The Aussie Broadband Ltd (ASX: ABB) share price is having a great finish to the week.
In morning trade, the internet provider's shares are up almost 9% to $3.37.
This follows the release of the company's FY 2023 results.
Aussie Broadband share price jumps on strong profit growth
- Revenue up 23.1% to $788 million
- Gross margin improved 2.1 percentage points to 35.4%
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 52.1% to $89.6 million
- Operating cash flow increased 147.2% to $116.7 million
- Net profit after tax up from $1.3 million to $21.7 million
What happened in FY 2023?
For the 12 months ended 30 June, Aussie Broadband reported a 23.1% increase in revenue to $788 million. This was driven by strong growth in its Residential and Wholesale segments, and accelerating momentum in the Business, and Enterprise & Government segments.
Total broadband connections increased 18.2% to 691,172 following strong growth across all segments. This led to the company's NBN broadband market share (excluding satellite) increasing to 7.6% from 6.5% a year earlier.
Things were even better for the company's earnings, with its EBITDA rising 52.1% to $89.6 million. Management advised that was underpinned by gross margin improvements thanks to a focus on more profitable services and leveraging its recent fibre network investment.
On the bottom line, Aussie Broadband's net profit after tax increased by over 1,500% year on year to $21.7 million.
Management commentary
Aussie Broadband's co-founder and managing director, Phillip Britt, was rightfully pleased with the company's performance in FY 2023. He said:
It's been another successful year for Aussie, marked by strong financial performance, growth across all segments and continued investment in our network infrastructure.
Our transition from being a largely residential-focused retail service provider into a multifaceted communications and technology company underpinned by award-winning customer service is well underway. We achieved strong levels of growth across the board, achieving record revenues and EBITDA, and we are continuing to win NBN market share ahead of other providers.
Outlook
Also boosting the Aussie Broadband share price today has been its guidance for the year ahead.
Based on current market conditions, operating plan, pipeline, and trading to date, management expects FY 2024 EBITDA to be in the range of $100 million to $110 million. This represents an increase of 12% to 23% on what it reported in FY 2023.
Britt concludes:
Our guidance for Aussie Broadband's FY24 results highlights the momentum in our business and our growth trajectory across our four segments. I am excited by the new additions to the team across all levels and looking forward to exploring new avenues to expand on our ability to change the game.
Our world-class infrastructure, award-winning customer service, and leading technology remain the foundation of our business. We're resolute in our pursuit of sustainable growth and achieving our strategic goals to cement Aussie Broadband's position as a leading force in the telecommunications space.
