IT'S still early days for Megaport (ASX: MP1), but the company has started to reap the benefits of an aggressive expansion, particularly in Asia Pacific.
The Brisbane elastic interconnection service provider grew recurring revenue by 80 per cent to $2.7 million over the last financial year as it launched services in North America and Europe.
Megaport is currently generating a profit in Asia Pacific and its business units in Australia and New Zealand are operating earnings before interest, taxes, depreciation and amortisation (EBITDA) positive.
The relatively new company, which listed on the ASX in November, posted a net loss on the ASX today of $17.7 million, including acquisition and non-recurring costs. This represented a slide from its half year loss of $9.9 million, reported in Feburary.
However, Megaport's loss just after direct network costs was $1.5 million.
It seems the price to pay for the company, which has 'aggressively expanded' over the period, says its CEO Denver Maddux.
The market appears to understand too, with Megaport trading up more than 2 per cent following the announcement at around $2.33.
Megaport is now in 132 locations. Its plans for North America have all been rolled out, while nine of its 13 planned sites for Europe are active, with Maddux saying here the company has 'effectively leapfrogged' its original plan.
At the end of FY15, Megaport was in 36 locations.
"This represents fast execution on our plan, both organically and through two key acquisitions in Europe, OM-NIX and PEERING GmbH, providing us with extraordinary reach," says Maddux.
"Megaport's monthly recurring revenue is up 80 per cent since the beginning of the fiscal year and we increased our ports by 127 per cent.
"We are extremely pleased with the results of our Australian and New Zealand business units. We have seen tremendous uptake in the number of ports and services. Not only does this mean we are increasing the number of customers participating in our ecosystem, but it also indicates a strong adoption of customers accessing of services across our platform."
Megaport completed a capital raise on August 5 of $17.85 million and on August 11 completed a share purchase plan to raise another $13.15 million.
This will fuel Megaport's expansion plans, providing for network, services and staff costs.
"We have one of the most pervasive elastic interconnection platforms around the globe," says Maddux.
"The recent funding enables us to take advantage of the significant opportunities ahead for Megaport. I could not be more thrilled by our team's performance in fiscal year 2016."
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