There is no evidence-based winner without comparing what each share costs. Zip is a consumer-credit and payments business; Megaport sells network connectivity and is expanding into compute. Their growth and profit figures cover different periods and use different measures, so the available results support a comparison of their businesses and risks—not a current-price buy recommendation.
What Zip and Megaport do
Zip: credit and payments
Zip Co (ASX: ZIP) provides point-of-sale credit and digital payment services through merchant networks in Australia and New Zealand and the United States. Its growth depends on transaction activity, customer use and its ability to earn income while managing credit losses and funding costs.
Megaport: network connectivity and compute
Megaport (ASX: MP1) operates a software-defined network connectivity platform. It also reports acquired compute operations, so its group growth increasingly reflects more than its original network business. Its FY26 highlights, stated as at 30 June 2026, included more than 37,000 services, over 1,200 enabled data centres and more than 4,000 customers.
How their reported performance compares
The figures below are company-reported and cover different periods and definitions. In particular, Megaport’s annual recurring revenue (ARR) is a run-rate measure, not revenue recognized over a full year.
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| Measure | Zip | Megaport |
|---|---|---|
| Growth and scale | FY26 total income was A$1,347.4 million, up 24.6% year on year; transaction volume was A$16.7 billion, up 27.2%. The FY26 scorecard also reported 6.5 million active customers and 97,400 merchants. | FY26 highlights as at 30 June 2026 included ARR above A$395.2 million, more than 37,000 services, over 1,200 enabled data centres and more than 4,000 customers. Megaport defines ARR as the final month’s recurring revenue multiplied by 12. |
| Profitability | FY26 cash EBITDA was A$268.9 million, up 57.9%, with a 20.0% operating margin. On its 20 August 2026 results call, management reported statutory net profit after tax of A$116 million, up 46%. | H1 FY26 revenue was A$134.9 million, up 26%, and EBITDA was A$35.3 million. These half-year results included acquired businesses; the cited FY26 highlights do not provide a comparable full-year earnings figure. |
| Operating indicators | The FY26 scorecard reported a 3.9% cash net transaction margin and net bad debts equal to 1.8% of transaction volume. | In its H1 FY26 results, Megaport reported group ARR of A$338 million, up 49% year on year, including Latitude.sh and Extreme IX. Excluding acquisitions, network ARR grew 19% in constant currency, and net revenue retention was 111% under the company’s customer-logo measure. |
The two growth stories should not be ranked by comparing the percentages alone. Zip’s transaction volume and total income are full-year flows, while Megaport’s ARR is a year-end run rate; Megaport’s group growth also includes acquisitions and is sensitive to currency movements.
What could support each investment case
Zip’s case rests on profitable growth and credit discipline
Zip’s FY26 results show rising income and transaction volume alongside higher cash EBITDA and a reported statutory profit. At the results call, management said the company had recorded 12 consecutive profitable quarters. The United States contributed A$613 million of revenue and A$155 million of cash earnings in FY26, according to management.
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That growth depends on keeping credit performance within acceptable bounds. Zip reported net bad debts of 1.8% of transaction volume for FY26. Management described a US loss target range of 1.5%–2.0% and said US losses were 1.67% of transaction volume in Q4. Those are distinct figures: the scorecard’s full-year measure and management’s quarterly US measure should not be treated as interchangeable.
Megaport’s case rests on recurring network demand and platform expansion
Megaport’s reported service count, customer base and ARR indicate a scaled recurring-revenue platform. Its H1 FY26 announcement also reported 111% net revenue retention on the company’s customer-logo measure, suggesting existing customers generated more revenue over the measured period than before. However, group ARR growth includes acquisitions; the reported 19% constant-currency network ARR growth excluding acquisitions offers a different view of the underlying network business.
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Management said its revised guidance reflected the expansion through Latitude.sh and Extreme IX as well as foreign-exchange movements. That makes the distinction between acquired growth, organic network performance and currency effects important when judging whether the growth is repeatable.
Risks and investment needs to weigh
- Zip—credit and funding: Higher customer losses or funding costs could weaken the economics of additional transaction volume. Consumer demand and execution also affect the growth outlook.
- Megaport—currency: Its H1 FY26 guidance assumed an AUD/USD rate of A$0.70 for H2. Megaport estimated that a A$0.05 appreciation would reduce revenue by about A$9 million, illustrating the sensitivity in that guidance.
- Megaport—capital spending and acquisitions: H1 FY26 guidance included A$90–100 million of capex. Maintenance capex was expected to be below 2% of revenue, with additional spending supporting growth and acquisitions. Integration and the returns on that investment matter alongside headline revenue growth.
Why the outlook figures are not a head-to-head forecast
Zip’s cited targets are for FY27, while Megaport’s cited guidance is for FY26, published with its H1 FY26 results in February 2026. They also use different measures and cannot establish which business is growing faster or earning more on a directly comparable forward basis.
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| Company and period | Company outlook | What it does—and does not—show |
|---|---|---|
| Zip FY27 | Management targeted A$340 million group cash EBITDA and a 20%–22% operating margin. Other targets included US transaction-volume growth of at least 30% in US-dollar terms and a group cash net transaction margin of 3.8%–4%. | These are management targets for FY27, not reported results. Cash EBITDA and operating margin are different measures. |
| Megaport FY26 | Guidance was A$302–317 million revenue, EBITDA equal to 21%–24% of revenue, and A$90–100 million capex. | These were FY26 forecasts, not FY27 guidance. The guidance included foreign-exchange assumptions and reflects a group that includes acquired operations. |
What to check before deciding which share to buy
Business quality and growth are only part of an equity decision: the price paid determines what future performance is already reflected in a share. The available company materials do not establish a complete, same-date valuation comparison for ZIP and MP1. Zip’s investor page displayed A$2.07 as at 2 October 2026, but a matching MP1 price and aligned market-value data are not established here; that ZIP quote alone cannot show which share is cheaper.
- Use matching market data: obtain ZIP and MP1 share prices for the same date, current shares on issue and market capitalisations. Account for any share-count changes before comparing per-share measures.
- Compare valuation with consistent earnings measures: use the same reporting period and definitions for both companies. Do not compare Zip’s cash EBITDA directly with Megaport’s half-year EBITDA or compare Zip’s full-year income with Megaport’s ARR.
- Check the latest reported results and guidance: Megaport’s cited forecasts are FY26, while Zip’s targets are FY27. Megaport’s FY26 highlights alone do not establish a full-year income statement, net profit, cash flow or per-share comparison.
- Decide which risks fit your time horizon and tolerance: consider Zip’s credit-loss and funding exposure against Megaport’s currency, acquisition and investment risks, alongside the possibility that either company’s execution or growth disappoints.
Until those valuation and reporting-period gaps are closed with current, matched information, the practical conclusion is a business-fit comparison rather than a categorical better-buy verdict. These company results and targets are not a personalized investment recommendation.
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