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INVESTOR PRESENTATION FY25 HALF YEAR RESULTS For personal use only
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Business Update Financial Results 2 Guidance Update Company Highlights For personal use only
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1. Annual Recurring Revenue (ARR) is the recurring revenue expected over a 12-month period, calculated as Monthly Recurring Revenue for the last month of the period x 12, and excludes any non-recurring or one-off revenue. 2. CC = Constant Currency. Constant Currency shows ARR based on the average FX rates for Dec-24. 3. Net Revenue Retention is the percentage of revenue retained from existing customers after accounting for expansion and churn. Calculation is FX adjusted and compared YoY. 4. Net Cash Flow is the change in Net Cash over the period. Net Cash is cash at bank less debt (including vendor finance facility). As at 31 December 2024, Net Cash comprised cash at bank of $89.8M less the amount outstanding under vendor financing facility of $12.9M. pp = percentage point. HoH = half on half, or sequential half. YoY = year on year. 3 NET CASH FLOW4NRR3 GROSS PROFIT H1 FY25 Highlights Sustained 70% Gross Margin First signs of stabilisation up 26% COMPANY HIGHLIGHTS YoY ARR1 up 18% (14% CC2) For personal use only
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Company Highlights Financial Results Guidance Update Business Update 4 For personal use only
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- New compute platform - 100G MCRs - NAT Gateway - BGP on Internet - Managed Cross Connect - MVE: Palo Alto Prisma, Aviatrix, 6WIND - 400G backbone - 100G VXCs from 597 DCs - Strategic DC expansion, +82 - 4 new IX locations, now 27 - +25 cloud on-ramps, now 315 - Brazil, Italy: now in 26 countries - Internet: France, Japan, Germany - AI Exchange 30+ providers - FS Exchange 600+ companies - Partner Portal Co-Branding - Sales headcount expansion - CSM roles to protect and expand - AI-enhanced Customer Support Customer And Ecosystem Greater Network Presence Execution Against Strategy - Investments for the Future Product And Innovation BUSINESS UPDATE 5 For personal use only
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Annual Recurring Revenue1 6 BUSINESS UPDATE Megaport Americas APAC EMEA Strong ARR1 growth of $22.7M up 18% in H1 FY25. The Americas contributes 58% of the total. ARR1 GROWTH 1. Annual Recurring Revenue (ARR) is the recurring revenue expected over a 12-month period, calculated as monthly recurring revenue for the last month of the period x 12, and excludes any non-recurring or one-off revenue. NB: Due to rounding, numbers presented in this section may not calculate precisely to the totals. For personal use only
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Showcasing that the transformation in GTM and product innovation is delivering. New Logos set the stage for future expansion. NEW LOGO GROWTH 1. Customer Logos reflect a consolidation of revenue-generating customer accounts, where those accounts are owned by the same company. Note: A spreadsheet with historical KPIs and metrics can be found on our website at https:/ /www.megaport.com/investor/business-overview/#kpis. BUSINESS UPDATE Quarterly Net New Customer Logos1 7 For personal use only
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YoY Note: A spreadsheet with historical KPIs and metrics can be found on our website at https:/ /www.megaport.com/investor/business-overview/#kpis. Trending growth reflects the impact of investments in GTM and product. Building for future connectivity and expansion. PORT GROWTH BUSINESS UPDATE Quarterly Net New Ports 8 For personal use only
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Net Change in Provisioned Port Capacity1 1. Provisioned Port Capacity represents the number of revenue generating Ports, multiplied by the Port capacity 9 BUSINESS UPDATE CAPACITY GROWTH Q1 and Q2 were back-to-back the largest capacity contributions in our history. Dramatically increases future connectivity revenue potential. For personal use only
