Swoop’s Revenue Surges 53% as It Invests $3m in Tech and Raises $9.3m
Swoop Holdings reports a robust 53% increase in customer receipts for the first half of FY26, driven by NBN and Mobile growth, while investing heavily in technology and launching a strategic refocus.
- Customer receipts up 53% in 1H FY26, driven by NBN, Mobile, and Melbourne Fibre Project
- Operating cash flow declined due to reduced payables, free cash flow down $12.4m
- Invested $3m in technology platforms to support growth and margin expansion
- Raised $9.3m via entitlement offer to fund Melbourne Fibre Project and working capital
- Board reshuffle with two non-executive directors resigning amid 'Focus. Divest. Grow' strategy
Strong Revenue Growth Amid Strategic Investments
Swoop Holdings Limited (ASX – SWP) has delivered an impressive 53% increase in customer receipts for the first half of fiscal year 2026, reaching $72.9 million. This surge was primarily fuelled by accelerating demand for its core NBN and Mobile products, alongside contributions from the Melbourne Fibre Project. Excluding one-off project revenues, customer receipts still rose a healthy 37% compared to the prior corresponding period.
Despite this top-line momentum, operating cash flow for the half declined by approximately $9.1 million, finishing at negative $4.1 million. The main driver was a significant reduction in accounts payable, reflecting a tighter cash management approach. Free cash flow also fell by $12.4 million to negative $14.9 million, influenced by the operating cash flow movement and a $3 million one-off investment in technology platforms aimed at supporting future growth and margin improvements.
Margin Outlook and Operational Focus
The company reported a gross margin of 25.2% for its core business, slightly below the prior year. However, Swoop is targeting an 8-10% margin improvement over the next 18 months. This is expected to be driven by supplier contract renegotiations, including a significant industry-wide NBN deal commencing July 2026, alongside organic growth and enhanced operating leverage across its network.
Monthly recurring sales nearly tripled, up 198%, while monthly revenue increased 39% year-on-year as of December 31, 2025. This reflects Swoop’s continued emphasis on its core consumer offerings and commitment to customer service excellence.
Capital Raising and Strategic Board Changes
In December 2025, Swoop completed an entitlement offer raising $9.3 million to fund working capital and capital expenditure for the Melbourne Fibre Project. The company also received $6.2 million from divesting its Vonex shares in October 2025. These moves have bolstered Swoop’s available funding to $16 million, including $6.2 million in cash, providing a solid financial base for ongoing projects and growth initiatives.
Responding to shareholder feedback, Swoop launched a “Focus. Divest. Grow” strategy aimed at simplifying the business and improving returns. As part of this transition, non-executive Chair James Spenceley and non-executive Director Matt Hollis resigned from the Board in December 2025, signaling a new phase for the company’s governance and strategic direction.
Looking Ahead
CEO Alex West highlighted the company’s strong organic growth and the strategic investments underpinning future margin expansion. With ongoing supplier negotiations and technology upgrades, Swoop is positioning itself to enhance profitability while maintaining growth momentum in Australia’s competitive telecommunications sector.
Bottom Line?
Swoop’s strong growth and strategic investments set the stage for a pivotal year ahead, but execution risks remain as it simplifies its business and pursues margin gains.
Questions in the middle?
- How will supplier contract renegotiations impact Swoop’s margins and pricing power?
- What are the implications of the Board resignations on strategic execution and investor confidence?
- Can the Melbourne Fibre Project deliver the expected returns amid rising capex and competitive pressures?
