Megaport (ASX:MP1) share price in spotlight following Q3 update

The Megaport Ltd (ASX: MP1) share price could be on the move following the company’s latest trading update. Here are the key highlights.

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Megaport Ltd (ASX: MP1) shares will be in the spotlight during morning trade following the release of the company’s quarterly update. At yesterday’s market close, shares of the global provider of elastic interconnection services were sitting at $11.70.

Let’s take a look at how the company has been faring.

How did Megaport perform in Q3?

Megaport shares will be on the radar today after the company provided investors with a robust result that saw consistent growth in all metrics.

For the quarter ending 31 March (Q3), Megaport delivered continued growth in monthly recurring revenue (MRR), which came in at $6.8 million for March. This represents a lift of $0.5 million, or an 8% quarter-on-quarter (QoQ) increase.

Revenue also elevated for the three months to $19.58 million, a jump of $0.9 million or a 5% QoQ increase. When looking at year-on-year change, revenue boosted by more than 25%.

Megaport advised it had 390 installed data centres at the end of March. This follows the commissioning of five new sites and the dropping of one existing data centre.

Total enabled data centres stood at 741, reflecting a surge of 25 new centres or 3% growth QoQ. The expanded network footpring came from Megaport’s partnerships with RagingWire, Digital Realty, and CyrusOne.

In further news that could impact the Megaport share price, the company reported 74 new corporate customers, bringing the total number of customers to 2,117, an increase of 4% QoQ.

Ports also rose by 346 to 7,037 ports, and total services came to 20,056, a jump of 778 services or a 4% lift QoQ.

Megaport declared a cash balance of $141.5 million at the end of the March quarter.

Management commentary

Megaport CEO Vincent English touched on the company’s near-term outlook, saying:

As we enter the final quarter of FY21, we have a strong pipeline of new customers, driven by increased requirements from digital transformation initiatives. We see this as an indication that enterprises now have greater line of sight to a post-pandemic normal and that overall IT budgets are improving. Our growth in ports and underlying revenue in the second half of the third quarter was strong, and we expect to see this trend continue.

Fiscal Year 2021 has highlighted the strong operating leverage in our business model and we remain on track to achieving EBITDA breakeven, on a run rate basis, by June 2021.

About the Megaport share price

The Megaport share price has been relatively flat over the last 12 months, rising by 2.54%. Year to date, however, the company’s shares are down by almost 18%.

Megaport has a market capitalisation of around $1.8 billion, with approximately 156 million shares on issue.

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Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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