This AI stock from ASX listed companies is posting significant lift in margins and profitability. With the Artificial Intelligence sector on the go, Megaport Limited could be one of the growing companies to invest in
Megaport Limited (ASX: MP1)
In FY24, Megaport Limited (ASX: MP1) achieved a significant financial turnaround, reporting a 28% increase in revenue, totalling $195.3 million. Among top growth stocks, its growth was driven by a remarkable rise in Annual Recurring Revenue, which surpassed $200 million for the first time. The company posted an EBITDA of $57.1 million, marking a 182% increase year-on-year. This success comes amid substantial operational changes, including a restructuring of the sales and customer success teams. Megaport ended the financial year with a strong cash position, achieving its first-ever net cash flow positive year, generating $28 million, which was a $62.5 million improvement from the previous year.
Megaport’s market leadership in Network as a Service (NaaS) continues to solidify, with a global presence spanning 26 countries and over 930 data centers. The company serves more than 2,600 customers, including major industry players driving innovation in AI and cloud technologies. The company’s core strategy focuses on acquiring new customers (new logos), protecting existing revenue, and expanding within its customer base through upselling and cross-selling. Megaport’s product offerings, including Megaport Reach, Global WAN, and Data Centre Interconnect, make it easier for businesses to adopt hybrid and multicloud solutions. These products have enabled the company to secure some of its largest contracts, such as a $4.2 million deal for Global WAN.
Megaport's product innovation was at an all-time high, with more products launched than in the previous five years combined. The company, one of the best growth stocks to buy now, significantly upgraded its network infrastructure, introducing a 400G backbone that increased connectivity speeds by ten times. The launch of new products like Megaport Internet and Global WAN helped the company expand its ecosystem, adding more data centers and internet exchange locations. Additionally, the company rolled out its most significant product and pricing update in history, designed to increase customer value and enhance competitiveness globally. This innovation-driven approach is key to Megaport’s success, as the demand for connectivity, driven by the rise of AI and hybrid cloud, continues to grow.
Megaport will be focused on maintaining profitable growth with FY25 revenue guidance of $214–222 million and EBITDA guidance of $57–65 million. The company is committed to further growth, investing in key growth areas, and further developing its product offerings to meet growing demand. Megaport is focused on executing its growth strategy with investment in go-to-market roles and expansion of its capabilities to accelerate revenue growth. The company is perfectly positioned to lead in these expanding markets for AI and cloud connectivity, with a robust balance sheet and a clear path toward sustainable, profitable growth in the coming years.
Source: Company’s Report
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