Comms Group Doubles Profit to $1.8M as Revenue Surges 39% to Record $37.6M

Comms Group delivers record first half with revenue up 39%

Comms Group (ASX: CCG) has reported its best-ever first half trading performance, with the Comms Group record first half delivering revenue of $37.6 million (versus $27.0 million in the prior corresponding period, up 39%) and underlying EBITDA of $4.5 million (versus $2.4 million, up 87.3%). The global communications and IT services provider declared an interim dividend of 0.125 cents per share, signalling management confidence in the company’s trajectory.

The results validate the Group’s growth strategy and acquisition integration efforts. Underlying Net Profit After Tax and Amortisation (NPATA) doubled to $1.8 million (up 100% from $0.9 million), while organic revenue growth came in at approximately 10% across the half year ended 31 December 2025.

Record revenue reflects organic and acquisition-driven expansion

The 1H FY26 results represent a material step-change in both scale and profitability for Comms Group (ASX: CCG). Record group revenue of $37.6 million reflected both organic expansion and the contribution from the TasmaNet acquisition completed in the prior period.

Gross profit increased 37% to $17.8 million (from $13.1 million), demonstrating the scalability of the company’s service delivery model. The strongest underlying EBITDA result for a half year at $4.5 million represented an 87.3% increase, with the underlying EBITDA margin expanding to 12.0% (versus 8.9% in the prior period).

Underlying operating cash flow rose 17.4% to $2.7 million (from $2.3 million), providing the financial capacity to support the interim dividend and ongoing investment in platform infrastructure. The declaration of 0.125 cents per share marks a return to dividend payments and reflects management’s confidence in the sustainability of earnings growth.

Divisional performance breakdown

All three operating divisions contributed to the record performance, with the Global & Wholesale and Secure Managed IT Solutions businesses delivering particularly strong EBITDA growth. Divisional revenue consisted of $7.5 million from Global & Wholesale, $10.9 million from Secure Managed IT Solutions, and $19.3 million from Cloud Communications & Collaboration (which includes TasmaNet).

The standout performer was Global & Wholesale, which recorded underlying EBITDA growth of 161% on organic revenue expansion of 23%. Secure Managed IT Solutions delivered underlying EBITDA growth of 40% on organic revenue growth of 16%, demonstrating the high-margin characteristics of both divisions.

The EBITDA margin expansion from 8.9% to 12.0% demonstrates operating leverage as the business scales. Higher-margin Global & Wholesale services drove outperformance, with the division’s international unified communications platform gaining traction across enterprise customers.

New business wins fuel $5.4m in contracted ARR

Comms Group achieved new business Annual Recurring Revenue (ARR) of $5.4 million in signed sales contracts during the first half, with growth recorded across all three divisions. The contracted revenue provides visibility over future earnings and reflects the company’s expanding market presence across multiple geographies and customer segments.

The Global & Wholesale division secured $1.8 million in new ARR across 17+ countries spanning Asia Pacific and Europe. Approximately 80 Australian and international corporates placed new orders during 1H FY26, either directly or via partner channels.

Customer categories included:

1. Global telecommunications carriers and UC providers
2. Global banking, insurance and investment institutions
3. Industrial and manufacturing companies
4. Global medical technology operators
5. US federal government agency
6. World-renowned consumer goods manufacturer

Services were ordered across countries including Australia, China, Fiji, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, Vietnam, France, Germany, Ireland, and the United Kingdom. This geographic diversification reduces customer concentration risk while positioning the company to capture growing demand for international unified communications services.

TasmaNet secured a major contract expansion with a key customer representing a Total Contract Value exceeding $1 million. The contract relates to connectivity services and demonstrates the division’s ability to cross-sell within its installed base.

An additional $0.9 million in ARR is currently in final contracting phase with two multinational banks (one headquartered in Europe, the other in the United States). The open opportunities pipeline for the Global & Wholesale division alone exceeds $5 million in ARR, providing a strong foundation for second-half performance.

