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Megaport quarterly revenue jumps to AU$1.8m following acquisitions

The elastic interconnection services provider has grown its revenue by 91 percent thanks to acquisitions, partnerships, and uptake of cloud and datacentre services.
Written by Corinne Reichert, Contributor

Australian interconnection services provider Megaport has reported its results for the first quarter of the 2016-17 financial year, recording revenue of AU$1.8 million -- up 91 percent "due to organic growth, acquisitions, and execution of key strategic partnerships".

As of the end of September, the company had 1,409 ports, 132 datacentre locations, and 83 percent more customers, at 561, in 19 countries.

The company connected to 13 datacentres in Australia, the United States, and Europe over the period: 40 are now present in the APAC region after additions in Perth and Sydney; 33 in North America after additions in Portland and Las Vegas; and 48 in Europe after nine additions in Amsterdam, Dublin, London, and Stockholm.

Capital raising throughout the quarter amounted to AU$30 million for the three-month period, while customer receipts were AU$2.2 million, increasing by 266.7 percent from AU$600,000.

Capex was AU$1.3 million, down from AU$1.6 million last quarter, and cash and cash equivalents stood at AU$31.61 million as of the end of September.

"The first quarter of fiscal year 2017 showed tremendous growth for Megaport. Our organic revenue has grown considerably due to the increased uptake of direct cloud interconnection," said Megaport CEO Denver Maddux.

"Partnerships with datacentre operators, internet exchanges, and other channel partners forged in the previous fiscal year are generating revenue. Our European acquisitions have contributed not only to our revenue, but to our ecosystem of service providers and strategic datacentres. Combined, we have nearly doubled our revenue run rate from the previous quarter. Our partnership, acquisition, and local go-to-market strategies are coming together to capture market share."

During the quarter, Megaport formed a partnership with Digital Realty, which will be active as of November 4; formed an Open Alliance agreement with 4Degrees datacentres in Montreal and Quebec City, Canada; and acquired Berlin-based internet exchange operator Peering GmbH for AU$1.9 million, which added 180 customers and 30 datacentres to Megaport's stable.

The acquisition of the German internet exchange operator will contribute around AU$4.5 million to Megaport's annual revenue, according to the company.

Megaport's FY16 financial results showed a net loss after tax of AU$21.35 million on revenue of AU$2.68 million, with cash and cash equivalents of AU$11.87 million.

Reported in August, a breakdown of Megaport's revenue saw cloud connectivity contribute AU$328,000; internet exchange add AU$363,000; network services contribute AU$45,000; monthly recurring revenue reach AU$736,000; and annualised revenue reach AU$8.9 million.

Megaport's AU$3.1 million acquisitions of ECIX and OM-NIX in July gave it presence in Frankfurt, Berlin, Munich, Düsseldorf, Nuremberg, and Hamburg, Germany; London, United Kingdom; Vienna, Austria; Stockholm, Sweden; Amsterdam, Netherlands; Dublin, Ireland; Luxembourg; Moscow, Russia; Sofia and Kapitan Andreevo, Bulgaria; Thessaloniki, Greece; Skopje, Macedonia; Bucharest, Romania; and Kiev, Ukraine.

Megaport recently raised AU$31 million in capital through a share purchase plan (SPP) in order to continue its global expansion.

Founded in 2013 by Australian technology entrepreneur Bevan Slattery, Megaport initially operated as a dark fibre business. It then spun off its fibre assets to found a separate company called Superloop, so that it could focus solely on expanding its layer 2 connectivity platform outside of Asia and Australia.

Megaport's US subsidiary signed a deal in January to expand its US footprint, partnering up with enterprise datacentre provider CyrusOne to provide software-defined networking (SDN)-enabled elastic interconnection and cloud services to customers using CyrusOne's US datacentres.

Megaport also announced signing a deal with non-profit company Amsterdam Internet Exchange (AMS-IX) to exclusively provide elastic multi-cloud connectivity to AMS-IX customers in Hong Kong, the San Francisco Bay Area, and Chicago.

In June, Megaport signed Verizon Media Digital Services as a new customer in a "long-term" agreement in the Asia-Pacific region and the United States, along with Fujitsu Australia and New Zealand as a reseller of Megaport services in Australia.

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