Good morning, everybody, and welcome to Megaport's Half Year Results and Market Update Presentation today, the time of February 2021. I'd like to begin by taking you through the last Overall, few as reported in the last quarter year to date recently, monthly recurring revenue was up 11% at $6,630,000 at the period ending December 31. Overall, our annualized revenues are also up 11% at $75,000,000 and the total number of customers increased by two zero one in the six months to 2,043, also up 11%. In terms of the number of ports in the network, by 16%, up nine twenty four to six sixty one in the six month period. And also, the number of services in the period increased by 15%, up 2,566 to 19,278.
And the total number of data centers, installed data centers increased by 20, up 5%. As you recall, the majority of these data center installs came from the back end of our last financial year July, and we are going to continue to refocus on the build phase in the second half of this financial year. Continuing on, on our highlights and on our leading cloud partners, we've added two new cloud partners, both CloudWare and OBM Edge Cloud, to the ecosystem during this first half of this financial year. And the number of cloud on run as we continue to work with our partners increased by 23, up 12% to two twenty. And the number of cloud regions also increased by 11, up 10% to 120.
And the total number of enabled data centers closed was up 47,716, up 7%. And I do want to call out one additional highlight, and that is that Megaport, during the month of December 2020, after eight months completed and received its ISO 27,001 accreditation, which is really important for our Financial Services business and ongoing security information. In terms of looking at the breakdown regionally of the revenue performance in the first half of the year, this is comparing the period, the first six months of this financial year FY 'twenty one to the first six months of FY 'twenty, total revenue in North America increased by $5,800,000 or 51% in the same period last year, up to $17,200,000 In our APAC region, it increased 31% to CHF 12,300,000.0, and our European region increased by 30%, up to CHF 6,500,000.0. Overall, revenue increased by CHF 36,000,000 in the first six months of this year compared to the first six months of the preceding year, up 39% or CHF 10,100,000.0. Looking to the financial performance in the financial statements that were released in the four d this morning.
Overall, as I said, revenue was GBP 36,000,000, up 39% for the period. The profit after direct network cost was GBP 18,200,000.0, an improvement of 5,100,000.0. And overall, our profit after direct network cost margin maintained the same at 51%. Operating expenses were GBP 26,900,000.0. And overall, our normalized EBITDA reduced GBP 8,675,000.000 compared to 10,200,000.0 in the preceding period, an improvement of 15,000,000.
The EBITDA normalized EBITDA margin closed at negative 24% compared to 40%, an improvement of 16 basis points in the period. Overall, net loss for the year increased to GBP 38,400,000.0 compared to the GBP 80,900,000.0 the preceding year. And a lot of that was drawn to the nonoperating items of GBP 18,800,000.0, which included over GBP 17,000,000 for FX losses, the majority of which were unrealized. Looking to the revenue breakdown. As I said, revenue is GBP 36,900,000.0, an improvement of 39% from the preceding year.
48% or 17,200,000.0 is accounted for in North America, up from 48%. The APAC region was 12,300,000 to 34%, slightly down on the 36% preceding year. And Europe it was at 6.5%, accounted for 88%, also down 2% preceding year. As you can see from the split and continued growth, our largest regional market is our North American business, which has continued to grow, and we expect this to also take a larger share of the revenue going forward. We'll have a more detailed breakdown in the regional analysis later in the presentation.
Looking at the breakdown of the operating costs, net direct network costs of EUR 17,800,000.0 increased in the preceding year. A lot of this got through to majority of sites that were added in the latter half of our financial year, which we had the full cost for this this half of the year. There was an average 80 sites increase difference in the preceding periods compared to this period. And the profit of direct network costs, I'd say, are GBP 18,200,000.0. Employee costs of GBP 20,000,000, up 4,000,000 in the preceding period to continue to expand as we support the business growth.
Marketing costs and travel costs both reduced significantly, mainly due to COVID-nineteen as we've learned no travel as part of our company policy with COVID-nineteen. And obviously, a lot of events and conferences that we would have partaken in around marketing also reduced as a result of the COVID-nineteen restrictions. Overall OpEx, 26,900,000.0 compared to GBP 23,000,000, and GBP 3,500,000.0 uplift in the same period. Looking at the financial position balance sheet. Two callouts, current assets includes very much improved trade receivables as we reported in the most recent appendix 4C cash flow, where we had our debtor days have reduced to twenty three days compared the lowest we've had before with the highest number of receivables.
