Megaport revenue jumps to AU$20 million for FY18

Megaport has reported a net loss of AU$24.5 million on revenue of almost AU$20 million for the year to June 30, 2018.
Written by Corinne Reichert, Contributor

Australian interconnection services provider Megaport has reported revenue jumping by 85 percent to AU$19.8 million for the 2018 financial year, adding a further 56 datacentres across the globe during the year.

Megaport's net loss for FY18 was AU$24.5 million, an 18 percent improvement from last year's AU$29.9 million, after spending AU$26.6 million in operating expenditure and AU$15.3 million on direct network costs after raising AU$60 million for its network expansion.

The company said it invested its capital in rolling out more datacentres across the globe; upgrading its North American network to 100 Gigabytes; software development; expansion of its ecosystem; and product development of the Megaport virtual cloud router (MCR), which launched in January.

As of June 30, 2018, Megaport had 221 datacentres in total, up from 165 at the end of last year; 2,755 ports, up from 1,829; 108 cloud on-ramps, up from 62; 1,038 customers, up from 738; 6,567 services, up from 3,764; and AU$2 million in monthly recurring revenue, up from AU$1.2 million.

Megaport pulled in the majority of its revenue from the Asia-Pacific region, at AU$8.4 million, followed by Europe with AU$6 million and North America with AU$5.4 million.

Normalised earnings before interest, tax, depreciation, and amortisation (EBITDA) was negative AU$22 million, a slight improvement from last year's AU$23.8 million.

"Megaport has had another incredible year. We achieved a milestone of AU$2 million in monthly recurring revenue. Our most mature market, Australia, reached a 62 percent gross margin position even as we expanded to new datacentres and new markets. We on-boarded 300 new customers and achieved our 1,000th customer in June," Megaport CEO Vincent English said.

"Megaport is connected to more cloud onramps than any other SDN or interconnection fabric ... this is driving significant uptake in direct cloud connectivity, with 58 percent of all connections on our platform today directly connecting enterprises to cloud services."

In Asia Pacific, Megaport now has 59 datacentres, 1,355 ports, 529 customers, and 3,676 services; in North America, it has 100 datacentres, 340 customers, 812 ports, and 2,057 services; and in Europe, it has 62 datacentres, 251 customers, 588 ports, and 834 services.

For 2019, Megaport said it would continue expanding its network, locations, and customers; introduce new network capabilities and services; and reduce cash expenditure.

"Taking a cue from our launch of Megaport Cloud Router, we will continue to produce powerful new tools enabling our customers to further realise the value of networking as a service," English added.

Company founder Bevan Slattery will be stepping down from his role as executive director as of September 1.

Megaport in April revealed a decrease in its receipts from customers for the quarter ended March 31, from AU$5.2 million to AU$4.5 million, with the company attributing this to "the timing of cash flows".

However, third-quarter revenue was up by 10 percent quarter on quarter, from AU$4.68 million to AU$5.14 million.

"Megaport's ongoing expansion into new datacentres in markets like Austin, Sacramento, and St Louis enable us to support enterprises in locations that have been underserved by direct connectivity to public cloud services," English said at the time.

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