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$203K Average Port-only Customer ARR1,3 $71K Average MVE Customer ARR1,3 10 Dec-23: $162K Dec-23: $66K BUSINESS UPDATE MVE Total Count2 MVE GROWTH Up 90% year on year. Almost 3x the ARR vs a port-only customer. Demonstrates that solution selling is beginning to pay off. 1. Annual Recurring Revenue (ARR) is the recurring revenue expected over a 12-month period, calculated as monthly recurring revenue for the last month of the period x 12, and excludes any non-recurring or one-off revenue. 2. All metrics are revenue-generating and measured at period end. 3. Represents Dec-24 ARR divided by relevant customer logo count at 31 December 2024. Megaport Virtual Edge (MVE) For personal use only
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BUSINESS UPDATE 11 Network Utilisation showcases customers leveraging Megaport’s product. Growth confirms investments in product and innovation are delivering usage acceleration. UTILISATION GROWTH 1. Customer Utilisation shows the daily peak of customer traffic on the Megaport network. Customer Utilisation1 - Total Network Traffic For personal use only
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Financial Results Company Highlights Business Update Guidance Update 12 For personal use only
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Consolidated EBITDA1 H1 FY25 $’M AUD H1 FY24 $’M AUD Change $’M AUD Change % Revenue 106.8 95.1 11.7 12% Direct network costs (19.5) (18.2) (1.3) (7%) Partner commissions (12.6) (10.3) (2.3) (22%) Gross profit 74.7 66.6 8.1 12% Gross margin 70% 70% n.m. 0 pp Employee costs2 (35.6) (27.5) (8.1) (29%) Other operating expenses3 (11.5) (9.0) (2.5) (28%) EBITDA1 27.6 30.1 (2.5) (8%) EBITDA margin 26% 32% n.m (6 pp) Revenue up 12%, driven by improvement in ARR per existing customer and addition of new logos. Direct network costs increased 7% reflecting the rollout of the 400G backbone, an increase in new data centre builds, and ongoing maintenance and support costs to support demand for additional capacity. Partner commissions underlying increased 16%. Continued strong engagement with partners, particularly within the USA, after normalising for true-up of historic adjustments with key partners. Gross profit demonstrates operating efficiency and profitability, highlighted by the stable gross margin of 70%. Employee costs2 up $8.1M from H1 FY24. Improved growth in core metrics and ARR during the half year, particularly in The Americas, saw us accelerate our investment in key GTM roles across Sales Executives, Channel Managers, and Customer Success teams. Other operating expenses3 up $2.5M reflecting marketing, travel and IT costs to support increased headcount in GTM activities. EBITDA1 of $27.6M includes an additional $1.5M in opportunistic investment in GTM hires during the first half of FY25. Excluding this would have resulted in an adjusted EBITDA of $29.1M reflecting an EBITDA margin of 27%, consistent with Jun-24 exit. 1. Earnings Before Interest Tax Depreciation and Amortisation (‘EBITDA’) represents operating results excluding equity-settled employee and related costs, foreign exchange gains and losses, gains and losses on disposal of property, plant and equipment, and certain non-recurring non-operational expenses. 2. Excludes equity-settled employee costs and restructuring costs. 3. Refer to Appendix for breakdown of Other operating expenses. n.m. = not meaningful. pp = percentage point NB: Due to rounding, numbers presented in this section may not calculate precisely to the totals or year on year movements provided. 13 FINANCIAL RESULTS Summary EBITDA1 For personal use only
