The Megaport Ltd (ASX: MP1) share price is rocketing higher this afternoon.
At the time of writing, the elastic interconnection services provider's shares are up a massive 27% to $8.53.
Why is the Megaport share price rocketing higher?
Investors have been scrambling to buy the company's shares today after it released an update on its guidance for FY 2023.
According to the release, Megaport has been performing very strongly since its last update, which has led to continued improvement in its operating metrics and its financial performance.
In light of this, the company has upgraded its normalised earnings before interest, tax, depreciation and amortisation (EBITDA) guidance for FY 2023 to be in the range of $19 million to $21 million. This compares to Megaport's previous guidance range of $16 million to $18 million.
Management also advised that reported EBITDA is now expected to be in the range of $24 million to $26 million for the 12 months.
Another big positive is that the company was net cash positive in the fourth quarter, inclusive of redundancy payments of approximately $2.6 million.
FY 2024 guidance
Looking ahead, management believes that the strong form can continue in FY 2024.
While Megaport is still finalising its FY 2024 budget to appropriately capture its network expansion, product, and revenue-generating headcount, it is expecting its FY 2024 EBITDA to be higher than the previous guidance of $41 million to $46 million.
Furthermore, barring any future strategic initiatives that it may decide to undertake, Megaport expects to be net cash positive for FY 2024. As a result, it has decided to terminate its $25 million debt facility with HSBC.
More details on its FY 2024 guidance will be provided no later than the release of its full-year results next month.
