Megaport Ltd. · ASX:MP1
Megaport — Investor Presentation (August 2024)
46 slides from Megaport's investor presentation, Aug 22, 2024
Slide 1: Investor Presentation FY24 Full Year Results
INVESTOR PRESENTATION FY24 FULL YEAR RESULTS
Slide 2: Company Highlights: What Does Megaport Do?
COMPANY HIGHLIGHTS What Does Megaport Do? WE CONNECT Largest Network-as-a-Service Pioneered global private Data Center Interconnect and Spin Up Virtual Routers and connections to cloud providers Multicloud connectivity all Global WAN between 860+ Firewalls from your favourite on the planet. provisio
Slide 3: Company Highlights, Annual Results, Business Update, Progress on Transformation
Company Annual Business Progress on Highlights Results Update Transformation 3
Slide 4: Profitable Efficient Growth
COMPANY HIGHLIGHTS Profitable Efficient Growth 4
Slide 5: FY24 Highlights
COMPANY HIGHLIGHTS FY24 Highlights REVENUE GROSS PROFIT EBITDA1 NET CASH FLOW2 up 28% YoY up 32% YoY up 182% YoY n.m. YoY 1. Earnings Before Interest Tax Depreciation and Amortisation (‘EBITDA’) represents operating results excluding equity-settled employee and related costs, foreign exchange gains
Slide 6: Profitable Efficient Growth
COMPANY HIGHLIGHTS Profitable Efficient Growth EBITDA1 EBITDA1 YoY FY24 EBITDA1 reflects the full year impact of Megaport’s turnaround to profitable, efficient growth. Full costs were not incurred until the second half, when the business began its re-investment in longer term growth. These reinvestments
Slide 7: Growth Across All Regions
COMPANY HIGHLIGHTS Growth Across All Regions North America Asia Pacific EMEA Global $110.8M $52.6M $31.9M $195.3M 57% of global revenue 27% of global revenue 16% of global revenue $25.4 M 30% $9.2 M 21% $7.6 M 31% $42.2 M 28% YoY YoY YoY YoY FY23: $85.4M FY23: $43.4M FY23: $24.3M FY23: $153.1M Note:
Slide 8: Annual Recurring Revenue
COMPANY HIGHLIGHTS Annual Recurring Revenue (ARR)1 ARR1 Net New Q4 ARR1 FX Comparison 3.7% 2.3% A$M Reported FX Adjusted2 1. Annual Recurring Revenue (ARR) in A$ is the recurring revenue expected over a 12-month period, calculated as Monthly Recurring Revenue for the last month of the period x 12, a
Slide 9: Continued Focus on Profitable, Efficient Growth
COMPANY HIGHLIGHTS Continued Focus on Profitable, Efficient Growth NET CASH FLOW1,2,3 Net Cash Flow1,2 +$28.0M up $62.5M YoY Net Cash1,2 $61.2M up $28.0M YoY Cash at Bank $72.4M up $24.0M YoY 1. Net Cash Flow represents movement in Net Cash, which is cash at bank less debt including the vendor financin
Slide 10: Company Highlights, Annual Results, Business Update, Progress on Transformation
Company Annual Business Progress on Highlights Results Update Transformation 10
Slide 11: Substantial Financial Turnaround
ANNUAL RESULTS Substantial Financial Turnaround 11
Slide 12: Summary P&L
ANNUAL RESULTS Delivering a robust financial Summary P&L turnaround, while also reinvesting for future growth. FY24 FY23 Change Change Consolidated Profit & Loss $’M AUD $’M AUD $’M AUD % Revenue up 28%, driven by growth in services across all regions and the full year impact in Revenue 195.3 153.1 42
Slide 13: Operating Costs
ANNUAL RESULTS Investing in go-to-market to drive Operating Costs future growth, while maintaining tight cost controls. 1H FY24 was significantly low across all opex categories, however 2H FY24 reflected the full FY24 FY23 Change Change impact of higher salary costs for the go to Operating Expenses $’
Slide 14: Cash Flow
ANNUAL RESULTS FY24 represents a substantial Cash Flow financial turnaround in cash generation. FY24 FY23 Change Change Consolidated Cash Flow $’M AUD $’M AUD $’M AUD % Increase in operating cash inflows YoY aligns with EBITDA growth, which was driven by Cash flow - Operating Activities 51.7 10.2 41.5
Slide 15: Financial Position
ANNUAL RESULTS Cash at bank at the the end of Financial Position FY24 was $72.4M, a 49% increase YoY. Non-current assets decreased due to lower 30 June 2024 30 June 2023 spend on equipment as existing inventory was Consolidated Statement of Financial Position $’M AUD $’M AUD consumed and no major ne
Slide 16: Capital Expenditure
ANNUAL RESULTS FY24 capex historically low. Capital Expenditure PPE Capex 39.8 ● Inventory was stockpiled during the pandemic due to supply chain delays 29.1 ● Downward trend in capex from FY22 due to utilisation of inventory for expansion 19.4 and upgrades ● FY24 in-year purchases reduced while fut
