Converge Targets Robust 14-16% Revenue Growth in 2025
Premier fiber broadband and tech provider, Converge ICT Solutions Inc., is poised to carry forward its impressive momentum from the previous year. The company projects a revenue growth of 14-16% for 2025, bolstered by the continued success of its fiber prepaid, a revitalization of its Enterprise business, and the fruition of significant investments in data centers and subsea cable systems.
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| Following 19% Growth in 2024, Converge Targets Robust 14-16% Revenue Growth in 2025 |
The company closed 2024 on a high note, with nearly a 19% increase in net income year-on-year, amounting to P10.8 billion. Consolidated revenues also witnessed an impressive rise of nearly 15%, reaching P40.6 billion. The Converge Board of Directors greenlighted a regular cash dividend payment of P0.43 per share, set to be disbursed on April 16, 2025, with a record date of April 2, 2025. The per-share value represents close to 30%—the upper end of the policy range.
"Following our strong performance in 2024, we're setting our sights on an equally robust 2025. We're targeting a consolidated revenue growth rate of 14-16%, with an EBITDA margin of 61-62%," stated Converge's Chief Finance Officer, Robert A. Yu, at the company's Q4 and full-year 2024 briefing.
"To ensure sustained growth, we've earmarked a CAPEX budget of P20-25 billion, which includes payments for two subsea cable systems—Bifrost and SEA-H2X—and two data centers, in addition to the port expansion and redundancy CAPEX set for this year," Yu added.
Converge Reports Strong Performance in First Nine Months of 2024
Converge's affordable prepaid offering, Surf2Sawa, and BIDA fiber, saw significant growth in 2024, with the EOP subscriber base for both services expanding by approximately 150% over the year. This growth trajectory bolsters Converge's confidence in reaching its mid-term goal of 4 million subscribers by 2027.
The company's Enterprise business is geared to surge in 2025, as it consolidates its offerings to Philippine businesses. Among these offerings is the Converge Content+, an internet-based TV solution designed for the hospitality industry. Furthermore, the company is planning to enhance the Enterprise portfolio with more technology collaborations.
Converge's burgeoning data center business is set to go live. The company has been broadening its network of digital hubs to meet the surging demand for content and cloud services, employing a multi-edge strategy for enhanced data delivery.
The Caloocan Data Center, designed to house 300 racks, will cater to the company’s operational needs. Meanwhile, the Pampanga data center project, designed for 1,200 racks, is set to fulfill the future needs of both residential and enterprise customers.
The company also anticipates the activation of its two subsea cables, the Bifrost Cable System and the Southeast Asia Hong Kong-Hainan Express Cable System. These systems will not only serve as redundancy but also enable Converge to fully cater to the needs of its customers and drive sector-wide innovation.
The integration of new data centers and the deployment of two subsea cable systems are set to turbocharge Converge's Enterprise Business.
Converge Posts 5% Revenue Growth and 22% Surge in Net Income in 2023 Amid Accelerated Fiber Internet Subscriptions
An important company in the fiber internet and technology industry, Converge ICT Solutions Inc. (PSE: CNVRG), reported excellent results for 2023. The company's consolidated sales went up 5% year-over-year to P35.4 billion, and its net income went up a noticeable 22% to P9 billion. This was due to more people wanting fiber internet services.
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| Converge Posts 5% Revenue Growth and 22% Surge in Net Income in 2023 |
The company got a massive 32% more residential users for its fiber plans, adding a total of 284,000 new customers. This was the biggest increase in fiber net adds in the industry for the year. The number of consolidated net additions went up by 13.4% year over year, making Converge the only big operator to see growth.
Dennis Anthony Uy, CEO and co-founder of Converge said, "Our newly launched products Surf2Sawa (S2S) and BIDA Fibre, along with our flagship brand FiberX, have continued to hold strong throughout 2023."
S2S and BIDA Fibre added a record number of net new customers in Q4 alone. By the end of 2023, the total number of users will have reached nearly 175,000, well above the company's goal of 120,000. The FiberX name also kept growing quickly, and now it has 1.8 million subscribers.
Converge Unveils 'Free Upgrade to Vision' Promotion for FiberX Subscribers
Because of how well the company did, it gained nearly 80,000 net new users in Q4 2023, which is 31.8% of the total net additions for the whole year.
In 2023, Converge added more than 2.1 million subscribers, with over 2 million regular subscribers and 114,000 prepaid subscribers. The company also won several awards at the Ookla Speedtest Awards. In the second half of 2023, it was named the Philippines' Fastest Internet Service Provider.
The company's industrial business also saw strong growth, rising from P4.3 billion to P5.1 billion, or 20% year-over-year.
"Our outstanding performance shows how dedicated we are to financial discipline. This has helped us become the leaders in our industry in 2023 in terms of revenues, ROIC, and EBITDA margins." "This success gives us the fuel to speed up our growth and give our stakeholders more value," said Maria Grace Uy, President and Co-Founder of Converge.
The company said its combined EBITDA margin was 61%, and its EBITDA of P21.5 billion was up 11.2% year over year. The company met its EBITDA goals for 2023 thanks to innovative cost management. Converge is still the leader in its field, with a 16.3% return on invested capital (ROIC).