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Megaport revenue quadruples as global business picks up

Megaport has announced a net loss of AU$13.77 million on revenue of AU$4.5 million for the first half of FY17 off the back of its expansion throughout APAC, Europe, and North America.
Written by Corinne Reichert, Contributor

Australian interconnection services provider Megaport has reported its financial results for the first half of FY17, revealing a net loss of AU$13.77 million, up substantially from the AU$9.9 million net loss announced this time last year due to its series of acquisitions and global expansion.

Megaport's revenue more than quadrupled to AU$4.5 million, with Asia-Pacific making up AU$2.35 million of this, Europe AU$1.87 million, and North America AU$245,040.

New chief executive Vincent English, who was appointed to the position following the resignation of former CEO Denver Maddux last week, called the six-month period a "leap forward" for the company.

"We have witnessed firsthand the effects of increased cloud adoption as evidenced by the dramatic uptick in our VXC count," English said.

"More customers are connecting to more cloud services across the Megaport SDN. Our monthly recurring revenue has increased by 311 percent in the last year, a result of acquisitions and accelerating customer adoption of Megaport services in our organic markets as demand continues to grow."

As of December 31, Megaport had 1,479 ports; 2,768 total services; and 621 customers across 19 countries, with a monthly recurring revenue (MRR) of AU$909,000, almost triple the AU$308,000 MRR reported in June.

Average revenue per port rose from AU$418 in June to AU$615 by the end of December.

The company's service connection types were made up of 38 percent private connections, 38 percent direct public cloud, and 24 percent internet exchange.

Megaport now has 141 datacentres in total: 39 in North America thanks to the addition of six during the six-month period and the deployment of services on 16 Digital Realty datacentres; 57 in Europe; and 45 in the Asia-Pacific region after adding three new datacentres in Australia and Singapore during the half year.

The company is also currently expanding into the New York and New Jersey metro areas and in Canada, as well as into 10 new CyrusOne locations, and is undergoing network integration in Europe that is due to be completed by the end of the financial year.

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

In January, 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 last month 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 earlier this month, 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, Amazon Web Services (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 announced a full-year FY16 net loss of AU$21.35 million on revenue of AU$2.68 million.

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