5G Networks hails channel’s contribution to strong H1

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5G Networks hails channel’s contribution to strong H1

5G Networks (5GN) called out its indirect channel for helping it to post a strong set of H1 FY 19/20 numbers.

The telco and IT services provider today revealed (pdf) H1 revenue of $25.4m, up 7.6 percent year-on-year. EBITDA of $3m comfortably exceeded the $900,000 outcome from H1 in FY 18/19. EBITDA margin of 12 percent was “at the top end of the company’s target range”.

Also present in the results presentation was a breakdown of 5GN’s different offerings, and their contributions to EBITDA. That makes for interesting reading as hardware & software revenue dipped markedly, while network & voice revenue and cloud services revenue both rose nicely.

Investors were told that 5GN has successfully transitioned to higher-margin annuity revenue, demonstrated by 21 percent growth in such sources of cash compared to H1 in the previous FY.

The company’s list of “Key Highlights Delivering Strategic Growth” was topped by the successful launch of its indirect channel, which as CRN reported was launched in November 2019 and by January 2020 won Servers Australia as its first partner.

5GN's strategy slide. Click to enlarge

The results presentation indicates 5GN has big expansion plans. A $2.2m debt facility is earmarked for acquisitions, efforts are under way to cross-sell more of the company’s offerings to clients of recently-acquired companies, and geographic expansion is on the FY 20/21 agenda.

Guidance for FY20 remains in the range of $55m to $60m, with EDITBA margin of between eight and twelve percent.

Overall, the report clearly attempts to impart the impression that 5GN is on track for continued growth, fuelled by more acquisitions, its move into cloud and carrier services, and cross-selling and up-selling opportunities.

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