Megaport has announced a significant pivot toward AI infrastructure with the execution of four new contracts worth A$458.9 million and the creation of an on-demand GPU Pool backed by A$350 million in investment. The announcement represents a material expansion of the company’s addressable market and a strategic response to accelerating global demand for distributed AI inference capacity. To fund the capital expenditure required for these initiatives, Megaport is raising A$827.3 million through a fully underwritten entitlement offer at a ratio of one new share for every 3.08 existing shares held.
The contracts require approximately A$369.5 million in capital expenditure, predominantly for high-performance NVIDIA GPUs alongside supporting network and storage infrastructure. This substantial capex commitment signals Megaport’s conviction in the durability of AI inference demand and its ability to deploy capital efficiently across its footprint of more than 1,100 connected data centres in 31 countries. The GPU Pool represents a material addition to Megaport’s commercial models, extending beyond its traditional software-provisioned network connectivity into compute infrastructure offered through both contracted and consumption-based arrangements.
From a revenue perspective, the contracted business is transformative. The compute division will see its annualized revenue run rate increase to A$385.2 million on a pro forma basis, with strategic contracts contributing A$301.3 million of annualized recurring revenue. Combined group pro forma ARR reaches A$662.9 million, underpinned by A$747.8 million of total contract value across the strategic contract portfolio. The entitlement offer price and timing will be crucial variables for existing shareholders assessing dilution. The company notes it has preserved strong liquidity, with pro forma cash of approximately A$287.6 million as at 31 December 2025.
Megaport’s core network business remains robust, with April 2026 network ARR increasing 25 percent year-on-year on a constant currency basis to A$277.7 million. Network net revenue retention by logo improved to 113 percent, demonstrating the stickiness of the core product and healthy organic expansion within the installed base. These metrics suggest the company maintains pricing power and customer satisfaction in its legacy business even as it pursues the GPU opportunity.
Investors should monitor capital deployment efficiency as Megaport executes on these contracts and scales the GPU Pool. Near-term attention will focus on the entitlement offer terms, customer onboarding timelines, and progression toward the tightened FY26 revenue guidance range of A$307 million to A$315 million. Longer-term, visibility into GPU utilization rates, pricing power within the on-demand pool, and competitive positioning in an increasingly crowded AI infrastructure market will prove critical. This announcement is price sensitive and has been flagged as 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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