Megaport Limited

Megaport Group ARR was $338 million, up 49% or $112 million year over year. Core Megaport ARR was $263.4 million, up 19% on a constant-currency basis, or $36.8 million year over year; the FX move from $0.65 to $0.70 reduced the reported growth rate to 16%. Net revenue retention by logo was 111%, up 3 percentage points year over year, and customer lifetime increased to 13 years. Management said total lifetime value increased 57% to $2.5 billion. The company added 51 data centers in the half, bringing total sites to 1,034, and added 5 new IX locations and 11 new cloud on-ramps to 344. EBITDA margin was 26% for the reported half, including one month of Latitude.sh, while the exit margin for the standalone network business was 21%. Cash flow commentary noted net cash outflow was under $10 million excluding capital raising and acquisition activity. For FY26, standalone Megaport Network revenue guidance was revised up at the bottom end to $260 million to $270 million, with EBITDA margin and CapEx unchanged. Combined-group FY26 guidance was $302 million to $317 million of revenue, EBITDA margin of 21% to 24%, and CapEx of $90 million to $100 million. Latitude.sh revenue guidance was reaffirmed, and management said a $0.05 move in AUD/USD changes revenue by $9 million.

Michael Reid framed the quarter as evidence that Megaport is benefiting from AI, not being disrupted by it, because the business is physical infrastructure plus software automation. He emphasized that the company is expanding its product set and TAM through new network services, compute, GPU, security, and market additions like India. His tone was upbeat and expansive, repeatedly pointing to execution, product-led growth, and the strategic fit of the acquisitions.

Leticia Dorman focused on the financial mechanics of the half: strong revenue from higher NRR, new logos, and the inclusion of one month of Latitude.sh compute revenue. She said partner commissions stayed around 11%, direct network costs were consistent on a net basis excluding IFRS 16, employee costs rose with planned hiring, and other opex reflected sales and marketing, travel, and IT. She highlighted EBITDA margin of 26% for the reported half, a 21% exit margin for the Megaport network business, and net cash outflow of under $10 million excluding capital raising and acquisitions, driven by expansion hiring and CapEx.

Analysts focused on why NRR improved, whether the company was lapping a weak prior quarter, and whether Latitude.sh and the India acquisition would add meaningful upside or margin pressure. Management said NRR is improving because the U.S. is strong, AI is increasing traffic and demand, and the company is selling higher-value products like long-haul and 100-gig services into the base. On Latitude.sh, management said ramp has been slowed by product availability and infrastructure deployment timing, and that the buildout plus overlay selling should create synergy over time, but not all of it is modeled upfront.