Megaport Ltd. · ASX:MP1
Megaport — Investor Presentation (August 2022)
43 slides from Megaport's investor presentation, Aug 9, 2022
Slide 1: Global Update FY22 Full Year Results
GLOBAL UPDATE FY22 FULL YEAR RESULTS MEGAPORT LIMITED | ACN 607 301 959 | ASX: MP1 | 9 AUGUST 2022
Slide 2: Company Highlights FY22
COMPANY ANNUAL BUSINESS CHANNEL OUR APPENDIX HIGHLIGHTS RESULTS UPDATE UPDATE FOCUS COMPANY HIGHLIGHTS FY22
Slide 3: Revenue Performance FY22
COMPANY HIGHLIGHTS REVENUE PERFORMANCE FY22 North America Asia Pacific Europe Global FY22 FY22 FY22 FY22 $57.8M $33.5M $18.4M $109.7M $19.1M 49% $7.8M 30% $4.6M 33% $31.4M 40% FY21: $38.7M FY21: $25.7M FY21: $13.8M FY21: $78.3M Note: Growth rates are calculated using the actual $ values. PAGE 3
Slide 4: Highlights FY22
COMPANY HIGHLIGHTS HIGHLIGHTS FY22 +43% +43% +16% Monthly Recurring Revenue1 Annualised Revenue2 Total Number of Customers $7.5M $10.7M $89.8M $128.3M 2,285 2,643 30 JUNE 2021 30 JUNE 2022 30 JUNE 2021 30 JUNE 2022 30 JUNE 2021 30 JUNE 2022 +26% +24% +46% Total Number of Services3 Total Number of Po
Slide 5: Highlights FY22
COMPANY HIGHLIGHTS HIGHLIGHTS FY22 JUNE 2021 JUNE 2022 Total Customers Group Exit Gross Margin Cloud Onramps 2,285 2,643 APAC 79% EMEA 71% NAM 54% MP1 65% 3.37 Average Ports per Customer 3.61 45 278 NEW TOTAL Drive to Profitability Average Services per Port Japan, Canada EBITDA profit Cloud Regions
Slide 6: Annual Results FY22
COMPANY ANNUAL BUSINESS CHANNEL OUR APPENDIX HIGHLIGHTS RESULTS UPDATE UPDATE FOCUS ANNUAL RESULTS FY22
Slide 7: Revenue
ANNUAL RESULTS REVENUE FINANCIAL RESULTS FOR YEAR ENDED 30 JUNE 2022 FY22 FY21 Revenue of $109.7M, up 40%, driven by customer growth and service uptake across all regions. $33.5M $25.7M NAM strongest growth across all 30% 33% regions, increasing $19.1M (49%) in $57.8M $38.7M FY22. 53% 49% USA is the
Slide 8: Financial Results
ANNUAL RESULTS FINANCIAL RESULTS FINANCIAL RESULTS FOR YEAR ENDED 30 JUNE 2022 FY22 FY21 Change Consolidated Profit & Loss $’M $’M % Revenue $109.7M up 40% Direct network costs increases $2.1M Revenue 109.7 78.3 40% (8%) with 26 new data centres Direct network costs 29.7 27.6 (8%) brought into the n
Slide 9: Operating Costs
ANNUAL RESULTS OPERATING COSTS FINANCIAL RESULTS FY22 FY21 Change FOR YEAR ENDED 30 JUNE 2022 $’M $’M % Average network cost per data centre Direct network costs 29.7 27.6 (8%) per month is $5.8K in FY22 ($5.9K in FY21) with increasingly efficient cost Partner commissions 11.7 8.6 (36%) control bein
Slide 10: Cash Flow
ANNUAL RESULTS CASH FLOW FINANCIAL RESULTS FY22 FY21 YoY FOR YEAR ENDED 30 JUNE 2022 $’M $’M % Normalised EBITDA1 (10.2) (13.3) 23% Cash used in operations of $9.8M Working Capital 0.4 4.7 (91%) increased 14% from FY21. Q4 cash flow from operations was positive. Cash flow used in Operating Activitie
Slide 11: Financial Position
ANNUAL RESULTS FINANCIAL POSITION FINANCIAL RESULTS FOR YEAR ENDED 30 JUNE 2022 30 June 2022 30 June 2021 $’M $’M Trade debtors up 55% at $10.2m and Cash 82.5 136.3 DSO unchanged at 25 days (FY21: 25 days). Other current assets 20.4 14.1 Total liabilities include 0% vendor finance of $13.7M outstand
Slide 12: Historical Financial Performance
ANNUAL RESULTS HISTORICAL FINANCIAL PERFORMANCE MARGIN TRENDS Group EBITDA positive for Quarter 4, a marked improvement on breakeven achieved in the month of June FY21. Investment in Scale Up, Scale Out completed within FY22. Accelerating revenue growth delivering margin growth as operating leverage
Slide 13: Business Update
COMPANY ANNUAL BUSINESS CHANNEL OUR APPENDIX HIGHLIGHTS RESULTS UPDATE UPDATE FOCUS BUSINESS UPDATE
Slide 14: Market Drivers
BUSINESS UPDATE MARKET DRIVERS Communications Services End-User Spending Worldwide by Megaport Value Proposition Service Type, 2020-2026 (Millions of Constant U.S. Dollars) Cloud Connect (2026) 68% of MP1 connections 278 Cloud onramps 12 Leading Clouds $3.8B Megaport Cloud Router IP MPLS (2026) 787
Slide 15: Cloud Trends
