Comms Group Revenue Surges 39% to $37.6M With EBITDA Doubling to Record $4.5M

Comms Group delivers record half-year with revenue up 39% and EBITDA surging 87%

Comms Group Limited has reported its strongest half-year financial performance on record, with the Comms Group record FY26 performance showing revenue climbing 39% to $37.6 million for the six months ended 31 December 2025. The telecommunications and IT services provider delivered underlying EBITDA of $4.5 million, representing an 87.3% increase over the prior corresponding period and marking the company’s best half-year result to date. Management reaffirmed the business remains on track to achieve its annualised run-rate targets of $75 million+ revenue and $9-$10 million underlying EBITDA for FY26, whilst declaring an interim dividend of 0.125 cents per share.

The 1H FY26 result demonstrates the operating leverage inherent in the business model as scale increases. Underlying EBITDA margin expanded to 12.0% from 8.9% in the prior period, with gross profit rising 37% to $17.8 million. Underlying net profit after tax and amortisation (NPATA) doubled to $1.8 million, whilst operating cash flow strengthened 17.4% to $2.7 million. The financial metrics reflect both organic growth momentum and successful integration of the TasmaNet acquisition, with the company reporting organic revenue growth of approximately 10% year-on-year.

The dividend declaration signals management confidence in the sustainability of cash generation. For investors, the combination of accelerating profit growth and dividend initiation suggests the business has crossed a threshold where scale economies are translating to meaningful shareholder returns.

What is driving Comms Group’s growth acceleration?

Revenue growth is being driven across multiple divisions, reducing concentration risk and demonstrating the breadth of the company’s market positioning. The Cloud Communications and Collaboration division (which includes TasmaNet) contributed $19.3 million in revenue, representing the largest segment. Secure Managed IT Solutions generated $10.9 million, whilst the Global & Wholesale division delivered $7.5 million.

The standout performances came from Global & Wholesale and Secure Managed IT, which recorded underlying EBITDA increases of 161% and 40% respectively. Organic growth rates were particularly strong in these divisions, with Global & Wholesale expanding 23% and Secure Managed IT growing 16% on an organic basis. The company noted that approximately 10% of total revenue growth was organic, with the remainder attributable to the TasmaNet acquisition.

Key divisional contributions:

• Cloud Communications and Collaboration: $19.3m revenue (including TasmaNet)
• Secure Managed IT Solutions: $10.9m revenue, +16% organic growth
• Global & Wholesale: $7.5m revenue, +23% organic growth, +161% EBITDA growth

The fact that multiple divisions are firing simultaneously indicates the business model is resilient to sector-specific headwinds. Strong organic growth rates independent of acquisitions suggest underlying business momentum rather than growth purely through M&A.

How recurring revenue works in telecommunications

For investors new to the telecommunications and IT services sector, understanding Annual Recurring Revenue (ARR) is essential for evaluating business quality. ARR represents the value of subscription-based contracts that renew automatically, providing predictable revenue streams over time. This differs from one-off project revenue, which must be won repeatedly.

Telecommunications and managed IT services naturally lend themselves to recurring revenue models. Once a business connects its phone systems, internet, or IT infrastructure through a provider, switching costs are high. Customer lifetime value tends to be substantial because clients remain on contract for years. This revenue predictability supports higher valuation multiples compared to businesses with less visible earnings.

Comms Group (ASX: CCG) signed $5.4 million in new business ARR during 1H FY26, demonstrating the strength of its recurring revenue pipeline. This figure represents future revenue that will flow through the income statement as contracts are delivered. For context, new ARR signings of this magnitude provide visibility over future earnings growth and validate the company’s sales and marketing investment.

New business wins span 80+ corporates across Asia Pacific and Europe

The company secured approximately 80 Australian and international corporate customers who ordered new services in 1H FY26 from the Global & Wholesale division. These orders span 17 countries across Australia, China, Fiji, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, Vietnam, France, Germany, Ireland and the United Kingdom.

Customer diversity is notable, encompassing global telecommunications carriers, unified communications providers, banking and investment institutions, industrial and manufacturing operators, medical technology companies, a US federal government agency, and a consumer goods manufacturer. This client mix validates the enterprise-grade positioning of the business and reduces reliance on any single customer vertical.

Within the Global and Wholesale Unified Communications business, $1.8 million in new ARR was signed across the Asia Pacific and European markets. TasmaNet secured a major contract expansion with a key customer representing Total Contract Value exceeding $1 million. Beyond signed contracts, the company disclosed $0.9 million in ARR currently in final contracting phase with two multinational banks (one European-headquartered, one US-headquartered), plus an open opportunities pipeline exceeding $5 million in ARR.

New business metrics:

1. $5.4m total new business ARR signed in 1H FY26
2. $1.8m new ARR from Global & Wholesale Unified Communications
3. $1m+ TCV TasmaNet contract with key customer
4. $0.9m ARR in final contracting phase (two multinational banks)
5. $5m+ ARR in open opportunities pipeline

For investors, geographic diversification across 17+ countries reduces single-market dependency, whilst the high-quality customer base (global banks, government agencies, multinational corporations) validates the company’s ability to compete at enterprise level. The pipeline metrics provide forward visibility on revenue growth potential.

