Good morning, everybody, and welcome to Megaport's half-year results and market update presentation today, the 10th of February 2021. I'd like to begin by taking you through some of the company highlights. Overall, as reported in our last quarterly update recently, monthly recurring revenue is up 11% at AUD 6.63 million, at the period ending on the 31st of December. Overall, our annualized revenues are also up 11% at AUD 75 million. The total number of customers increased by 201 in the six months to 2,043, also up 11%. In terms of the number of ports in the network increased by 16%, up 924 to 661 in the six-month period. The number of services in the period increased by 15%, up 2,566 to 19,278. The total number of 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 into July. We're going to continue to refocus on the build phase in the second half of this financial year. Continuing on our highlights and on our leading cloud partners, we've added two new cloud partners, both Cloudflare and OVHcloud, to the ecosystem during this first half of this financial year. The number of cloud on-ramps, we continue to work with our partners, increased by 23, up 12% to 220. The number of cloud regions also increased by 11, up 10% to 120. The total number of enabled data centers closed was up to 47 of 760, up 7%.
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 27001 accreditation, which is really important for our financial services business and our 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 2021, to the first six months of FY 2020. Total revenue in North America increased by AUD 5.8 million or 51% from the same period last year, up to AUD 17.2 million. In our APAC region, it increased 31% to AUD 12.3 million. Our European region increased by 30% up to AUD 6.5 million.
Overall, revenue increased by AUD 36 million in the first six months of this year compared to the first six months of the preceding year, up 39% or AUD 10.1 million. Looking to the financial performance in the financial statements that were released in the 4D this morning. Overall, as I said, revenue was AUD 36 million, up 39% for the period. The profit after direct network cost was AUD 18.2 million, an improvement of AUD 5.1 million. Overall, our profit after direct network cost margin maintained the same at 51%. Operating expenses were AUD 26.9 million, overall, our normalized EBITDA reduced to AUD 8.675 million compared to AUD 10.2 million in the preceding period, an improvement of 15. The normalized EBITDA margin closed at a negative 24% compared to 40%, an improvement of 16 basis points in the period.
Overall net loss for the year increased to AUD 38.4 million compared to the AUD 18.9 million in the preceding year. A lot of that was down to the non-operating items of AUD 18.8 million, which included over AUD 17 million for FX losses, the majority of which were unrealized. Looking to the revenue breakdown. As I said, revenue is AUD 36.9 million, an improvement of 39% from the preceding year. 48% or AUD 17.2 million was accounted for in North America, up from 48%.
The APAC region was AUD 12.3 million at 34%, slightly down on the 36% preceding year. Europe was at AUD 6.5 million, accounting for 18%, also down 2% from the preceding year. As you can see from the split and the continued growth, our largest region and market is our North American business, which has continued to grow, we expect this to also take a larger share of the revenue going forward.
I'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 cost of AUD 17.8 million increased in the preceding year. A lot of this got through the majority of sites that were added in the latter half of our financial year, which we've had the full cost for it in this half of the year. There was an average 80 sites increase difference in the preceding periods compared to this period. The profit after direct network cost, as I said, are AUD 18.2 million. Employee costs of AUD 20 up, AUD 4 million in the preceding period to continue to expand and support the business growth. Marketing costs and travel costs both reduced significantly, mainly due to COVID-19 as we little or no travel as part of our company policy with COVID-19.
Obviously, a lot of events and conferences that we would have partaken in around marketing also reduced as a result of the same COVID-19 restrictions. Overall, OpEx aud 26.9 million compared to AUD 23.5 million uplift in the same period. Looking at the financial position balance sheet. Two call-outs. Current assets include 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 33 days. The lowest we've had before was the highest number we've received. Notwithstanding the COVID environment, our customers are continuing to stay very sticky with Megaport, and that's been very evident in the way that the receivables and the payment of invoices and bills have continued to improve. Overall closing cash position in the period is just under AUD 145 million.
