products including a global cloud storage platform, DDoS protection, AI-driven network management tools, and enterprise-grade virtual machines and Kubernetes services.
Executive Remuneration and Governance
Executive pay outcomes reflected strong company performance, with the CEO’s short-term incentive vesting at 91% of the maximum and long-term incentives vesting at 100%. The remuneration framework was benchmarked against US and ASX-listed peers, aligning pay with global technology markets, especially given Megaport’s significant US revenue exposure. The Board undertook governance enhancements and capital management initiatives to support sustainable growth and integration of the acquisitions.
Risks and Outlook
Megaport’s key risks include information security, regulatory compliance across multiple jurisdictions, integration of Latitude.sh and Extreme IX, foreign exchange volatility, and competitive pressures from traditional telcos and cloud providers. The company maintains a strong balance sheet with total equity exceeding AUD 1 billion and net tangible asset backing per share rising to 247.7 cents.
Looking ahead, Megaport’s FY27 guidance anticipates revenue between AUD 620 million and AUD 730 million, with EBITDA margins of 38% to 40%. Capital expenditure is expected to range from AUD 1.28 billion to AUD 1.38 billion, reflecting continued investment in strategic contracts and the on-demand GPU pool. The company aims to convert its expanded platform and contracted demand into durable growth and strong cash returns, emphasizing disciplined capital allocation and execution focus.
Bottom Line?
Megaport’s FY26 results mark a pivotal shift into AI infrastructure, but the coming year’s challenge lies in turning its expanded platform and $1 billion capital base into sustained, profitable growth.
Questions in the middle?
- How effectively will Megaport integrate Latitude.sh and Extreme IX to realise anticipated synergies?
- Will supply chain constraints impact the timely deployment of the on-demand GPU pool and strategic contracts?
- How will Megaport navigate intensifying competition from hyperscalers and traditional telcos in AI infrastructure?