Profit Dive and Goodwill Hit Raise Questions on Aussie Broadband’s Expansion Strategy
Aussie Broadband reported an 8.4% revenue rise to $637.8 million in H1 2026, driven by broadband and mobile growth, but net profit fell 58% due to a $14.8 million goodwill impairment. The company declared a fully franked dividend and announced major acquisitions to boost its customer base.
- Revenue increased 8.4% to $637.8 million
- Net profit after tax declined 58.3% to $5.1 million due to goodwill impairment
- EBITDA before one-off costs rose 13.5% to $74.7 million
- Interim fully franked dividend of 2.4 cents per share declared
- Agreed acquisitions of AGL Energy’s telecom business and Nexgen Investment Group
Revenue Growth Amidst Profit Pressure
Aussie Broadband Limited has delivered a solid revenue increase of 8.4% to $637.8 million for the half-year ended 31 December 2025, reflecting continued momentum in broadband and mobile customer growth. The company’s broadband connections rose 5% to over 827,000 services, with its National Broadband Network (NBN) market share expanding to 8.8%.
Despite this top-line growth, net profit after tax plunged 58.3% to $5.1 million, primarily due to a $14.8 million goodwill impairment linked to the divestment of its Digital Sense Hosting business. This impairment weighed heavily on earnings, overshadowing operational improvements.
Operational Efficiency and Financial Discipline
Underlying operational performance showed strength, with earnings before interest, tax, depreciation, and amortisation (EBITDA) before one-off costs rising 13.5% to $74.7 million. The company improved operating leverage, reducing operating expenses as a percentage of revenue from 25.8% to 24.6%, and maintained a gross profit margin of 36.3%, consistent with the prior six months.
Capital expenditure was notably lower at $16.9 million compared to $32.6 million in the prior period, reflecting disciplined investment. Operating cash flow increased to $29.4 million, up $13.1 million year-on-year, supporting the company’s financial flexibility despite net borrowings rising slightly to $139.2 million.
Strategic Moves and Future Growth Platforms
In a significant strategic development, Aussie Broadband entered a six-year wholesale services agreement with More Telecom, expected to add approximately 290,000 connections upon migration. This deal provides a substantial platform for future earnings growth.
Post-period, the company amended its syndicated debt facilities, reducing interest margins and extending tenors, enhancing its capital structure. It also announced two major acquisitions: the telecommunications business of AGL Energy Limited, expected to add 350,000 broadband and mobile connections plus 46,000 voice services, and Nexgen Investment Group, adding around 7,500 business customers. These acquisitions, to be completed mid-2026, signal aggressive expansion ambitions.
Shareholder Returns and Outlook
The board declared a fully franked interim dividend of 2.4 cents per share, consistent with the prior year, reflecting confidence in ongoing cash generation. With a strengthened balance sheet, operational improvements, and a clear growth strategy through acquisitions, Aussie Broadband is positioning itself for a transformative period ahead.
However, the goodwill impairment and divestment highlight challenges in portfolio management and the need to integrate new assets effectively. Investors will be watching closely how these strategic moves translate into sustainable profitability.
Bottom Line?
Aussie Broadband’s growth story is intact but profit pressures and integration risks set the stage for a critical next phase.
Questions in the middle?
- How will the integration of AGL Energy’s telecom business impact Aussie Broadband’s margins and costs?
- What are the risks and timelines associated with migrating More Telecom’s 290,000 connections?
- Will the goodwill impairment signal further portfolio reshaping or cost pressures ahead?
