This upgrade announucement hasn't come through on the services linked to ASX yet, so I have pulled it off the ASX website directly.

A nice upgrade, indicating that the new strategic direction is yielding results. SP has poppsed as a result.

FULL Text of the Announcement

Upgrading EBITDA Guidance FY2023 and FY2024

Megaport Limited ACN 607 301 959 (Megaport or Company) (ASX: MP1) announces that, as a result of

continued improvement in the Company’s operating metrics and financial performance, the Company is

upgrading its FY23 Normalised EBITDA¹ to be in the range of $19M to $21M (compared to previous

guidance of $16M to $18M). Reported EBITDA² Guidance is now expected to be in the range of $24M to $26M.

The Company also confirms that it was net cash positive³ in Q4FY23 inclusive of redundancy payments of

approximately $2.6M.

While the Company is still finalising its FY24 budget with the new CEO to appropriately capture network

expansion, product and revenue generating headcount, the Company expects its FY24 EBITDA guidance

to be higher than the previous guidance of $41M to $46M. More detailed FY24 guidance will be provided

no later than the release of the FY23 full year results on 22 August 2023.

Additionally, excluding any future strategic initiatives the Company may decide to undertake, Megaport

confirms it expects to be net cash positive³ for FY24 after taking into account the planned incremental

growth in sales headcount and planned capital expenditure. Further details will be provided no later than

the FY23 full year results presentation.

The Board has also decided to terminate its $25M HSBC debt facility due to a lack of requirement and to

reduce costs. The Board is confident that, should the Company have a requirement for bank debt in the

future, it would be able to obtain a significantly larger facility on terms reflecting the improved financial

performance of the business.

Authorised by the Board of Megaport Limited.

Disc: Held in RL and SM

So Bevan didn't have to spend too long getting his hand dirty. Michael Reid, new CEO, looks like an Aussie who went to Silicon Valley via Cisco. Becoming CEO of $MP1 brings him home to Brisbane.

Compensation look a bit rich to me for a company with a market cap of $600-700m and losing money. $1m fixed per annum; maximum $2m STI and $2.25m LTI, with the STI and LTI released in three tranches over FY24, FY25 and FY26. Performance conditions a mix of EBITDA growth, Customer Growth, Revenue Growth and TSR performance. Nothing about earnings or cashflow, alas.

CFO also now moving on. Full text of announcement below.

Interestingly, this is how he describes himself in his LinkedIn Profile. I will be watching to see if he holds to the current commitment to continue the path to cash flow breakeven with current cash reserves. (Talk of "rocket ships" makes me nervous, but my holding is so small now, I am prepare to hold on an see.)

I also note, our man didn't spend long on his "rocketship" before hitting the "eject" button.

From LinkedIn

Chief Revenue Officer

ThousandEyes (part of Cisco) · Full-time

Jun 2021 - Present · 1 yr 10 mos

San Francisco Bay Area

Leading 385 Global Sales SUPERHEROES to build upon the astounding growth of this pure SaaS rocket ship as we charge towards $1B in ARR. Heading up Sales, Solutions Engineering, Channel, Customer Success, Revenue Operations and Strategy & Planing teams, attracting, hiring and retaining crazy, wicked, diverse talent who think BIG and want to make a difference.

Full Text of Annoucement

ASX Announcement 28 March 2023

Megaport Limited Appointment of Chief Executive Officer and Management Update

Megaport Limited ACN 607 301 959 (Megaport or Company) (ASX:MP1), the industry-leading Network as a Service platform, today announces that its Board of Directors has appointed Michael Reid as the Company's Chief Executive Officer, effective 15 May 2023.

Mr Reid joins Megaport from Cisco, where he currently serves as Chief Revenue Officer for ThousandEyes, one of Cisco’s fastest growing SaaS businesses.

Mr Reid brings over 19 years of industry expertise and experience to Megaport. During his time with ThousandEyes, Mr Reid transformed the organisation’s go-to-market efforts and helped grow ThousandEyes into the largest cloud, SaaS and internet visibility platform in the world. In addition, Mr Reid expanded the team from 150 personnel to nearly 400, grew ARR by 2.4 times and extended the business into new regions across the globe. Mr Reid is known for his passionate and transformative sales and global go-to-market leadership focusing on culture, people and execution. Prior to ThousandEyes, Mr Reid’s experience with Cisco includes serving as head of global sales for multiple Cisco acquisitions, leading sales for the northern region of Australia, and leading sales for the country’s largest financial services customers.

Bevan Slattery, interim CEO and Chairman of the Board, said, “We are thrilled to welcome Michael as the new CEO of Megaport. Michael is a proven technology growth leader with deep experience in developing and leading multiple global recurring revenue SaaS businesses. His expertise and drive will be pivotal to strengthening Megaport’s go-to-market strategy and product roadmap and leading the Company into its next stage of growth.”

