Thank you. Good morning, everyone, and welcome to Aussie Broadband's FY 2025 Results Briefing. My name is Brian Maher, and I am the Group Chief Executive Officer of Aussie Broadband. I'd like to start off today by acknowledging the Aboriginal and Torres Strait Islanders as the first Australians, and for their role as the original communicators, connectors, scientists, and carers of the land and waters across Australia. We pay our respects to elders past and present. We commit to working respectfully to honor ongoing cultural and spiritual connections between the traditional owners of this country and to building an inclusive Australia together. I'm joined on the call today by Andy Giles Knopp, our CFO, and Michael Omeros, known to many as Mo, the Group Executive of Wholesale and CEO of Symbio. Thank you all for joining us for our FY 2025 results and training update.
I'll also touch on our other announcements today: our new exclusive wholesale services partnership that we've formed with More and Tangerine, and the sale of Buddy Telco and its customer base later on this call. Before we go into the results in more detail, I wanted to provide an overview of where Aussie Broadband stands today and the value it provides to our stakeholders, including our valued shareholders. We'll turn to page four. At our Investor Day earlier this year, we set out our three-year Look to 28 strategic goals, which included to grow to $1.6 billion in revenue and to have a million connections. In 2028, our aim is to continue to be a Telco with diversified revenue streams across three segments: residential, business, enterprise and government, and wholesale. Our higher ambition is for Aussie Broadband to be the Telco people love.
This is an infinite journey and a continuation of the principles established in the business by our founders. We are proud to have been nominated as Australia's most trusted Telco for the fourth consecutive year and Roy Morgan's best of the best in the industry. We continue to provide industry-leading customer service with Australian-based support teams and call centers, and that's something we remain extremely proud of. It's that culture of quality and service that is embedded throughout the business. We take pride in being easy to do business with, and this is the feedback we receive from our growing customer base in business, enterprise, and government. We want to do more and go further and continue to deliver industry-leading service to our customers. Telco is a challenging and ever-changing environment, and that is why in FY 2025, we continue to focus on diversifying into business, enterprise, government, and wholesale.
We have some great success stories across each of these segments. Our advantage is not only based upon our award-winning customer service, but in our strategic assets, which we continue to invest in. One of those is our Aussie Fibre network, which provides us a higher margin symmetrical offering to our enterprise and government customers. We're also not just growing our own customer footprint. Aussie Broadband continues to empower multiple wholesale partners and MVNOs in the fixed broadband and mobile spaces through our enablement platforms and our two Tier 1 voice networks in Symbio and NetSIP. "We win when our customers win," is our wholesale mantra. While we grow, diversify, and evolve, we maintain strong financials through sustained earnings growth, a strong balance sheet, and a capital management framework aimed at delivering optimal returns for shareholders. This is evidenced by the results we share with you today.
The group today announced strong underlying growth in both revenue and earnings, good momentum going into FY 2026, and a strong balance sheet. This year also continues our run of having met or exceeded our EBITDA guidance every year since we listed in October 2020. The team and I are very proud of these results, and I will now go into a little bit more detail on page six. FY 2025 has been a year of transition in many ways, but importantly, EBITDA of $138.2 million finished at the high end of the upgraded guidance. This represented a year-on-year increase of 14.7% in underlying EBITDA. CapEx of $77 million was midpoint of the revised guidance. Revenue grew by almost 19% across the group, and our diversification across products and segments continues to underpin the growth and the strength of the business.
The Telco environment continues to be characterized by challenges taking market share, and we played our ongoing role in that trend in FY 2025 with 15% growth in broadband connections and reaching 8.4% share of the MBM market, excluding satellite. Our strong brand reputation and recognition as the most trusted Telco will continue to underpin our position and confidence in winning in the new high-speed plan that NBN is introducing in September. At the same time, and backed by our new five-year MVNO agreement with Optus, although a small part of our revenue, we have seen some excellent momentum in our mobile offerings, which we expect to continue through FY 2026. Symbio's first full year has also been a success, with the business contributing $39.4 million to EBITDA, a growth of 35% on a pro forma basis.
This included $6 million of synergies, with both EBITDA and synergy realization exceeding expectations for this financial year. Symbio remains a cornerstone to our future growth in wholesale. We continued investing in Aussie Fibre in FY 2025, deploying $18 million of capital towards its footprint. Our investment now totals almost $80 million at June 30, 2025. The investment was underpinned by the significant backhaul annual savings of $20+ million , but during the year, our focus has turned to increasing the utilization. Albeit early stages, we've seen some positive signs over recent months, and we'll go into more detail about Aussie Fibre later in the call. We announced this time last year that the migration of our white label customer had left us with some stranded overheads, and we knew we had to deploy strict financial discipline to find productivity improvements and efficiencies.
At the half year, we unveiled positive steps towards these targets, and today I can reveal we've had great success in all these areas. We've removed almost $11 million in operating overheads and made notable productivity gains along the way. We believe we can further progress in this regard. Finally, we launched our Look to 28 three-year strategy. This provided clearly defined ambitions and priorities to underpin growth and strong returns to our shareholders. There was a change in the leadership group as our founders bailed out, and I was given the privilege to lead the business. We come into FY 2026 with our new segment-based structure to deliver stronger customer and financial outcomes. On page seven, we'll look at the operational highlights of the year. Our share of the fixed broadband MBM market continued to grow, up 1.1 points to 8.4%.
