Megaport Limited has secured three major infrastructure contracts through its Latitude.sh subsidiary valued at approximately AUD $254.0 million in total contract value, with around AUD $90.6 million in annualised recurring revenue. The contracts are with two US-based technology providers that operate AI applications and inference workloads, each backed by institutional shareholders. Two contracts span 36 months representing approximately 90 percent of the total value, while the third runs for 24 months.
The structure of these contracts delivers meaningful advantages for Megaport investors. The commitments are binding fixed-term arrangements that secure revenue irrespective of usage levels, providing revenue certainty that many technology infrastructure companies struggle to achieve. This revenue profile aligns with the company’s stated capital deployment strategy and represents the kind of long-term visibility that markets reward. The fact that one of the customers is an existing Megaport client demonstrates successful account expansion and validates the company’s ability to win incremental business from established relationships.
Realising the full revenue potential requires approximately AUD $140.3 million in incremental capital expenditure, primarily for NVIDIA GPU hardware and associated compute, network, and storage equipment. This investment carries an attractive payback period of approximately two years, a duration that compares favourably with many infrastructure deployment cycles. Hardware orders are already placed with delivery expected in the latter half of the 2026 financial year or early 2027, with phased deployment commencing in the first half of 2027. At the end of each contract term, the assets will be redeployed within the broader Latitude.sh platform to serve other revenue opportunities.
The announcement reflects broader structural tailwinds in AI infrastructure. Global enterprises and emerging hyperscalers increasingly require distributed compute capacity positioned close to end markets, creating demand for exactly the kind of automated global platform Megaport has built through combining its network infrastructure automation with Latitude.sh’s compute capabilities. The company’s stated pipeline of comparable opportunities suggests this may prove to be a template for future growth rather than an isolated transaction. The company notes it will apply disciplined criteria around counterparty credit quality, contract terms, paybacks and returns when evaluating new deals.
Investors should monitor several milestones ahead. The phased hardware deployment beginning in H1 2027 and the expected run-rate contribution of the full AUD $90.6 million ARR by the end of H1 2027 will provide quarterly visibility on execution. The company’s capacity to secure similar contracts and whether this emerging infrastructure-as-a-service model becomes material to earnings represent key questions for following quarters. This announcement has been flagged as price sensitive and material by the ASX.
View the full ASX announcement (PDF)
About Megaport Limited (ASX: MP1)
Megaport Limited is a software-defined network service provider that offers Network as a Service (NaaS) solutions enabling enterprises to connect to cloud providers, data centers, and internet exchanges on a flexible, pay-as-you-go basis. The company operates a global interconnection platform connecting approximately 3,000 enterprise customers across over 1,000 data centers worldwide. Megaport’s Marketplace enables businesses to access multiple cloud and IT service providers without relying on the public internet.
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