Is Megaport going to be a silent beneficiary of the AI boom?

Megaport announced strong growth in network, compute and AI infrastructure contracts during the first half of FY26.

Megaport Limited (ASX: MP1)

achieved strong progress for the 6 months ended 31 December 2025. Group Annual Recurring Revenue increased 49% year on year to AUD$338M. Revenue reached AUD$134.9M including AUD$129.1M from the Megaport Network business and AUD$5.8M from Latitude.sh after its acquisition on 26 November 2025. EBITDA for the half year was AUD$35.3M. During the period, MP1 completed the acquisitions of Latitude.sh and Extreme IX and also raised AUD$218.2M in capital. Excluding acquisition costs of AUD$15.8M, the underlying net loss was AUD$3.3M.

Megaport also recorded stronger customer metrics with Net Revenue Retention increasing to 111%, ARR growth of 19% in constant currency, customer lifetime extending from 10 years to 13 years and customer lifetime value increasing 57% to AUD$2.5B.

3-Year Compute Contract

On 27 April 2026, Megaport announced that Latitude.sh secured a new 36-month compute and storage contract worth about USD$25.1M, equal to around AUD$35.4M. The agreement added approximately USD$8.4M or AUD$11.8M in Annualised Recurring Revenue. The platform continued to benefit from growing AI demand for CPU, GPU, and storage services. Compute ARR for the on-demand platform, excluding this deal, increased 31% to USD$58.7M from USD$45.0M at 31 December 2025. Megaport also stated that more of its revenue was now coming from contracted business rather than short term monthly arrangements. At 31 March 2026, Megaport Network ARR including India reached AUD$272.0M, up 23% on a constant currency basis compared with the prior corresponding period.

AUD$254.0M Infrastructure Contracts

Megaport announced that Latitude.sh secured three major GPU, CPU, network, and storage agreements across two customers on 14 May 2026. The contracts had a combined total contract value of about USD$182.9M, equivalent to AUD$254.0M and represented around USD$65.2M or AUD$90.6M in Annualised Recurring Revenue. Two contracts, accounting for about 90% of total contract value, were signed for initial terms of 36 months, while the third agreement had a 24-month term. The company stated that these were fixed-term contracts with committed long-term revenue regardless of usage levels. The combination of its network automation platform with Latitude.sh’s compute and storage capabilities had created a global automated infrastructure platform covering more than 1,100 data centre locations.

Outlook

Megaport reaffirmed its FY26 revenue and EBITDA guidance that was originally provided with the H1 FY26 results on 20 February 2026. The company also kept FY26 Group Capex guidance unchanged at between AUD$90M and AUD$100M, excluding the newly announced contracts and the strategic deal announced on 27 April 2026. Megaport stated that if equipment for the new contracts is delivered before 30 June 2026, FY26 Group Capex could increase by up to a further AUD$140.3M. The company also informed it continues to assess additional opportunities linked to its automated global infrastructure platform whereas maintaining strict requirements around customer quality, contract terms, payback periods and returns.

(Source: Company Report)