Just saw this from Rudi ... seems like @mikebrisy is on the money

Bit expensive now with only 11% revenue growth for the outlook

@edgescape and @NewyRookie I had an entry price on here of $10.00, but the softness of the guidance is giving me pause for thought.

If its just management conservatism (which I think it is), then the -20% SP is an over-reaction against my valuation ($10.00-$15.00), and I'm being offered a perfect entry point.

But the guidance is so weak, that its got me scratching my head because if it is a fair assessment, then it puts $MP1 on a lower trajectory altogether.

I've historically held this one, but I don't have a high enough conviction and vision of what it will be in 5-10 years. So, I think I'm going to sit this one out, even though I think the market reaction is probably over-done.

Just joining the call late and hoping to catch the Q&A to see if there are any other insights.

... CEO Mike Reid is in mid-flight rattling off everything that has been delivered this year... slide 30. Very upbeat.

Disc: Not held

Just off the $MP1 investor call Q&A. Fascinating.

The analysts were working hard to get their heads around the apparent disconnect between 1) Huge new products launched through FY24 (reportedly opening up some impressive TAMs) + rebuilt sales and marketing and GTM strategy success AND 2) decidedly soft FY25 guidance. (You could almost here the "this does not compute" in question after question.)

Having heard the discussion, I admit to not having a clear picture. But it may be something around falling NRR around the existing product set driven by short product life cycles, and the lag effect of $MP1 pulling back on innovation from 2021-2023, during their period of "difficulty".

In addition, 2024 margin growth has been flattered by the inventory run down, which is now complete, so inventory has to be replenished again to drive revenue.

I've recorded the Q&A and need to go back through this, and will also see what sense the analysts can make of this.

But for now, I don't understand it. And I can't invest in what I don't understand, irrespective of the price.

That said, I have an even stronger sense, however, that the guidance is conservative and may reflect the inexperience of the new CEO/CFO combination in post (May-23 and Oct-23). Michael Reid has fundamentally transformed $MP1 in little over one year, and clearly does not want to overpromise and under-deliver.

My hypothesis is that the low guidance is a combination of these factors. But my conviction is low.

I saw the FY25 figure in the morning and decided to make a quick exit in the morning before the price tanked.

Didn't add this in the previous post because was on mobile, but you can figure out from my earlier post was not too happy.

Hard to make sense of the reduced guidance when at the same time they are rolling out new products/services.

@mikebrisy @NewyRookie @edgescape listened in on the call this morning as well.

Without repeating previous comments but what may be adding to the confusion (how i interpreted the discussion) relating to revenue and ebitda guidance for FY25 in the Q&A was the discussion whereby Megaport was ok to onboard clients whom are contracted with other providers but were not satisfied and had less than a year to run would be able top switch across at no cost as long as they signed a min 1yr contract with MP1 ? These clients would not be recognised as revenue until the revenue actually was flowing through.

There was an element of desperation in Michael Reid's comments when talking about the number of new products launched in past year being more than the past 5yrs. Add to this was the explicit comments re the lack of innovation by previous management over the past 3-4 years resulting in current challenging environment.

Disc : Held in RL not on SM (2% position)

Heard one place recently pulling apart some non prod cloud environments which connect to on premise using megaport cross connects. Again can't say anything about who this is.

So dev projects getting cancelled?

Is this what a downturn in IT spend looks like and why Megaport couldn't answer the guidance cut?

Maybe do what Data3, Orcoda or ARB group do and not provide any guidance.

Peak fear again being spread by the industry via me. Must be contrarian time to buy soon.