The Megaport Ltd (ASX: MP1) share price has been an incredible performer over the last 12 months.
Although its shares have fallen almost 17% from their June high, they are still up approximately 70% since this time last year.
This compares to an 11.5% decline by the S&P/ASX 200 Index (ASX: XJO) over the same period.
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Why is the Megaport share price up 70% in 12 months?
Investors have been scrambling to buy the shares of the global leading provider of elastic interconnection services after the pandemic accelerated the shift to the cloud.
Its global platform allows users to organise all their connections from one place and bring their network together into an easy-to-use platform.
This means businesses can build hybrid, multi-cloud, cloud-to-cloud, and disaster recovery solutions with multiple connections to regional and global services. And instead of managing each resource separately, Megaport brings everything together into a seamless process.
Among its 1,842 customers (up 24% year on year), you'll find a diverse range of companies such as Adobe, BHP Group Ltd (ASX: BHP), FedEx, ING, Tesla, and Zoom.
Management notes that another driver of this strong customer growth has been its growing ecosystem, which is adding value to users.
The company's CEO, Vincent English, explained: "Megaport's strategy revolves around driving more value for our customers, partners, and shareholders. We have grown our ecosystem to over 360 service providers and now connect customers to 197 cloud onramps – the most of any neutral global interconnection fabric."
"We've made it easier than ever for our customers and partners to securely connect to the services that power their businesses. This has paid off with strong growth in our regional business units which is underpinned by increased customer usage and the growing adoption of multicloud."
What about revenues and profits?
From the aforementioned customers, the company is currently generating Monthly Recurring Revenue (MRR) of $5.7 million. This MRR equates to approximately $68.5 million on an annual basis.
And while Megaport is making a loss at the moment while it pursues growth, it recently revealed that it is aiming to achieve EBITDA breakeven by the end of FY 2021.
Mr English commented: "Profitability remains a company-wide priority. We will focus on achieving EBITDA breakeven by the close of Fiscal Year 2021 by driving further customer growth across all regions."
Looking ahead, the CEO appears confident that its strong growth can continue.
"With our SDN reaching over 700 enabled data centres across 23 countries, we are well positioned to capture the demand for elastic interconnection to support the ever-increasing surge of data powered by the digital economy," he added.
Should you invest?
Although the Megaport share price is up 70% over the last 12 months, I would still be a buyer if you're planning to make a long term investment.
Along with Macquarie Telecom Group Ltd (ASX: MAQ) and NEXTDC Ltd (ASX: NXT), I believe Megaport is well-placed for long term growth thanks to the structural industry tailwinds which are accelerating the cloud computing boom.
