Megaport hits AU$1m in monthly recurring revenue

After opening connectivity routes between the US, Hong Kong, Singapore, Ireland, the UK, and Brazil during the quarter, Megaport has hit the AU$1 million mark for total quarterly revenue of AU$2.94 million.
Written by Corinne Reichert, Contributor

Megaport has reported its financial results for the third quarter of the 2017 financial year, with the interconnection services provider announcing that it now brings in a monthly recurring revenue of AU$1 million, up from AU$909,000 last quarter.

While average revenue per port slipped from AU$615 down to AU$605 as of March 31, Megaport offset this by increasing its number of ports from 1,479 to 1,658 over the three-month period for a total quarterly revenue of AU$2.94 million, up 17 percent from the previous quarter.

"We've achieved 17 percent growth, which positions us at a AU$1 million monthly recurring revenue milestone," said Megaport CFO Haidee Van Ruth.

"This is a reflection of increased product traction, as we have expanded our footprint to address additional markets. Enterprise adoption of direct connectivity to service providers is fuelling growth in our services, particularly VXCs. This is in turn helping drive our revenue growth."

Megaport's total services now number 3,269, up from 2,768, while it signed an additional 55 customers during the quarter for a total of 676, including airliners Virgin Australia and Tiger Airways.

Present in 19 countries, Megaport now has 150 datacentres in total: 45 in the Asia-Pacific region; 57 in North America thanks to the addition of seven in Ashburn, Cincinnati, Norfolk, New York, Chicago, Montreal, and Quebec; and 57 in Europe.

In Europe, Megaport said its SDN network integration with ECIX Munich has already taken place, with the remaining footprint to be completed by June, while Megaport also established three cloud on-ramps in AWS London, AWS Frankfurt, and Azure Berlin during the period.

During the quarter, Megaport announced opening a new connectivity route between Los Angeles and Hong Kong, as well as a secondary path between Singapore and Hong Kong due to high traffic along this route.

It also switched on its link on the transatlantic AE Connect 13TB subsea cable connecting New York, London, and Dublin under a partnership with the cable's owner, Aqua Comms.

Megaport is also moving into the South American market; its United States subsidiary signed a deal with Seaborn Networks in February, giving it access to a fibre-optic subsea cable system between the US and Brazil to expand its services to customers in South America.

In return, Seaborn will be able to provide its South American customers with Megaport's software-defined networking (SDN)-enabled interconnection services via an online portal, as well as exclusively offer Megaport-enabled "broadband on demand" for connecting internationally.

Megaport's routes allow enterprise customers to connect directly to Microsoft Azure, AWS, and Google Cloud Interconnect without needing a physical presence of their own in all locations.

The Seabras-1 subsea cable, stretching between New York and Sao Paulo, is due to begin providing services in June.

Megaport earlier this week also announced entering a global partnership with Oracle to provide customers with North America-based cloud services via Oracle FastConnect.

"The addition of Oracle Cloud Services across our SDN is a major step forward in that respect. The IRUs [indefeasible rights of use] and long lease will yield substantial monthly direct network savings over the life of the agreement, increasing our competitive advantage, and enabling us to position the Asia-Pacific region towards profitability," Megaport CEO Vincent English, who was appointed to the position following the resignation of former CEO Denver Maddux earlier this year, said on Thursday.

"Connecting Australia to North America and delivering Megaport Exchange means that we can now provide more comprehensive connectivity options for customers."

For the first half of the financial year, Megaport reported its revenue quadrupling to AU$4.5 million, but an overall net loss of AU$13.77 million due to its series of acquisitions and global expansion.

The company is also expanding into 10 new CyrusOne locations.

Last year, the company raised AU$31 million in capital through a share purchase plan in order to continue its global expansion.

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