Megaport [ASX:MP1] Stocks rise on FY22 results

Megaport [ASX:MP1] shares rose 9% after its FY22 results were released, with revenue up 40% to $109.7 million and net loss down 12% to $48.5 million .

While the stock is up 35% in the past month, Megaport is still down 50% year-to-date.

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Megaport publishes its 2022 financial statements

Last month, Megaport released its fourth quarter results for FY22, turning group EBITDA positive in the quarter.

This morning the company released its full accounts for FY22.

The main financial statements are as follows:

  • Revenue from ordinary activities increased by 40% compared to FY21, reaching $109.7 million.
  • After-tax losses fell 12% to $48.5 million in FY22 from $55 million.
  • Monthly recurring revenue increased 43% from $7.5 million to $10.7 million.
  • Annualized revenue reached $128.3 million, up 43% from $89.8 million.
  • The total number of customers increased by 16% to 2,643.
  • The total number of ports increased by 24% to 9,545.
  • The total number of services increased by 26% to 27,383.
  • Normalized EBITDA losses improved 23% to $10.2 million.
  • Megaport’s closing cash balance decreased 39% to $82.5 million from $136.3 million.

ASX: ANNUAL REVENUES MP1Source: MP1

Revenue by region

  • North America revenue was the strongest growth, climbing 49%, totaling $57.8 million from $38.7 million in 2021 (an increase of $19.1 million) .
  • Revenue from Europe also increased, a 33% increase to $18.4 million from $13.8 million last year (an increase of $4.6 million).
  • Asia grew 30%, generating $33.5 million in revenue, compared to $25.7 million in 2021 (an increase of $7.8 million).

ASX: MP1 YOY REVENUE BY GEOSource: MP1

Operational Highlights

But what drove these results?

  • The total number of customers improved in 2022, up 2,643 from 2,285 customers in 2021.
  • The average number of ports per customer also increased, 3.61 from 2.37 last year.
  • Average services per port increased slightly, 2.87 from 2.82 in 2021.
  • Revenue per port also increased by an average of $1,120 from $974 in 2021.

Cloud Trends

Megaport cited research that 60% of study participants expect their organizations to adopt at least four IaaS CSPs in the next 24 months.

Network investments are expected to increase by 15% relative to overall IT budgets in the coming year.

Today, 66% of branch offices depend on cloud connectivity.

ASX: MP1 CLOUD TRENDSSource: MP1

Bevan Slattery, President of MP1, said:

This massive growth in cloud adoption is fueling a growing reliance on critical communications infrastructure as data travels between end users and public and private cloud locations. Megaport was designed to solve this problem and founded at the intersection where network infrastructure and operations meet next-generation software and automation.

More than a way to scale cloud connectivity, Megaport has become a fundamental part of solving cloud interoperability.’

Megaport cuts staff as inflation bites

In its FY22 report, Megaport admitted to cutting 35 positions for ‘reduce costs and prepare for rising prices and inflation‘ in its main markets.

The layoffs were not announced in FY22 (having been made last month), meaning the layoffs were not reflected in current annual reports.

Megaport said the resulting redundancy costs were “impossible to measure.

Lithium’s little brother

The world is striving to decarbonize, and electric vehicles (EVs) are a big part of that.

Mass adoption of electric vehicles is expected to drive demand for metals like lithium, copper, nickel, cobalt and graphite.

And while the focus has been on lithium, our experts believe there must be a much smarter way to play the EV boom.

It implies what you can call lithium’s “little brother”.

Cheers,

Kiryll Prakapenka,
For silver morning