The Megaport Ltd (ASX: MP1) share price is down by 3.04% so far today, despite providing a strong quarterly update to the market. At the time of writing, the Megaport share price is trading at $13.71 per share.
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What does Megaport do?
Megaport offers a 'network as a service' to enterprises, enabling customers to increase or decrease their fixed broadband bandwidth. This enables them to ramp up their bandwidth requirements during busy times and reduce their usage when demand is lower.
This service is enabled via an ecosystem network of cloud providers, data centre operators, and network service providers. Megaport partners with cloud operators including Amazon Web Services, Google Cloud and Microsoft Azure. The company has a customer base across the Asia Pacific, Europe and North America.
Strong revenue growth continues
For the quarter ended June 2020, Megaport reported solid revenue growth of 12%, quarter on quarter, to total $17 million. Megaport's year-on-year quarterly growth grew even more strongly, up by 66%.
Megaport's recurring revenue base also continues to grow. The company's monthly recurring revenue (MRR) totalled $5.7 million for the month of June. This was a year-on-year quarterly increase of 57%, and an increase of 4% on the previous quarter.
Megaport has a subscription-based billing model, which provides it with a sticky recurring revenue stream. It receives revenue from its network access points, as well as from the services that customers consume within its ecosystem.
Megaport also reported a strong quarter in terms of receipts from customers, which were up 44% on the prior quarter to $20 million. On a year-on-year basis, Megaport's total customer base has now grown by 24% to reach 1,842.
Megaport also announced a strong cash position of $166.9 million at the end of June.
Megaport's cloud ecosystem continues to grow
Megaport continues to grow the number of total installed data centres within its cloud ecosystem. Total installed data centres for Megaport has now have reached 366, which is 11% higher than last quarter, and 22% higher than the same quarter last year. The number of enabled data centres within its ecosystem also is growing strongly, up 11% on the prior quarter.
About the Megaport share price
Despite falling by 3.04% so far today, the Megaport share price has performed strongly over the past 12 months. During that time, the Megaport share price has risen by 85%, driven by strong revenue and customer growth.