Our total broadband connections across the group grew to 788,000, up 104,000 from the year prior. We also saw some strong momentum in mobile, with services growing across the group to 216,000, up by 35,000 or 19%. Our Aussie Fibre grew to almost 2,000 km with 896 connected buildings and opening up more than 2,600 near-net buildings in our immediate footprint. Our connections per building for Aussie Fibre is at 1.2 connections and growing, and growing that ratio represents a significant opportunity for us. We are already seeing modest improvements in that ratio. We have around 8.2 million numbers hosted across our Symbio and NetSIP Tier 1 voice platforms, with a total of 8.7 billion call minutes across our domestic networks. Lastly, but just as importantly, we were nominated by Roy Morgan as Australia's most trusted Telco for the fourth consecutive year.
Turning now to page eight to look at our segments and product diversification for the year. To demonstrate our continued and consistent growth across revenue and underlying EBITDA, we've broken those out for you into charts on the left. Here you can see the work we've done to improve gross margin over the years, along with the work we've done on our underlying EBITDA margin. Although the EBITDA margin of 11.6% was a slight decline on FY 2024, this relates to the impact of Buddy, and if you exclude this impact, the EBITDA margin improves to 12.5%. On the right, you can see our revenues and gross profit by segments and product. Residential continues to be the engine room of the business, with 57% total revenue and nearly 50% of our total gross profit.
Our ambition is to continue to grow our market share in residential while growing at least equally fast in the other areas to maintain our revenue diversification. With Symbio now included for a full financial year, the weighting of the higher margin products of Symbio and NetSIP means voice now represents 29% of gross profit for the group. I'll now hand over to Andy. He will take you through our financials in a little more depth.
Thank you, Brian, and thank you all for joining us on the call this morning. I'm pleased to talk about the financial results for FY 2025. It's been a big year, certainly a positive year of transition and one that sets us up for the future growth. Let's turn to page 10 and discuss the highlights. Our financial performance was strong for FY 2025 and is a great credit to everyone involved with Aussie Broadband. Revenue grew by 18.7% to $1.187 billion. The growth came from all segments, but the residential segment continued with strong growth on the back of continued market share gains. Pleasingly, the enterprise and government segment delivered good growth following significant customer wins over the last 18 months, and the pipeline continues to be strong into FY 2026. Our underlying EBITDA of $138.2 million was at the top end of the revised EBITDA guidance and grew by 14.7%.
I'll walk through the EBITDA bridge in a couple of slides for more color. On a statutory basis, EBITDA was $131.1 million, up 22% on last year. Our operating cash flow before interest and tax was $117.3 million, down 8.5%. The cash conversion of 84.9% improved significantly from the first half position at 74.9%, but was impacted by several items, which I'll cover off in a moment. Underlying net profit after tax before acquired amortizations, so MPAA, was $55.8 million, up 6.5%, and again is a very strong outcome for the year. Earnings per share (EPS) calculated using underlying MPAA, and the weighted average number of shares for the year was $0.19, down $0.003. Noting here that the weighted average shares have been influenced by several changes over the course of the last two years, the EPS of $0.19 again demonstrates the strong fundamentals of the business.
Let's turn to page 11, and here's the underlying P&L in more detail. For FY 2025, it was a year of continued growth for Aussie Broadband across key metrics: revenue, EBITDA, and MPAA. Importantly, on the back of the revenue growth, the gross margins of $435.1 million were up 20.7%, and the gross margin at 36.7% improved by 0.6 percentage points on last year. Overall, the gross margin percentage improved due to the annualized impact of Symbio, but this is an impressive outcome considering the competitive landscape throughout the year. Underlying EBITDA, MPAA, and MPAT have all been heavily influenced by the $9.7 million investment in Buddy . Excluding this impact, particularly considering the divestment we announced today, the underlying EBITDA would be up 22.7%, MPAA up 20%, and MPAT up 18.6%. Again, strong outcomes. The EPS would also have improved to $0.214, so up $0.021.
It's worth noting our statutory net profit after tax was $32.8 million, up 24.3%, and our statutory basic EPS was $0.1119, up from $0.0974 last year. The final dividend, we're pleased to declare a fully franked final ordinary dividend of $0.024 per share, meaning a total fully franked dividend of $0.064 for FY 2025. Now, let's turn to page 12 just to explain the underlying EBITDA bridge. It's been a big year of change and transition, with many factors influencing the EBITDA of the business when comparing the results year on year. The underlying EBITDA of $121 million increased to pro forma of $138 million with the annualized impact of Symbio in $24 million. 1. Origin is at a negative contribution of $20 million over the period.
