Business/Technology · NEWS EXPLAINER
Megaport Signs A$978.6 Million in AI Infrastructure Deals, Raises FY27 Guidance
Megaport says three new Latitude.sh contracts cover GPU and CPU compute, networking and storage for AI workloads. The agreements carry A$978.6 million in total contract value, are expected to add A$232.4 million in annual recurring revenue at full deployment, and prompted higher FY27 revenue and EBITDA-margin guidance.
Australian cloud and network infrastructure provider Megaport has signed three new AI infrastructure contracts through its Latitude.sh business with combined total contract value of A$978.6 million. Reuters and Capital Brief report that the agreements cover compute, networking and storage for AI applications and inference workloads.
The headline contract value is not the same as near-term revenue. Megaport says the three contracts are expected to contribute about A$232.4 million of annual recurring revenue at full deployment and include roughly A$322.6 million of customer prepayments. The company also raised its FY27 revenue and margin guidance while increasing planned capital expenditure to support the rollout.
TCV, ARR and prepayments are different numbers
The A$978.6 million figure is total contract value across the three agreements. It represents the contracted value over their terms, not revenue Megaport will recognize all at once.
The company separately expects about A$232.4 million in annual recurring revenue when the contracts are fully deployed. A$322.6 million of customer prepayments is another distinct figure: cash committed in advance to support infrastructure deployment, not another measure of annual revenue.
The contracts span compute, network and storage
Reuters reports that the agreements cover GPU and CPU compute, networking and storage for AI applications and inference workloads. That makes the new contracts broader than a pure GPU-rental arrangement.
Capital Brief reports that two of the agreements are with new customers and that Megaport has secured the power and space needed for those deployments. A third customer is described as a publicly listed enterprise running its own AI workloads. Customer names were not disclosed in the sources reviewed.
Megaport raised FY27 guidance
Megaport now expects FY27 group revenue of A$720 million to A$810 million, compared with its previous A$620 million to A$730 million range. It also lifted expected EBITDA margin to 42%-44% from 38%-40%.
The company simultaneously raised capex guidance to A$1.78 billion-A$1.88 billion from A$1.28 billion-A$1.38 billion. Higher capex is part of the execution story: the company needs to build and deploy infrastructure before the contracted ARR reaches full run-rate.
What to watch next
Reuters says the new agreements follow four AI infrastructure contracts worth A$458.9 million announced in June. Megaport says strategic contract value announced since April is now about A$2.3 billion and pro forma group ARR would reach about A$1.1 billion once current contracts are deployed.
Those are forward-looking operating measures. The next useful checkpoints are deployment timing, actual revenue recognition, capital spending against plan and whether EBITDA margins track the upgraded range. Until then, the new guidance should be treated as management's forecast rather than a guaranteed outcome.
