Welcome to another ActivePort Group investor briefing. My name's Peter Christie, Chairman and CEO of ActivePort, and the theme of today's presentation is Under New Management. The primary purpose of this presentation is to introduce our latest appointment to the executive team, Michael Glynn, as our Chief Operating and Commercial Officer. We're very excited to have Mike here. Mike has unmatched pedigree in our industry. If you think about the sector that ActivePort operates in, it's the same sector that Megaport and Console Connect operate in, the software-defined networking market. In the software-defined networking market globally, the two major proponents in that space, the two major success stories that all of our customers look to when they're looking for inspiration to use our software is Megaport and Console Connect.
If you look at Mike's pedigree, his history in the industry, he was a founding team member of Megaport, when Bevan and Mike set that business up. Most recently, he was the product owner, the business owner of Console Connect, where he built the Console Connect business on top of the Hong Kong telecom network from scratch to what it is today as Megaport's major competitor in the world across 64 countries and more than 1,200 data centers. We're very excited to have Mike on board because we know and the industry knows that in our sector, he is the expert. Mike's got a pedigree across the network industry in Australia as well, starting with PIPE Networks, moving to Vocus, then Megaport, and then Bevan and Mike separated Superloop out of Megaport, and then to Console Connect.
We know that Mike is the person, if anybody can, Mike is the person that can carry the ActivePort business forward to become a multi-billion dollar success story. We're really excited to have Mike on board. Mike's been in the chair for 60 days, his top three priorities are these. First of all, to internationalize ActivePort's business. Mike was in Melbourne, resides in Sweden nowadays, he's certainly in the center of the universe. He's an hour from London. He's six hours from New York. Mike is perfectly positioned geographically to internationalize the ActivePort business, and that's really important for us because we know that the majority of the revenue opportunity for us is beyond the shores of Australia.
Mike is working very quickly to commercialize our product and monetize our software across three different verticals that we'll talk about today, then efficiently scale the business. The one thing that Mike will tell you he is very good at is startups. Mike knows how to scale a software telco from zero to hundreds of millions of dollars of revenue. Mike's been applying that skill to ActivePort in spades over the last 60 days. It's been very exciting to watch. When we look at the milestones of Mike's first 90 days and the focus of Mike's efforts, we've identified AUD 1 million of OpEx in the business that we can remove. We've actually identified AUD 1.3 million-AUD 1.5 million of OpEx, and we'll relocate some of that spend into lower-cost jurisdictions and jurisdictions closer to the international customer base.
The software development team has been reset, which is very exciting because it's really helped us change our approach to marketing, selling, and delivering the product. Made it easier for us to monetize the product and deliver it to customers faster. Mike introduced Matt Hawken to the software development team to lead the team reset. Matt previously was a product owner at Console Connect, Matt has built our sort of software before, which has been a breath of fresh air for us because Matt knows what works. He knows what the customers need.
He knows how to present it to the customers in the way that it's easy to digest. The changes to the software development team have been quite radical over the last 60 days. Of course, Mike is a consummate salesperson, Mike knows where the customers are. He knows where the opportunities lie around the world. We've seen the pipeline of our software business, the sales pipeline grow 400% just in the last 60 days since Mike started with us. The change at ActivePort under our new management leadership has been dramatic, and it's very, very exciting for us.
One of the things that happened quicker than I've ever seen happen before was the modernization of our user interface , and Mike can go deeper into some of these changes, but you can see from these screenshots that just the work that Mike and Matt have done in the last 60 days has been quite exciting around delivering a new skin, a new look and feel for our products across both our Network- as- a- Service product and our NaaS- in- a- Box product, to make it way more digestible by customers, more attractive.
The things that Mike will tell you sell. The styling changes that we need to be punchy and exciting and attractive to the customers. If we focus then down on what we're seeing in the market that's driving revenue in our business, the AI era is definitely with us, and it's not going away. It's driving our customer base, which comprises the traditional telco operators and data center operators, to really need a modern-day platform and a software-defined interface across the top of their network to keep up with the increased demand of data flows across their networks from AI operations, AI demand, inference requirements, as GPUs are being deployed across their networks globally.