As discussed at the half, this relates to the gross margin earned less the directly attributable operating overheads related to the customer service, and that's $27 million for FY 2024 and $7 million for FY 2025. 2. The investment in Buddy, which has had a negative impact on the EBITDA of $10 million, a gross margin of $1 million less the marketing and other overheads of $11 million. The total investment was in line with our guidance. The remaining core business contributed $30 million of growth, points 3 and 4, and this relates really to three aspects. Point three, the stranded costs associated with the Origin transition. We communicated a year ago that we'd managed to pull out $4 million of costs, and at the half, this had increased to $5 million, but I'm pleased to say that we realized $11 million through productivity savings for the full year.
Growth in margins across each of the segments contributed an additional $13 million, and then there's point four, the Symbio synergies. Symbio delivered $6 million of synergies for the year, reducing overheads more than expected and exceeding the $4 million outlined last year as its target. A final note, although the underlying EBITDA of $138 million grew by 14.7%, removing the impact of both Buddy and Origin on the EBITDA, the core business grew by 26.8%, another really strong result. Let's turn to page 13, where I can just talk about the cash. As mentioned earlier, our operating cash flow of FY 2025 was $117.3 million, down 8.5%. The cash conversion was 84.9%, down on last year of 106.5%. There are really two key points to pull out here. First, there was a working capital timing difference of $7.7 million, which benefited FY 2024 and had the reverse impact on FY 2025.
Second, we made the decision to fund the employee share trust $4.6 million to enable the trust to buy back shares towards the end of May 2025 when the share buyback activity stopped. If the working capital timing differences were reversed and the employee share trust cash was added back, the FY 2025 operating cash would have been $129.6 million at 94% conversion, and the prior year would be at 100% conversion. Overall, our current, as well as our outlook for underlying operating cash flow and cash conversion, remains strong. In line with the capital management framework, we did return capital to shareholders via non-market share buyback, which we announced in November 2024. By May of 2025, we'd bought back $36.9 million or 3.1% of the ordinary share capital.
It's important to stress that the capital management framework outlines that we will return excess to shareholders where we forecast the future 12 to 18 months net leverage ratio sitting under the target range of 1.75x- 2.5x . The net leverage ratio at the 30th of June was 0.9x , comfortably below the range. We do have the flexibility to continue the share buyback until November 2025, but it's equally important to say that we continue to consider M&A opportunities if and when they arise, and that we see M&A activity as an important option for accelerating our growth. Let's turn to page 14. Our $77 million of CapEx for FY 2025 did come into the midpoint of our updated guidance range of between $75 million and $80 million.
It's important to confirm that CapEx will return to a baseline of between $55 million and $60 million guidance range for FY 2026. We made strategic investments in FY 2025 to support future growth, including Symbio's investment in a new enablement platform to underpin the five-year wholesale partnership with MEDION Australia, the launch of Aussie Broadband's new Nitrogen platform, and accelerated investments in the new internal cloud platform for additional capacity and future growth. $18 million to extend our Aussie Fibre network and the additional IP addresses to ensure capacity through to FY 2028. It's been a big year of investment through FY 2025, which will be future-proofing the business. It'll also underpin both the acceleration of growth as well as driving further productivity outcomes. Our ongoing fibre capital investment is focused on increasing utilisation and financial returns over the short to medium term.
Overall, the financial results are strong for FY 2025 and create a solid foundation for 2026 and delivering on our Look to 28 strategy. That's it from me, and I'll hand back over to Brian to take you through the segments in more detail.
Thanks, Andy. Let's start with our residential segment on page 16. We maintained strong momentum in the residential market throughout FY 2025 with our continued brand strength in ambient sales, helping drive a 15.7% growth in revenue. Gross margin was broadly in line with prior years at 31.5%, despite an increasing proportion of broadband customers on 100 Mb or higher plans, greater allocation of network costs, and a highly competitive landscape. Active broadband services grew by 67,000 or 11.4%. Residential is obviously a key driver of our NBN market share growth. We've also seen a notable uptick in connections in the Opticomm footprint, with Opticomm connections growing by 27% in FY 2025. We continue to be a leader in high-speed NBN plans, with 56% of our connections now at 100 Mb tier or higher.
Almost 50% of eligible customers have been upgraded to full fiber connections through the Fibre Connect program, and our new customer acquisition has been targeting users in full fiber and HFC areas. We also successfully launched a pro range of residential plans during the year. We're continuing to make ground in the mobile space, thanks to the re-signing of our Optus agreement in March. The strategic partnership was key to our mobile ambitions, and by June 30, our mobile products have grown 24.5% to 72,000 residential services. On page 17, we'll look at our business segment. We continued our good momentum in the business segment as well, with an 11.4% increase in revenue, thanks to the increased need for high speeds and reliable connectivity. Our business call center remained a core engine of sales performance, generating over 18,000 new TC4 service orders.
Demand was strong for high-speed symmetrical services, with good sales in both Enterprise Ethernet and Aussie Fibre. We saw a significant uptick in mobile sales for our business customers, with over 4,000 new SIMs activated during the year. While the segment saw a decline in its gross margin percentage to 41.9% from increased promotional activity and intense competition in the market, our revised operating model has already started to deliver long-term efficiencies. This did not affect our service quality or customer satisfaction, as our enhanced digital presence and the ethos to customer service saw the team win Canstar Blue's most satisfied small business customers for the year. We'll now look at enterprise and government on page 18. Our A&G team had double-digit growth in revenue, thanks to some excellent work from the team in securing new clients and re-signing existing ones.