Slide 17: Operating Leverage - Exit June Month
ANNUAL RESULTS Jun-24 reflects the second half Operating Leverage - Exit June Month reinvestment in growth. EBITDA Exit Margin of 27% reflects the continued reinvestment through FY24 in the go-to-market function. The exit run rate for Jun-23 was a result of cost cutting measures but was prior to the r
Slide 18: Company Highlights, Annual Results, Business Update, Progress on Transformation
Company Annual Business Progress on Highlights Results Update Transformation 18
Slide 19: Breaking Through $200M
BUSINESS UPDATE Breaking Through $200M 19
Slide 20: Annual Recurring Revenue
BUSINESS UPDATE Annual Recurring Revenue1 ARR1 Megaport YoY ARR1 growth Jun 24 Group2 14% NAM 16% NAM APAC 11% EMEA 14% APAC EMEA 1. Annual Recurring Revenue (ARR) in A$ is the recurring revenue expected over a 12-month period, calculated as Monthly Recurring Revenue for the last month of the period
Slide 21: ARR Contribution By Cohort
BUSINESS UPDATE ARR Contribution By Cohort1 Each customer cohort contributes to ARR growth year after year. Cloud VXC Reprice MVE MCR EMEA NAM 1. Customer Cohorts remain based on accounts, and are not normalised for either logo consolidation or revenue generating status 21
Slide 22: ARR per Customer
BUSINESS UPDATE ARR per Customer ARR per Customer1,2 Megaport NAM EMEA APAC 1. ARR calculated on a constant currency basis, using June 2024 average AUD/USD = 0.664 and AUD/EUR = 0.617 2. ARR per Customer at a group level is higher than the regional calculation as the group customer count is lower th
Slide 23: Annual Recurring Revenue Per Service Is Increasing
BUSINESS UPDATE Annual Recurring Revenue Per Service1 is Increasing Total Services1 Total Services1 29,816 Jun 23: 26,960 Services Per Customer 11.3 Jun 23: 10.6 ARR Per Service $6,840 Jun 23: $6,625 1. Total Services comprise revenue-generating Ports, Virtual Cross Connects (VXCs), Megaport Cloud R
Slide 24: Megaport Cloud Router + Megaport Virtual Edge
BUSINESS UPDATE Megaport Cloud Router + Megaport Virtual Edge Our pivot to solution selling made a significant impact in the sales of MVE services. Jun-24 Average Services per Customer Logo1 MCR Count MVE Count 9.6 17.4 25.1 Jun-23: 9.3 Jun-23: 16.3 Jun-23: 23.1 Port only Customer MCR Customer MVE Cu
Slide 25: Megaport Demo
Megaport Demo 25
Slide 26: Company Highlights, Annual Results, Business Update, Progress on Transformation
Company Annual Business Progress on Highlights Results Update Transformation 26
Slide 27: Reinvestment For Future Growth
PROGRESS ON TRANSFORMATION Reinvestment For Future Growth 27
Slide 28: FY24 Progress
PROGRESS ON TRANSFORMATION FY24 Progress Q1 Q2 Q3 Q4 Develop Strategy Execute Strategy Build GTM Momentum Refine & Optimise 》 People 》 Rebuild GTM machine 》 Restart marketing 》 Double-down on proven machine successes in sales and 》 Product 》 3x quota-bearing sales marketing execs in NAM 》 Fuel the ne
Slide 29: GTM Highlights
PROGRESS ON TRANSFORMATION GTM Highlights 4Q FY24 Highlights 》 Largest ARR1 contribution from New Access Products2 in Megaport history ✓ 》 Largest quarter in Megaport history for MVE sales ✓ 》 Largest overall termed services sales ✓ 》 Total customers generating more than $100K ARR grew 20% in FY24 ✓
Slide 30: FY24 Execution
PROGRESS ON TRANSFORMATION FY24 Execution People, Product, Profits 》 Massive fiscal turn around ✓ 》 Largest product launches in Megaport history ✓ 》 Exec rebuild: CFO, CTO, CLO, CSO, CMO, 3 x GTM EVPs ✓ ○ Reach, Global WAN, Internet, Termed VXC, 100G VXC, DCI, MVE vendors 》 Ground up rebuild of GTM ✓
Slide 31: Strategic Investments for Long-Term Growth
PROGRESS ON TRANSFORMATION Strategic Investments for Long-Term Growth Scaling Network & Product Innovation Geographic & Ecosystem Expansion 》 Scale network for demands of AI 》 Strategic data centre expansion 》 Roll-out 400G backbone to provide 100G access across 》 New countries & competitive pricing
Slide 32: Outlook and Guidance
PROGRESS ON TRANSFORMATION Outlook and Guidance FY25 REVENUE1 FY25 EBITDA1,2 》 FY25 revenue guidance reflects expected new logos and expansion of our existing customer base 》 The FY25 EBITDA guidance represents the continuation of profitable, efficient growth while reinvesting in the business to drive