We know the opportunity for us just in the software license sector is around AUD 50 billion in software licensing across the SDN market in those Tier 1, Tier 2 telcos and data center operators around the world, and it's growing at 25% compound. It's an exciting market. It's a high-margin market for us. It offers a huge target addressable revenue opportunity, and it's growing quite quickly. The catalyst for us is this AI traffic demand, which is really forcing urgent change across our telco customers to adopt software like ours to make their networks more accessible. On that note, I'll hand over to Mike.
Thank you, Peter, and thank you for the warm welcome. What I first of all want to run through is our three key revenue streams of ActivePort. Peter, can you just jump into the next slide? As Peter mentioned, what we're seeing in the market at the moment is traditional networks or even data center providers looking to launch their own platforms, either to build or to buy.
Some of the large global carriers such as Colt, Lumen, you see over the last, especially over the last couple of years, have started launching their own software on top of their networks. This traditionally was a demand for connectivity to cloud as a customer at the edge is moving traffic from cloud back to the edge, and be able to move that traffic up and down or to move the bandwidth up and down.
Carriers then started to look at how software controls their network. Traditional carriers around the world, as Peter mentioned there before on that additional slide, there's 5,000+ carrier networks around the world. There's 200+ data centers, data center providers that have more than one data center. They're now looking at how do they create more revenue or additional revenue on the connectivity component because a lot of the data centers don't just have cloud within their environment, they have to go and outsource that cloud, and then they use other partners to get there. The key component here for ActivePort is the software component. Number one, ActivePort is a software provider. We provide software and automation software for carriers or network providers that want to use us as an underlay, which means that that controls their network.
More than likely, they want to use us as an overlay. They have their core network, and the software sits on top of that network, and it automates components of that network. We're seeing a large increase in data centers looking to launch their new interconnection platform between their own DCs, and carriers to launch their own NaaS-in-a-Box or Network-as-a-Service interconnection platform, or SDN platform. It's all sort of the same thing. Also, the key component is that the ActivePort software is fully white-labeled, so they can go to the market very quickly. Some of the larger data centers, sorry, a lot of the larger network providers are looking, do they build, do they invest millions of AUD to build the software, or do they buy the software? That's where ActivePort comes in our license.
It's an on-prem, which means that the software sits on top of their network in their environment. It's custom- made for their environment. Peter, next slide. We've come up with three core revenue streams. The core revenue stream for ActivePort is selling the licensed software on top of carrier or network providers. We do that with a license fee as well as a service fee, a clip of the service every time someone uses the platform, and it's a small fee underneath. The orchestration platform sits directly on top, and it allows a network provider to look at a commercial on a new product term, such as buying access ports, lighting up layer-2 or layer-3 connectivity between their points of presence or the customer edge CPEs, as well as IP transit and those sorts of things.
The big component here, especially as we talk about AI, is how does an enterprise customer privately get an AI compute function back to the edge, but how do they turn bandwidth up and down? That's where software comes in, especially for carriers. We sell the software to carriers as a license and take a service fee underneath. Next slide, please, Peter. The key products of the software enable our partners to launch their Network-as-a-Service platform, to launch launch layer-2, layer-3, and now we're working with layer one on demand, which is a subsea cable. How do they turn layer-1 wavelengths on demand between different countries also in the same metro? Also, our software integrates to the carrier or the network provider.
It integrates via API to their billing system, to their CRM system, to their cloud on-ramps, which means our software also talks to AWS, GCP, which means our APIs talk to their APIs, so they can provision services in real time and also monitor those services. A lot of our partners also buy connectivity out of their network, and that's where the software becomes unique as well.
Our software integrates directly with different partners like Equinix, Megaport, Console Connect. We're looking at DCConnect. We're looking at the Epsilon Infiny platform at the moment, which means that our software is a unique software in the market that nobody has this at the moment, which overlays, gives the front-end orchestration, and is purely white-labeled to the carrier. Nobody really knows it's ActivePort, but we're the engine or the glue that sits underneath. Next slide, please, Peter.
Looking at this licensed software, the sizable market at the moment is around AUD 181 billion. You already have some of the data centers, big global data centers that already run software-defined platforms. They call it something different. Equinix run a fabric between their data centers, or if you're on their fabric, you can order IP transit, you can order connectivity to the cloud, CoreSite, Digital Realty, NextDC here in Australia run an AXON platform. That's just a network with the software which they've built directly on top of their network.
