Activeport Faces Funding Decisions Despite Strong Q4 Revenue Gains

Strong Revenue Growth in High-Margin Segments

Activeport Group Ltd (ASX, ATV) closed FY25 on a high note, delivering robust growth in its core software and Network as a Service (NaaS) businesses. Software revenue climbed 23% quarter-on-quarter, reflecting expanded adoption of orchestration solutions across telecommunications, data centres, and internet service providers. Meanwhile, underlying NaaS revenue surged 31%, driven by early demand for the company’s Global Edge platform operating on the FibreconX network.

This shift towards higher-margin software revenue is notable, with software now representing 56% of total revenue, up from just 32% at the start of the financial year. This transition is a key factor behind the company’s improved financial efficiency, as operating costs remained stable despite the deployment of new services.

Major Contract Wins Signal Growth Trajectory

June saw Activeport secure significant new software contracts with major telecommunications players including Telekom Malaysia, Ishan Technologies, and Reliance Jio. These agreements, set to begin generating revenue in the first quarter of FY26, provide a solid foundation for recurring revenue growth. The Global Edge NaaS platform also added $3.2 million in total contract value during June and July, with infrastructure commissioned in Sydney and Melbourne poised to drive further adoption.

Activeport’s refreshed sales team is actively cultivating a strong pipeline, with at least five additional projects expected to commence in the first half of FY26. This momentum suggests the company is well positioned to capitalize on growing demand for cloud-enabled network orchestration and edge computing services.

Focused R&D Enhances Product Capabilities

Research and development efforts in the quarter concentrated on advancing the Compute V3.0 platform, which supports automated deployment of GPU servers and virtual machines across multiple operating systems. This technology is critical for the upcoming large-scale rollout of GPUs for Reliance Jio in India, scheduled to start in August. Additionally, alpha testing of the Version 4.0 streaming engine continues, promising significant performance improvements for cloud gaming applications.

The Global Edge NaaS platform, currently delivering 10Gb ports and IP transit, is set for further feature enhancements in FY26, which are expected to unlock additional revenue streams and strengthen the company’s competitive position.

Financial Management and Funding Outlook

Activeport improved its cash consumption by 43% over the last two quarters, reflecting a disciplined approach to cost management alongside revenue growth. The company terminated its previous loan facility with Radian Arc and arranged new financing, including a secured loan against its R&D tax incentive refund and an unsecured working capital facility. Despite cash reserves covering just over one quarter of operating expenses, Activeport remains confident in maintaining current cash flow levels and is exploring credible funding options to support ongoing operations and growth initiatives.

Additionally, the company detailed its Zero Exercise Price Options (ZEPOs), which are tied to share price milestones and could provide future equity incentives aligned with shareholder value creation.

Looking Ahead

Chairman and CEO Peter Christie highlighted Q4 FY25 as a pivotal period, marking the achievement of a recurring revenue baseline and improved margins. With a strong sales pipeline, expanding product capabilities, and strategic financing in place, Activeport is poised for steady revenue growth and enhanced cash flow in FY26. Investors will be watching closely as new contracts begin to contribute and the company scales its Global Edge platform across key markets.