Mr Reid holds a Degree in Aerospace Engineering from QUT and was CEO Magazine Sales Executive of the Year 2019. Mr Reid will initially commence his role in San Francisco where he is currently based, but will relocate to Brisbane by July 2023. The key terms of Mr Reid’s employment agreement are attached to this announcement. Further details of the remuneration paid to Mr Reid each year will be disclosed in the Company’s annual remuneration reports.

Mr Reid will succeed interim CEO Bevan Slattery, who will continue in his role as Chairman of the Board. The Company advises that it has signed an interim CEO appointment letter with Mr Slattery. The key terms of Mr Slattery’s appointment are attached to this announcement.

The Company also advises that Sean Cassidy is leaving the position of Chief Financial Officer, effective today. Ms Leticia Dorman will be appointed as interim Chief Financial Officer while the Company undertakes a global executive search. Ms Dorman has worked for the Company since October 2021 in the role of Head of Finance and, prior to joining Megaport, was Head of Commercial Revenue at Brisbane Airport Corporation. Ms Dorman has over 15 years’ finance experience, including external audit experience at KPMG, and is a member of Chartered Accountants Australia and New Zealand (CA ANZ). Authorised by the Board.

Disc: Held IRL (0.45%) and SM (1%)

A good call today. I just love the detailed metrics management continue to update on product growth and customer growth year after year.

Further to my earlier note, and without getting into a lot of detail, there were a few important items shared which are significant in the context of the key question: will $MP1 become profitable before havng to raise more capital?

• The high FY22 $50m investing CF, a big step up, had two non-recurring elements. First, a $10m acquisition payment and second a $10m inventory charge ensuring that $MP1 infrastructure rollout was not constrained by shortages in the chips and electronic components. Sean Cassidy (CFO) indicate they were holding 9 months of kit to stay ahead of supply chain problems. And I am glad they are because there were no supply chain stories given as part of the revenue narrative. (There are mixed industry report on semicondictor supply chain outlook, ranging from firms saying they are already easing to others projecting improvements later this year and into 2023. Irrespective, $MP1 appear on top of things and Sean even spoke about looking forward one day to this effect reversing, i.e., working capital reduction. Personally, I hope they don't hurry!)
• Sean guided that $30m would be a more normal capex going forward.
• Sean and VIncent both pretty confident that operating CF breakeven is now passed. So last Q not a one-off, despite the reported favourable one-off items.
• Sean said that once OperatingCF breakeven is achieved, then FCF break-even will follow soon after "in a few quarters" - you can do the maths.
• Sean stated that further capital raising would not be required before achieving CF breakeven.
• Sean stated repeatedly that he is confident that over time this will become a 70+% GM business (APAC already 79% but follows more of a direct sales model, so high margin that RoW)

I came away from the call with a sense of confidence in the management that the firm will soon move to becoming cash generative, even though they are very disciplined in not giving guidance or timelines. I do respect consistency!

Everything about the call gave me a sense of strong momentum. Still, I am going to be disciplined and will wait for one more Q to see operating leverage trend evidence before increasing my position. (Just hope the bear market lasts a bit longer!)

Disc: Held IRL not on SM (when I buy again IRL, I'll do it on SM too)

https://newswire.iguana2.com/af5f4d73c1a54a33/mp1.asx/2A1389724/MP1_FY22_Full_Year_Investor_Presentation

$MP1 presents this afternoon at 1pm. Registration link here: ttps://openexc.zoom.us/webinar/register/WN_Qs4uZ4i1RWyLGu7ylMUkeA

There's not a lot new that I can see in the presentation given the fairly comprehensive updates we get in the briefings accompanying the 4Cs. It is good to hear the focus on building operating leverage. (At the cash level you can see the gradual long term trend in the 4C analysis below.)

I also find the detailed cohort analysis helpful - each cohort of customers increases both number of services year on year and average revenue per customer... consistently going back 9 years.

One area of concern is that Total OPEX is growing fast than revenue (42% vs. 40%) with most of this occurring in the indirect cost elements. Part of this is due to the return of marketing and travel costs, now that international conferences are back on. So, something to watch in the next period.

For me the top line is that $MP1 is maintaining strong revenue growth, but I remain cautious because it is yet to demonstrate strong operating leverage. With the global footprint now established this should in theory now be easier to demonstrate. For now, with a cash balance of $82.5m and a cash burn of $54.2m in the last year, shareholders will be nervous about further capital raisings. I expect balance sheet and the confidence in the path to breakeven to feature significantly in the Q&A on the call today.

I reduced my holdings in $MP1 in March-21 and again in June-21 (as part of my paring back cash burners) so I now only hold 1.5% IRL. Am watching it closing and will increase if ca demonstrate progress in developing operating leverage while maintaining growth in the next 2Q periods.

Disc: Held IRL