BUSINESS UPDATE CLOUD TRENDS MULTICLOUD MANDATE Use of three or more cloud providers to go from 52% of organisations to 84% 60% of respondents expect their organisations to leverage 4 or more IaaS CSPs 24 months from now Mean estimation that 66% of branch locations require cloud connectivity PAGE 15
Slide 16: Cloud Trends
BUSINESS UPDATE CLOUD TRENDS IAAS IS LEVERAGED FOR Estimated mean: 63% BUSINESS-CRITICAL APPLICATIONS Three quarters of all respondents say that the majority of their IaaS-hosted applications are business-critical Network investments to increase 15% more than overall IT budget over the next 12 month
Slide 17: Megaport Cloud Enablement
BUSINESS UPDATE MEGAPORT CLOUD ENABLEMENT 278 Total Onramps FY22 Increase: 45 +19% 77% of Megaport connections terminate to public cloud providers ONRAMP TOTAL Amazon Web Services 78 40% of Megaport customers connecting to cloud are multicloud Microsoft Azure 54 Google Cloud 43 Multicloud customers
Slide 18: Leading Companies Trust Megaport
BUSINESS UPDATE LEADING COMPANIES TRUST MEGAPORT Customers Fortune 100 20 Customers 20% Fortune 500 80 Customers 16% Fortune 1000 140 Customers 14% PAGE 18
Slide 19: Growth in Ports, Services, and Revenue
BUSINESS UPDATE GROWTH IN PORTS, SERVICES, AND REVENUE Total Ports Total Services 1. Total Services comprises of Ports, Virtual Cross Connections (VXCs), Megaport Cloud Router (MCR), Megaport Virtual Edge (MVE), and Internet Exchange (IX) at period end. PAGE 19 2. Monthly Recurring Revenue (MRR) is
Slide 20: Customer Cohort Trends
BUSINESS UPDATE CUSTOMER COHORT TRENDS Average Services per Customer Customer take up an increasing number of services over time. Behaviour exhibited by every cohort. New cohorts initial services increasing every year. Increasingly selling more complex solutions to larger global organisations. Avera
Slide 21: Customer Cohort Trends
BUSINESS UPDATE CUSTOMER COHORT TRENDS Average Monthly Revenue per Customer ($) Average spend by customer increases annually in line with taking additional services. Trend for customer initial spend increasing every year. Cohort size, number of customers added, increasing every year. Average Revenue
Slide 22: Customer Cohort Survival
BUSINESS UPDATE CUSTOMER COHORT SURVIVAL Customer Survival % by Customer Cohort Year Customer survivorship displaying similar characteristics over every cohort. Customer churn after Year 2 drops significantly. More than half of initial cohort still a customer after 9 years. Compound annual churn rat
Slide 23: MRR Contribution by Cohort
BUSINESS UPDATE MRR CONTRIBUTION BY COHORT MVE Revenue contribution from every cohort grows annually. Uptake of services by existing customers far exceed services lost MCR through customer churn. Later cohorts yielding greater contribution to Group MRR. EMEA Increasingly selling global solutions to
Slide 24: LTV to CAC Annual Growth
BUSINESS UPDATE LTV TO CAC ANNUAL GROWTH Early days LTV to CAC reflective of meteoric growth in scale of reach (lower GM) and investment in customer acquisition in new markets. Apparent slight drop in LTV to CAC reflects additional investment in sales in FY22 to stand up channel. Quarterly breakout
Slide 25: Megaport Cloud Router
BUSINESS UPDATE MEGAPORT CLOUD ROUTER MCR Growth Average Monthly Revenue per Customer1 $3.6k $6.4k Port only Customer MCR Customer Avg Services per Customer2 9.5 14.9 Port only Customer MCR Customer Total MCRs 502 731 At 30 June 2021 At 30 June 2022 1. Represents June 2022 MRR divided by relevant cu
Slide 26: Megaport Virtual Edge
BUSINESS UPDATE MEGAPORT VIRTUAL EDGE Average Monthly Revenue per Customer1 SD-WAN Technology Partners Initial sales through Cisco channel Q3 and Q4. $3.6k $12.0k MVEs sales over first 5 quarters Port only Customer MVE Customer mirroring MCR with majority of sales through direct sales channel. Avg S
Slide 27: Global MVE Use Case
BUSINESS UPDATE GLOBAL MVE USE CASE COMPANY: 40,000 EMPLOYEES CHALLENGE: DIGITAL TRANSFORMATION WITH GLOBAL CISCO SD-WAN DEPLOYMENT SOLUTION: 2 MVE IN EACH REGION, CONNECTING TO AWS & AZURE RESULT: GLOBAL, PRIVATE NETWORK BACKBONE BUILT FOR RESILIENCY AND DISTRIBUTED WORKFORCE. REVENUE: ~$100,000/MO