It is the same as some of the big global carriers, Megaport, PCCW Global, Colt, Zayo, Lumen. They've all launched their platforms. Megaport is unique because their platform or their network was built around the software, where the other networks are very much traditional networks that they put the orchestration platform directly on top. You will find there's some new entries into the market. Telekom Malaysia, Hisham, Telehouse out of London, Lightstorm. They all run their own platforms and launching their own platforms. The unique part of these new platforms is that it's actually ActivePort orchestration sitting over their networks, but they've white-labeled it as their own. That's the key component of ActivePort. Peter, over to you.
Thanks, Mike. An exciting new addition to our lineup is neocloud software. We're approaching the neocloud market from two angles. People who have been watching our story for a few years now know that we've been orchestrating GPUs for cloud gaming in telcos. We've built up quite a depth of expertise and quite a strong software library to orchestrate GPUs on telco networks that are distributed and orchestrate workloads or user connectivity at scale. The best example of that is the cloud gaming network that we're rolling out at Reliance Jio, where they're looking to deploy 200 million subscribers on that platform. ActivePort today is orchestrating a distributed fleet of GPUs across 30 different telcos around the world and handling millions and millions of transactions or connections across those networks for users today.
When you look at that software stack, it's really just one degree of separation from being an inference software solution. We're approaching the inference market in two ways. With the traditional neoclouds, and a really good example of this in Australia is the Sharon AI neocloud. The first way we are approaching this market is to use ActivePort software as the glue between what I call an NVIDIA-based neocloud, like Sharon AI, and the customers on the local major carrier, which in Australia's case is Telstra.
The announcement we made last week where we're using our software to glue the bigger customers on the Telstra network to what I would call the sovereign AI compute stack or GPU stack that Sharon AI have deployed at the NextDC data center in Melbourne. ActivePort is the glue that connects the customers to the GPUs over a secure Telstra network. We can take that model to other countries where the major telco and the local neocloud operating an NVIDIA-based GPU service stack is attracting what we would call sovereign workloads to those platforms.
That Telstra-customer-to-Sharon-AI-GPU solution that we're building in Australia is something that we can replicate to our telco customers around the world. The other way we're approaching the neocloud market is through our partnership with AMD using the newer chips and these new modular chips. In AMD's case, it's a MI395. In NVIDIA's case, it's a DGX platform.
We've built a complete software stack that operates from the hardware, these distinct GPUs that are emerging in the market today in the inference space, and layering our software across the top of that to build a complete inference engine that is somewhat different than the traditional neocloud stack built on NVIDIA B300 style GPUs. It's a modular platform, it's a lower CapEx, it's a lower cost entry point, and it's suitable to workloads that are somewhat unique, that are suited to this modular architecture. ActivePort, with its four years experience orchestrating GPUs at scale in the cloud gaming sector, is taking this newer approach to inference to the telco market to build what we call a unified workspace platform.
The reason that this new chipset from AMD is important and what differentiates the most from the NVIDIA approach to the inference market is that not only is it good for inference, but it's a generic chipset that can be used for other things. It can be used for cloud gaming, it can be used to offer virtual workstations, digital twins, really to host any sort of application that requires that GPU capacity that inference workloads require. This is not a dedicated inference solution that is trying to compete with the traditional neoclouds that are NVIDIA-based. This is a new style of compute platform orchestrated by ActivePort software that's perfectly suited to telcos, where they're looking to make that investment in GPUs, but to be able to monetize it by delivering applications that suit a range of different use cases.
The GPU- as- a- service and inference market is new. Difficult to predict how big it's going to get, but it's certainly not going away, and it's growing very, very quickly. Market analysts estimate that this market is AUD 134 billion today, up from just AUD 21 billion in 2024. It's growing rapidly. What we're very excited about is that ActivePort has a complete software stack to enter this market and drive revenue for the ActivePort business quite rapidly over the next few years. Mike, back to you.
Thank you, Peter. Our third revenue stream is really a new product we're coming to market with, which is called Global Edge. This is something that ActivePort have trying to launch for the last couple of years. Global Edge is using our software to produce our own platform for global carriers to order connectivity in Australia. The connectivity could be NBN, it could be through FiberX or other partners that we interconnect on the Australian side.
