Shares of Megaport surged 19% to A$22.44 on September 29 after the Brisbane-based infrastructure firm disclosed three new AI contracts and hiked its earnings outlook — the latest escalation in a breakneck pivot that has transformed a networking middleman into a billion-dollar AI hardware operator in barely six months.
• Nearly A$1 Billion in New Deals, But the Customers Are Still Unnamed
Megaport signed three AI infrastructure contracts with a combined value of A$978.6 million ($686.78 million) and upgraded its earnings forecast for 2027.
All three contracts are with unnamed customers and include GPU and CPU compute, network and storage for AI applications.
The contracts are expected to contribute about A$232.4 million in annual recurring revenue — money that repeats every year. The deals lift total strategic contracts announced since April to A$2.3 billion. The speed is impressive, but undisclosed counterparties leave investors unable to assess credit quality or concentration risk.
• Higher Revenue Guidance Comes With a Much Bigger Spending Bill
Megaport now sees full-year group revenue between A$720 million and A$810 million, up from A$620 million to A$730 million.
EBITDA margin — essentially the share of revenue left as operating profit before depreciation — is now expected at 42%–44%, up from 38%–40%. That sounds generous, but FY27 planned capital expenditure was raised to A$1.78–1.88 billion, reflecting new contract requirements. For context, FY26 group revenue was just A$312.2 million. Management is guiding for more than double that revenue while spending roughly six times last year's total capex.
• Customer Prepayments Ease the Cash Crunch — For Now
The new contracts bring upfront customer prepayments of A$322.6 million and push pro forma group annual recurring revenue to A$1.1 billion, with over 85% from North America.
The company says it remains fully funded, ending with pro forma liquidity of approximately A$362.2 million. That cushion is thin relative to the capex bill, meaning any deployment delay could pressure cash.
• The Old Business Still Matters
Network recurring revenue reached A$302.6 million as of August 2026, up 29% year-on-year on a constant currency basis, while compute recurring revenue stood at A$201.4 million, up 90% from June. The legacy networking arm provides stable income, but AI infrastructure now dominates the growth narrative. Broker Morgans recently set a A$26.40 price target — still above today's price but set before these contracts were disclosed. Investors are betting that Megaport can deploy billions in hardware on time and on budget. History says that's the hardest part.