New sales order volume grew by 13% in the year, with a similar increase in the value of incremental monthly recurring revenue. The top 10 deals closed in the year yielded a total contract value of $20 million alone and spanned a variety of industries. There was a significant increase in the number of $1+ million contracts signed in the year, highlighting our growing relevance in large-scale procurement processes. Contracted monthly recurring revenue now represents 91% of the total revenue of the segment. We were also recognized for our success with a major international vendor, Fortinet, awarding us Telco Partner of the Year for our consistency and skill in executing nationwide rollouts with key technology partners. On page 19, we look at some of the key wins we've had across our business and A&G teams.
Here you can see some key customers that the teams have brought on across our business and A&G segments over the past year. They range from household names with hundreds of sites, key institutions such as Queensland Police, Queensland Fire, to major brands like the Reject Shop and the Roll'd chain of eateries. We're also excited to be the official telecommunications partner of Cricket Australia, focusing on technology upgrades and community initiatives for the next three years. This is an impressive list of large organizations who are not only our customers now, but they form a growing number of references we can leverage in procurement processes and as we look to convert our sales pipeline. Turning now to Aussie Fibre on page 20. The next two slides cover our Aussie Fibre initiative. Page 20 provides a snapshot of the numbers, and I will highlight the customer per building at 1.2.
Our focus moving forward is to at least double this metric in the next three years. On page 21, you can see that the FY 2025 incremental volumes of buildings 354, and connections 514, was at a ratio of 1.545, higher than the average, and we are looking to accelerate this through a focus on net connections. I'll now hand you over to Mo who'll walk you through the results for our wholesale and Symbiote segments.
Thanks, Brian. Let's turn to page 22. Our wholesale team within the Aussie Broadband business had a solid year, with a 23.1% increase in like-for-like revenue to $63.6 million. We now service 1,301 accounts, up 16%, with new customers being onboarded in FY 2025, including Neptune Internet, Uplink Me, GPK Group, and partner wholesale networks. Broadband services in our wholesale division doubled to approximately 52,000 during the year, which includes around 17,000 Symbio services that were migrated to Aussie Broadband from a third-party network. Even after adjusting for that migration, we still had strong connection growth of 37%. Our growth in wholesale was underpinned by an enhanced partner engagement program, and our Carbon platform continues to be popular with our wholesale and E&G customers. We implemented a range of enhancements during the year, built by demand from customers for a richer functionality set.
Let's turn to page 23 now for a look at Symbio. When I spoke to you at our half-year results, we were on track to deliver our expected EBITDA contribution to the group. Pleasingly, we exceeded our expectation in this first full year as part of Aussie Broadband, adding $39.4 million to the group's EBITDA on a pro forma basis, primarily as a result of realizing synergies and efficiency gains. The team retained key clients, including long-term contract renewals of MEDION Australia and Spark New Zealand. We also expanded the number of hosted numbers on our network by 6.1%, despite decommissioning several legacy platforms throughout the year. Mobile services and operations grew by 12.6% in FY 2025, with eSIM accounting for 30% of all new activations. Our gross margin percentage fell marginally, largely due to intense pricing competition in the voice market.
Despite two large partners losing customers in FY 2025, the minutes on our network were in line with the prior year due to growth in our international swaps products, albeit this revenue does come at lower margins when compared to other product offerings. Utilizing our new Nitrogen platform that we launched internally earlier this year, we successfully migrated all of our services from a third-party provider onto the Aussie Broadband network in the period. A new Nitrogen platform allows wholesale partners to scale and manage their operations much in the same way as if they had direct connectivity to NBN from within their own system. This provides significant efficiencies and a vastly improved wholesale and retail experience and showcases another example of how Aussie Broadband is continuing to change the game in Telco.
We chose to launch our Nitrogen platform first before migrating any services to provide the best experience for our customers. This did delay the migration, as well as our ability to service the pipeline of data opportunities within Symbio, however, it ensured minimal churn, and we can now look forward to offering our wholesale customer base the Aussie Broadband experience. We also launched our advanced PBX cloud-based voice solution during the year, providing real-time analytics, automated provisioning, and a rich functionality like AI translations, Teams direct routing, and more. That's it from me. I look forward to taking questions you might have later on. For now, I'll hand back over to Brian.
Thanks, Mo. Before we head into our Q&A, I'll run through a summary and a few words on the future. We'll turn to page 26 for a refresher on our ambitions under our Look to 28 strategy. For those of you who joined us for our Investor Day, these finite goals within our infinite gain will look familiar. For those who weren't, these are our ambitions that we laid out as part of our strategy to FY 2028. It outlines our growth for the group's revenue to be greater than $1.6 billion, the ongoing diversification of our revenue, an EBITDA margin of more than 12.5%, more than 11% NBN market share, and at least 20% compound growth in our earnings per share.