Understanding ARR and why it matters for recurring revenue businesses

Annual Recurring Revenue (ARR) is a metric used by telecommunications and IT services companies to measure the value of recurring subscription contracts. ARR represents the annualised value of active customer contracts and excludes one-off implementation fees or variable usage charges.

For investors, ARR provides predictability of future revenue streams and is a key valuation metric for software and services businesses. Strong ARR growth indicates sticky customer relationships and predictable cash flows, which supports higher valuation multiples compared to businesses with transactional or project-based revenue models.

In Comms Group’s case, the $5.4 million in new ARR signed during the half represents incremental annual revenue that will flow through once services are fully deployed. The diversified customer base across sectors and geographies reduces concentration risk while the $5 million+ pipeline provides revenue visibility into FY27.

TasmaNet integration on track with infrastructure consolidation underway

The TasmaNet integration is progressing according to plan, with completion expected by the end of FY26. All customers, including key Tasmanian Government accounts, have now been transitioned to Comms Group systems. Mainland customers have been appropriately novated to either the Secure Managed IT Solutions or Cloud Communications & Collaboration divisions.

Integration milestones achieved include:

• All customers transitioned to Comms Group systems
• Key suppliers novated and onboarded
• Additional sales and marketing resources hired within TasmaNet
• Synergy plan underway with focus on supplier cost optimisation

The company has commenced a substantial network and cloud platform integration and rationalisation project across its domestic businesses. The initiative consolidates three domestic telecommunications networks into a single national network (the “One Network” project) and merges two private compute infrastructure platforms (the “One Cloud” project).

Initial estimates indicate the rationalisation project should save the company up to $2 million per annum in external costs once completed. The project is expected to finish in Q4 FY26, with some one-off capital expenditure being incurred during the current financial year to upgrade core capacity and capability.

The $2 million in annualised savings from network consolidation flows directly to EBITDA, potentially adding 2-3 percentage points to margins once fully realised. Combined with the organic growth trajectory, this positions the company to exceed its underlying EBITDA target range.

Global expansion strengthens competitive position

The Global & Wholesale division expanded its geographic reach during the half, adding licences and carrier partners in Vietnam and six additional European countries. The company has also laid groundwork for expansion into further key countries, with several licence applications underway.

Additional carrier partners were added in existing markets to enhance capability, improve supply diversity, and lower cost of supply. Management claims the company now has the most extensive licensed coverage in the Asia Pacific region for the supply of local PSTN and Unified Communications services, including local direct in-dial services (DIDs or telephone numbers).

The expanded geographic licensing creates barriers to entry and positions the company to capture growing enterprise demand for international unified communications. As multinational corporations increasingly standardise on cloud-based communications platforms (particularly Microsoft Teams and Cisco Webex), Comms Group’s ability to deliver seamless services across 65+ countries with local number provisioning represents a competitive advantage.

FY26 guidance reaffirmed with clear path to targets

The Group reaffirmed guidance for FY26, targeting annualised run-rate revenue of $75 million+ and annualised run-rate underlying EBITDA of $9 million to $10 million. Management noted continuing strong organic growth opportunities, particularly in the Global & Wholesale and Secure Managed IT divisions.

Outlook items for the remainder of FY26:

• On track for $75m+ annualised run-rate revenue
• Targeting $9m-$10m annualised run-rate underlying EBITDA
• TasmaNet integration to finalise within FY26
• Active M&A pipeline with disciplined approach to pricing and business quality

With 1H FY26 revenue at $37.6 million (annualised $75.2 million), the company is already at the lower end of its revenue target. The underlying EBITDA run-rate target implies continued margin expansion through the second half, supported by the $2 million in network rationalisation savings beginning to flow through in Q4 FY26.

The company continues to actively review M&A opportunities while maintaining a disciplined approach to valuation and business quality. The return to dividend payments and strengthening balance sheet (with underlying operating cash flow of $2.7 million in the half) provides capacity to pursue strategic acquisitions should suitable targets emerge.

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