Megaport shares dive as FY25 guidance misses expectations
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The news: Megaport shares dived at market open after the Network as a Service (NaaS) provider set FY25 revenue and earnings guidance short of average analysts' expectations.
The numbers: Megaport shares tumbled 18.3% to $9.63 by 11:10am AEST, making it the worst performing stock across the ASX 200.
The company reported EBITDA of $57.1 million, up from $20.3 million in FY23, and in the middle of its upgraded range of $56 million to $58 million.
Full-year revenue totalled $195.3 million, up 27.6% year on year, and above its guidance range of $190 million to $195 million.
The cloud connectivity provider also notched its first ever profit after tax of $9.6 million, compared to a $9.8 million loss last year.
However, the company posted lower-than-expected FY25 guidance, forecasting revenue of $214 million to $222 million compared to Visible Alpha consensus estimates of $233.1 million, and EBITDA of $57 million to $65 million, compared to average analysts' forecasts of $73.3 million.
The context: Megaport said FY24 marked a "massive financial turnaround", setting the platform for further investments in product, engineering and its ecosystem. In FY25, the company said it plans to expand into new markets and geographic locations, and prepare for additional capacity augmentations to meeting the rising demand from artificial intelligence.
E&P Capital analyst Paul Mason flagged that Megaport's FY25 guidance is "quite a bit below" expectations and will likely result in consensus downgrades of at least 5%.
What they said: "...we would expect the stock to see some pressure today," Mason said. "The company will need to discuss in detail its revenue growth turn-around plans in order to keep the share price supported."
The sources: ASX announcement, E&P Capital research