In light of the announcements today, where we will likely achieve our connections target for FY 2028 by the end of this financial year, we will consider these goals over the coming months and refresh our outlook and ambitions at the half year. To unlock all these ambitions and the strategic priorities underpinning those, we needed to realign our operating structure, which we'll go into in more detail on page 26. As of July 1, and as we've outlined under our Look to 28 strategy, we have reorganized our business into a segment-led business to drive better customer and financial outcomes going forward. There are three key segments: residential, business and A&G, and wholesale. Our residential division will continue to focus on the customer experience, but we will augment the abilities of our staff going forward with new digital capabilities so they can continue to do what they do best.
For FY 2026, our residential team will continue to benefit from our position as the leaders in high-speed plans. NBN's accelerate great speed upgrades are going live from September, and we will continue to convert users from legacy copper technologies to full fiber connections through FY 2026 and beyond. We will continue to focus on productivity and digital capabilities, which will help support our margin in the residential segment. We combined the business and A&G segments together under a single Group Executive to enable a greater focus on removing customer friction points between sales, provisioning, and ongoing service operations. It also enables us to offer an enhanced level of service to both cohorts of customers. With a simpler product offering and better outcomes for delivery, support, and the customer experience, we are looking forward to growing average revenue per customer and an acceleration in customer acquisition in FY 2026.
The combined segment will continue leveraging our strong brand proposition to land major clients and contracts. The wholesale segment, which is being led by More going forward, is already benefiting from some strong tailwinds, most notably the More Tangerine agreement announced today. A shift away from major Telcos and increased growth of cloud communications presents a great opportunity for both MVNOs and wholesalers in the Australian market, and the team is already growing its sales pipeline through Carbon, our advanced PBX platform, and the sale of Aussie Fibre. The combination of the capabilities of Symbio and Aussie Broadband wholesale teams will provide enhanced opportunities to accelerate growth. I've already mentioned on this call that there are some major changes being implemented in the NBN environment in the next few weeks, so we want to highlight the opportunity there and why we think Aussie Broadband is placed to succeed.
Let's turn to page 27. Aussie is well established as a leader in the broadband space for high speeds, reliability, and service. That reputation will serve us well come September, when NBN will be upgrading the wholesale speeds of three of its most popular NBN plans, as well as launching the first multi-gigabit residential plans. From September, NBN's 120 plan will be upgraded to 500 Mb download with 50 Mb upload. The 250/25 plan will be upgraded to 750/50, while the gig 50 plan will have its upload speed doubled to 100 Mb. All of these changes will go live without any additional wholesale cost. At the same time, NBN will also launch a new 2 gig 200 plan for users on full fibre connections and 2 gig 100 for users on HFC connections.
It is worth noting that these plan upgrades will only be available for users on full fibre or HFC connections. They cannot be made available for users on copper connections. For note, 56% of Aussie 's connections at 30 June 2025 were on FTTP and HFC technologies. These changes are happening to accommodate Australia's need for speed. The average amount of downloads on the NBN network are expected to double in four years and quadruple within six years. Almost four in five Australian households have shown an interest in adopting new technologies with high download or high upload requirements, and the amount of internet-connected devices each household owns is expected to grow to 44 by 2029, according to research from NBN. This creates an environment where Australians will need more speed just to power the devices in their daily lives.
We are confident Aussie Broadband is well placed in the new high-speed world. 60% of our connections are already on speeds of 100 Mb or higher. Sorry, that should be 56%, indicating our customers' existing demand for high-speed internet. Since almost half of our current fixed line customers who are eligible for a full fiber upgrade through the NBN Fibre Connect program have done so, those users will be disposed of the faster speeds. With our premium branding and strategic approach to pricing, we expect continued growth in connections and market share once NBN's Accelerate Great program rolls out in September. Turning to page 28, we'll go into greater detail about the major news we announced this morning. Today we've announced that the group has signed an exclusive six-year agreement to provide wholesale services to More and Tangerine Telecom.
More and Tangerine have common owners with CBA holding 40% of the shares. CBA also supports the More brand through a discounting regime and features its products on its Yellow platform. Between the two brands, there are currently 250,000 customers. More and Tangerine will continue to manage the retail customer relationship and experience, and Aussie will provide layer three connectivity to NBN. We are expecting around 290,000 connections to be onboarded post-migration, which will lift Aussie's total connections above 1 million. The agreement is estimated to contribute $12 million in annualized EBITDA from FY 2027 before amortization of contract incentives and based on only the migrated volumes. There is no expected material impact from the agreements in FY 2026. Powering this deal is the creation of our new wholesale network platform that Mo talked about earlier. More and Tangerine users will be migrated onto the Aussie Broadband network from H2 FY 2026.