So notwithstanding the COVID environment, our customers are continuing to stay very sticky with Megaport, and that's going be very evident on the way that receivables and the payment of invoices and bills have continued to improve. Overall, closing cash position in the period was just under 145,000,000. Having a look at the overall group results at the December, for the month of December comparing to preceding periods in preceding years. As you can see from the chart, the operating leverage is starting to really come through at the December. Our profit after direct network cost margin was 54%, slight improvement on December preceding year, but the group EBITDA margin has improved down to negative 15% from negative 30% preceding year.
And this bodes well and is on track for our overall goal to achieve breakeven on an EBIT basis for the entire group by the end of the financial year June 2021 on an exit run rate basis. Switching to some business updates starting with some of the KPIs. Looking at the top chart, overall, there's been a consistent growth period on period over the last half year and preceding periods. Ports were up 16% and services were up 15% in the half year. The overall average revenue per port is $934 also up from the preceding period.
The monthly recurring revenue, however, grew by 11% in the last six months, and that's mainly due to the tailwinds we've seen in the appreciation of Australian dollar versus the U. S. Dollar, which I'll touch on a little bit later. Looking to the update on the Megaport Cloud ecosystem. Like I said, we had two twenty on ramps with addition 23 on ramps in the period.
That came from adding also two new partners, Cloudflare and OVH, and that also increased the number of cloud regions we were active in by 11 up to 120 as we continue to focus on our ecosystem and our partners. And later in the presentation, I'll talk a little bit about NV and SD WAN, but we continue we will continue to grow our platform and add more partners, not just cloud partners on time as we continue to address customers' needs and end destinations for their data usage. Looking to the network effect, and I would say, categorically, this is probably the last time I present this slide. This barograph in the top right hand corner illustrates, as usual, the ports in the outer ring and the density of the number of connections on the inner ring for services connecting. The bottom pie chart, 68%, and further increase not only in the number of services and customers and ports we have, but also the number of increase in the density of connectivity to one or more cloud providers.
Looking to the Spirograph, just to call out where some of the prominent cloud partners are at the roughly at 02:00 position is AWS in sort of an orangey color. And down at the 05:00 position, slightly pink color is where Microsoft Azure are. Slight to the left of Microsoft Azure, that slight green bar is the first time we have Oracle appearing on our Spirograph as more and more multi cloud comes into effect. And at the 03:00 position, slightly purply pink color is Google. So they're the four main prominent users with both AWS and Microsoft Azure, still the more prominent two cloud partners of choice for direct enterprise customers.
Just an update on switching to Megaport Cloud Router. And as I just mentioned about the multi cloud and hybrid cloud usage, and more customers are continuing to use MCR. We have an increase in terms of the number of MCRs. The total of MCRs in use in December is three eighty two, up 160 from the same period last year. Overall, average revenue per MCR is $812 per MCR, up 11 percent.
The average revenue per customer is steady at around $5,150 per customer, and the number of services continue to be steady at around 13.8 to 14 services per customer using an MCR. And we continue to use that. And as we continue to add more features and functionality to MCR, we expect this along with NV to continue to grow with customers and their usage for cloud and for Angular endpoint services across the ecosystem. Switching to an update on the Megaport Virtual Edge, MBE. First of all, an update on the platform space.
We have deployed to 11 major metros in already, four in The U. S, two in Europe and five in the APAC region with a further 10 metros to be added, in the coming months, with an additional seven in The US, three in Europe and two in APAC. And the MBE platform is available live for service to use it across the Megaport virtual edge from the March 31, so well on track with that. We've signed an MoU with VMware for their VeloCloud SD WAN, and that integration is underway. We expect that to be available in early part of quarter four.
And our technology partner pipeline with other providers, there's ongoing strong pipeline with ongoing negotiations will cover at least 50% of the SD WAN market share over the coming months. For an update on the Cisco SD WAN integration and service offering, customer trials are well underway. Everything is going pretty well. And the integration with Cisco WIP TeleServis offering will be available in this coming quarter sorry, fourth quarter coming up on track. The product launch will also be featured at the Cisco Live Premium Global Conference on the West Coast on the thirtieth and the April 1 to all of the Cisco resellers and the Cisco partners.