Having a look at the overall group results at the end of 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 end of December, our profit after direct network cost margin was 54%, slight improvement on December preceding year. The group EBITDA margin has improved down to negative 15% from negative 30% the preceding year. This bodes well and is on track for our overall goal to achieve breakeven on an EBITDA 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 on 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 AUD 934, also up from the preceding period. The monthly recurring revenue, however, grew by 11% in the last six months. That's mainly due to the tailwinds we've seen in the appreciating 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 220 on-ramps. We additioned 23 on-ramps in the period. That came from adding also two new partners, both Cloudflare and OVH. 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.
Later in the presentation, I'll talk a little bit about MVE and SD-WAN, but we will continue to grow our platform and add more partners, not just cloud partners, onto it 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'll present this slide. The spirograph 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%, another 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 2:00 position is AWS in sort of an orangey color. Down at the 5:00 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. At the 3:00 position, that slightly purply-pink color is Google. 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 and switching to Megaport Cloud Router. As I just mentioned about the multi-cloud and hybrid cloud usage, more 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 at the end of December is 382, up 160 from the same period last year. Overall average revenue per MCR is AUD 812 per MCR, up 11%. The average revenue per customer is steady at around AUD 5,150 per customer, and the number of services continuing to be steady at around 13.8-14 services per customer using an MCR. A continued use of that. As we continue to add more features and functionality to MCR, we expect this along with MVE to continue to grow with customers and their usage, for cloud and for any other endpoint services across the ecosystem. Switching to an update on the Megaport Virtual Edge, MVE. First of all, an update on the platform status. We have deployed to 11 major metros 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 U.S., three in Europe, and two in the APAC. The MVE platform is available live for service to use it across the Megaport Virtual Edge from the 31st of March, 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 the early part of quarter four. Our technology partner pipeline with other providers, there's ongoing, strong pipeline, but 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 the service offering, customer trials are well underway. Everything is going pretty well.
The integration with Cisco Viptela service 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 Premier Global Conference on the West Coast on the 30th and the 1st of April to all of the Cisco resellers and the Cisco partners. 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 MVE 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 386 across the globe as we added 20 in here, the 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 - 405 in terms of ending our FY 2021 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. Ten 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 1,039, up 15%. The total number of ports, we added 561 in the six months to 3,014, up 23%.
The total number of services, we added 1,531, up 23%. Our monthly recurring revenue grew by 15% to AUD 3 million on a reported Australian dollar basis. However, in U.S. dollar terms, this monthly recurring revenue grew by 26% in the six months. I will touch on that next slide. Overall, profit after direct network cost margin improved by four points from 38% to 42% in six months. Just to note on the average revenue per port of AUD 981, while it did decrease by 6% in the period, in U.S. denominated terms, it grew by 2% as opposed to the AUD reported average revenue per port. Looking to the currency impact, really FX has been quite volatile in the past, probably preceding 9-10 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 $1.7 million-$2.2 million from June to December. In obviously reported in AUD terms, it grew from AUD 2.5-AUD 2.9, which is an increase of 15%. You can see the impact on the Australian dollar, the appreciation 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 continued to grow at double-digit rates and notwithstanding the FX impact. Also want to point out that our North American region achieved EBITDA positive in the second quarter of this half-year results.
That means that all three regions, which I will touch on later, all three regions are now EBITDA positive in the business. Looking to that very point on the operating leverage, 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%. The business has turned EBITDA positive for November. During the period, our quarter four of that period is now at 9% and continued to grow. 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% or 11% in the period.
Customers grew by 66, up 8%. The total number of ports grew by 234, up 10%. Number of services in the region grew by 780, up 10%. Overall, our monthly recurring revenue grew AUD 2.2 million, also up 10%. Across most of our metrics, a consistent 10% growth rate in the period now from June to December. In terms of the profit after direct network costs, it declines 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 after direct network cost is 72%. Looking to the operating leverage chart for the APAC region.