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Consolidated Cash Flow H1 FY25 $’M AUD H1 FY24 $’M AUD Change $’M AUD Change % Cash flow - Operating Activities 31.7 25.9 5.8 22% Cash flow - Investing Activities (17.0) (11.6) (5.4) (47%) Cash flow - Financing Activities (0.8) 0.4 (1.2) n.m Effect of FX movements 3.5 (0.7) 4.2 n.m. Total Cash Flow 17.4 14.0 3.4 24% Opening Cash Balance 72.4 48.5 23.9 49% Closing Cash Balance 89.8 62.5 27.3 44% Opening Vendor Financing Balance (11.2) (15.2) 4.0 26% Closing Vendor Financing Balance (12.9) (16.7) 3.8 23% Net Cash Flow1 15.7 12.5 3.2 26% Closing Net Cash2 76.9 45.8 31.1 68% 14 FINANCIAL RESULTS Cash Flow NET CASH2 IMPROVEMENT vs H1 FY24 $31.1M H1 FY25 represents continued cash generation. Operating cash inflows increase driven by strong receipts from customers during the period. Investing activities increased by 47% to $17.0M, reflecting a $6.0M capex payment for three years of equipment licences. Financing activities were $1.2M lower as H1 FY24 included $1.3M proceeds from exercise of share options (H1 FY25 of nil). Effect of FX movements during H1 FY25 predominantly driven by the change in the AUD:USD exchange rate. Cash at bank has risen 44% since H1 FY24 at $89.8M. 1. Net Cash Flow is the change in Net Cash over the period. 2. Net Cash is cash at bank less debt (including vendor finance facility). As at 31 December 2024, Net Cash comprised cash at bank of $89.8M less the amount outstanding under vendor financing facility of $12.9M. n.m. = not meaningful NB: Due to rounding, numbers presented in this section may not calculate precisely to the totals or year on year movements provided. For personal use only
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H1 PPE Capex $12.8M 15 H1 Capitalised Wages Capex $5.9M Other Deployment Network Development Product Development OtherNetwork and Capacity Upgrades Equipment Refresh Capital Expenditure FINANCIAL RESULTS FY25 TOTAL CAPEX UNCHANGED $27M - $30M1 Inclusive of $6M in network licences for 3 years. Licences 1.Includes planned capital expenditure, assumes a foreign exchange rate of AUD $1.00 to USD $0.668, and excludes any future strategic initiatives the Company may decide to undertake. Any variation to the exchange rate will impact costs. 29.1 39.8 19.4 27 - 30 H1 FY25 capex spend supports current project pipeline. PPE Capex - Maintenance of inventory to support planned expansion and upgrades. - Major projects included the 400G backbone upgrade, new locations and network operations interface tool. - Investment in equipment licences to be utilised over 3 years ($6M). Capitalised Wages - Predominantly reflects ongoing efforts on delivery of network enhancements, new and existing product development, and deployment to new and upgrades to existing sites. - In line with FY24 spend. For personal use only
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Guidance Update Company Highlights Business Update Financial Results 16 For personal use only
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》 Revenue Guidance1: Tightened the lower end to reflect early signs of NRR3 stabilisation. 》 EBITDA Guidance1,2: Unchanged. Includes opportunistic investment in key GTM roles, expected to be $4M for FY254. 》 Estimated annualised impact of $0.01 move in AUD:USD5: Revenue Lower End Tightened, EBITDA Unchanged 17 1. Guidance is provided after taking into account planned investments in go-to-market capabilities, product development, marketing, advertising, travel, entertainment, professional fees and planned capital expenditure, and excludes any future strategic initiatives the Company may decide to undertake. FY25 Guidance assumes a foreign exchange rate of AUD $1.00 to USD $0.668. Any variation to the exchange rate will impact revenue, costs and cash flow. H1 FY25 average rate was AUD $1.00 to USD $0.661. 2. Earnings Before Interest Tax Depreciation and Amortisation represents operating results excluding equity-settled employee and related costs, foreign exchange gains and losses, gains and losses on disposal of property, plant and equipment, and certain non-recurring non-operational expenses. 3. Net Revenue Retention is the percentage of revenue retained from existing customers after accounting for expansion and churn. Calculation is FX adjusted and compared to the prior comparative period. 4. $1.5M for H1 FY25. 5. Estimated based on Dec-24 exit results annualised. GUIDANCE UPDATE FY25 REVENUE1 (AUD:USD = 0.668) FY25 EBITDA1,2 (AUD:USD = 0.668) previously $214M - $222M unchanged Revenue $2.0M - $2.2M EBITDA $0.6M - $0.8M For personal use only