So that's all well on track as we get down to the final components of our go to market strategy together over the course of the next few weeks. I guess the overall message on the NVE is that we're on track, and we expect it to be live and available for commercial use at the start of the fourth quarter. Switching to an update on some of the regional highlights. Overall, as I said, growing ecosystem, we expect this further updates for the number of sites. We're at three eighty six across the global as we added 20 in here, majority of which came as an overflow from the preceding financial year.
We are switching to a build mode now that the MVE platform is pretty much up and running and from an installation point of view is done. We expect to be in the region between 400,000,000 to four zero five million in terms of ending FY twenty twenty one June run rate for installed data centers, and obviously, that has an impact on increasing our enabled data center footprint. Looking to a deeper dive in North America, 10 of those 20 sites that we added in the period came into the North American region, up 6% at 184. We added 136 customers to ten thirty nine, up 15%. And the total number of ports, added five sixty one in the six months to twenty fourteen, up 23%.
The total number of services, we added fifteen thirty one, up 23%. And our monthly recurring revenue grew by 15% to 3,000,000 on a reported Australian dollar basis. However, in U. S. Dollar terms, this monthly recurring revenue grew by 26% in the six months, and I will touch on that.
Next slide. Overall, profit of Direct Network gross margin improved by four points from 38% to 42% in the six months. Just to note, on the average revenue report of $981,000,000 while it did decrease by 6% in the period, in U. S. Denominated terms, it grew by 2% as opposed to the Australian reported average revenue report.
Looking to the currency impact and really, FX has been quite volatile in the past, probably preceding nine to ten months. Looking at the chart on the left hand side where we look at the monthly recurring revenue in U. S. Dollar terms, it grew by 26% from USD 1,700,000.0 to 2,200,000.0 in June from June to December. And then obviously reported in Australia terms, it grew from AUD 2.5 to AUD 2.9, which is an increase of 15%.
And you can see the impact on the Australian dollar depreciation of the Australian dollar against The U. S. Had an impact of 9% on our MRR. Now the purpose of showing this slide is really to draw out the fact that the underlying businesses continue to grow at double digit rates and notwithstanding the FX impact. I also want to point out that our North America region achieved EBITDA positive in the second quarter of this half year results.
So that means that all three regions, which I'll touch on later, all three regions are now EBITDA positive in the business. Looking to that very point on the operating leverage, and this is the snapshot at the month of December. You can see from the chart that in December, our run rate profit after direct network costs are running at 42% and that the business has turned EBITDA positive for November and during the period our core four of that period is now at 9% and continue to grow, and we expect that to improve over the second half of the year as the whole business as a whole shifts towards EBITDA breakeven for June on a run rate basis. Looking into the APAC Region. The second 10 of the 20 sites that we added came into the Pacific Region, growing by 10% to or 11% in the period.
Customers grew by 66, up 8%. The total number of ports grew by two thirty four, up 10%. Number of services in the region grew by seven eighty, up 10%. And overall, our monthly recurring revenue grew €2,200,000 also up 10%. So across most of our metrics, a consistent 10% growth rate in the period from June to December.
In terms of the profit after direct network costs, it declined slightly from 72% to 68% as we did invest in extra sites in the period and some network infrastructure. The Pacific region also includes our Japan market. Excluding the Japan business, our profit direct network cost is 72 percent. Looking to the operating leverage chart for the APAC region. And in December, as I said, the profit after direct network cost at the December was 68%, and our EBITDA margin was running at 36% and consistently growing year on year.
Excluding the Japan market, the profit after Direct Network cost was 72%, and the regional EBITDA margin was 43%. We are making very good inroads with our Japan market has continued to grow and great traction there, And we expect this time next year that, that business will be profitable and contributing to enhancing the margins in our APAC region. The European business, we didn't add any sites as we did most of the heavy lifting in the second half of the financial year last year. Total number of customers grew by 31, up 9%. The number of ports grew by 129, up 15%.
And the number of services grew by two fifty five, up 10%. Monthly recurring revenue remained flat. As you recall from our first quarter, our quarter one in this financial year, we had a softening in our monthly recurring revenue due to some repricing. That's now recorrected itself, and we expect this to improve in the second half of the year as we've seen in the growth rates in quarter two versus quarter one. Overall, the profit after Direct Network costs in the region slightly decreased by 64% to 60%, but we expect this to recorrect itself in the second half of the year.