In December, as I said, the profit after direct network cost at the end of 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 markets, continue to grow and great traction there. 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. The number of customers grew by 31, up 9%. The number of ports grew by 129, up 15%, and the number of services grew by 255, up 10%.
Monthly recurring revenue remained flat. As you'll recall from our first quarter one in this financial year, we had a softening in our monthly recurring revenue due to some repricing. That's now re-corrected 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%-60%. We expect this to re-correct itself in the second half of the year. Looking to the operating leverage for the month of December. Overall profit after direct network costs was 60%. The EBITDA profit for the period is now running at 7%. All three regions are now profitable. The APAC region turned profitable back in June, at the beginning of the year.
By the end of last financial year, beginning of this financial year. We expect that margin to continue to improve as revenue grows within the business. Overall, I just wanted to give a quick update. In terms of COVID-19, the health and wellbeing of our team is still the highest priority. Working from home protocols, together with the suspension of all travel, is to continue for some time. This is for, again, like I said, safety and health and wellbeing of our teams. We're a globally dispersed team, over 230 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 AUD 145 million cash in the bank at the end of the period, allowing us to continue to grow and expand our network and our ecosystem. In terms of our platform information, 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. 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. Finally, the other objective that we set ourselves for this year was that we are on track to achieve the EBITDA break even 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. That all three regions are EBITDA positive just leaves us to cover the corporate overhead during the second half of this financial year. Our focus remains very much on revenue growth, and at the same time achieving the group EBITDA positive on an exit run rate. Finally, recently we just announced a new Chief Revenue Officer, Rodney Foreman, who joined us on the 1st of February. This is part of our overall strategy to start to break into indirect and other channels of selling and enabling other partners to sell on our behalf as we continue to focus on adding more customers and revenue to the Megaport platform. That concludes the presentation.
Perhaps tomorrow there is some additional materials in the appendix for about Megaport and some case studies that are there for FYI, for anybody else who wants to get some more detail. I'd like to hand it over now for questions, please.
Hi, 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 break even run rate basis. 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 break even." Or can be EBITDA break even?
Yeah. There's EBITDA break even for all three operating business units. There's still the corporate overhead, which we have to cover for the second half of the year. If I draw your attention to the chart on the operating leverage in the financial section. I think it's slide 11. You can see from the chart that's the overall group position at the end of December.
Okay.
Whereas the three regions are all positive.
Okay, understood. The regions remain EBITDA positive, but the covering of that-
Yeah.
Corporate overhead, incorporated into.
Is the last piece?
The last piece, and that gets covered as we go. Can I ask quickly?
Yeah.
Sorry.
I was just saying, the continued growth in revenue, this is where the margin improves from here on in. We've got the regions up and running. They're paying for themselves. They're in the black. As each region continues to deliver and bring more customers and growth, 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 a whole.
Got it. 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. Would you expect from this second half of fiscal 2021 onwards, we would start to see that gross profit margin deliver operating leverage at that level? Is there something that's changed that means your incremental margins are no longer in that sort of 70% range? Region. Could you just help us understand that?
Yeah, sure. If you're looking at that same slide 11, comparing December 2019 to December 2020, we added 80 different sites in that same period. The cost for those would've impacted the margin. Like every other period when we do some heavy lifting on sites, we expect the proceeding period to deliver as we monetize those. As you know, we haven't added that many sites this financial year yet, and we're expecting to probably end up around that 405 mark for the end of the year. We won't be adding anything like the costs in terms of increasing network costs, like that we had preceding before. It's very much now focusing on leveraging what we've already got and built.
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. We've got 70% headroom there to actually sell into. That's the focus now.
Okay. If I could just sneak in one last question, just building on that. The appointment of a global revenue officer, how will this position, in fact, 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 considerable 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. That will continue in its current format. Might be a couple of slight tweaks, but we will be building in around channel and indirect selling, mainly around system integrators, managed service providers, resellers in general. We're enabling other people to sell our product as part of their portfolio. In other words, going for volume effectively, without having to necessarily increase a direct selling team. It's more of an indirect shift. Rodney's great experience over 20, 30 years of doing that and a high track record in achieving that and that skill and that knowledge and experience and the cultural fit with our company is really part of why we're excited about taking on that journey. I did talk about that.
