Why the Megaport Ltd (ASX:MP1) share price surged today

Shares in Megaport Ltd (ASX: MP1) were up 3.5% to $4.18 on Thursday, after the company updated the market with its results for the last quarter of FY18.

While you may have often heard about software as a service, or SaaS, Megaport provides “Network as a Service”. Its business is connecting customers’ IT services with cloud service providers. The company has partnerships with some of the world’s leaders in this sector, including Alibaba, Google, IBM and Microsoft Azure.

In the June 2018 quarter, the company added Oracle Cloud to its list of partners and opened 15 new data centres, reaching a total of 221 data centres across the Asia-Pacific, North America and Europe.

Revenue was up 12% on the previous quarter, to $5.8 million. Monthly recurring revenue was $2 million in June 2018, a 63% increase on last year that says something about Megaport’s capacity to expand its customer base.

The price of the stock has grown 85% in the past 12 months, matching the company’s yearly revenue growth, and confirming Megaport as one of the hottest tech shares on the ASX.

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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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