Shares in Megaport Ltd (ASX:MP1) are gaining today after the company released a report on its record performance over the final quarter of the 2021 financial year, which included an update on its products.
At the time of writing, the Megaport share price is up 0.67%, with shares in the software-defined network service provider swapping hands for $16.64. However, earlier today the Megaport share price was $16.93 – a 2.41% increase.
For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.07% right now.
Let's take a look at the news released by Megaport today.
What could be driving the Megaport share price?
Fourth quarter performance
Megaport reported record growth across all its metrics in the quarter just been.
A total of 168 new customers were added to Megaport's services over the 3-month period – that represents an 8% quarter-on-quarter increase. Megaport now has 2,285 customers.
The company's monthly recurring revenue increased by $735,000 to reach $7.5 million in June. It also reported record growth in its underlying monthly reoccurring revenue, which increased by $667,000 over the quarter.
Megaport's total revenue was $22.7 million – 16% more than its previous corresponding period. At the end of June, the company had $136.3 million cash in the bank.
Additionally, the Megaport share price gained 47% over the quarter just been.
Product updates
Megaport also announced a number of updates on its products.
First, it announced its Megaport Virtual Edge service has integrated three leading software-defined networking in a wide area network (SD-WAN) service providers. Megaport is also working to integrate another 3 SD-WAN providers. It says its "growing ecosystem" of partners will increase the service's functionality.
Megaport also announced demand for 100 gigabit customer access ports is increasing. The company is working to get more port inventory to stay ahead of demand. Also, it has increased its deployment of 100 gigabit port speeds. They are are now available in 64 sites across Megaport's network.
Additionally, Megaport announced its Megaport cloud routers are continuing to be popular. Eighty routers were sold during the last quarter – 19% more than in the previous quarter. Megaport cloud router users now make up 12% of Megaport's customer base.
Finally, Megaport's partnership with Digital Realty Trust is continuing strong. The companies plan to send Service Exchange, Powered by Megaport to the market in the current quarter. Service Exchange is a white-label of Megaport's platform.
Digital Realty has recently sold its holding in Megaport, but the two are focused on continuing the partnership.
Commentary from management
Chief executive Vincent English said of the news potentially driving the Megaport share price today:
Our record quarter is a direct outcome of the increased demand for Megaport services as businesses accelerate their digital transformation and cloud-based initiatives. With accelerating adoption of all Megaport services, our customers are taking advantage of the power of the Megaport platform as a whole.
… With a record quarter in the books, we also built a strong commercial pipeline to keep the momentum going into the new fiscal year… Megaport is well positioned to continue investing in our revenue engine to capture the increasing demand for connectivity services in FY22 and beyond.
Megaport share price snapshot
With today's gains included, the Megaport share price has grown by 17% year to date. It has also gained 19% over the last 12 months.
The company has a market capitalisation of around $2.5 billion, with approximately 156 million shares outstanding.