The unique component of this gives our partners, our global carriers, and our global marketplace partners to order DIA, to start off with, across Australia. The software component here is we're using our orchestration software to give our customers the tools to price, order, in real time, provision services via API into our third-party last-mile vendors. The software also enables our partners to manage and monitor all their connectivity in Australia.
When you look at a global carrier, global carriers order thousands of DIA services in Australia every year. These DIA service or direct internet services is just a carrier will order to put their managed SD-WAN boxes on, or their enterprise customer in New Zealand may have five or six sites throughout Australia. They then now can access our platform all via API to price, provision, and manage those services all by a simple-to-use platform. This unique platform, we can cookie cut this platform. Once it's up and live, we integrate then via API, as I mentioned, to NBN and a few others. We can take that, we can put that in different regions around the world, and we can interconnect local partners, local carriers in there.
A carrier that may be based internationally can buy Australia, may buy Singapore, may buy Hong Kong, may buy the U.S., all from one platform. They can manage all their DIA services. We'll launch with DIA here in Australia. Here's some of the branding that we're about to launch. This product will be launched in the next week, with the new platform. We'll add on products to that, which means a layer-2 , layer-3 , a carrier can interconnect and then move that traffic or move that VLAN to the customer edge.
Such as a NaaS provider can plug into our network and move their network, which means at the edge of, let's say, the end of an NBN, someone like a Megaport or Equinix or Colt or Console Connect, anyone who is already running a software platform can extend their platform directly to the edge anywhere across Australia. It's a key component that we're going to launch in the next couple of weeks. Traditionally, ActivePort own a brand called Future Broadband. We will continue that, but we will move those 1,700 tails, those NBN tails, under the framework of Global Edge under that platform. We'll keep that as a separate revenue stream for now. We have roughly about 1,000, 1,200 customers. We'll increase and rebrand that residential or retail broadband in Australia.
We'll increase the revenue here by cross-selling new services to them, but also services that we have with other partners to them to increase revenue. It's still an important brand for us. When we look at the three different revenue streams, the Australian Oh, sorry. Let me backtrack. If we look at just the Australian connectivity sizable go- to- market, you look at the fixed broadband, is about AUD 6.5 billion just in fixed broadband.
That's DIA services in Australia. You start looking at layer-2 , layer-3 , or MPLS circuits and DC to DC, all up around AUD 8.9 billion is sort of the sizable market here in Australia that we can capture. With the Global Edge product, we're not really focusing on Australian businesses to order services. It's really international businesses buying NBN or Vocus services in Australia, and that will increase our revenue dramatically.
Looking at our three key revenue streams. We've got the NaaS, a NaaS-in-a-Box or our software overlay, which we've worked and we are working with many global carriers and data centers around the world. We're looking at our GPU-as-a-Service , and we're looking at our Global Edge and the Future Broadband. All up, you're looking at a sizable market cap around about AUD 330 billion, just on the market cap of those three different products. If we can capture 15% of that market, you're looking around AUD 50 billion, which is huge amount, that we can capture over the five, 10 years. Peter, back to you.
Thanks, Mike. The targets for us, and these targets haven't really changed, but I think with the changes Mike has made, are a much better position to reach than in the current year. AUD 16 million is still our revenue target to reach profitability, and if Mike can increase our sales run rate by 22% quarterly, or quarter-on-quarter over the next 12 months, we should hit that number somewhere in around the March quarter, in financial year 2027. The stretch goal in the calendar year is AUD 25 million of recurring revenue, and I think we're well positioned to be able to hit those numbers sooner than our objectives. We know that we can get to cash flow positive. We're focused on reducing some of our spend to make sure our burn is under control.
With Mike and Matt on board, we know that we can hit these targets sooner rather than later. Here are comparisons for the analysts on the call. I always keep track of what I think are the batch of successful software companies on the ASX. I know these are large compared to ActivePort. There's a footnote at the bottom that compares some of the smaller software peers on the market. The point being here that the average market-cap-to-revenue multiple of these peers is around six. Interesting, when I did this slide 18 months ago, that number was closer to 12. Certainly the market sentiment has shifted towards software operators on the ASX in the last 12 months.
