Megaport delivered its strongest result to date with incremental annual recurring revenue climbing 103% year-on-year, marking the largest single-year expansion in the company’s history. The growth was underpinned by $506.2 million in total contract value from new strategic deals and the continued scaling of the Latitude.sh compute acquisition, demonstrating that the company’s diversification into compute infrastructure is gaining material traction alongside its core networking business.
The scale of capital being deployed reflects management’s confidence in the growth trajectory. A new $825 million debt facility was announced, including refinancing of existing $150 million facilities, providing substantial firepower for further data centre expansion and strategic initiatives. This capital raise via entitlement offer, combined with the debt facility, signals the company intends to pursue an aggressive growth strategy across both segments. The $1.3 billion in strategic contracts announced represents a significant vote of confidence from major customers in Megaport’s ability to deliver at scale.
The network segment remains the financial backbone, with ARR reaching $289.6 million and growing 27% year-on-year on a constant currency basis, excluding India’s impact. More importantly, network net revenue retention by logo stood at 114%, indicating strong customer expansion and low churn. The addition of 155 new data centres in the year, up 35% from the prior year, shows Megaport is executing on its infrastructure expansion playbook. Critically, the new cohort of data centres is landing with 55% higher first-year ARR per location than previous records, suggesting improved customer quality and pricing power.
Compute ARR has grown 72% since the Latitude.sh acquisition closed in late November 2025, reaching $105.6 million by June 2026. Even excluding strategic customer contracts, the segment grew 48% from acquisition, indicating organic momentum beyond the large deals. Growth of 37% year-on-year in total compute ARR demonstrates that the acquisition is delivering both immediate contract wins and compound growth. This diversification is reducing Megaport’s reliance on any single product or customer set.
For investors, the trajectory is noteworthy. Megaport is operating in an undersupplied market for both interconnection and GPU compute capacity, where demand from hyperscalers and AI workloads is outpacing supply. The company is capitalizing on this dynamic by building shared infrastructure that customers value, as evidenced by the 114% network NRR and growing new contract sizes. The capital intensity of the model means near-term earnings may be compressed by expansion spend, but the durability and quality of recurring revenue provides visibility to cash generation.
The key watch points are the execution pace on new data centre builds, the conversion of contracted revenue into billed ARR, and the competitive response from other infrastructure providers. Management will also need to demonstrate disciplined capital allocation to ensure the debt facility and equity raise drive adequate returns for shareholders. 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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