The Megaport Ltd (ASX: MP1) share price is on the move on Thursday morning.
At the time of writing, the elastic interconnection services provider’s shares are up 2.5% to $16.19.
Why is the Megaport share price rising?
Investors have been bidding the Megaport share price higher today following the release of its fourth quarter update.
According to the release, the company reported a $735,000 or 11% quarter on quarter increase in its monthly recurring revenue (MRR) to $7.5 million for the three months ended 30 June.
This led to total quarterly revenue increasing 16% quarter on quarter or 34% on the prior corresponding period to $22.7 million.
This growth was underpinned by the addition of 168 new customers during the quarter. Management notes that this is a record number of organic customer additions for any quarter. At the end of the period, Megaport had a total of 2,285 customers, up 8% quarter on quarter.
In addition, the company drove record net increases in the quarter across all major operating metrics. This includes achieving 652 new Ports and 80 new Megaport Cloud Routers. This brought their totals to 7,689 (up 9%) and 502 (up 19%), respectively.
Positively, long-term deal commitments reached a record in the quarter, with 46% of net new Ports being acquired with committed terms of between 12 and 36 months. Management advised that this represents a growing trend of customers using Megaport to connect long-term IT solutions.
Also giving the Megaport share price a boost today was its improving cashflow. Megaport recorded net cash outflow from operations of just $202,000. This compares to a cash outflow of $4.9 million in the prior quarter.
Management advised that this reflects the company’s progress in achieving EBITDA break even on a run rate basis in June 2021. At the end of the period, Megaport had a cash balance of $136.3 million.
Following today’s gain, the Megaport share price is up 14% in 2021.