That was a key element that we wanted out of our Chief Revenue Officer role. We were going through the recruitment phase earlier this year.
Terrific. Thank you. I'll jump back in the queue.
Hey, Vincent. It's Bob here from JP Morgan. How are you?
Hi. How are you?
Good. Just a follow-up to that last point there on going down that indirect sales path. How does that impact your margins going through the partner channel rather than the direct sales channel?
There's a commission structure. Each one is slightly different. The trade-off is you have a lower OpEx impact. You do have that commission that comes off the top, as typical of how it works. 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.
Okay, great. Just on the MVE product that's launching quite soon. From my perspective, how should we think about modeling that sort of going forward? It doesn't seem like there's too much financial details out there. Yet, could you talk about it in comparison to your current product and support and services model, is that what you said?
Yeah. I can talk about generally. It'll be a similar construct for each partner that comes onto the network. There'll be effectively a billing event around the actual MVE 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 or how many locations or regions or countries for that matter, that are connected as part of announcing an overall SD-WAN footprint or the network based on the customer. 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 a bit like MCR, where we track MCR separately, we'll be tracking MVE. We will be able to report on that as we go forward. That will be a separate billing instance.
It's not too dissimilar from how the MCR construct is done.
All right, perfect. Just finally from me. I'm starting to see the average revenue per port sort of coming through sort of flat across some of the regions. Where do you feel that level will sort of flatten out at? It looks like most of the regions, like the services per port sort of start flattening out around that sort of three services per port level. Is that how we should think about it at sort of a mature business level in a few years' time?
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 in Australian dollars is that when you get volatility or the strengthening of the Australian dollar, disproportionate to the actual growth rate. We are seeing a lot more services, and you can see that the growth service per customer, service per port, number of services in the half-year are all like been around 20%-23%. The actual U.S. dollar revenue increased by 26%. When you look at it in U.S. dollar, maybe we should start reporting in U.S. dollars. When we start looking at it in U.S. dollars, it's much higher. It's just affected.
I think it's a little bit distorted and merged here by the fact that it's in Australian dollars. I think the biggest growth region by far going forward will be the U.S. market. That's why we always said that, we're focusing on that as we are in each of the markets. 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.
The next question from Jonathan from RBC Capital Markets.
Thanks. Question about margins. Slides 22, 24, and 26 give a pretty good overview on kind of the regional level. 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?
Yeah. Jonathan, I expect in North America. If you look at the gross margin or the profit after network costs in North America, it does look a little less than where it should be compared to the other regions. But we have invested more than anywhere else in the last 12 months and six months in terms of the uplift in cost there in network. So I think a truer reflection would, you will see that bump up over the next 12 or 6- 12 months, and more akin to a high 60s number over the course of certainly over 2021. And obviously, I think we'll end up with a higher EBITDA margin in the U.S. as a result of that.
Part of the other reason in the margins are a little flatter in gross margin level is because part of our commission is where we have most of our partners are actually in the U.S. or in North America. That cost, instead of being in the OpEx line as a cost of commissions of the direct sales, is actually in the direct cost network line. It looks a little deflated compared to others on a region by region basis. I think the EBIT number will far outstrip that because there's less cost there going forward.
Then Cloudflare new on the partner list, and I just wondered if you could talk to what sorts of business you're anticipating bringing in through that relationship as distinct with some of your other traditional public cloud partners.
A lot of it's got to do with private infrastructure and some private cloud. This goes back to hybrid. There's certain instances where customers want to use both public cloud and the, I suppose, private infrastructure, private cloud applications that are in the cloud there and similar to OVH and similar to Rackspace. Where they've got their own products. Customers are looking to enhance that with access to public cloud. Having the ability to have all of that connected through one single pane of glass or through Megaport creates that ease of use for the end customer. That was one of the major reasons for doing that. 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 facilities and same locations where some of these other partners exist.