As part of the agreement, Aussie Broadband will issue approximately 5.9 million shares to More on the signing of the contract. These shares are subject to a lock-up arrangement. Separate to this agreement, Aussie Broadband is announcing that it will sell the Buddy Telco brand customer base and assets to Tangerine, and we'll touch on that on page 29. As announced on the ASX this morning, we've agreed to sell the Buddy brand customer base and assets to Tangerine for approximately $8 million. We launched Buddy in July 2024 as a digital-only experience to target value-seeking households and to act as a digital moat for price-sensitive customers who are churning from the main brand. The digital-first approach has been an invaluable testing ground, allowing us to trial in-app enhancements, changes to our online experience, and a digital service delivery model.
The immediate market response was intense, with an elevated number of promotional offers. To that end, while Buddy made modest inroads in the value-led space with 14,000 connections, it became clear we would not meet our original launch ambitions of 100,000 connections by FY 2028. The final value of the agreements will be dependent on the number of customers transferred to Tangerine, which we expect to be completed in H2 FY 2026. As part of the new wholesale services agreement we just announced, all of those Buddy customers will remain on the Aussie Broadband network. On page 30, we'll provide a trading update and some guidance for FY 2026. Looking at our performance in the first few weeks of FY 2026, we're encouraged by our start. We've net growth of approximately 12,100 connections since 1 July, in a period marked by the impacts of price increases and increased activity ahead of the stall.
We are excited about our growth prospects with a strong A&G pipeline, with our most recent blue-chip customer being our core hotels. There is ongoing margin pressure in the industry, but we're confident we can offset that with accelerated growth. We are well positioned to be a significant player in the speed bestowal arena. We have the excitement of our new partnership with More and Tangerine, although this is not expected to deliver any material contribution in FY 2026. Our view for FY 2026 is another year of growth. The divestment of Buddy will result in a net positive to the new year of around $7 million, which absorbs the loss of the FY 2025 contribution from the exited white label agreement. For clarity, Buddy has a net cost of $10 million in FY 2025 and is expected to be a net cost of $3 million in FY 2026.
From there, we anticipate growth of between 14% and 21%, delivering underlying EBITDA in the range of $157 million- $167 million. Our CapEx guidance is moderated from this year's high back to $55 million- $60 million. Before we head into Q&A, we have four final takeaways that we want to leave you with. We'll turn to page 31. FY 2025 was a year with a few performance challenges as we exited our white label contract, launched a new brand, and began to integrate a significant acquisition. We restructured a number of areas to deliver greater cost efficiencies than originally anticipated. Our core business remained strong throughout, with strong year-on-year growth and financial results delivered at the top end of our upgraded guidance.
Within that, we introduced a new leadership team after the retirement of our two co-founders, Phillip Britt and John Reisinger, and the business developed its new three-year strategy and realigned it to three functional segments for residential, business and A&G, and wholesale, which will facilitate delivery of that strategy. We anticipate continued strong growth into FY 2026 with over 14% growth in EBITDA. We will continue to perform well in a high-speed residential world, leverage our developing reputation in the business and enterprise government space, and in wholesale, we will launch our new platform for MEDION and work towards a successful migration of More and Tangerine customers onto our network. Finally, we will continue to maintain a strong capital management framework that has allowed us to invest in our growth, and we will look to optimize our capital allocation for return on investment.
We have declared a fully franked final $0.024 dividend for FY 2024, meaning a total FY 2025 fully franked ordinary dividend of $0.04 per share. We also paid a special dividend of $0.024 at the half year and acquired 3.1% of our own stock through a share buyback that remains open until November 2025. We will, however, maintain flexibility to continue to evaluate inorganic growth opportunities as they arise. That concludes our presentation for our FY 2025 results. Thank you for joining us on the call today. We're ready to take questions. I suspect there's a long queue, so we may not be able to get to all of them, but if we don't get to them, then please feel free to contact Heidi through the email address that's on our ASX announcements.
Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you'd like to ask a question via the webcast, please type into the ask question box and click submit. Your first question today comes from Jonathon Higgins from Unified Capital Partners. Please go ahead.
Hi guys, great set of results. Well done to you all and well done, obviously, being in the primary chair there, Brian. It's a huge effort for the result. A couple for me today. Firstly, just in regards to the wholesale deal, well done on winning that. Can you maybe just a few particulars on it? I think you've called out that that's transitioning in the second half of 2026. Is that plan to complete all in the second half of 2026? Secondly, just on that wholesale agreement, can you give us an idea? We can see the bogus numbers in NBN. Can you give us an idea? Is that a growing agreement? You'd suspect so?
Thanks, Jonathon. Yes, the intent is to complete the migration no later than June 30, 2024. That's certainly the aim of what we're trying to work on. We need to work alongside More, actually develop some of the functionality that they're working. Part of the attraction for them is they were able to help design the platform that we will be finalizing in the next few months. We will start the migration in the second half and aim to have it complete by the end of the financial year. On the second one, as we land on there, it's More and particularly More brand is featured heavily in CBI's environment. We see that as an exciting source of growth for them. Tangerine is performing well in that value end of the market where Buddy operates.
We see plenty of growth opportunity in both brands, but it's not for us to declare their growth ambitions.
Fair enough, understand that. Thanks for the context. Just on the $12 million and also $3 million of Buddy, I think you've called out that you've left $3 million of Buddy sort of in this year type thing. Is it really $12 million + $3 million into the FY 2026 year that circles sort of $15 million, just to confirm?
