Megaport Locks in AUD$254M in Committed AI Infrastructure Deals Across Two US Customers
Megaport’s Latitude.sh locks in AUD$254M in AI infrastructure contracts across two US customers
Megaport Limited (ASX: MP1) has announced that its wholly owned subsidiary, Latitude.sh, has secured three binding contracts with a combined total contract value (TCV) of approximately USD$182.9M (AUD$254.0M) across two US-based AI customers. The contracts deliver approximately USD$65.2M (AUD$90.6M) in Annualised Recurring Revenue (ARR) and are fixed-term and committed regardless of customer usage levels, providing material structural revenue protection. The announcement positions the combined Megaport and Latitude.sh platform as a significant participant in the expanding AI infrastructure market.
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What’s inside the three contracts
The three contracts span two US-based customers and vary in term length and scale. Key details include:
- Both customers are US-based technology companies running AI applications and inference workloads, supported by institutional shareholders. Their identities have not been disclosed for competitive reasons.
- One customer is an existing Megaport customer, representing a successful upsell and validation of the combined platform.
- Two contracts carry 36-month initial terms and represent approximately 90% of the combined TCV.
- The third contract carries a 24-month term.
- Full ARR contribution is expected on a run-rate basis by the end of H1 FY27, as hardware is deployed incrementally.
Capital investment and payback profile
The contracts require approximately USD$101.0M (AUD$140.3M) in incremental capital expenditure, primarily allocated to high-performance NVIDIA GPU, compute, network, and storage hardware. The payback period is approximately 2 years, measured as the time for cumulative EBITDA to exceed the initial compute server capex.
Megaport has placed orders for the hardware, with delivery expected in late FY26 or early FY27 and phased deployment commencing H1 FY27. At the end of each contract term, the assets will be deployed within the Latitude.sh compute pool and remain available to generate revenue for their remaining asset life, either through contract renewal or as part of the on-demand platform. This structure eliminates stranded asset risk at contract expiry.
| Metric | Contracts 1 & 2 (combined) | Contract 3 | Combined Total |
|---|---|---|---|
| Term | 36 months | 24 months | – |
| TCV share | ~90% of total | ~10% of total | USD$182.9M (AUD$254.0M) |
| ARR contribution | Majority of USD$65.2M (AUD$90.6M) | Remainder of USD$65.2M (AUD$90.6M) | USD$65.2M (AUD$90.6M) |
| Capex allocation | Proportional to TCV share | Proportional to TCV share | USD$101.0M (AUD$140.3M) |
| Expected deployment | Phased, commencing H1 FY27 | Phased, commencing H1 FY27 | Full run-rate by end H1 FY27 |
Understanding Latitude.sh and the combined infrastructure platform
Latitude.sh provides compute and storage capabilities that complement Megaport’s foundational global network automation. Together, the two businesses form a global automated infrastructure platform spanning more than 1,100 data centre locations, offering rapid deployment, ultra-low latency, and dedicated high-performance infrastructure.
For investors familiar with Megaport as a network connectivity business, Latitude.sh meaningfully expands the addressable market. Where Megaport traditionally served customers needing software-defined networking between clouds and data centres, the combined platform now enables the delivery of dedicated compute resources at scale across a globally distributed footprint.
This matters for AI workloads specifically because the industry is shifting. As demand moves from large-scale foundation model training toward inference (running AI models in real-time applications) and edge deployments, the proximity of compute to end markets becomes a deciding factor in platform selection. Distributed compute at scale, delivered through automated global infrastructure, is precisely what the combined Megaport and Latitude.sh platform is built to provide.
Neither business could independently pursue the scale of customer opportunities now available to the combined group. These contracts with two institutional-backed AI customers illustrate that the platform thesis is beginning to convert into committed, long-term revenue.
CEO Commentary
“We are at the forefront of an accelerating inflection point across the industry. As use cases shift from AI foundation models to inference and the edge, Megaport is becoming an essential platform for powering the applications of tomorrow with globally distributed, automated infrastructure,” said Michael Reid, CEO of Megaport.
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Funding, liquidity, and what comes next
Megaport will fund the USD$101.0M (AUD$140.3M) capex requirement through a combination of existing cash reserves and available capacity under a newly upsized AUD$150.0M committed debt facility from a leading global financial institution. Pro-forma liquidity as at 31 December 2025, incorporating these contracts and the strategic deal announced to ASX on 27 April 2026, would have been approximately AUD$199.1M.
These contracts also satisfy the committed USD$86.0M capex undertaking agreed for CY26 and CY27 under the terms of the Latitude.sh acquisition, keeping the alignment between Latitude.sh vendors and Megaport shareholders intact.
On guidance, Megaport reaffirms its FY26 Revenue and EBITDA guidance for the combined group, as provided in the H1 FY26 half year results announcement lodged with ASX on 20 February 2026. Base FY26 Group Capex guidance of AUD$90M to AUD$100M remains unchanged, excluding these contracts. However, if equipment is delivered prior to 30 June 2026, FY26 Group Capex could increase by up to a further AUD$140.3M.
Full financial performance detail across both network and compute will be provided at the full year results in August 2026.
Key financial metrics at a glance:
- Combined TCV: AUD$254.0M (USD$182.9M)
- ARR: AUD$90.6M (USD$65.2M)
- Capex required: AUD$140.3M (USD$101.0M)
- Payback period: approximately 2 years
- Pro-forma liquidity: approximately AUD$199.1M
- Committed debt facility (newly upsized): AUD$150.0M
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