Looking to the operating leverage for the month of December. Overall profit after direct network costs were 60% and the profit the EBITDA profit for the period is now running at 7%. So all three regions are now profitable. The APAC region turned profitable back in June at the beginning of the year or the end of last financial year, beginning of this financial year. So we expect that margin to continue to improve as revenue grows within the business.
So overall, I just wanted to give a quick update. In terms of COVID-nineteen, the health and well-being of our team is still the highest priority. Working from home protocols together with some with the suspension of all travel is to continue for some time. And this is for, again, like I said, safety and health and well-being of our teams. And we're a globally dispersed team over two thirty employees across 23 countries.
The impact on the Megaport's operational financial performance has not been significant as we've seen from the results and the performance. The financial position, it remains strong with over GBP 145,000,000 cash at the bank at the end of the period, allowing us to continue to grow and expand our network and our ecosystem. Also in terms of our platform information is that innovation and product focus, as I mentioned, we will continue to expand with the MVE platform, not just with SD WAN providers, but also other network function virtualization, which will come through during the rest of the calendar year 2021. And we're all really looking forward to a project that's very much on track, which is the successful launch of MVE with SD WAN in the start of quarter four. And finally, the other objective that we set ourselves for this year was that we are on track to achieve the EBITDA breakeven on an exit run rate for June.
Achieving EBITDA positive in the North America region this half year was an important milestone for us to be on track for that, and we've done that. So that all three regions are EBITDA positive, just leaves us to cover the corporate overhead during the second half of this financial year. So our focus remains very much on revenue growth and at the same time, achieving the group EBITDA positive on exit run rate. And finally, recently, we just announced that a new Chief Revenue Officer, Rodney Foreman, who joined us on the first of Feb. And this is part of our overall strategy to start to break into indirect and other channel selling and enabling other partners to sell on behalf as we continue to focus on adding more customers and revenue to the Megaport platform.
That concludes the presentation for this morning. There is some additional materials in the appendix for about Megaport and some case studies that are there for FYIs for anybody else who wants to get some more detail. I'd like to hand it over now for questions, please.
Vincent. It's Andrew here. I don't know if you can hear me.
Yes, I can.
Okay, sorry. I wasn't sure how to communicate a question. If I could just start with a couple. Do you mind clarifying the outlook comments on EBITDA? You say you're on track to exit this year on a breakeven run rate basis.
Basis. But obviously, you were profitable in that second quarter. Can you just sort of talk us through what costs you're anticipating will accelerate in the second half that are preventing you from simply saying, okay, we are now EBITDA breakeven? Or can EBITDA breakeven be
bit more? Yes. There's EBITDA breakeven for all three operating business units. There's still the corporate overhead, which we have to cover for the second half of the year, which we if I draw your attention to the chart on the operating leverage in the financial section, there's I think it's Slide 11. You can see from the chart, that's the overall group position at the December, whereas the three regions are all possible.
Okay, understood. So the regions remain EBITDA positive, but the covering of that corporate overhead incorporated into
the Is the last piece.
The last piece, and that gets covered, basically. I ask
with respect to the sorry? Well, you're saying the continued growth in revenue, this is where it all the margin improves from here on. And so we've cut the regions up and running. They're paying for themselves during the black. So as each region continues to deliver and bring more customers and grow it, that margin improves.
There's not too much more incremental cost to be added that will deflect that situation or the outcome of getting to EBITDA positive for the group as well.
Got it. And on growth, just on that sort of operating margin, at the gross profit level, the last two halves, there hasn't really been a change in gross profit margins, and you've indicated some of the costs that have gone up. But would you expect from this 2021 onwards, we would start to see that gross profit margin deliver operating leverage at that level? Or is there something that's changed that means your incremental margins are no longer in that sort of 70% region. Could you just help us understand that?
Yes, sure. I mean if you're looking at that same Slide 11 comparing December 19 to December 2020, we added 80 different sites in that same period. So the cost for those would have impacted the margin. So like every other period when we add and we do some heavy lifting on sites, we expect the preceding period to deliver as we monetize those. And as you know, we haven't added that many sites this financial year yet, and we're expecting to probably end up around that four zero five mark for the end of the year.
So we won't be adding anything like the costs in terms of increasing network costs that we had proceeding before. So it's very much focusing on leveraging what we've already got and built.
