New contracts but modest H1 FY25 revenue rise for Comms Group

ASX-listed communications services provider Comms Group has announced modest revenue growth but record new business acquisition in its latest half-year financial results.

Total revenue reached $27.05 million for the company, representing a slight increase of 0.3 per cent year-on-year.

Gross profit meanwhile climbed to $13.1 million, up 1.5 per cent compared to the same period last year, with gross margin improving to 48.3 per cent.

Comms Group secured $5.9 million in new annual recurring revenue (ARR), marking its strongest half-year for new contracts on record.

Major wins included contracts with a global software as a service (SaaS) provider, and an international technology company.

Underlying earnings before tax (EBITDA) fell to $2.4 million, down 19 per cent year-on-year.

This reflects increased investment in staffing for future growth at Comms Group.

"We are pleased to see positive momentum in the business and significant new business won that will translate to revenue in future periods," Peter McGrath, chief executive of Comms Group said.

"The half saw the strongest new business results in the business on record with $5.9m in new ARR secured," McGrath added.

"The further investment in new staff has impacted our short-term results, however, we are confident that the additional investment will assist us with future key growth opportunities being secured," McGrath said.

Comms Group increased headcount in Singapore and Australia to support its growing Global unified communications as a service (UCaaS) and Wholesale business.

Licensing footprint expanded across Asia, Latin America, and Europe to unlock new revenue opportunities.

The business completed key security certifications including ISO 27001:2022, SOC 2, and UK Cyber Essentials to support its global expansion.

Demand remained strong for Microsoft Teams Calling, communications platform as a service (CPaaS), and managed IT services across its Cloud Communications and Secure Workplace Solutions divisions, the company said.

Looking ahead, Comms Group provided FY25 guidance with expected revenue between $55 million and $57 million.