Pentanet Achieves Remarkable Growth in Telecommunications and Gaming Segments in Q4FY24
5GG (5GG) Share Update July 2024 Monday 29th
Pentanet Reports Strong Q4FY24 Growth in Telco and Gaming Segments
Pentanet Limited (ASX: 5GG) has reported impressive growth in both its telecommunications and gaming segments for the fourth quarter of the fiscal year 2024, driven by strategic promotions and expanded service offerings.
Instant Summary:
- Gross Telco sales increased by 26% QoQ.
- Gaming subscription revenue grew by 114% YoY to $1.7 million.
- Gaming subscription gross profit surged by 195% YoY to $0.4 million.
- CloudGG paid membership grew by 79% YoY.
- Consolidated revenue increased by 6% YoY to $20.9 million.
- EBITDA loss decreased by 67% YoY to $1.2 million.
- Net cash used in operating activities decreased by 82% YoY to $0.6 million.
Telecommunications Growth
Pentanet's telecommunications segment saw a robust 26% quarter-over-quarter (QoQ) increase in gross sales, largely attributed to the company's End of Financial Year (EOFY) promotion. This promotion resulted in the addition of 263 net new subscribers, a significant improvement from the previous quarter.
The company also reported a 46% QoQ increase in net new 5G subscribers. Since launching its 5G service in October 2023, Pentanet has added 400 subscribers to its 5G network, with 31% of that total added in Q4FY24. This growth supports the business case for future expansion of the 5G network footprint.
Gaming Segment Expansion
Pentanet's gaming segment also experienced substantial growth. The company's gaming subscription revenue increased by 114% year-over-year (YoY) to $1.7 million, while the gross profit from gaming subscriptions surged by 195% YoY to $0.4 million.
CloudGG, Pentanet's gaming platform, saw a 79% YoY growth in paid memberships and a 54% increase in overall membership, reaching over 589,000 members. The company's inclusion in NVIDIA's Graphic Delivery Network (GDN) is expected to further expand its compute capabilities and explore new commercial opportunities.
Financial Performance
Pentanet reported a 6% YoY increase in consolidated revenue to $20.9 million and a 13% YoY increase in gross profit to $9.6 million. The company's EBITDA loss decreased by 67% YoY to $1.2 million, and net cash used in operating activities reduced by 82% YoY to $0.6 million.
The company's strong financial performance was driven by improvements in both the telecommunications and gaming segments. The focus on higher-speed plans and strategic promotions helped increase the Average Revenue Per User (ARPU) and gross profit margins.
Operational Updates
In Q4FY24, Pentanet launched its EOFY promotions, contributing to a significant increase in net new subscribers and a 46% QoQ growth in 5G subscribers. The company also focused on customer retention by offering deals to existing subscribers who recontracted for 12 months.
Pentanet's 5G network, supported by ten 5G-enabled towers, has shown promising results with an average Return on Investment (ROI) of 110%, projected to reach up to 254% once fully subscribed. The most popular plan among new subscribers is the 200/20Mbps plan, indicating a shift towards higher-speed internet plans.
The strong growth in both the telecommunications and gaming segments is likely to positively impact Pentanet's stock price. The significant increase in revenue and reduction in EBITDA loss demonstrate the company's effective strategic initiatives and operational efficiency.
Investor Reaction:
Analysts are expected to react positively to Pentanet's Q4FY24 performance, highlighting the company's successful promotions and strategic focus on higher-speed plans. The growth in the gaming segment, particularly with the inclusion in NVIDIA's GDN, is also seen as a promising development for future revenue streams.
Conclusion:
Investors should keep an eye on Pentanet's continued growth in both the telecommunications and gaming segments. The company's strategic initiatives and focus on customer retention are expected to drive further growth through 2025 and beyond. Subscribe to our newsletter for regular updates on Pentanet and other stock market news.