And some of that you
can see in the port utilization in each of the three regions where even in North America, even adding all those sites, we're only at 30% port utilization. So we've got 70% headroom there to actually sell into, and that's the focus now.
Okay. And if I could just sneak in one last question, just building on that, the appointment of a global revenue officer. I mean, how will this position in practice sort of make a difference to your go to market strategy or the rate at which you're adding new customers and selling services? Should we be able to see a discernible impact as the year goes on with respect to momentum in those metrics?
Yes, is the short answer. Less emphasis on direct enterprise selling because I think we've already got the team set to do that. So that will continue in its current format. Might be a couple of slips like tweaks, but we will be building in around channel and indirect selling mainly around system integrators, managed service providers, resellers in general. And so we're enabling other people to sell our product as part of their portfolio.
And so in other words, going for volume effectively, without having to necessarily increase a direct selling, team. So it's more of an indirect shift. Rodney's great experience over twenty, thirty years of doing that, a high track record in achieving that. And that skill and that knowledge and, experience is part of and the culture fit with our company is really part of why we're excited about taking on that journey. And I did talk about that.
That was a key role a key element that we wanted to do with our Chief Revenue Officer while we were going through the recruitment phase earlier this year.
Vincent, it's Bob here from JPMorgan. How are you?
Hi. How are you?
Good, good. Just a follow-up to that last point there on sort of going down that indirect sales path. I mean, how does that impact your margins going through the partner channel rather than the direct sales channel?
Yes. I mean, there's a commission structure. Each one is slightly different. But the trade off is you have a very lower OpEx impact, which I do have you do have that commission that comes off the top as typical of how it works. So it might be a little bit of a flattening on the margin, but it should be more than compensated by the volume of sales coming through and has a more improved impact on the EBITDA position rather than necessarily on the gross margin.
It really depends where the cost is. The cost tends to be covered in the cost of sales or direct network costs or net of revenue as opposed to an increase in the OpEx.
Great. And then just on the the MBE product that's launching quite soon. I mean, from from my perspective, like, how should we think about modeling that sort of going forward? It it doesn't seem like there's too much financial details out there. And yet, so could you just talk about it in comparison to your current development support and services model that you currently have?
Yeah. I mean, I can I can talk about it generally? It'll be a similar construct for each each partner that comes on to the network. So there'll be effectively a billing event around the actual NV instance itself where we charge for that. There will also be a charge for the volume of VXCs that will be used to connect depending on, how many branches and how many locations or regions or countries for that matter that are connected as part of enhancing an overall SD WAN footprint or network based on the customer.
And so it will be services will be impacted and there will also be an increase in services, which will be VXCs, which we track. There'll also be a new product, which will like MCR, where we track MCR separately, we'll be tracking MBE. So we will be able to report on that as we go forward. And that will be a separate billing instance. It's not too dissimilar from how the MCR construct is done.
Alright. Perfect. And then just finally for me. Yeah. I'm starting to see, like, the average revenue per report sort of coming through sort of flat across some of the the regions.
Where do you sort of feel that level will sort of flatten out that? It looks like most of the regions, services put put forth to start flattening out around that with free services per core level? I mean, is that how we should think about it at sort of a mature business level on the fee side?
Yes. Three to five is about the average, and it depends on the type of customers that are coming on. We are seeing more Fortune 500. We do take more in The U. S.
Compared to everywhere else. I think the problem with reporting with Australian dollars is that it's when you get volatility or the strengthening of the Australian dollar, it starts disproportionate to the actual growth rate. So we are seeing a lot more services, and you can see that the growth service per customer service per port, number of service in the half year are all like being around 20% to 23%. And the actual U. S.
Dollar revenue increased by 26%. So when you look at it in U. S. Dollar, maybe we should start reporting in U. S.
Dollars. When we start looking at in U. S. Dollars, it's much higher. It's just effective.
I think it's a little bit distorted and merged here by the fact that it's in Australian dollars. But I think the biggest growth region by far going forward will be The U. S. Market. And that's why we're and we always said that.
So we're focusing on that as we are in each of the markets, but I think in terms of acceleration of the growth it will be in that space in the short term.
All right. Perfect. Thanks for that.
And the next question from Jonathan from RBC Capital Markets.
Thanks. So question about margins. So Slides 22, twenty four and twenty six give a pretty good overview on kind of the regional level. And if you could maybe remind us the APAC margins that you're seeing now at the regional level, what are the reasons why you may or may not see that in Europe as well as in North America?
