How 5G Networks’ AUCyber Acquisition Sparked a $5.7M EBITDA Turnaround
5G Networks has reported a strong FY25 with an 8% revenue increase and a positive EBITDA turnaround, driven by the strategic acquisition of cyber security firm AUCyber. The company’s expansion into sovereign cloud services signals a new growth chapter.
- Revenue from continuing operations up 8% to $53 million
- Total consolidated revenue including AUCyber rises 27% to $62.6 million
- Underlying EBITDA turns positive at $3.2 million, a $5.7 million improvement
- Acquisition of 89.6% controlling stake in AUCyber expands cyber security footprint
- Strong cash position of $29.3 million despite $19.1 million acquisition spend and $4.6 million share buyback
Strong Financial Turnaround
5G Networks Limited (ASX, 5GN) has delivered a notable financial turnaround in FY25, reporting an 8% increase in revenue from continuing operations to $53 million. More impressively, the company swung to a positive underlying EBITDA of $3.2 million, marking a $5.7 million improvement from the previous year. This performance reflects disciplined execution amid a challenging telecommunications landscape.
Strategic Expansion into Cyber Security
The standout development for 5GN this year was the acquisition of an 89.6% controlling interest in AUCyber Limited (ASX, CYB), a specialist in sovereign cloud and cyber security solutions. This move not only diversifies 5GN’s portfolio but also positions the company as a key provider to Australian government and critical national industries. AUCyber contributed $9.6 million in revenue within just five months of acquisition, underscoring the immediate accretive impact.
Growth Across Enterprise and Wholesale Segments
Beyond the acquisition, 5GN’s core Enterprise and Wholesale segments continued to grow. Enterprise revenue rose 7.5% to $40.4 million, while Wholesale revenue increased 12% to $8.9 million, buoyed by large-scale contracts across the Asia-Pacific region. The company’s strategy to re-price data centre contracts and simplify its service offerings appears to be paying dividends.
Financial Strength and Capital Management
Despite investing $19.1 million in AUCyber and returning $4.6 million to shareholders through a share buyback, 5GN maintained a robust cash position of $29.3 million at year-end. This financial strength provides a solid foundation for further strategic acquisitions and organic growth initiatives. The company also refreshed its board during the year, signaling a renewed focus on governance and strategic oversight.
Looking Ahead
For FY26, 5GN plans to complete the integration and potentially the full acquisition of AUCyber, while continuing to expand data centre and cloud capacity. The company aims to leverage its enhanced cyber security capabilities to secure government and critical industry contracts, maintaining capital discipline as it scales. This strategic pivot into cyber security aligns with broader market trends emphasizing data sovereignty and national security.
Bottom Line?
5G Networks’ FY25 results mark a pivotal shift, but the success of its cyber security expansion will be critical to sustaining momentum.
Questions in the middle?
- Will 5GN complete the full acquisition of AUCyber and how will it impact future earnings?
- How effectively can 5GN integrate AUCyber’s operations to unlock synergies?
- What new government or critical industry contracts might 5GN secure leveraging its cyber security capabilities?
