Megaport clears positive cash from operations hurdle for first time

Company looking to break even on EBITDA at the end of this fiscal year.

Australian interconnection services provider Megaport has continued to burn through its cash reserves, but has taken a step towards being profitable by reporting positive cash from operations for the first time.

At the end of its second quarter to December 31, the company reported netting AU$894,000 from operations, but for the first half, it used up AU$7.7 million from operations. Once the use of cash in purchasing assets and financing is taken into account, Megaport's cash decreased from almost AU$169 million at the start of the year to AU$144 million. After some one-off payments that will occur in the second half of the year, the company expects to maintain positive cash from operations in FY22.

The company said it received AU$6.3 million in monthly recurring revenue for the second quarter, up 8% on last quarter's AU$5.8 million and up by over a third compared to the AU$4.5 million reported for the same time last year. Megaport now has 2,043 customers, 6,691 ports, and 19,278 total services.

Broken down by region, Asia-Pacific is delivering AU$2.16 million in monthly recurring revenue from 124 enabled data centres, North America is providing just shy of AU$3 million from 390 enabled data centres, and Europe is contributing AU$1.14 million from 202 enabled data centres.

"Achieving EBITDA breakeven on a run rate basis this fiscal year remains a priority as we continue to optimise our footprint to maximise margins and move to profitability," CEO Vincent English said.

Similar thoughts were expressed when Megaport handed down its fourth-quarter results for 2020.

In the second half of its fiscal year, Megaport said it would launch its network virtualisation platform, Megaport Virtual Edge, with Cisco on board as an integration partner.

For its 2020 fiscal year, Megaport saw its revenue increase by 66% to AU$58 million, while it burned through AU$23.4 million in cash across the 12-month period.

Related Coverage