Slide 33: Megaport Services - More Than Just Cloud
PROGRESS ON TRANSFORMATION Megaport Services - More Than Just Cloud Megaport Services CONNECTIVITY NETWORK EXCHANGE DC to Cloud Virtual Routing Internet Exchange Cloud to Cloud Hybrid Multicloud Marketplace Exchange DC to DC Global WAN Financial Services Exchange DC to GPU Virtual Security AI Exchan
Slide 34: Questions
INVESTOR PRESENTATION FY24 FULL YEAR RESULTS Questions. @megaport ASX: MP1 @megaportnetwork megaport.com/investor @megaportnetworks megaport.com/newsroom THANK YOU
Slide 35: Important Information
Important Information This presentation has been authorised by the Board of Megaport. MEGAPORT LIMITED ACN 607 301 959 Nothing in this presentation should be construed as either an offer to sell or a All references to “$” are to Australian currency (AUD) unless otherwise noted. solicitation of an of
Slide 36: Appendix
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Slide 37: 4Q FY24 Revenue-Generating KPIs
APPENDIX 4Q FY24 Revenue-Generating KPIs1,2 Net QoQ QoQ % Net YoY YoY % KPIs & Metrics1,2 Jun-24 Mar-24 Growth Growth Jun-23 Growth Growth ARR3 ($m) 203.9 199.4 4.54 2% 178.6 25.3 14% ARR per Service ($) 6,840 6,834 6 0% 6,625 215 3% Customer Logos 2,637 2,627 10 0% 2,545 92 4% Total Services5 29,81
Slide 38: Customer Cohort Trends
APPENDIX Customer Cohort1 Trends Average Services per Customer Average ARR per Customer ($) 2 2 1. Customer Cohorts remain based on accounts, and are not normalised for either logo consolidation or revenue generating status 2. FY22 has been adjusted to remove 40 accounts that were being utilised for
Slide 39: Customer Cohort Trends
APPENDIX Customer Cohort1 Trends Survivorship by Customer Cohort 2 1. Customer Cohorts remain based on accounts, and are not normalised for either logo consolidation or revenue generating status 2. FY22 has been adjusted to remove 40 accounts that were being utilised for ongoing customer training pu
Slide 40: North America Metrics
APPENDIX North America Metrics Total Enabled Data Centres Total Number of Customers ARR per Port3 450 491 1,455 1,533 $26,940 +8% 30 JUNE 2023 30 JUNE 2024 30 JUNE 2023 30 JUNE 2024 Services per Port Total Number of Ports Total Number of Services1 3.4 +4% 4,022 4,290 13,227 14,713 Services per Custo
Slide 41: North America Financial Performance
APPENDIX North America Financial Performance - June Month Exit June result Sustained growth in Jun-24 Revenue vs Jun-23 +16%. Gross margin is stable reflecting ongoing investment into the network. Jun-24 EBITDA margin is primarily reflective of reinvestment in GTM. Jun-23 EBITDA margin was higher due
Slide 42: Asia Pacific Metrics
APPENDIX Asia Pacific Metrics Total Enabled Data Centres Total Number of Customers ARR per Port3 138 148 935 947 $17,027 +7% 30 JUNE 2023 30 JUNE 2024 30 JUNE 2023 30 JUNE 2024 Services per Port Total Number of Ports Total Number of Services1 3.4 +2% 3,121 3,228 10,090 10,959 Services per Customer 30
Slide 43: Asia Pacific Financial Performance
APPENDIX Asia Pacific Financial Performance - June Month Exit June result Growth in Jun-24 Revenue vs Jun-23 +11%. Gross margin is down 3% reflecting ongoing investment, as Megaport expands its data centre footprint and increases the capacity of its network. The lower EBITDA margin is primarily reflect
Slide 44: EMEA Metrics
APPENDIX EMEA Metrics Total Enabled Data Centres Total Number of Customers ARR per Port3 224 229 517 560 $26,524 +7% 30 JUNE 2023 30 JUNE 2024 30 JUNE 2023 30 JUNE 2024 Services per Port Total Number of Ports Total Number of Services1 3.3 +4% 1,151 1,259 3,643 4,144 Services per Customer 30 JUNE 202
Slide 45: EMEA Financial Performance
APPENDIX EMEA Financial Performance - June Month Exit June result Growth in Jun-24 Revenue vs Jun-23 +14%. Gross margin is up 3% reflecting optimisation of the network and ongoing operating leverage conversion. The lower EBITDA margin is primarily reflective of reinvestment in GTM - marketing, events
Slide 46: Equity Settled Employee Costs
APPENDIX Equity Settled Employee Costs FY24 of $13.7M includes: 》 PRSUs3 allocated to the CEO in March 2023 and approved at the AGM in November 20234 of $2.8M. 》 Vesting of RSUs3 granted to employees of $7.5M. 》 FY24 bonus accrual of $3.3M. 1. FY21 has been normalised to exclude $1.1M of payroll tax