John, I expect that North America is like I said, we had a lot of if you look at the gross margin or the profit after network costs in North America, it does look a little bit less than where it should be compared to the other regions, but we have invested more than anywhere else in the last twelve months and six months in terms of the uplift in cost there in in network. So I think a true reflection would you you would see that bump up, over the next twelve or six to twelve months, and more akin to a a high sixties number, over the course of the the next, business, certainly over 02/2021. And and, obviously, I think we'll end up with a higher EBITDA margin in The US as a result of that. Part of the other reason in, the the margins are a little flatter in gross margin level is because partner commissions where we have most of our partners are actually in The US or North America. So that cost, instead of being in the OpEx line, and the cost of commissions of the direct sales is actually in the direct cost network line.
And so it looks a little different compared to others on a region by region basis, but I think the EBITDA number will far out strip that because there's less cost there going forward.
And then Cloudflare, new on the partner list. And I just wondered if you could talk to what sorts of business you're anticipating bringing into that relationship as distinct with some of your other traditional public cloud partners.
Again, a lot of it's got to do with private infrastructure and some private cloud, and this goes back to hybrid. So there's certain instances where customers want to use, both public cloud and the, I suppose, private infrastructure, private cloud, applications that that are in the cloud there and similar to OVH and similar to Rackspace, where they've got their own products, but, customers are looking to enhance that with access to public cloud. So having the ability to have all of that connected through one single payment last or through Megaport creates that ease of use for the end customer. Hence, that was one of the major reasons for for doing that. Again, thinking about the customer journey and what they're trying to connect, not always the public cloud tends to reside in some of the same services and same locations where where some of these other partners exist.
So people who actually connect all of that, together, is is the main driver.
Thank you.
And the next question is from Paul from the Evenson Partners. Please go ahead and unmute yourself.
Hi, guys. Just a couple for me. The first one on the virtual edge product. I just wanted to sort of draw sort of an analogy from you guys about so when when you started out with your your big partnerships with Digital Realty and CyrusOne back in the day, there was there was a a fair lead time in terms of how long it took you guys to train their Salesforce to start selling your product. And and I think, you know, that that that was up to, like, twelve months Yep.
To get those channels really firing. How should we think about that in terms of Cisco, your first and then any of the others that follow? And where are you up to in sort of training that channel?
Paul. Yes, good question. There's a big difference between each of the partners. I'll probably just I'll speak to Cisco one first. So Cisco has their own reseller network effectively over over 5,000 partners globally that they sell.
They we are going through a a go to market strategy and implementation plan with them, literally between now and March and culminating in the Cisco Live event where they all come where most people come together and stay in there to be virtual. But most of the heavy lifting, for Cisco selling their own product will be done by the Cisco team for their own Cisco reseller channel. We'll be part of that. And then most of the heavy lifting on our side where we have people coming to use Megaport and a virtual edge to use the Cisco product and bring in our Cisco license. We will be covering that element of ourselves when we're selling direct to a customer or to a reseller.
But in the majority of cases, the heavy lifting will be done by our partner Cisco, in this case, for educating and materials and collateral and how to, etcetera, for their own reseller channel. And we'll be assisting in supporting that initiative. So I really think that there is obviously, there's a beta testing customers that we're working through that will continue to use the service as we go live and initiate there. But we would expect over FY twenty twenty one a better uplift or a better uptake on that basis is very different than a data center operator.
Okay. Great.
And VMware and the others are slightly different in terms of how go to market, and that's what we're working through right now in terms of enabling that. So it will be that's their follow on slightly after that.
And just on the data center rollout plans, you guys have been pretty clear about your expectation for this year, and I think you've been signaling that the number of enabled data centers you're going to roll out is probably going to slow from here on an annual additions basis. Could you maybe talk to how that is gonna look in your direct network cost per data center? That that's trickled up year over year and and has every year. And my presumption is that is interacting with more the Enable's data center account as opposed to the installed data center account, but your calculation is based on the installed data center account. Yes, maybe if you can give your thoughts on just how those metrics are going to interact.
Yes. I think it's fair to say that we do have a moderation going forward from this year, notwithstanding new product launch with MVE. I think some further expansion and if there is to be a boost in data center sites, it will come from new regions or new markets, which are always a little slower as you work through the challenges around that. And we are having extensive conversations around those markets at the moment. They just take a bit longer.
