Michael Reid (Megaport)
Publicly listed network-as-a-service platform Megaport has confirmed it has recorded its first positive normalised earnings before interest, tax, depreciation and amortisation (EBITDA) ever, rising to $20.2 million.
This is an increase of over 250 per cent, up from the financial year prior’s EBITDA loss of $12.3 million.
According to the vendor, the positive normalised EBITDA was due to “robust” revenue growth, which was up 39.5 per cent for the 12 month period to 30 June 2023, to $153 million, as well as a focus on cost control.
Additionally, its net loss for the financial year shrunk by 80 per cent, to a loss of $9.8 million, and annual recurring revenue was up 39 per cent, to $178.6 million.
In a message to shareholders, Megaport founder and chairman Bevan Slattery said FY23 was a year of transformation.
“Today we find ourselves with a business that is EBITDA positive, generating cash and with a new streamlined, focused and invigorated executive team,” he said. “We delivered a significant upgrade in earnings outlook and trajectory, an annual [$30 million] cash flow improvement in less than six months and our first net cash positive quarter in history.”
Megaport CEO Michael Reid, who was appointed to the role in May, said the “outstanding” result is due to its improvement in operating and financial performance, which led to it upgrading its earnings guidance in July 2023.
“This is a strong validation of our business model and demonstrates our excellent operating leverage as the business continues to grow revenue,” he said.
At the same time as its earnings guidance update last month, it also revealed that it paid $2.6 million in redundancies in the last quarter of the financial year, with the figure for the whole financial year being $4.9 million – which it reiterated in footnotes in its FY23 results.
In the financial year ahead, FY24 is expected to be net cash flow positive, with EBITDA to be in the range of $51 million to $57 million – an increase of 152 per cent to 182 per cent on its FY23 normalised EBITDA and even higher than its July update, which stated it forecasted $46 million.
Additionally, revenue is predicted to reach between $190 million to $195 million, an increase of 24 per cent to 27 per cent compared to FY23.
“In fiscal 2024, Megaport will continue to innovate on our incredible platform bringing new services, features and capabilities to our customers globally,” Reid added.
