Megaport shares plunge as FY26 capex plans outstrip estimates
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The news: Network-as-a-service provider Megaport saw its shares tumble in morning trade after the company outlined higher-than-expected investment in the 2026 financial year.
The numbers: Megaport shares were down 18.4% to $12.08 at 11:20am AEST, having advanced 63.9% over the last 12 months.
The company reported EBITDA of $62.3 million, up 9% year on year and meeting guidance of $57 million to $65 million. Revenue of $227.1 million, up 16% compared to FY24, was at the top end of its upgraded guidance. Annual recurring revenue increase 20% to a record $243.8 million.
Megaport expects another step up in revenue in FY26, guiding a range of $260 million to $270 million.
However, FY25 capex of $34.3 million was 14% ahead of consensus estimates. Megaport has guided FY26 capex at 18-20% of revenue, implying a total investment of $47 million to $54 million, which is 50-73% higher than average forecasts.
RBC Capital Markets analyst Jonathan Atkin said that while the company has previously highlighted the pipeline of products in development, he believes "the degree of pull forward in investment is unexpected".
What they said: "The success of our investment in growth has given us the confidence to double down on accelerating top-line growth by building on the proven initiatives in our [go-to-market] capability, product innovation, global network, ecosystem and compute platform," said managing director and CEO Michael Reid.
"FY26 will be a year of acceleration. We are investing boldly, expanding globally, and harnessing even more innovation opportunities to deliver exceptional value for our customers and shareholders."
The sources: ASX, RBC Capital Markets research