The $3 million, we've obviously got to keep maintaining Buddy through to completion. There are ongoing costs there. That's a cost that will not reoccur in FY 2027. The $12 million is discrete to the new contract based on the volumes that we expect to migrate.
Excellent. Thanks for being specific. Just the last one, you sort of called out efficiencies. At the Investor Day, we saw several charts talking about cost to serve, productivity, AI is on everyone's lists. We could see you doing some, adding some roles to make the business more efficient. Is there anything further you can share on ambitions there and when you might look to kick that off further?
Yeah, we have made great strides in getting a better ratio of staff to connections. We still think we've got some room to move there as well. In terms of AI, we are using AI and developing some models. We are being cautious. We're using it in our customer service areas. What we don't want to do is be using external data that can be flawed and deliver poor information. What we're doing is we've got a team of, each of our customer service teams has a thing called an Aussie expert, which is the escalation point for technical matters that the frontline staff can't easily resolve.
What we've been doing is using that team of Aussie experts to document all their knowledge to create a model that the frontline staff can then draw on using AI to answer customer questions immediately so that the number of escalations gets reduced and the customer can get their issues resolved very quickly. That's a work in progress and we're really excited by the opportunities in that. There's a range of other areas we're working on as well. What we're being very careful of is only trying to use our own data in those models so that we're not corrupting the data that we're using to service our customers.
Thanks, guys.
Thank you. Your next question comes from Entcho Raykovski from E&P. Please go ahead.
Morning, everyone. My first question is also on the wholesale agreement with More. I guess firstly, are you able to confirm whether it requires any additional investment in the network to support those further services that you're adding? If it does, how do you think about the IRR on that investment? Certainly from your CapEx guidance, it's next year. It doesn't seem like that's the case, as in you need to add in a whole lot more CapEx. If you can split it out to the extent you're able to, as part of that answer, can you provide more detail around the revenue and costs required to deliver the $12 million in EBITDA?
Thanks, Entcho. In terms of the investment, I think we've talked for a while about investing in our network to build capability to meet our goals of a million connections plus. We have been working towards that goal. As we grow, there are incremental elements to add to the network. The addition of more really just brings that forward by a matter of months from what we were doing anyway. From an incremental perspective, we're not seeing that the matter of months is immaterial in the scheme of things. It's not actually attributing particularly much to our infrastructure requirements. It's things we were building to anyway for our organic growth. They tend to come in steps. You need a step up, and then you're probably okay for a couple of years, then you need another step up. It just brought that forward a little. That's probably the infrastructure point.
On the revenue and costs, all we could talk about really is this is a wholesale agreement. The relationship we have with More is that we're essentially passing on the NBN costs to them with our margin. Essentially, we're acting as their agent with NBN. We won't count that pass-through as revenue. What we will recognize as revenue is what we call the network management fee, which is the contribution that they're paying to us for our backhaul network and for providing that interface with NBN. In terms of revenue, it's a relatively modest revenue, but it's a good margin because we're not trying to make, we're not trying to recover on the AVC and CVC costs from NBN.
Okay, got it. Thank you. That's a good color. I mean, you obviously displaced Vocus as the incumbent provider. I think you've mentioned it was a competitive process. Did you have to be more aggressive on price in order to win this contract? Was it the share issue that was the sweetener? Can you perhaps talk to what were the key factors you saw as helping you win the contract?
Yeah, I mean, I think probably More are probably the best place to answer that question. From our perspective, we're not party to what others may or may not have pitched to More. What we do know is what, as is in the quote in the release, is that we came at this very much from a partnership perspective. We were very transparent with them right from the start. As we said earlier, one of the attractions to them is being able to design, be involved in the design of our platform so they can get what they want out of that platform.
It was really very much a relationship-driven outcome in my mind, that we worked very closely with them for a long time and listened to them and listened to what they wanted and tried to build a solution that gave them what they needed and wanted to be the platform for their growth into the future.
Okay, thanks, Brian. Final one around your broadband subscriber growth. I mean, accelerating into the second half and in Q4, which was a great outcome, was there anything different which you did? Did you have to market more aggressively during that period? Was it better gross ads, for example? I think you mentioned strength in Opticomm areas. Did you also see some reduction in churn during that period to drive that outcome?
Yeah, I mean, we're generally very tactical with our marketing. We're looking at the market all the time, adapting what we're doing, obviously trying to drive higher and higher conversion through our sales funnels. I wouldn't say we did anything particularly different. I mean, our gross ads were strong through the half. We obviously, I think, as all players would have experienced in June-July, it was spiky from a churn perspective because all the price activity was going on. You know, we're pretty happy with how that's all going. I wouldn't say we did anything particularly new or different. We are always tactical, always assessing the market, always adapting, changing our approach to manage the current environment.
Sorry, and churn, right? Are you able to say how that tracked?
It spiked in June and July when you put prices up, which is normal.
Okay, great. Thank you.
Thank you. Your next question comes from Benjamin Jones from JP Morgan. Please go ahead.
