Megaport Ltd (ASX:MP1) shares slid nearly 18% to $12.21 in early trading despite the software group delivering record full-year results, as weaker-than-expected guidance for FY26 weighed on sentiment.
The company posted FY25 earnings before interest, taxes, depreciation and amortisation (EBITDA) of $62.3 million, up 9% on FY24. This beat Visible Alpha consensus estimates of $61 million and landed at the upper end of Megaport’s guidance range of $57 million–$65 million. Total revenue for the year reached $227.1 million.
Barrenjoey analyst Eric Choi noted that Megaport’s FY26 revenue forecast of $260 million–$270 million was broadly in line with consensus expectations of $254 million. However, EBITDA guidance of $50 million at the midpoint fell well short of market forecasts of $69.5 million, reflecting what the company called “deliberate investment”.
RBC Capital Markets analyst Jonathan Atkin highlighted that Megaport’s implied capital expenditure of $47 million–$54 million for FY26 is 50–73% above consensus. “Management have previously highlighted their pipeline of products in development, however, the degree of pull forward in investment is unexpected,” he said.