Our focus has been very much, as I said, the beginning of the year, to build as much this first half year, focused on getting MBE and that up and running and obviously on the revenue growth of the existing products. And in the second half, we'll uplift and we're probably going to go from three yes, I'll probably end up around four zero five range. And I think we'll have a similar kind of cadence going forward on the installed data centers year by year work As through markets and as the edge evolves, and I think then that will probably get enhanced by new markets or new countries or regions that we go into or supplemented by that. In terms of the enabled, yes, very much around using the technology and the partnerships we have with our data center operators to get deeper reach. That program is working quite well, and I think we're really going to see the benefit of that going forward, where we're working very closely with data centers on an enhanced program of how to sell further into that selling with our partners.
So we're and you can see that in some of the utilization in terms of the number of ports for data centers that continues to increase period on period.
And
the next question is from James from UBS.
Just a couple of questions for me on the SD WAN opportunity, if possible, please. Is there any way you can give us a bit of a sense in terms of how advanced the discussions are with those other partnerships that are in the pipeline? And do those integrations become incrementally easier or faster as you've done more and more of them? Or is it just kind of more of the same? Yes.
Okay. Well, look, as I said before, Cisco is going to be the first one off the first cab off the rank. The second one is probably gonna be weeks after that, and the third one's gonna be weeks after that again. We've got three that are very advanced, Cisco plus two others. The other ones are in pre MOU discussions.
So, you know, that's that's the cadence. In terms of the work effort and the work workload, the one that we've done with Cisco is a fully integrated single pane of glass through the Cisco portal. And the other ones are going to go through a two phase approach where we'll be both using Megaport and their existing portal and then we'll further integrate. But the workloads is required about 70 to 80% of that workload is common and they get a part of it. So they will happen much faster and quicker, most of the heavy lifting being complete and done, which is typically how we build it with other clouds and all of our API integrations for 80%.
We aim for 80 of it being commonality. So once you build it once, it's for use, and then the other 20% is tweaked to allow for customer workflows and the integration with the partners' systems.
Hi. This is Nick Harris. Can I ask a question?
Hi, Nick. Yeah. Excellent.
Thanks, Vinny and Sean. Just a couple of questions for me. Just trying to get a feel for the direct side of things. Obviously, you talked about what's happening with indirect. But just on the direct side of things, is that rate of sales broadly stabilized now?
And I guess, just supporting that, could you just talk a little bit about the number of direct salespeople you've got now by the regions? And has that sort of changed dramatically in the last twelve months? And then the second question was just for Sean, who's looking a bit lonely there. Just on currency, would you guys contemplate switching to U. S.
Dollars? Obviously, FX is moving things around dramatically, but could you change your accounts to U. S. Dollars? Would that be a reasonable, sensible thing to do?
Well,
maybe, Sean, I'll let you answer that one first.
Yes. It may well be a reasonable sensible thing to do and something that I'll be looking at over the next while about functional currency because it's not just about the percentage of revenue that we derive from US dollars. It's about our overall expense and from our network cost to reach our staff cost. And it's definitely something we will look at. There's quite a little bit of work to do.
Be casting all our balance sheet for a change of functional currency. But certainly, if that is the case, then we would probably look to change our reporting currency at the same time.
Thanks, Sean. Just Nick, on the direct sales component. We haven't changed the structure too much since in the last six to eight months from where we've been at. We are having a good hard look as we've changed from an account management structure where we've over 2,000 customers. So we've bolstered up our account management team to support those customers as we continue to add new ones and trying to focus our direct sales enterprise team and data center teams on actually acquisition of new customers and services.
So that transition has happened, and we will continue to evolve that over time. It's also a great opportunity for, as I said to earlier on, for Rodney when he come in. Obviously, he's got he's responsible for all of the revenue in the business. And so it's a it's a great opportunity for someone to come in with that amount of experience, for us to have a look at at how we're set up and how we're structured and more importantly, continue to tweak that sort of scales, which is really important. And at the same time, it give us access, greater access and more efficiency about acquiring new customers and services.
So hasn't too much changed in terms of the number of people, But we have, as I said earlier and said previously, at the full year, we have pivoted towards more reliance and use of account management to support the existing customer base. And I think that will continue to evolve as we add more customers. Do we have any anybody else wants to ask any more questions?