Slide 28: Global Footprint
BUSINESS UPDATE GLOBAL FOOTPRINT >200,000km OF NETWORK CIRCUITS MULTI-TERABIT NETWORK CAPACITY 25 145 423 787 COUNTRIES CITIES INSTALLED DCs ENABLED DCs See: megaport.com/locations PAGE 28
Slide 29: Channel Update
COMPANY ANNUAL BUSINESS CHANNEL OUR APPENDIX HIGHLIGHTS RESULTS UPDATE UPDATE FOCUS CHANNEL UPDATE
Slide 30: Evolution of Market Access
CHANNEL UPDATE EVOLUTION OF MARKET ACCESS FY13 FY20 FY23+ Other SDWAN Cisco DCO VAD DCO GSI MSP Reseller ENTERPRISE CUSTOMER ENTERPRISE CUSTOMER ENTERPRISE CUSTOMER DCO = Data Centre Operator, VAD = Value-Add Distributor, MSP = Managed Service Provider, GSI = Global System Integrator PAGE 30
Slide 31: PartnerVantage - New Logo Path to Revenue
CHANNEL UPDATE PARTNERVANTAGE - NEW LOGO PATH TO REVENUE PartnerVantage is additive to existing indirect business. TRAIN MENTOR COACH 78 new resell partners added from launch, 28 in Q4. 78 Channel managers onboard and train new partners and encourage REVENUE GENERATION increased engagement with Vant
Slide 32: Channel Logo Highlights
CHANNEL UPDATE CHANNEL LOGO HIGHLIGHTS PAGE 32
Slide 33: Our Focus
COMPANY ANNUAL BUSINESS CHANNEL OUR APPENDIX HIGHLIGHTS RESULTS UPDATE UPDATE FOCUS OUR FOCUS
Slide 34: Our Focus
SECTION HEADING HERE OUR FOCUS Operating Leverage Profitability Competitive Differentiation Market-Leading Innovation Drive service uptake across Optimise for efficiency – align Consolidate our position as Accelerate competitive global platform, leveraging operational costs to market the market lead
Slide 35: Thank You
THANK YOU ASX: MP1 ON THE WEB: megaport.com/investor megaport.com/media-centre SOCIAL: /megaportnetworks @megaport @megaportnetwork MEGAPORT LIMITED | ACN 607 301 959 | ASX: MP1
Slide 36: 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 37: Appendix
COMPANY ANNUAL BUSINESS CHANNEL OUR APPENDIX HIGHLIGHTS RESULTS UPDATE UPDATE FOCUS APPENDIX
Slide 38: Asia Pacific
REGIONAL HIGHLIGHTS ASIA PACIFIC Total Installed Data Centres Total Number of Customers Average Revenue per Port3 105 108 917 1,003 $945 +18% 30 JUNE 2021 30 JUNE 2022 30 JUNE 2021 30 JUNE 2022 No. of Ports per Data Centre 32.3 +40% Total Number of Ports Total Number of Services 1 Services per Port
Slide 39: Asia Pacific Financial Performance
REGIONAL HIGHLIGHTS ASIA PACIFIC FINANCIAL PERFORMANCE MARGIN TRENDS1 APAC $M1 Japan became EBITDA positive from April. APAC profit after direct network costs margin continues to grow with increasing MRR, and direct network costs remaining steady. The EBITDA return continues to increase in line with
Slide 40: Europe
REGIONAL HIGHLIGHTS EUROPE Total Installed Data Centres Total Number of Customers Average Revenue per Port3 102 105 430 531 $1,174 +3% 30 JUNE 2021 30 JUNE 2022 30 JUNE 2021 30 JUNE 2022 No. of Ports per Data Centre 13.5 +21% Total Number of Ports Total Number of Services 1 Services per Port 1,137 1
Slide 41: Europe Financial Performance
REGIONAL HIGHLIGHTS EUROPE FINANCIAL PERFORMANCE MARGIN TRENDS1 EMEA $M1 EMEA EBITDA continues to be positive for the full year. France positive GM for the year, approaching EBITDA breakeven. EMEA remains in a strong position for growth via indirect channels. EMEA EBITDA margin improvement driven by
Slide 42: North America
REGIONAL HIGHLIGHTS NORTH AMERICA Total Installed Data Centres Total Number of Customers Average Revenue per Port3 $1,234 +16% 198 210 1,219 1,462 30 JUNE 2021 30 JUNE 2022 30 JUNE 2021 30 JUNE 2022 No. of Ports per Data Centre 22.1 +23% Total Number of Ports Total Number of Services1 Services per P
Slide 43: North America Financial Performance
REGIONAL HIGHLIGHTS NORTH AMERICA FINANCIAL PERFORMANCE MARGIN TRENDS1 NAM $M1 Canada EBITDA positive from March. Launch of Mexico in Q4 adds leverage, temporarily slowing margin expansion. EBITDA margin more impacted than other regions by additional labour costs from investment in Scale Up Scale Ou