Morning guys, thanks for taking my question. Just the first one on the FY 2026 EBITDA guidance you provided, it's actually a touch ahead of what the street was looking for. Can you just talk us through the moving parts in that guidance and what assumptions you're making at the top and bottom end of that range?
Yeah, I'll cover that one off. Obviously, Buddy 's included in that in terms of the investment coming out. You know, volumes and the sort of market change will have a range on the upward and downward side as well. We've got flexibility in the margins a little bit as the year forwards. We obviously went in with the year with our pricing strategy, but we have flexibility there. Productivity, we continue to drive and we'll continue to want to take out more costs relative to the growth. I think that's a degree of upside downside as well. Those are really the key factors.
Got it. Thanks, guys. On the second half, EBITDA margin also looks pretty strong, and you obviously got those 12.5% margin targets there by 2028. You're obviously quite close to that now. Is there any additional cost or any reasons that we could see margins step down from here?
No, I think we called out that there was margin pressure through this year. We don't see any signs of that getting any easier. We're assuming ongoing challenges in margin across the whole industry. I think we're not unique in that. If we do find ways to improve margin, then that target would obviously be higher.
Yep, yep, makes sense. Obviously, this final one, you're sitting below that net leverage range and you talked about the importance of M&A. Is there any guide you can provide around what sort of acquisitions you may be looking to make and maybe given the sale of Buddy and those 28 targets of below 60% RESI contribution, that maybe they're not going to be in the RESI segment or any sort of guidance you can provide on what sort of acquisitions you might be looking at?
No, I mean, the [change] of RESI is always a challenging one because some people then say, you don't want RESI to grow fast. You go, yeah, we do. You could have fabulous success in RESI and that means all of our metrics improve, but that one deteriorates, which is not what we're doing. We put that target out there really to tell Aaron and Mo that they've got to keep growing as fast as RESI. We'll see how they go. In terms of M&A, we're open to a range of M&A opportunities. Customer books are attractive at the right price. There's capability in A&G. Position A&G is always interesting to us. We look at various things and voice businesses as well. There's a range of things we look at. If we see value in a particular business, then we'll pursue it.
I think it's also worth saying, Brian, that we've communicated quite clearly that we're keeping to our core.
Good point.
It's important.
Not that wide, yes.
Yes, keeping the direction we're in, it's about core.
Yes.
Core Telco for us.
Yes.
Those are the things that we'll invest in if we have the opportunity.
Probably only got time for one more question, I think.
No, great result. Thanks, guys.
Thank you. Your next question comes from Kane Hannan from Goldman Sachs. Please go ahead.
Morning guys. Just for the More Tangerine deal, you're able to talk a little bit about sort of the key milestones there, I suppose, and how it works with CBA in their sort of discounting activities. Any change to sort of how you see those guys approaching the market?
It's not for us to comment on how they're going to approach the market. In terms of milestones, the most significant milestone is getting to migration. Beyond that, we're working together. Obviously, it's in both our interests for their businesses to grow fast, and we work with them. We are providing some incentives to support them to increase net growth over time, but we're not sharing what that information is.
Yeah, perfect. I suppose, exiting Buddy, let's talk a little bit about your go-to-market strategy, brand segmentation. I mean, are you now covering off sort of the cohort one and then three through the wholesale strategy, or is that something you might need to address through M&A? Just interested for you to talk about that, please.
Yeah, sure. The Buddy journey was interesting, but there were probably two groups of people who came to Buddy in different guises. The first group that came, it turned out, wanted more digital experience, but still wanted to be able to call people. We lost early churn with those people. We pivoted our marketing activity to get what we were really after, which was those who are happy to deal exclusively online. What we've learned a lot from that is how we can bring some of those digital capabilities into Aussie and appeal more to those original Buddy customers. We think there's almost a sub-cohort of the sub-cohort that we can attract within the Aussie brand.
There's a lot of nuanced, detailed research that our marketing team has got, which enables us to be a little bit more targeted in how we're marketing to even sub-segments of those cohorts that Buddy was originally designed for. It's a very complex area that we could talk for hours on. Not that we would, but we could, and we do. There's not much more I could say at the moment.
Yep, that's helpful. Just lastly, just mobiles, we obviously had good sub-growth. Talk about how the ARPUs trended during the year. I suppose, I'm sorry if I'm missing something here on the disclosure, but did the second half net ads pick up on the first half or just sort of how the rate of growth in the second half trended, please?
Yeah, the second half was definitely stronger. Through our new arrangements, we now provide bundle discounts for mobile and broadband, which we could not do previously. We've seen a marked step change in sales since then.
Thanks, guys.
Okay, I think we're going to have to pull up stumps there because we've got a tight meeting schedule all day. I just want to say thank you very much for attending today and all your questions. Those we weren't able to get to, we apologize, but Heidi is happy to receive those questions offline or in one of the other sessions we'll have this week. I just want to say thank you for attending. We're very proud of our business and we're very proud of these results. We're very grateful for the ongoing support of our shareholders. Thanks very much.
That does conclude our conference for today. Thank you for participating. You may now disconnect.