Shares of Megaport Limited (ASX:MP1) are soaring after the company announced an upgrade to its earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance for the financial year 2023 and provided insights into its financial year 2024 projections.
A leading global Network as a Service (NaaS) provider, Megaport, has attributed its revised FY23 normalised EBITDA guidance to the sustained improvement in the company's operating metrics and financial performance. The updated range is now expected to be between $19 million and $21 million, representing an increase from the previous guidance of $16 million to $18 million. The reported EBITDA guidance for FY23 is anticipated to be in the range of $24 million to $26 million.
Megaport also confirmed that it achieved a net cash positive position in the fourth quarter of FY23, even after accounting for redundancy payments totalling approximately $2.6 million.
While finalising its FY24 budget, Megaport is working with its new CEO to incorporate factors such as network expansion, product development, and revenue-generating headcount. The company anticipates that its FY24 EBITDA guidance will surpass the previous range of $41 million to $46 million. A more detailed outlook for FY24 will be provided no later than the release of the FY23 full-year results on 22 August 2023.
Furthermore, excluding any future strategic initiatives, Megaport expects to maintain a net cash positive position in FY24, taking into account the planned growth in sales headcount and capital expenditure. Additional details regarding the company's financial outlook will be disclosed during the FY23 full-year results presentation.
In a move to reduce costs and capitalise on its improved financial performance, the Megaport Board has decided to terminate its $25 million HSBC debt facility. The decision reflects the company's confidence that it could secure a larger facility with more favourable terms in the future, should the need for bank debt arise.
The upgraded EBITDA guidance and the positive cash position for FY23 demonstrate Megaport's commitment to delivering strong financial results and further establishing itself as a leading player in the NaaS market.
