Can Comms Group Hit $75M Revenue After TasmaNet Acquisition?
Comms Group Limited reported a steady 2% revenue increase in FY25, hitting the highest gross margin in five years, while targeting over $75 million in run-rate revenue post-TasmaNet integration.
- FY25 revenue up 2% to $56.6 million
- Gross margin reaches 47.9%, highest in five years
- Underlying EBITDA declines 12.7% to $5.7 million due to global investment
- TasmaNet acquisition completed June 2025, driving growth outlook
- Targets $75 million+ revenue and $9-10 million EBITDA run-rate post-integration
Steady Growth Amid Strategic Investment
Comms Group Limited (ASX, CCG), a specialist provider of cloud communications and managed IT services, has reported its FY25 financial results, showing modest revenue growth alongside strategic investments that position the company for accelerated expansion. Revenue rose 2% year-on-year to $56.6 million, while gross profit increased 3% to $27.1 million, marking the highest gross margin in five years at 47.9%. This reflects effective pricing and cost management despite a competitive telecommunications landscape.
Underlying EBITDA declined by 12.7% to $5.7 million, which the company attributes to increased investment in global resources and integration costs related to the TasmaNet acquisition completed in June 2025. Despite this, the EBITDA result landed at the top end of the company’s guidance, underscoring operational resilience amid growth initiatives.
TasmaNet Acquisition and Growth Prospects
The acquisition of TasmaNet represents a pivotal step in Comms Group’s strategy to expand its footprint across the Asia-Pacific region. The company is targeting a run-rate revenue exceeding $75 million and an underlying EBITDA between $9 million and $10 million once the integration is complete. This ambitious target signals confidence in the combined entity’s ability to leverage cross-selling opportunities and scale its cloud communications, collaboration, and secure managed IT solutions.
Comms Group’s diversified revenue streams span domestic SME, corporate, and government sectors, as well as global wholesale unified communications. The company boasts a client base of over 5,000 with low churn rates, supported by a recurring revenue model that accounts for over 90% of total revenue. This mix provides a stable foundation for sustainable growth and cash flow generation.
Financial Position and Outlook
Comms Group maintains a strong balance sheet with modest net debt of $5.2 million and gearing well within banking covenants. Operating cash flow remained robust at $3.6 million despite one-off acquisition costs, while free cash flow held steady at $3.3 million, underpinning the company’s capacity to fund growth and return capital to shareholders.
Looking ahead, the company plans to continue investing in its global resources and pursue both organic and inorganic growth opportunities, including active M&A discussions. The focus remains on digital transformation initiatives, rationalising networks, and enhancing service offerings to meet rising demand for secure, cloud-based communications and IT solutions.
Comms Group’s leadership team, with deep industry experience, is steering the company through this phase of expansion, aiming to solidify its position as a leading cloud communications provider in the Asia-Pacific region.
Bottom Line?
Comms Group’s FY25 results set the stage for accelerated growth, but successful TasmaNet integration and M&A execution will be critical to delivering on ambitious targets.
Questions in the middle?
- How smoothly will the TasmaNet integration proceed and impact FY26 earnings?
- What are the key inorganic growth targets and timelines for M&A activity?
- How will rising investment in global resources translate into revenue and margin expansion?
