Megaport lands ~A$979M in AI infrastructure contracts and lifts FY27 guidance
Australian network-and-compute company Megaport said Tuesday it secured three new AI infrastructure contracts through Latitude.sh totaling about A$978.6 million in contract value, with roughly A$322.6 million in customer prepayments, and raised its FY27 revenue guidance.
A network company that bought Latitude.sh has nearly a billion Australian dollars of AI-computer contracts on the page, and customers are paying hundreds of millions before the machines arrive. That is booked yearly revenue on a schedule, not a full year of cash already in the door, and not a short rental of chips when they happen to be free.
On Tuesday, 29 September 2026, Megaport Limited, which trades on the ASX as MP1, said it secured three further AI infrastructure contracts through Latitude.sh, a wholly owned subsidiary. Together the contracts are about A$978.6 million in total contract value. Megaport also states that figure as about US$685.0 million. Total contract value is what the contracts add up to over their term. It is not cash already counted as this year’s revenue. The work is GPU and CPU compute, network, and storage for AI applications and inference. A GPU is the chip that does the heavy math for an AI model. Inference is the step where a trained model produces an answer. Megaport converts those US dollars at A$0.70 per US dollar, the rate it states as of 28 September 2026. The contracts are written in US dollars. Those lines are in Megaport’s ASX announcement dated 29 September 2026.
Two of the three agreements are with new customers. Megaport says two agreements are with US-based technology providers backed by institutional shareholders, and that one of those two is an existing customer. The third is a new customer, a publicly listed company that will use the computers for its own AI work. Megaport says the names are withheld for commercial reasons. The announcement does not print a company name.
Customers are paying about A$322.6 million before the service is delivered. A prepayment is cash paid ahead of delivery. One new customer is prepaying about A$281.5 million of that, so it can get GPUs Megaport had already ordered for a pool of chips kept for shorter jobs. Megaport says that payment covers most of the cash spending needed to fulfil that one contract. Michael Reid, the chief executive, rounds the prepayment total on today’s contracts to about A$323 million. The A$322.6 million and the A$281.5 million are the announcement’s figures. The A$323 million is inside Reid’s sentence.
Megaport expects the contracts to add about US$162.7 million, or A$232.4 million, in annual recurring revenue once the hardware is running. Annual recurring revenue is the yearly pace of repeat revenue. The company expects the machines to come online through the third quarter of FY27 and to reach that full pace by the fourth quarter of FY27. FY27 is the label on Megaport’s guidance year. The announcement does not print the calendar dates of those quarters. The weighted average length of the contracts is just over four years. Each contract pays committed revenue for its fixed term, whether or not the customer uses every chip. Those lines are Megaport’s. They describe a schedule. They are not a report that these three contracts are already billing.
Megaport says the new contracts take pro forma group annual recurring revenue to about A$1.1 billion, and that more than 85 percent of ARR is from North America. Pro forma, in the announcement’s footnote, adds network revenue as of 31 August 2026, compute revenue as of 22 September 2026, and committed revenue on the strategic contracts that is not yet billed. The same announcement says group revenue currently billing is over A$500 million. The A$1.1 billion figure is the larger total, including contracts not yet on the bill. Once every strategic contract is billing, Megaport expects an annualised EBITDA run rate over A$650 million, and that figure leaves out the GPU pool. EBITDA, in Megaport’s footnote, is an operating result before interest, tax, and depreciation, and it also leaves out items such as employee share costs and currency gains and losses. Those lines are Megaport’s.
Megaport raised its FY27 group revenue guidance to A$720–810 million, from A$620–730 million. It raised the EBITDA margin guidance to 42–44 percent, from 38–40 percent. A margin, here, is that profit measure as a share of revenue. It raised capital spending guidance to A$1.78–1.88 billion, from A$1.28–1.38 billion. The company says the upgrade follows the new compute contracts, earlier delivery on some contracts it had already announced, and the trading update. It is not a raise pinned only on these three deals. In the same table, network revenue goes to A$325–335 million, from A$315–325 million, and compute revenue goes to A$395–475 million, from A$305–405 million. Megaport says the higher floor of the compute range reflects both the trading update and the new contracts, and that the higher ceiling of the compute range reflects only the new contracts. Those ranges are Megaport’s.
The new contracts need about US$350.2 million, or A$500.3 million, of capital spending, mostly for high-performance NVIDIA GPUs and for compute, network, and storage hardware. Megaport is assigning chips it had already ordered for an on-demand pool to these contracts, and it has started ordering replacements. Refilling the pool is about US$252.0 million, or A$360.0 million, over FY27. Megaport expects that replacement gear to be bought and installed by the fourth quarter of FY27, with revenue from the refilled pool building in the first half of FY28. The company says it has power and space for the new contracts and for the replacement machines. It says it is fully funded for the updated FY27 spending plan, with pro forma liquidity of about A$362.2 million. The announcement’s footnote builds that liquidity figure from cash, share-offer proceeds, a debt facility, and customer prepayments, minus the year’s capital spending after earlier prepayments. Those lines are Megaport’s plan and its funding claim. They are not a statement that the new clusters are already switched on.
“Since April, we’ve announced approximately A$2.3 billion in total strategic contract value,” Reid said. “Together with our existing business, these contracts support approximately A$1.1 billion in Group ARR once deployed.” He said earlier deployments, the new contracts, and network growth sit under the higher FY27 revenue and margin guidance, and that customers have committed about A$323 million in prepayments on today’s contracts. The A$2.3 billion is the combined strategic contract value announced since April. It includes today’s A$978.6 million. It is not a second pile on top of it. The quotation is his, in the announcement.
Reuters, in a story datelined 29 September, reported the same A$978.6 million of contracts and the same 2027 revenue range, A$720–810 million, up from A$620–730 million. Reuters’s opening line calls the move a higher annual earnings forecast. The figures it then prints are the revenue range and the capital-spending range, A$1.78–1.88 billion, up from A$1.28–1.38 billion, which it says is to support the new contracts and refill the GPU pool. Reuters does not print the 42–44 percent margin. That margin is in the announcement. Reuters converted A$978.6 million to about US$686.88 million, at one US dollar to 1.4247 Australian dollars. That is Reuters’s rate. Megaport’s A$0.70 rate is what produces the announcement’s US$685.0 million. Reuters said the shares rose as much as 20.5 percent, to A$22.720, the highest since 13 August, while the benchmark index was up 0.2 percent. Mark Gardner, founder and chief executive of MPC Markets, told Reuters: “The test is now execution: installing the equipment on time, converting contracted value into revenue, and earning an adequate return on a much larger capital base.” He also said: “Nearly a billion dollars of contract value is impressive. It is not a billion dollars of revenue today.” Those sentences are his, as Reuters prints them. Reuters said the A$2.3 billion since April includes four similar deals worth A$458.9 million secured in early June. That June split is Reuters’s. This announcement states the A$2.3 billion. It does not break out the June deals.
In plain terms, Megaport’s compute subsidiary has three new AI-computer contracts worth about A$978.6 million over a term a bit longer than four years, with about A$322.6 million paid ahead. The yearly pace Megaport expects once the machines are in is about A$232.4 million. The A$1.1 billion group figure counts revenue that is not all billing yet. The customers are not named.
The picture is a desk card in Megaport red. It names Megaport and Latitude.sh, three AI infrastructure contracts, about A$978.6 million in total contract value, about US$685 million, about A$322.6 million in prepayments, about A$232.4 million in annual recurring revenue, pro forma group ARR of about A$1.1 billion, and FY27 revenue of A$720–810 million. It is a graphic of the figures in the announcement. It is not a photograph of a data center.