Megaport reports quarterly so the majority of things were already known to the market. Things that caught my eyes in FY22 report is:
Reduced workforce:
Now we can take this as positive that management is adapting to the new market conditions and responding accordingly or we can be sceptical about it : I am not 100% certain but I am leaning towards negative at this stage.
![92471b1b91017cabd4e6824f05588e778a6472.png](//strawman.com/member/uploads/objects/1e/92471b1b91017cabd4e6824f05588e778a6472.png)
Gross and EBITDA Margin
![2a90b1226030c7409ec374575b13e65b7d0841.png](//strawman.com/member/uploads/objects/83/2a90b1226030c7409ec374575b13e65b7d0841.png)
![77cdef1fc588fe7b5e75ea4085a4632061ef37.png](//strawman.com/member/uploads/objects/b4/77cdef1fc588fe7b5e75ea4085a4632061ef37.png)
On the call, it was evident that CFO is ok with guiding the market that an APAC-like Gross margin won't be achievable but they are comfortable with a 70% Gross margin in the future for the group.
Churn or Customer cohort survival
Compound annual churn rate is trending toward 7% and decreasing.
If I am reading this graph correctly, it tells me that Megaport loses roughly 20% of the newly signed customers in the first 2 years ( Probably because they used megaport services for a specific projects rather than recurring usage)
![85c28d9b34f133d37ec9b047e4eabee75d4ebf.png](//strawman.com/member/uploads/objects/61/85c28d9b34f133d37ec9b047e4eabee75d4ebf.png)
Competition
On the call, the CEO mentioned that they have never lost a deal because of the price or specific company as yet. They lose only if the customer chooses to go with the Internet instead of Megaport services ( i.e for workload not requiring great network and/or security).
CEO Remuneration
CEO fixed rate increase from 547K to 1m ( I find that's a huge jump)
![bcca8f421d3625b9fb9f0e102417dc966388fe.png](//strawman.com/member/uploads/objects/33/bcca8f421d3625b9fb9f0e102417dc966388fe.png)
How megaport sell its services
The following illustrates the evolution of other channels to sell its services. Obviously, we could see the investment in FY22 for it - but hopefully, it will increase the growth from hereon.
![81d7ac9932d3baf99dd32c11d885f4f58641a3.png](//strawman.com/member/uploads/objects/30/81d7ac9932d3baf99dd32c11d885f4f58641a3.png)
Overall, things are going very smoothly and still need to monitor the growth and margin trends - can't wait for FY23