Yes. This is Roger Samuel here from Jefferies.
Hi. How are you?
Hey. Good. Thanks. Morning, guys. First question for me is do you have a sense that some of your enterprise customers or potential customers in 2020 had delayed their IT spend?
And what's your sense about the outlook for your pipeline for this kind of year?
Yes. I mean, I think if you just if you're referring to the calendar year 2020,
yes,
which would have calendar year. I think, yes, there was big swings in terms of what happened, and that's evidenced by our quarterly, KPIs. So you could see the beginning of the year was, it was a little slow in January to begin the deal when COVID came out in February. And then it was early February, and then there was this huge scramble, for turning up additional service mainly from our existing existing base. Then we went into a reasonably quieter, flatter period, in terms of the June, July period, where we had not as many new customers or new service being turned up, but mainly the revenue was driven by the existing customer base.
Once we came to August, we also saw that the suppose a lot of people said, okay, COVID is COVID, is what it is, but we also need to accelerate some IT spend, particularly in the cloud, as we, prepare for, you know, for lockdowns, more working remote working, working from home, etcetera, and the ability for businesses to continue. And so we had a huge increase in the number of ports and new customers there in the quarter ending in September. And then towards the back end, we had another little bit tapering off where we had a bit increasing our monthly recurring revenue, but less so on the ports and customers. And to be honest, a lot of that has also got to do with the seasonality. Pretty much once we hit Thanksgiving, everything just went into kind of lockdown.
So that was 2020. And in the general feedback and talking to our data centers as well, we had a similar they had a similar pattern in terms of colocation, in terms of spend and new business in their pipeline. So we had strong pipelines, but people were just sitting on it and holding back until they got the green light internally. And that was that ebbing and flowing we talked about in 2020. And way we are at the moment, I think, really coming back post Christmas, the first week or two and same trend the last two or three years, people are just dusting off the cobwebs.
It's the new financial year for a lot of businesses in The U. S, new budgets and planning cycles, and are ready to go and kick into execution mode. So we're seeing a lot of that, early this quarter coming into the planning for 2021. I think there's also I think there's sorry, there's someone speaking in the background if you wouldn't mind muting. There's I think also for FY 'twenty one, we're seeing a lot of businesses like starting to get over COVID-nineteen and the fatigue around that and just getting on with running business and less sort of stop start motion that we're seeing, and that's coming from a lot of conversations we've had with partners and customers.
And a lot of it's been there is a sort of an optimism at some point in time when we'll get vaccines and that life will return to some better form of normality than what we've been through. And businesses have to go on and IT infrastructure can't be held up both either on the software, on the network or the hardware or infrastructure side. That's the common theme and the feedback we've been getting.
Sure. Thanks. My next question is on Asia Pacific. And I noticed that the number of ports per data center went down by 2%. I'm just wondering what's the reason behind this?
Is it there was a customer churn or there was a No. Yeah.
No. No. It's not customer churn because yeah. No. Because our customers went were increased.
No. It wasn't customer churn. It was we've added 10 data centers into the region, which I think is the most we've added in any one short period, and a lot of them came, like I said, from the fall over from there. And so when you add 10 more data centers in, you create more ports available in the network. So it's just a function of dividing one number by the other.
And hence, the port utilization also went down because we've added those data centers. So that increases the number of ports available to sell. So I think you'll see that number kick on. That is purely a fact that we've added more capacity.
Sure. Perhaps the last one for Sean is what's your outlook for the corporate cost in the second half? Because you jumped quite a lot in the first half, up almost 20% year on year.
So what's your target for the second half in terms of corporate cost?
Some of the corporate cost that we see, I thought we saw standing up were related to a significant increase in our in our insurance costs, and there were some one off type costs and professional fees that we don't see going into into the second half. I would expect I I would hope to get back to address where we're starting to invest a little bit more in marketing and travel as business gets back to normal, But I don't see any significant uptick on our our spend rate in h two over h one.
Alright. Thank you.
Is there any questions from the audience? You can just unmute yourself and then ask the questions, or you can just raise up your hand. Thank you. Should be no more questions from the audience.
Okay. Thank you. I guess we'll we'll conclude the meeting then. I know there's a there's a a hefty number of one on ones lined up for over the next couple of days. So with that, I'd like to thank everybody for participating on the call.
We look forward to catching with you all a bit later. Thank you. So