Megaport posts full-year loss as it plans to scoop up US-based InnovoEdge for $15m

Australian interconnection services provider Megaport has announced its plans to acquire InnovoEdge, a US-based company focused on automating multi-cloud deployment.

Under the agreement, Megaport will pay up to $15 million, comprising $7.5 million in cash consideration and up to $7.5 million worth of ordinary shares in Megaport.

“Empowering our customers and partners with greater agility is a priority for Megaport. The acquisition of InnovoEdge aligns well with that priority and will help us drive greater functionality across our leading Network as a Service platform,” Megaport CEO Vincent English said.

“By integrating the InnovoStudio service with our portal and software defined network, we will provide customers and partners with greater visibility and control of networking, cloud, and service resources.”

The acquisition is subject to conditions and is anticipated to close in mid-August 2021.

In announcing the acquisition, Megaport also released its financial results for 2021, posting a net loss of AU$55 million, down 13% from the AU$48 million loss reported a year prior. Revenue was AU$78.2 million, a 35% increase over last year.

Once network and operating costs were taken out of its revenue number, Megaport reported normalised earnings before interest tax depreciation and amortisation (EBITDA) of negative AU$13.3 million, a 37% improvement on last year’s negative AU$21 million.

Looking at the revenue composition, Megaport now gets AU$7.5 million each month in recurring revenue, which is a 33% increase on last year.

By region, Asia-Pacific contributed AU$38.7 million — or 49% — of total revenue, North America accounted for AU$25.7 million, and comprising 18% was Europe with AU$13.8 million.

At the end of the 12 month period, Megaport boasted 2,285 customers, an increase year over year by 443.

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Image: Megaport

Installed data centres at the end of June 2021 increased by 39, or 11%, to 405 locations; while enabled data centres increased by 92, or 14%, to 761 locations. Ports increased by 1,922 to hit 7,689. Average revenue per port in June 2021 decreased by AU$2 year on year to AU$978.

“The Megaport mission for the coming year is to ‘ScaleUp, ScaleOut’,” English said.

“With a proven business model, the trust of partners and customers, and a leading platform built for innovation, we are well positioned to achieve this. We will invest in revenue growth by making investments in further market expansion, product and service innovation, and most critically, the people responsible for making Megaport the transformational technology company that is changing the way IT services are built today and tomorrow.”

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