TasmaNet integration on track for FY26 completion

The integration of TasmaNet into Comms Group is progressing according to plan, with completion targeted by the end of FY26. All customers, including key Tasmanian Government accounts, have now been transitioned across to Comms Group systems. Mainland customers acquired through TasmaNet have been novated to the appropriate divisions within the group (either Secure Managed IT Solutions or Communications and Collaboration, depending on service type).

Supplier novation has been completed, with the company now focused on optimising supplier costs across the enlarged group through synergy realisation. Additional sales and marketing personnel have been hired within TasmaNet, and the business has established local market presence through targeted events and programmes. Management noted opportunities for growth through new business acquisition alongside upsell and cross-sell initiatives leveraging the broader Comms Group service portfolio.

Successful integration execution de-risks the acquisition and supports the margin expansion trajectory. Cross-selling opportunities from the combined customer base represent additional upside not reflected in standalone TasmaNet performance.

Network consolidation to unlock $2m in annual cost savings

Comms Group has commenced a substantial infrastructure rationalisation project for its domestic operations, consolidating three separate telco networks into a single national network (termed “One Network”) and merging two private cloud platforms into a unified infrastructure (“One Cloud”). The project includes capacity upgrades and capability enhancements, with some one-off capital expenditure being incurred in FY26.

Initial estimates suggest the rationalisation should deliver up to $2 million per annum in external cost savings once complete. The project is scheduled to finish in Q4 FY26, meaning the full run-rate benefit will be realised in FY27.

Strategic Infrastructure Investment

The network and cloud consolidation addresses legacy fragmentation from the company’s growth through acquisition. By moving to unified platforms, Comms Group eliminates duplicate systems, reduces vendor costs, and creates a scalable foundation for future expansion. The $2 million annual saving flows directly to EBITDA, providing permanent margin uplift independent of revenue growth.

For investors, infrastructure consolidation creates permanent margin improvement that compounds over time as revenue scales. The $2 million annual saving represents approximately 4.4% of 1H FY26 annualised revenue, indicating material EBITDA leverage once fully implemented.

Global expansion strengthens competitive moat

Within the Global division, Comms Group expanded its geographic reach into new markets, adding licences and carrier partnerships in Vietnam and six additional European countries. The company has also lodged licence applications in several further jurisdictions to support ongoing international expansion.

Additional carrier partnerships were established in existing markets to enhance capability, improve supply diversity, and reduce cost of supply. Management stated the company believes it now has the most extensive licensed coverage in the Asia Pacific region for the supply of local Public Switched Telephone Network (PSTN) and Unified Communications services, including local direct in-dial services (telephone numbers).

Regulatory licences create barriers to entry, as obtaining telecommunications licences in multiple jurisdictions requires time, capital, and regulatory expertise. Multi-carrier supply diversity improves network resilience (reducing single points of failure) and provides negotiating leverage with vendors. The expanded geographic footprint positions the business to service multinational corporate clients with unified global communications solutions.

Outlook and what comes next for Comms Group

Management reiterated the company remains on track to achieve its annualised run-rate revenue target of $75 million+ and underlying EBITDA target of $9-$10 million for FY26. The guidance reaffirmation following the 1H result provides confidence in second-half momentum, particularly given the company is already tracking at an annualised $75.2 million revenue run-rate based on 1H performance.

The business continues to see strong organic growth opportunities, particularly within Global & Wholesale and Secure Managed IT divisions. TasmaNet integration is scheduled to finalise within the current financial year, with synergy realisation expected to accelerate post-completion. Management confirmed the company remains active in evaluating M&A opportunities whilst maintaining discipline on price and business quality.

Forward-looking highlights:

• $75m+ annualised run-rate revenue target for FY26
• $9-$10m annualised run-rate underlying EBITDA target for FY26
• 0.125 cents per share interim dividend declared
• TasmaNet integration to complete within FY26
• Ongoing evaluation of disciplined M&A opportunities

The combination of organic growth momentum, integration completion, infrastructure cost savings, and M&A optionality provides multiple avenues for continued earnings expansion. Dividend initiation signals the board’s confidence in sustainable cash generation, whilst the maintained guidance following a strong first half suggests management visibility over second-half performance.

Want to Know How Comms Group Plans to Sustain This Record Growth?

Comms Group’s doubling of underlying profit and 87% EBITDA surge demonstrates genuine operating leverage as the business scales. The company’s $2 million network consolidation savings and expanding Asia-Pacific presence position it for continued margin expansion beyond the current financial year.

Discover the full details of Comms Group’s strategic infrastructure projects and pipeline opportunities by visiting the CCG investor centre for comprehensive analysis. With management reaffirming $75 million+ revenue guidance and initiating dividends, understanding the business model’s recurring revenue dynamics becomes essential for evaluating long-term shareholder returns.