Converge ICT Solutions, Inc. Registered Consolidated Revenues of P9.5 Billion for Q12024, Up 10.4%

Converge Information and Communications Technology Solutions, Inc. (Converge), the first pure-play high-speed fixed broadband provider in the Philippines, had 2,252,845 subscribers as of March 2024. There are 160,948 prepaid subscribers and 2,091,897 postpaid subscribers in total.

In Q12024, FiberX contributed 54,615 net additions out of the total consolidated net additions of 124,793 (considering the upselling of HFC customers), which was the highest quarterly net additions since Q32021. Similarly, gross additions during Q12024 of 244,670 was the highest since the same period.

Record-breaking quarterly net additions in ten quarters; sharply lower consolidated churn rate; 10.4% increase in consolidated revenues to P9.5 billion in Q12024 from P8.6 billion in Q12023, solidifying the company's standing as the Philippines' fastest-growing fixed broadband service provider.
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Over the same time period, residential business increased to P8.2 billion. FiberX reported gross increases for the quarter that exceeded the gross additions for 2023. Significantly lower churn rates allowed net additions to reach 54,615—the highest level since Q12022. All income groups' sustained desire for fiber internet is demonstrated by BIDA Fiber and Surf2Sawa's record-breaking quarterly gross additions.
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In Q12024, the consolidated average monthly churn rates have likewise decreased QoQ to 1.82%. To further reduce turnover to more favorable levels, a specialized churn management team was formed to spearhead long-term strategic churn management initiatives. Total net additions across all brands came to 2,252,845 in the consolidated subscriber base.

Enterprise revenue increased from P1.2 billion in Q12023 to P1.4 billion in Q12024, a 10.5% annual growth. With a 31% increase in revenue, small and medium-sized enterprises (SMEs) remained the fastest-growing subsegment.

The company's EBITDA increased from P5.2 billion in Q12023 to P5.8 billion in Q12024, a double-digit growth of 12.8%. In Q12024, the consolidated EBITDA margin increased to 61.1% from 59.9% in the same period the previous year.
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Because there was less churn during the quarter, the amortization of deferred contract costs (DCC) decreased by 17% year over year. This account comprised the unamortized DCC of churned subscribers, which was recognized in advance and was higher in Q12023. The 24% decrease in outside services was also caused by savings from third-party optimization. These were counterbalanced by increased labor, marketing, and advertising costs, as well as repair and maintenance costs.

The company increased its Return on Invested Capital (ROIC), which leads the industry, from 16.3% to 17.4% in the previous quarter. As more ports are used, the company anticipates significant improvements in ROIC. The company's methodical capital deployment strategy to grow its fiber network and enhance its overall services is what has led to this performance.

Net income after tax grew from P2.2 billion in Q12023 to P2.6 billion in Q12024, resulting in a net income margin of 26.7% for Q12024, higher than Q12023 net income margin of 25.1%.
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Converge has been able to comfortably stay within bank covenants while maintaining a healthy balance sheet and cash flows with plenty of liquidity. As of March 31, 2024, the company's net debt position—defined as total financial debt less cash and cash equivalents—was P20.1 billion, down from P21.5 billion on December 31, 2023. By paying back some of its debt, the company's outstanding balance as of March 31, 2024, was P34.2 billion, P1 billion less than it was on December 31, 2023. As a result, Q12024's financing costs decreased. The company's net debt-to-total equity ratio was 0.4x and its debt service coverage ratio (DSCR) was 3.4x, both of which were comfortably within the necessary financial covenants from its financing facilities.

Total cash CAPEX as of Q12024 amounted to P3.0 billion.