Swoop’s Subscriber Base Surges 35%-218%, Targets $5M+ Margin Boost

Robust Subscriber Growth Drives Momentum

Swoop Holdings Limited (ASX – SWP) presented a confident update at its November 2025 AGM, highlighting strong organic growth across its core telecommunications offerings. The company reported approximately 61,000 active nbn services in operation, marking a tripling of market share year-on-year to 0.69%. Meanwhile, its mobile subscriber base stands at around 127,000, reflecting a 35% organic increase since acquisition. This growth underscores Swoop’s positioning as a fast-growing challenger in the Australian internet service provider market, particularly among price-conscious and value-led consumers.

Melbourne Fibre Rollout Gains Traction

The company’s Melbourne fibre network project is progressing well, with 24% completed and approximately 65 kilometres built to date. With $57 million in contracted revenue secured and a $61 million sales pipeline, Swoop is targeting hyperscale data centre and enterprise customers amid a booming demand environment driven by major tech players like Amazon, Microsoft, Google, and Meta expanding capacity in the region. The fibre rollout is on track for completion by mid-FY27, with peak funding expected in the second half of FY26.

Strategic Divestments and Margin Improvement

Continuing its focus on core products, Swoop has divested its Voicehub business for $8.8 million, generating a profit of around $4 million. The company is actively progressing divestments of non-core assets including data centres, non-strategic fibre networks, and fixed wireless networks, with indicative offers totaling $9-10 million and ongoing contract negotiations adding $3-5 million in potential value. These moves align with management’s strategy to streamline operations and enhance profitability.

Looking ahead, Swoop aims to increase its gross margin by approximately 10% over the next two to three years, targeting an uplift of more than $5 million in annual cash flow from its mobile and nbn user base. This is expected to be achieved through renegotiation of supply contracts and leveraging economies of scale.

Financial Performance and Outlook

In the first quarter of FY26, Swoop reported revenue of $33.1 million, a 46% increase compared to the prior corresponding period, driven by a 22% rise in recurring revenue. However, EBITDA declined by 9% to $2.9 million, reflecting ongoing investments and cost pressures. Despite this, the company projects underlying EBITDA to more than double by FY30, supported by investments in automation and a major reduction in cost of goods sold, while maintaining flat headcount costs.

Valuation benchmarks based on recent transactions in the nbn and mobile virtual network operator (MVNO) sectors suggest that Swoop’s combined nbn and mobile businesses may be undervalued, with potential enterprise values ranging from $43.7 million to $62.5 million. This highlights the market opportunity as Swoop continues to scale its core offerings.

Customer Satisfaction as a Differentiator

Swoop’s award-winning customer service remains a cornerstone of its value proposition, consistently earning top ratings across major independent review platforms. The company’s no lock-in contract approach and focus on customer support have helped it secure a loyal and growing subscriber base, particularly among lower-data and price-sensitive consumers.