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Megaport continues to burn through cash across FY18

Company is projecting cash outflow of AU$19.5 million in the next quarter, nearly matching half the AU$39.6 million outflow experienced over FY18.
Written by Chris Duckett, Contributor
(Image: Megaport)

Australian interconnection services provider Megaport remains very much in an expansion phase, as the company is projecting cash outflow of AU$19.5 million in the first quarter of FY19, which in a matter of three months almost eclipses the AU$23.6 million outflow from operating activities experienced over the course of FY18.

In delivering its fourth quarter update to June 30, the company showed a 85 percent increase in yearly revenue to AU$19.75 million, and a 63 percent jump in monthly recurring revenue to AU$2 million.

Across the 2018 fiscal year, Megaport has seen a 75 percent increase in services, 51 percent boost in ports, 41 percent jump in customers, and a 34 percent increase in the number of datacentres it is located in. Of the 221 locations it is now present in, 100 are in North America, 62 are in Europe, and 59 are located in Asia Pacific.

"One of Megaport's top priorities is to expand our Network as a Service footprint to extend the reach of cloud services to the locations enterprises currently manage their on-premises infrastructure," CEO Vincent English said. "This allows us to make it very easy for IT decision makers to adopt a multicloud architecture while they are undertaking their digital transformation journey without the need to re-engineer their physical deployments."

At the end of the fourth quarter, the company had cash and bank balances of AU$56.3 million, thanks to raising over AU$74 million from share placements during the year.

For its fourth quarter, its revenue of AU$5.8 million was barely outstripping the individual line items of product manufacturing and operating costs at AU$5.4 million and staff costs of AU$5.4 million, which resulted in cash outflow just under AU$7 million from its operating activities.

Over the fiscal year, the company made AU$19.5 million in revenue, but had cash outflow of AU$23.6 million from operating activities, as well as AU$16 million leaving the business thanks to asset purchases.

For its next quarter, Megaport is expecting AU$19.5 million to flow out of the business, with operating and staff costs to sit around the same numbers registered for the fourth quarter.

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