The ability to actually connect all of that together is the main driver.
Thank you.
The next question is from Paul from the Evans and Partners. Please go ahead, and unmute yourself.
Hi, guys. Just a couple from me. The first one on the Virtual Edge product. I just wanted to sort of draw sort of an analogy from you guys about when you started out with your big partnerships with Digital Realty and CyrusOne back in the day, there was a fair lead time in terms of how long it took you guys to train their sales force to start selling your product. I think that was up to 12 months 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?
Hi, Paul. Yeah, good question. There's a big difference between each of the partners. I'll probably just, I'll speak to Cisco one first. Cisco have their own reseller network, effectively, over 5,000 partners globally that they sell. We are going through a go-to-market strategy and implementation plan with them literally between now and March and culminating in the Cisco Live event where most people come together, and this day and date will be virtual. 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. Then most of the heavy lifting on our side, where we have people coming to use Megaport and Virtual Edge to use the Cisco product and bring in their Cisco license.
We will be covering that element off ourselves as in when we're selling direct to a customer or to a reseller. In the majority of cases, the heavy lifting will be done by our partner, Cisco, in this case, for educating and the materials and collateral and the how-to, et cetera, for their own reseller channel. We'll be assisting in supporting that initiative. I really think that obviously there's beta testing customers that we're working through that will continue to use the service as we go live and initiate there. We would expect over FY 2021 a better uplift or a better uptake on that basis. It's very different than a data center operator.
Okay. Great.
VMware and the others are slightly different in terms of how they're go to market, and that's what we're working through right now in terms of enabling that. That's their follow on slightly after that.
Just on the data center rollout plans, you guys have been pretty clear about your expectations 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 going to look in your direct network cost per data center? Because obviously that's trickled up year-over-year and has every year. My presumption is that is interacting with more of the enabled data center count as opposed to the installed data center count. Your calculation is based on the installed data center count. Maybe if you can give your thoughts on just how those metrics are going to interact.
Yeah. 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. 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 at the beginning of the year, not to build as much this first half of the year focused on getting MVE and that up and running, and obviously on the revenue growth of the existing products.
In the second half we'll uplift and we'll probably end up around 400-405 range. I think we'll have a similar kind of cadence going forward on the installed data centers year by year as we work through markets and as the Edge evolves. I think then that'll probably get enhanced by new markets or new countries or regions that we go into or is supplemented by that. In terms of the enables, 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.
You can see that in some of the utilization in terms of the number of ports for data centers as it continues to increase period on period.
Okay. That's it from me. Thank you.
Thanks.
The next question is from Tim from UBS. Please unmute yourself and then ask your questions. Thank you.
Hi, Vincent. How are you going?
Hey, Tim.
Just a couple of questions from 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? 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?
Okay. Look, as I said before, Cisco's going to be the first cab off the rank. The second one is probably going to be weeks after that, and the third one's going to 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. That's the cadence. In terms of the work effort and the workload, the one that we've done with Cisco is a fully integrated single pane of glass through the Cisco portal. The other ones are going to go through a two-phase approach where we'll be both using Megaport and their existing portal, then we'll further integrate. The workloads is required about 70%-80% of that workload is common.
They will happen much faster and quicker, most of the heavy lifting being complete and done, which is typically of how we build it with other clouds and all of our API integrations for 80%. We aim for 80% of it being commonality. Once you build it once, it's for use, and 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, Vincent and Sean. Just a couple of questions from me. Just trying to get a feel for the direct side of things. You talked about what's happening with indirect, just on the direct side of things, has that rate of sales broadly stabilized now? I guess just supporting that, could you just talk a little bit about the number of direct sales people you've got now by the regions, and has that sort of changed dramatically in the last 12 months. 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? FX is moving things around dramatically, could you change your accounts to U.S. dollars? Would that be a reasonable, sensible thing to do? Thanks.
