Aussie Broadband has had a solid first half of FY25, delivering growth. Revenue jumped 6.8% to $588.5 million, thanks to more broadband subscribers and the continued integration of Symbio. 

Profitability improved as well, with underlying EBITDA (bullshit earnings) up 8.9% to $65.8 million, they say this is helped by tight cost controls and better efficiency. Broadband connections grew 12.5% to 727,951, showing that Aussie is still gaining ground in the market. The company is confident in its outlook, upgrading full-year EBITDA guidance to between $133 million and $138 million. 

To top it off, shareholders are seeing the benefits, with a fully franked interim dividend of 1.6 cents per share and a special dividend of 2.4 cents per share.

Symbio is proving to be a valuable addition to the business, staying on track for 30% earnings growth, with an expected EBITDA contribution of $38 million by year end. The company has boosted its gross margin to 47.8%, up from 45.0%, thanks to stronger performance in its core business. Its Singapore operations are now profitable, and expansion into Malaysia and other APAC markets is progressing well. However, revenue dipped slightly by 1.3% to $103.8 million, reportedly due to dropping lower-margin products.

On the flip side, there are a few hurdles. Aussie Broadband has revised capex guidance up to $75 to $80 million as it ramps up investment in its fibre network. Interest costs have also nearly doubled. Growth in Buddy services has been slower than expected, meaning more work is needed to hit the 100,000 connections target by FY27. Symbio, while delivering higher margins, still has to navigate a tough competitive landscape to keep up momentum.

Overall, Aussie Broadband is in a strong position, with its strategy of diversification and expansion paying off so far. While there are short-term challenges to manage, the company is pushing ahead with key investments that should drive long-term value. 

For a business selling wholesale commodity, which in the UK resulted in a race to the bottom with the likes of Sky TV, Virgin Media, British Telecom etc focused around NBN equivalent "BT Openreach", my thesis is weighted towards the growing performance of the B2B businesses and preservation of corporate culture. I'm very keen to see revenue growth for Symbio. Separately I'm pleased to see growth of other B2B aspects particularly for 'Business' and 'Enterprise & Government'. Less fussed about wholesale due to Origin. We still need to see how Phil's departure will impact culture. Encouraging but one to watch very carefully over the next 12 months or so.

Holding IRL and SM

Aussie Broadband FY24 Results:

Investor Presentation

Results Announcement

Annual Report

Hi Folks,

I've just dropped off the call. Generally positive results. I'll spend a bit more time later delving into the details and share more insight but here are some tid-bits that came up in the call or are noteworthy from documentation:

• 4c fully franked dividend - first dividend payout.
• When asked about cannibalization risk for Buddy (currently 2192 customers), the feedback was that their focus on Buddy is to provide a safety net for customers that would ordinarily transition to a competitor. They mentioned that there was an initial transition spike of Aussie customers to Buddy. They characterized the population doing this as tech savvy people who have no need for human customer service. They were bullish on a 100k subscriber count over 3 years.
• They are looking to continue to be aggressive with their Fiber build, focusing on where there's not enough fiber close to hot-spots of service. At the same time they're taking calculated risks on enabling future service hotspots, the phrase ' if you build it, they will come ' .
• They indicated that of the $12m of Opex associated with the soon to be deprecated Origin deal, that $4m will be cut in 2025 and the remaining $8m will be assessed for 2026. They indicated that most of this is people cost. There's little opportunity to transition to Buddy because the Buddy model relies on automation. They said that they will spend the 12 months figuring out how to redeploy people to retail and wholesale etc..
• They mentioned that with big wins for Bunnings and Lora Jane, they attended the sales rallies of those companies and the feedback was that whilst commercials were important, so to were Aussie's ease of doing business, flexibility and innovation in thinking that helped them beat the big-4 incumbents.

Short term market sentiment loves it with a 40c rise.

More to come.

Held IRL and here.