The Megaport Ltd (ASX: MP1) share price is in focus after the company secured three new AI infrastructure contracts worth nearly $1 billion and upgraded its FY27 guidance.
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What did Megaport report?
- Three new AI infrastructure contracts with a combined total contract value (TCV) of A$978.6 million
- Group pro forma annual recurring revenue (ARR) lifted to around A$1.1 billion, with over 85% from North America
- Prepayments on these contracts total A$322.6 million, supporting future growth
- Group FY27 revenue guidance raised to A$720–810 million (from A$620–730 million)
- FY27 EBITDA margin guidance increased to 42–44% (previously 38–40%)
- FY27 planned capital expenditure (capex) raised to A$1.78–1.88 billion, reflecting new contract requirements
What else do investors need to know?
Megaport's new agreements have brought the combined total contract value for strategic contracts announced since April 2026 to A$2.3 billion. The contracts span GPU and CPU compute, networking, and storage for AI and inference workloads, and include prepayments that help fund capital expenditure and bolster liquidity.
Network ARR as of 31 August 2026 reached A$302.6 million, up 29% year-on-year on a constant currency basis, while Compute ARR (September 2026) stood at A$201.4 million, up 90% from June and up 227% since acquisition. Megaport's Net Revenue Retention for the network climbed to 116%. The company remains fully funded for its updated strategy, ending with pro forma liquidity of approximately A$362.2 million.
What did Megaport management say?
Michael Reid, Megaport CEO said:
Since April, we've announced approximately A$2.3 billion in total strategic contract value…Together with our existing business, these contracts support approximately A$1.1 billion in Group ARR once deployed.
Earlier deployments, new contracts, and Network growth underpin our upgraded FY27 revenue and EBITDA margin guidance. Customers have committed approximately A$323 million in prepayments on today's contracts, supporting the infrastructure investment behind future growth.
We're broadening our customer base, replenishing our GPU pool, and expanding our AI inference platform. Our progress has been extraordinary, and we remain focused on delivery and disciplined investment. We're just getting started.
What's next for Megaport?
Megaport expects these new contracts to begin billing progressively through FY27, helping the business reach its full run-rate ARR by Q4 FY27. The company is also investing heavily in replenishing its GPU pool and securing infrastructure to maintain growth momentum.
Looking ahead, management sees strong demand for AI infrastructure services and is targeting continued expansion of its platform and customer base. With growth driven by both existing and new strategic contracts, Megaport's upgraded guidance reflects confidence in execution and sector opportunities.
Megaport share price snapshot
Over the past 12 months, Megaport shares have risen 22%, outperforming the S&P/ASX 200 Index (ASX: XJO).
