Megaport (ASX: MP1) was up over 20% this morning after the network-as-a-service provider large-cap delivered its first positive earnings (EBITDA) quarter.
At $30.6m, fourth quarter revenue was up 10% on the previous quarter, and monthly recurring revenue for June was $10.7m, an increase of $1.2m, or 13% quarter-on-quarter.
Annualised recurring revenue at 30 June 2022 was $128m.
With two new markets, Canada and Japan, becoming profitable and ahead of schedule, the company also reported an inaugural normalised earnings (EBITDA) of $1m in fourth quarter.
After taking into account equity–settled employee related costs, foreign exchange gains and losses on disposal of property, plant and equipment, and other non-recurring expenses, normalised earnings (EBITDA) year-to-date is -$10.2m.
Overall, monthly recurring revenue was up 15% in North America, 12% in the Asia Pacific, and 9% in Europe fourth quarter of FY22.
Megaport’s CEO Vincent English attributed much of the earnings profit in the quarter to increased service uptake and strong new customer growth.
Customers at the end of the quarter were 2643, an increase of 102, or 4% quarter-on-quarter, and Megaport sold 1,447 new services during the quarter, up 6% on the prior quarter.
Multi-cloud connections on the Megaport platform also increased, with 9% more Megaport Cloud Routers (MCR) sold in the June quarter.
English pointed to strong operating leverage within the underlying Megaport network and business model with which to further increase profit and generate cash as revenue grows.
“Japan and Canada have reached profitability ahead of plan and early indications are that Mexico may outperform plan expectations.”
During the quarter, Megaport also launched in Mexico, the second largest IT spending market in Latin America – where the company enabled 16 new data centres during the quarter - four of which were in Mexico.
Having aligned the business to reduce cash burn, English also reminded investors of the company's clear runway to profitability and proven business plan.
The company has a strong cash position of more than $80m available, and English believes all operating metrics provide excellent momentum going into FY23.
“With a record of successfully executing on our plans, we have a high degree of confidence in FY23 and will continue to stay out front as the leading global NaaS provider."
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