Megaport revenue and capex increase amid worldwide expansion

Australian interconnection services provider Megaport has published its financial results for the last quarter of calendar 2016, revealing revenue of AU$2.51 million -- up 39 percent quarter on quarter thanks to its acquisitions and growth throughout the period.

Total monthly recurring revenue as of December 31, 2016 was AU$909,000, which amounted to a quarterly increase of 14 percent, or AU$115,000.

Customer receipts increased by 29 percent during the quarter, to AU$2.9 million, which Megaport attributed to "geographic expansion, organic growth, and recent acquisitions", while capex spend was AU$184,000 more than the previous quarter, at AU$1.5 million -- also due to its expansion and acquisitions throughout Europe and North America.

Cash and cash equivalents stood at AU$24.19 million as of the end of the period.

"The second quarter of fiscal year 2017 has resulted in 39 percent growth, reflecting the first full quarter of acquisition revenue and organic growth for Megaport," said CFO Haidee Van Ruth.

"This is a result of a strong contribution from North America, with a 272 percent net increase, along with continued growth in Australia and Europe.

"Of particular note, there was a 40 percent increase in VXCs [virtual cross connections] during the period, which improved the average revenue per port and overall revenue. This indicates that Megaport customers are leading the trend of cloud compute adoption, and increasing their consumption of cloud connectivity."

Megaport spent AU$3.7 million on staff costs during the quarter, AU$393,000 more than the previous quarter due to its expansion into additional areas requiring more staff members; AU$3.3 million on product manufacturing and operating costs; AU$1.14 million on administrative and corporate expenses; AU$246,000 on advertising and marketing costs, down by AU$34,000 quarter on quarter; AU$59,000 on leased assets; and AU$9,000 on research and development.

During the period, nine new datacentres went live -- three in Australia and Singapore, and six in North America -- with the company's total services increasing by 15 percent and average revenue per port growing by 21 percent, to AU$615.

As of the end of December, Megaport had 1,479 ports, 2,768 total services, 141 datacentres, and 621 customers in 19 countries. Of its 141 datacentres, it has 45 in APAC, 39 in North America, and 57 in Europe.

It has also flagged expansion across two Canadian markets, the New York/New Jersey metro areas, and 10 new locations with enterprise datacentre provider CyrusOne to provide SDN-enabled interconnection and cloud services to customers using CyrusOne's US datacentres.

Its partnership with Digital Realty also came to fruition in November, with Megaport services going live across 16 Digital Realty datacentres.

Earlier this month, Megaport announced opening a new connectivity route between Los Angeles and Hong Kong, as well as a secondary path between Singapore and Hong Kong; switched on its link on the transatlantic AE Connect 13TB subsea cable connecting New York, London, and Dublin; and signed a deal with Seaborn Networks to access a fibre-optic subsea cable system between New York and Sao Paulo to expand its services to customers in South America when it begins providing services in June.