Thursday, 25 August 2016 12:20

Megaport reaping benefits of ‘aggressive’ expansion


Listed Australian network interconnection company Megaport’s aggressive expansion globally and a positive performance by its Australian and New Zealand business have driven strong revenue growth for the year to the end of June.

The company (ASX:MP1), started in 2011 by serial entrepreneur Bevan Slattery, reported revenue for the 12 months of $2.67 million with revenue in the month of June up 80% from the beginning of the financial year – the majority of which was generated in the Asia Pacific business units, of which Australia accounts for 86%.

Megaport also reports that monthly recurring revenue is up 80% since the beginning of the fiscal year and the company increased the number of network ports by 127%.

Net loss adjusted for acquisition and non-recurring costs was $17.7 million, supporting network and services expansion, marketing, and staffing growth underpinning Megaport’s new global infrastructure.

Megaport’s chief executive Denver Maddux says fiscal year 2016 was a “tremendous year for Megaport”.

“We aggressively expanded into new regions globally in a very short time period. Megaport is now live in Asia Pacific, North America, and Europe,” Maddux says.

“At the beginning of the fiscal year, Megaport was deployed in 36 locations. As of today, we are now in 132 locations. This represents fast execution on our plan, both organically and through two key acquisitions in Europe, OM-NIX and PEERING GmbH, providing us with extraordinary reach.

“While we expanded our footprint, we continued to grow our overall business; increasing customers, ports, and revenue. Megaport’s monthly recurring revenue is up 80% since the beginning of the fiscal year and we increased our ports by 127%.

“In addition, we forged a number of strategic partnerships, including leading data centre operators like CyrusOne and EdgeConnex and with the Amsterdam Internet Exchange. These partnerships yield excellent channel opportunities and service reach, with which Megaport can effectively go-to-market with a broader set of resources selling our services in more locations.”

In August, Megaport successfully completed a capital raising of $17.85 million and a share purchase plan to raise a further $13.15 million.

Megaport has said the net proceeds of the combined capital raising of approximately $30 million will be used for capital expenditure, ongoing operating costs of the network, services and staff, and network capacity investment.

Key details of Megaport’s expansion over the FY 2016:

●     Asia-Pacific: since listing on the ASX, Megaport expanded into six new locations and increased its footprint in underserved cloud connectivity markets like Auckland and Perth. Total locations are 42. The Australia and New Zealand business units are Operating EBITDA positive.

●     North America: Megaport has completed all 27 of its planned builds and began generating revenue in May 2016. Megaport has expanded into two additional markets, Las Vegas and Portland, with Boston underway, and now operates in 33 locations.

●     Europe: nine of the 13 planned sites are active with a combined total of 57 locations following the acquisition of OM-NIX, and PEERING GmbH (ECIX). Combined acquisitions generate $4.5 million of annualised revenue. The region is operating EBITDA positive.

Mark Cooper has been appointed executive vice-president of Europe.

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Peter Dinham

Peter Dinham - an iTWire treasure is a mentor and coach who volunteers also a writer and much valued founding partner of iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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