The Megaport Ltd (ASX: MP1) share price is sinking today amid the company's quarterly update.
Megaport shares are currently down 20.18% and are fetching $6.13. The company's share price rose 22% between market close on 30 December and 30 January and has today shed most of those gains.
For perspective, the S&P/ASX All Technology Index (ASX: XTX) is sliding 0.52% today.
Also, the technology-heavy NASDAQ-100 (NASDAQ: NDX) in the USA fell 2.09% overnight amid a potential US Fed Reserve rate rise and multiple big technology companies reporting.
So what did the ASX tech share report to the market today?
Megaport share price falls
In today's FY23 quarterly results, Megaport reported:
- Cash from operations of $0.2 million in 2Q FY23, down from $0.3 million in the previous quarter
- Normalised earnings before interest, tax, depreciation and, amortisation (EBITDA) of $2.4 million, up 159% on 2QFY22
- Profit after direct network costs lifted by 50% on the prior corresponding quarter
- Total net cash flow of -$11.9 million, compared to -$9.6 million in the prior corresponding quarter
- Closing cash balance of $57.5 million
What else?
Megaport shares are falling today despite the company reporting EBITDA growth. It appears the results may have fallen short of the market's expectations.
Also of note, the company's cash from operations fell to $0.2 million, down from $0.3 million in the first quarter of the financial year.
Megaport said this was due to "lower receipts from customers".
Megaport reported a profit after direct network costs and partner commissions of $24.8 million, up by $3.1 million compared to the first quarter of FY23 and $8.3 million more than the prior corresponding quarter.
Revenue lifted 10% on the previous quarter to $37 million. This was also a 39% lift on the prior corresponding quarter in FY22.
What's ahead?
The company is forecasting annual capital expenditure of $33 million in FY23 and $28 to $30 million in FY24. The company is planning to engage external consultants to review the operational efficiency within the business. There will be a focus on "improved automation".
Commenting on the future outlook for Megaport, CEO Vincent English said:
We will continue to stay focused on providing secure, scalable connections to the newest and industry-leading services our cloud partners bring to market to stay out in front of our customers' evolving needs
Megaport share price snapshot
The Megaport share price has tumbled 54% in the last year and 27% in the past six months.
Megaport has a market capitalisation of about $977 million based on the current share price.
