MegaportLimited (ASX:MP1) today reported its first half earnings to 31 December 2017including a general market update.
Performance Highlights
H1FY18 Financial Highlights
● The Company’s revenue for thehalf-year period ended 31 December 2017 was $8.8M, an increase of 98% from thesame period ended 31 December 2016.
● Total monthly recurringrevenue for the month of December 2017 was $1.6M, an increase of $0.69M or 78%from the month of December 2016.
● The business generated aprofit after direct network costs[1] of$2.1M for the half-year period ended 31 December 2017 compared to a loss afterdirect network costs of $831k in the same period ended 31 December 2016.
● Net loss for the half-yearperiod ended 31 December 2017 was $13.3M.
● At 31 December 2017, thecompany’s cash position was $21.1M.
VincentEnglish, Chief Executive Officer, Megaport Limited said: "The first half offiscal year 2018 saw the company driving increased adoption of Megaportservices which grew significantly while we continued to expand our network footprintinto markets underserved by cloud connectivity. Revenue grew 98% throughincreased Port adoption as well as increased utilisation of services. This, inturn, has had a positive impact, resulting in a $2.1M profit after directnetwork costs in this reporting period."
Key Performance Metrics
Executing on global growthopportunity and first-mover advantage
Thekey metrics to the end of December 2017 are:
*Servicesincludes Ports, VXCs, and IX
H1FY18 Operating Highlights
● Total Services[2]increased from June 2017 to December 2017 by 1,277, or 34%.
● Average Revenue per Port increased to $707 for the period.
Market Updates
On22 January 2018, the Company launched Megaport Cloud Router, a new product thatenables virtual routing services and addresses key challenges for cloudnetworking and the expansion of network-based services around the globe. Moreinformation about MCR can be found at https://www.megaport.com/megaport-cloud-router/
Megaportentered into several new strategic partnerships including two key cloudpartnerships with IBM Cloud and Salesforce as well as new data centrepartnerships with Cyxtera, vXchnge, HKT SkyExchange, QTS, Stream Data Centers,and Iron Mountain.
On19 February 2018, Steve Loxton joined Megaport as Chief Financial Officer.Steve brings over 27 years of experience in leadership roles across finance andinvestment. Prior to Megaport, Steve was integral to originating Australianinfrastructure investments for Canada Pension Plan Investment Board, one of theworld’s ten largest retirement funds.
VincentEnglish, Chief Executive Officer, Megaport Limited said: "The number ofcustomers accessing multicloud connectivity on the Megaport SDN grew 107% inthe first half of the fiscal year. This is a reflection of the continued growthof our service provider Ecosystem as more customers are taking advantage of keyfeatures and capabilities enabled by multiple IaaS, PaaS, and SaaS providers.Our recent partnership with IBM Cloud, for example, now empowers customers withdirect connections to services optimised for AI, analytics, blockchain,Internet of Things, serverless, and more. Our Salesforce partnership brings thetop CRM and leading Software as a Service company into the mix. We now have thetop seven Cloud Service Providers on our platform which is connected to 102cloud onramps around the world."
"Thelaunch of Megaport Cloud Router opens up a number of new Layer 3 use cases onthe Megaport SDN. Service providers can further extend the reach of theirhosted service offerings rapidly without the need to procure physicalinfrastructure. Businesses born in the cloud that have virtualised theirinfrastructure can use MCR to directly connect Cloud Service Providers togetherto support service interoperability and boost their adoption of multicloud. Ourrecent data centre partnerships and our expansion into cities like Kansas City,Adelaide, and Wellington highlight our focus on enabling cloud connectivity inmarkets where enterprises are architecting their cloud strategies."
Conclusions and Outlook
VincentEnglish, Chief Executive Officer, Megaport Limited said: "Megaport willcontinue to focus on capturing our first-mover advantage by expanding intoenterprise-rich markets and locations. In doing so, we effectively extend theservice reach of cloud onramps which greatly benefits both Cloud Service Providersand enterprises looking to adopt their services. We will further deepen ourintegration with the hyperscalers to maximise ease-of-use while bringing moreManaged and Network Service Providers into our Ecosystem. In the second half ofthe year we will continue to work with our partners to accelerate serviceadoption and drive greater revenue. We are very excited to have such a solidfirst half-year performance and look forward to continuing to accelerate ourrollout plans and revenue opportunities."
Moreinformation can be found in the FY18 Half-Year Market Update lodged with theASX on 21 February 2018.
Supporting Resources
● Visit Megaport: https://megaport.com/
● Follow Megaport on Twitter: @megaportnetwork
● Like Megaport on Facebook
● Follow Megaport on LinkedIn
[1] Direct network costs are comprised of data centre power andspace costs, physical cross connect fees, bandwidth and dark fibre costs,network operation and maintenance fees, and channel commissions, which aredirectly related to generating the service revenue of Megaport Group.
[2] Totalservices are comprised of Ports, Virtual Cross Connections (VXCs), and InternetExchange (IX). ---
