Rising Losses Shadow Swoop’s Strategic Shift and Fibre Network Ambitions

Revenue Growth Amidst Rising Losses

Swoop Holdings Limited has delivered a mixed set of preliminary financial results for the year ended 30 June 2025. The company reported a robust 19.8% increase in total revenue to $106.5 million, underpinned by strong organic growth and new contract wins. However, despite this top-line momentum, Swoop’s net loss after tax widened significantly to $6.95 million, nearly doubling from the prior year’s $3.79 million loss.

The widening loss reflects a combination of increased depreciation and amortisation expenses, higher acquisition and integration costs, and notable fair value losses on financial assets. Underlying EBITDA, a key measure of operational profitability, declined by 7.2% to $15.2 million, though the core business EBITDA; excluding discontinued operations and one-off projects; actually grew by 14.2%, suggesting operational improvements beneath the headline figures.

Strategic Divestments and New Contracts

During the year, Swoop completed the divestment of its wholesale voice call termination business for $8.8 million, a move aligned with its strategic focus on core markets. The company also inked a three-year wholesale internet services agreement with Flip, expected to contribute approximately $10 million in annual revenue with potential upside as Flip’s subscriber base expands.

Significantly, Swoop commenced long-term customer contracts valued at up to $49 million over 22 years, involving the construction, ownership, and operation of a substantial fibre network in Greater Melbourne. This initiative positions Swoop as a key infrastructure player in the region’s telecommunications landscape, signaling a strategic pivot towards network asset development and long-term recurring revenue streams.

Balance Sheet and Cash Flow Highlights

At 30 June 2025, Swoop reported net assets of $54.3 million, down from $59.5 million the previous year. The company’s working capital deficit widened to $18.5 million, reflecting ongoing investments in network infrastructure and operational platform automation. Despite this, operating cash flow before interest payments was strong at $17.6 million, a 64.4% increase year-on-year, underscoring healthy cash generation from core operations.

Swoop held $8 million in cash and had $10 million in undrawn debt facilities available, providing liquidity to support its growth initiatives. Additionally, the company holds a 22.8% stake in Vonex Limited, with an announced plan to divest this holding by October 2025, expected to yield approximately $6.1 million in cash proceeds.

Outlook and Shareholder Returns

No dividends were declared for the year, consistent with the company’s focus on reinvestment and strategic repositioning. Share-based payments and long-term incentive plans remain in place to align management interests with shareholder value creation. The company’s investments in intangible assets, including software and contractual agreements, reflect ongoing efforts to enhance operational capabilities and support future growth.

Overall, Swoop’s FY25 results reveal a company in transition; balancing short-term profitability challenges with strategic investments and contract wins that could underpin longer-term value. Investors will be watching closely how these initiatives translate into sustainable earnings and cash flow improvements in the coming years.