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INVESTOR PRESENTATION FY25 HALF YEAR RESULTS THANK YOU Questions. @megaport @megaportnetwork @megaportnetworks ASX: MP1 megaport.com/investor megaport.com/newsroom For personal use only
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Important Information Reference Slides MEGAPORT LIMITED ACN 607 301 959 Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell Megaport securities in any jurisdiction. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or thoroughness of the information, whether as to the past or future. Recipients of the document must make their own independent investigations, consideration and evaluation. The information contained in this presentation is subject to change without notification. This presentation includes certain forward looking statements that are based on information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward looking statements. Such forward looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Megaport. These factors may cause actual results to differ materially from those expressed in the statements contained in this presentation. For specific risks, please refer to the FY24 Annual Report lodged with the ASX on 22 August 2024. For specific disclaimers, please refer to the Megaport Placement & Share Purchase Plan presentation lodged with the ASX on 7 April 2020. All references to “$” are to Australian currency (AUD) unless otherwise noted. For definitions refer to the Glossary for Investors on the Megaport website at https://www.megaport.com/investor/business-overview/. A summary of Megaport's historical KPIs and metrics can be found on our website at https://www.megaport.com/investor/business-overview/#kpis. Subscribe for ASX announcements at https://www.megaport.com/investor/#investor-contact. This presentation has been authorised by the Board of Megaport. Megaport Limited Level 3 825 Ann Street Fortitude Valley Queensland 4006 Contact: Investor Relations Megaport Limited investor@megaport.com 19 For personal use only
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Appendix 20 For personal use only
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1. Revenue-generating key performance KPIs and metrics are those with billed revenue in the period, and active at the end of period. Megaport's Revenue-generating Key Performance Indicators (KPIs) can be found on our website at https:/ /www.megaport.com/investor/business-overview/#kpis. 2. ARR is the recurring revenue expected over a 12 month period, calculated as monthly recurring revenue for the last month of the period x 12, and excludes any non-recurring or one-off revenue. 3. Customer Logos reflect a consolidation of revenue generating customer accounts, where those accounts are owned by the parent company. 4. Total Services comprise Revenue-generating Ports, Virtual Cross Connections (VXCs), Internet Exchange (IX), Megaport Cloud Router (MCR), and Megaport Virtual Edge (MVE). H1 FY25 Revenue-Generating KPIs1 KPIs & Metrics1 Dec-24 Jun-24 Net HoH Growth HoH % Growth Dec-23 Net YoY Growth YoY % Growth ARR2 ($m) 226.6 203.9 22.7 11% 191.7 34.9 18% Customer Logos3 2,720 2,637 83 3% 2,615 105 4% Total Services4 31,677 29,816 1,861 6% 28,495 3,182 11% Ports 9,294 8,777 517 6% 8,602 692 8% VXC and IX 21,099 19,874 1,225 6% 18,858 2,241 12% MCR 961 914 47 5% 865 96 11% MVE 323 251 72 29% 170 153 90% 21 APPENDIX For personal use only
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Other operating expenses H1 FY25 $’M AUD H1 FY24 $’M AUD Change $’M AUD Change % Professional fees 2.5 2.1 0.4 19% Marketing costs 2.0 1.1 0.9 82% Travel costs 2.0 1.2 0.8 67% IT costs 1.9 1.4 0.5 36% Other 3.1 3.2 (0.1) (3%) Total other operating expenses 11.5 9.0 2.5 28% NB: Due to rounding, numbers presented in this section may not calculate precisely to the totals or year on year movements provided. 22 APPENDIX Other Operating Expenses The increase in other operating expenses represents investment in areas that support the go-to-market engine. Increase in marketing, travel and IT costs was due to additional spend to support the increased headcount for go-to-market activities. For personal use only