The Megaport Ltd (ASX: MP1) share price is under the spotlight after the company reported new contracts worth almost $1 billion.
Megaport provides private compute, network and storage. It partners with service providers, data centres and systems integrators across more than 1,200 enabled locations globally.
New contract wins
Megaport reported that it has signed three new AI infrastructure contracts with a combined total contract value (TCV) of approximately $978.6 million.
The ASX share noted that prepayments from these contracts total approximately $322.6 million.
Thanks to these new contracts signed, pro forma (unofficial company-calculated) group annual recurring revenue (ARR) has increased to approximately $1.1 billion. Megaport highlighted that more than 85% of ARR is from North America.
It said that it’s fully funded for both the strategic contracts and the GPU pool replenishment, with pro forma liquidity of approximately $362.2 million.
Trading update
The company announced that its group ARR is now billing over $500 million.
Its network net revenue retention (NRR) at August 2026 was 116%, up 6 percentage points year on year.
Network ARR at August 2026 reached A$302.6 million, up 29% on a constant foreign currency basis compared to last year.
The company also said that it’s at the early execution stage of strategic contracts. Multiple GPU clusters, CPUs, storage and networking has been provisioned, accepted by customers and are now billing.
Megaport then said that compute ARR reached $201.4 million as it 22 September 2026, which was up 90% since 30 June 2026 and up 227% since the acquisition.
Upgraded guidance
Megaport announced an upgrade to its FY27 guidance following the positive news I’ve outlined above.
Group revenue is now expected to be between $720 million to $810 million, up from previous guidance of between $620 million to $730 million.
The company increased its EBITDA (EBITDA explained) margin expectations for FY27 to between 42% to 44%, up from the previous range of between 38% to 40%.
The final change to guidance was a massive rise in expected capital expenditure. Capex is now projected to come between $1.78 billion to $1.88 billion, up from the previous range of $1.28 billion to $1.38 billion, reflecting the new contracts.
Final thoughts on the Megaport share price
Clearly, the company is benefiting from the strong demand for AI and digital infrastructure. Its revenue is rapidly rising, though it’s also investing significant capex to unlock that revenue.
More demand is good news for the company, so I’d be happy if I were a shareholder. However, I don’t know whether the current Megaport share price is attractive or not, with how much growth is already baked into the valuation.
For my own portfolio, I’m looking at other ASX growth shares.
