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Pentanet (ASX:5GG) well-placed to drive growth in FY24

ASX News, Telecommunication
ASX:5GG      MCAP $12.99M
20 July 2023 15:03 (AEDT)

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Perth-based internet provider Pentanet (5GG) has reported a 17 per cent jump in revenue year on year (YoY) for FY23 to $19.7 million.

The company attributed its gains to off-net service price increases, which bolstered off-net recurring revenue by 25 per cent YoY – as well as an increase in on-net subscription revenue, lifting by 10 per cent YoY.

Meanwhile, Pentanet posted a 15 per cent rise in gross profit to $8.5 million for FY23.

5GG Managing Director Stephen Cornish said FY23 posed challenges for the company, despite registering double-digit growth in both revenue and gross profit.

“June 2023 marked a substantial milestone for the company as we achieved EBITDA breakeven across both telecommunications and cloud gaming independently for the first time,” he said.

“The telecommunications business is now in the best position it has ever been, reaching operating breakeven in the lead up to significant additional capacity turning on to drive new subscriber growth in H1 FY24.”

Also during FY23, the company saw the deployment of its fourth 5G enabled tower, with another four planned in FY24.

Pentanet’s cloud gaming revenue was up 125 per cent YoY.

“We are also incredibly proud of bringing a world-leading cloud gaming platform technology to Australia and have grown that business to where it can already cover costs whilst still having a significant amount of additional capacity for paid user growth,” Mr Cornish said.

Cornish added that the company was positioned to “significantly” accelerate growth in FY24.

At the end of Q4 FY23, Pentanet held a cash balance of $9.9 million.

Shares in 5GG were up 17.2 per cent, trading at 9.5 cents at 3:03 pm AEST.

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