Megaport Launches $827M Entitlement Offer to Fund AI Contracts and GPU Pool
Megaport secures A$458.9M in AI contracts and launches A$827.3M entitlement offer
Megaport Limited (ASX: MP1) has announced four new AI infrastructure contracts with a combined Total Contract Value (TCV) of A$458.9M, alongside a fully underwritten accelerated non-renounceable entitlement offer targeting A$827.3M. Together, these transactions form the foundation of the company’s strategy to build a Globally-Distributed AI Inference Cloud, leveraging its existing platform of more than 1,100 connected data centres across 31 countries.
Michael Reid, Chief Executive Officer
“AI inference represents one of the biggest infrastructure opportunities of the next decade. The contracts announced today reflect the accelerating demand for globally-distributed AI inference infrastructure. Megaport’s software-provisioned compute, network, and storage platform positions us strongly to meet that demand.
“The proceeds from the Entitlement Offer will enable us to fulfil contracted customer demand while building an on-demand GPU Pool that creates new opportunities across enterprise and sovereign AI markets globally.
“AI inference is becoming a global infrastructure challenge, not simply a GPU problem. As AI adoption accelerates, organisations need seamless access to GPUs, CPUs, storage, and the connectivity that powers them. Megaport is built to deliver it all.”
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What is AI inference, and why does it need a global infrastructure layer?
AI inference is the stage at which a trained AI model is put to work, generating real-time outputs such as answering questions, producing images, or processing live data. This is distinct from AI training, which involves building and refining the model. Because inference happens in real time, it is highly latency-sensitive: the closer the compute is to the end user, the faster and more reliable the response.
Megaport identifies three constraints that must be solved to support AI inference at scale: data centre space and power, low-latency global connectivity, and access to high-performance GPUs. Leveraging its footprint of more than 1,100 data centres across 31 countries, together with Latitude.sh’s platform capabilities, the company is positioned to address these through a decentralised infrastructure approach.
The GPU supply gap driving enterprise demand
Demand for GPU-based compute is currently outstripping supply as enterprise AI workloads shift from training to latency-sensitive inference. To address this, Megaport is establishing an on-demand GPU Pool that offers automated provisioning, consumption-based pricing, and rapid access to infrastructure without traditional deployment lead times.
The GPU Pool serves three core objectives:
- Attract new customers seeking immediate access to AI infrastructure
- Provide existing customers with flexible burst capacity
- Create a pathway to convert short-term usage into longer-term contracted deployments
Four new contracts and a GPU Pool: the numbers behind the strategy
The announcement covers two distinct components: four newly signed AI infrastructure contracts, and the establishment of an on-demand GPU Pool. These represent separate capital commitments and should not be conflated.
The four signed contracts carry a combined TCV of A$458.9M (US$330.4M) and an ARR of A$199.0M (US$143.3M), with contracts expected to commence in H1 FY27. Approximately 55% of ARR and 70% of TCV are generated by contracts with 36-month terms. Delivering on these commitments requires incremental capital expenditure of A$369.5M (US$266.0M), primarily for high-performance NVIDIA GPUs supported by network and storage components, with an estimated payback of approximately 27 months. All customers are US-based technology providers running AI applications and inference workloads, supported by institutional shareholders; their identities have not been disclosed for competitive reasons.
Separately, Megaport will invest A$350.0M (US$252.0M) to establish the GPU Pool. This investment is independent of the contract capex above. The GPU Pool is expected to take 6 to 9 months to procure and deploy, followed by a further 3 to 6 months to ramp to optimal utilisation. Once at optimal utilisation, the payback target is 16 to 22 months.
| Component | TCV / Investment | ARR | Capex Required | Payback Target |
|---|---|---|---|---|
| Four new contracts | A$458.9M | A$199.0M | A$369.5M | ~27 months |
| GPU Pool | A$350.0M investment | Consumption-based | A$350.0M | 16–22 months (at optimal utilisation) |
Pro forma ARR picture after today’s contracts
The cumulative ARR build across both the Network and Compute divisions, incorporating all Strategic Contracts announced to date, is as follows:
- Network ARR (Apr-26): A$277.7M, up 25% year-on-year on a constant currency basis
- Compute ARR (excluding Strategic Contracts): A$83.9M, up 40% since the Latitude.sh acquisition
- Pro forma Compute ARR (including all Strategic Contracts): A$385.2M, a 6.4x increase since the Latitude.sh acquisition
- Strategic Contracts total: TCV A$747.8M, ARR A$301.3M (comprising today’s contracts plus announcements on 27 April and 14 May 2026)
- Group pro forma ARR: A$662.9M
Network Net Revenue Retention (by logo) increased to 113%, up 4 percentage points year-on-year.
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Entitlement offer structure and what it means for shareholders
Megaport has launched a fully underwritten accelerated non-renounceable entitlement offer to raise A$827.3M. New shares will be issued at A$14.30 per share, representing a 10.9% discount to the Theoretical Ex-Rights Price (TERP) and a 13.9% discount to the last close price of A$16.61 on 1 June 2026.
Eligible shareholders may subscribe for 1 new share for every 3.08 existing shares held at the record date of 7:00pm Sydney time on 5 June 2026. The retail offer opens 11 June 2026 and closes 29 June 2026. Eligible retail shareholders who take up their full pro rata entitlement may also apply for up to 50% additional new shares, subject to shortfall availability and scale-back at the discretion of Megaport and the joint lead managers.
Proceeds from the entitlement offer will be allocated as follows:
- A$369.5M for high-performance NVIDIA GPUs, compute, network, and storage hardware to service the new contracts
- A$350.0M for GPUs and storage to seed the on-demand GPU Pool
- A$88.5M for balance sheet capacity and future near-term customer growth opportunities
- A$19.3M in transaction costs
Pro forma liquidity as at 31 December 2025 is approximately A$287.6M after accounting for all commitments. On FY26 guidance, the company has tightened its revenue range to A$307M to A$315M, while EBITDA margin guidance of 21 to 24% of revenue and Group Capex guidance of A$90M to A$100M both remain unchanged. Notably, FY26 guidance does not yet incorporate the impact of the Strategic Contracts; full Network and Compute financial performance will be provided at the full-year results in August 2026.
Leticia Dorman, Chief Financial Officer
“Megaport remains in a strong net cash liquidity position after this Entitlement Offer and, before the realisation of attractive cash returns from our recent investments and deployment of our GPU Pool. This will be further strengthened with the continued execution of a funding framework that optimises cost, diversity, our underlying assets, and prudent leverage. We expect that debt will become a more permanent part of our capital structure.”
The offer is fully underwritten by the joint lead managers and bookrunners.
Key dates for eligible shareholders
- 5 June 2026: Trading halt lifted; Megaport shares recommence normal trading
- 11 June 2026: Retail Entitlement Offer opens (9:00am Sydney time)
- 29 June 2026: Retail Entitlement Offer closes (5:00pm Sydney time)
- 6 July 2026: Allotment of new shares issued under the Retail Entitlement Offer
- 7 July 2026: Normal trading of new shares issued under the Retail Entitlement Offer commences
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