5G Networks Posts $62.7M Revenue, $3.7M EBITDA After Cybersecurity Buy

• 27% revenue growth to $62.7 million in FY25
• Underlying EBITDA of $3.7 million, reversing prior losses
• Acquisition of 89.65% stake in AUCyber for $19 million
• Enterprise and wholesale segments show strong growth
• Cash balance reduced to $29.3 million post acquisition and share buyback

Strategic Expansion and Financial Turnaround

5G Networks Limited (ASX, 5GN) has delivered a compelling FY25 performance, posting a 27% increase in total revenue to $62.7 million. This growth was fueled by both organic expansion and a significant acquisition, marking a pivotal moment in the company’s evolution within the cloud services and cybersecurity sectors.

Underlying EBITDA swung to a positive $3.7 million from a loss of $2.5 million in the previous year, reflecting improved operational efficiencies and revenue mix. However, this figure excludes a $500,000 net loss from AUCyber, the cybersecurity firm in which 5GN acquired a controlling 89.65% stake during the year.

Acquisition of AUCyber, A Move into Sovereign Cloud and Cybersecurity

The acquisition of AUCyber, an Australian-owned provider specializing in secure cloud infrastructure and cybersecurity services, represents a strategic diversification for 5GN. AUCyber’s focus on data sovereignty and servicing critical national industries aligns with 5GN’s ambition to deepen its footprint in government and enterprise sectors.

5GN’s initial 10.74% stake was acquired in December 2024, followed by an on-market takeover offer that culminated in an 89.68% holding by February 2025. The board has indicated intentions to pursue compulsory acquisition to exceed 90% ownership, consolidating control and facilitating integration.

Segment Growth and Market Reach

The enterprise segment, bolstered by AUCyber’s $9.6 million revenue contribution, grew 23.5% to $49.9 million. Organic growth within enterprise services added approximately $4 million, underscoring strong demand for cloud hosting, managed IT services, and digital marketing products.

Wholesale revenue surged 42.7% to $12.7 million, driven by large contract wins across the Asia-Pacific region. This segment benefits from 5GN’s extensive fibre network and data centre infrastructure, which supports cloud hosting and network services.

Financial Position and Cash Flow Considerations

Despite the positive revenue and EBITDA trends, 5GN’s cash balance declined to $29.3 million from $66.7 million in the prior year. This reduction reflects the $19.1 million investment in AUCyber and a $4.6 million share buyback program. The company also repaid $29.7 million in debt during FY25, strengthening its balance sheet.

Trade receivables increased by $8 million, which may warrant monitoring for cash flow implications. Non-operating expenses, including impairments and share-based payments, impacted net profitability but are considered non-recurring.

Looking Ahead, Integration and Market Positioning

5GN’s expanded service offering now includes sovereign cloud solutions and enhanced cybersecurity capabilities, positioning it well to capture growing demand from government and critical infrastructure sectors. The company’s extensive fibre network and data centre assets provide a robust platform for future growth.

However, successful integration of AUCyber and sustaining EBITDA momentum will be key challenges. Investors will be watching closely for updates on the compulsory acquisition process and how synergies translate into financial performance in upcoming quarters.

Bottom Line?

5GN’s FY25 results mark a strategic inflection point, but the path to seamless integration and sustained profitability remains to be navigated.

Questions in the middle?

• Will 5GN complete compulsory acquisition of remaining AUCyber shares soon?
• How will AUCyber integration impact 5GN’s EBITDA and cash flow in FY26?
• Can 5GN sustain growth in wholesale contracts amid competitive pressures in Asia-Pacific?