Well, maybe, Sean, I'll let you answer that one first.
Yeah. 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 U.S. dollars, it's about our overall expense and from our network costs through to our staff costs, and it's definitely something we will look at. There's quite a little bit of work to do. I have to be casting all our balances or change of functional currency. 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 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. 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. That transition has happened, and we will continue to evolve that over time. It's also a great opportunity for, as I said earlier on, for Rodney when he come in.
Obviously, he's responsible for all of the revenue in the business, and so it's a great opportunity for someone to come in with that amount of experience for us to have a look at how we're set up and how we're structured, and more importantly, continue to tweak that so it scales, which is really important. At the same time, give us greater access and more efficiency about acquiring new customers and services. Hasn't too much changed in terms of the number of people. We have, as I said earlier, and we said previously at the full-year, we have pivoted towards more reliance and use of account management to support the existing customer base. I think that will continue to evolve as we add more customers.
Great. Thanks very much.
Cool. Do we have anybody else who 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 from me is, do you have a sense that some of your enterprise customers or potential customers in 2020 had delayed their IT spend? What's your sense about the outlook for your pipeline for this calendar year?
Yeah. I think if you're referring to the calendar year 2020-
Yes, calendar year.
Yeah, calendar year. I think yes, there was big swings in terms of what happened, and that's evidenced by our quarterly KPIs. You could see the beginning of the year was a little slow in January at the beginning of the year when COVID came out in February. Early February, there was this huge scramble for turning up additional services, mainly from our existing base. 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 the I suppose a lot of people said, "Well, okay, COVID's COVID."
It is what it is, we also need to accelerate some IT spend, particularly in the cloud, as we prepare for further lockdowns, more remote working from home, et cetera, and the ability for businesses to continue. We had a huge increase in the number of ports and new customers there in the quarter ending in September. Then towards the back end, we had another little bit tapering off where we had a big increase in the monthly recurring revenue, but less so on the ports and customers. 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. That was 2020.
In the general feedback in talking to our data centers as well, they had a similar pattern in terms of colocation, in terms of spend and new business in their pipeline. 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 I talked about in 2020. The 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, planning cycles, and are ready to go and to kick into execution mode. We're seeing a lot of that early this quarter coming into the planning for 2021.
I think there's also, sorry, there's someone speaking in the background. If they wouldn't mind muting. I think for FY 2021, we're seeing a lot of businesses starting to get over COVID-19 and the fatigue around that, and just getting on with running businesses and less so the stop-start motion that we're seeing. That's coming from a lot of conversations we've had with partners and customers. A lot of it's been, there is a sort of an optimism at some point in time we will get vaccines, and that life will return to some better form and normality than what we've been through. Businesses have to go on, and IT infrastructure can't be held up either on the software or 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. 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, it's not customer churn because our customers were increased. No, it wasn't customer churn. We've added 10 data centers into the region, which I think is the most we've added in any one short period. A lot of them came, like I said, from the fallover from there. When you add 10 more data centers in, you create more ports available in the network. It's just a function of dividing one number by the other. Hence the port utilization also went down because we've added those data centers. That increases the number of ports available to sell. I think you'll see that number kick on.
Yes.
Purely a fact that we've added more capacity. Yeah.
Oh, sure. Perhaps the last one for Sean is, what's your outlook for the corporate cost in the second half? It jumped quite a lot in the first half, up almost 20% year-on-year. What's your outlook for the second half in terms of corporate cost?
Some of the corporate costs, I think they'll be sort of standing up, were related to a significant increase in our insurance costs, and there were some one-off type costs and professional fees that we don't see going into the second half. I would hope to get back to a place where we're starting to invest a little bit more in marketing and travel as business gets back to normal. I don't see any significant uptick on our spend rate in H2 over H1.
All right. 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 conclude the meeting then. I know there's 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. I look forward to catching up with you all a bit later. Thank you.