Nonetheless, if we work through our objectives of AUD 17 million, AUD 31 million, AUD 50 million of revenue over the next two or three years, we should be able to drive the market cap of ActivePort towards AUD 130 million up to AUD 300 million, and then through AUD 300 million - AUD 500 million of market cap, quite successfully. The one distinguishing factor you would notice about the businesses that we compare ourselves to, they're software businesses, so they run very high gross profits. Because, as Mike said, we operate an enterprise software product that's on-prem, we don't have a lot of operating costs to run the software. When we mature, our gross profit should be in the 90%, just like Objective or Hansen or Gentrack.
Our EBITDA should be in the high 30%, towards 40%, as we get bigger and get economies of scale, and our NPAT should be in the high 20%s. We're excited about the opportunity. We've got the right management team in place. We've got the right leader now in Mike. We think it's the right moment. We see a lot more activity in our target audience for our software in the telco sector and data center sector, driven by the AI evolution, the AI era in these networks, we're very excited about the future. On that note, Mike, unless you have anything else, we'll hand over to questions.
Sounds good.
Let me have a look at the questions. Lachlan was asking about how's our last two quarters of growth been versus the target of 20% Q-on-Q. I think, Lachlan, the answer there is, and I'll answer that one, Mike, because it was before your time, but I think the history shows that our revenue has been growing on the software side of the business. It's been growing in the Global Edge side of the business, but against that, we've been fighting a slower services revenue number and a slower number on the Future Broadband side.
All in all, the last two quarters have been quite flat in terms of revenue growth. In July, we're turning on three major new customers. Michael has re-engineered the Global Edge platform, combined the Future Broadband customer base into our new hardware layer and network layer. We've integrated the NBN to give us more coverage. Mike has been doing a great job to bring on board new telco customers for that platform as well.
We know that it has been flat for the last two quarters, but we can see the growth coming in the September quarter. We can see the growth coming in the December quarter, and I think it's quite achievable to hit those 22% Q-on-Q growth numbers from here. Regarding the drivers to get to our target number, I think the real catalyst for us to hit these numbers is the work that Mike and Matt have done to re-engineer the product.
One of the things that we've really struggled with over the last few years is monetizing the software, and that came down to two factors: it needed to be more scalable, so we needed to be able to deploy more telco and data center customers with our software faster. We have to be able to increase the cadence from one every six months or one every quarter to two per month. The work that Matt has done to re-architect the software has delivered that for us. In particular, we've separated the back-end platform from the front-end service layer, and we're using AI tools now to build the front end for our customers.
Every time we roll out a solution, previously, it was a very manual task to customize the product for each user, to brand it, and to alter the workflows to suit their environment, do the integration work. Matt's introduced a raft of AI solutions now that mean that we can push these new user interfaces out on a daily basis as opposed to a half-yearly basis. There's been a huge increase in cadence in our ability to deliver product. The other factor that is really driving revenue growth, two factors. First of all, Mike's ability to attract international carriers to buy NBN services for us in Australia, and we'll have some really strong announcements coming up in the next few weeks about business that we've brought onto that. The third catalyst for that, of course, is the AI market.
As we delve into the neocloud space in Australia, first with our tie-up with Sharon AI and Telstra, and then duplicate that model in other countries. I think that's very exciting. It's a whole new revenue stream for us. Then our new AI inference stack in conjunction with AMD's hardware is quite exciting because that's opening up a new market in our existing telco customer base, that promises to deliver a whole new revenue stream to the business. There are a lot of catalysts that we're working with at the moment that will probably see us exceed those goals heading into the next financial year. Angus is asking about, how's the pipeline for new customers looking? Mike, do you want to talk to the pipeline?
Sure. The pipeline is very good. I had an opportunity to take some of the sales guys and Peter to International Telecoms Week in Washington. It was the first time that ActivePort was on the global stage, meeting customers or meeting potential customers of international data centers and carriers. Out of that, we're working with roughly about 12 new customers to deploy services, overlay services. What I'm working at the moment is, especially with the sales teams, working on certain products to go to market. Traditionally, the sales teams have been selling the products with add-ons, which has slowed down the delivery of these products or these services, which of course slows down the revenue. We've put together clear product scopes on what we sell, and they are received quite well in the market.
For those products, especially on the overlay product, this is the commercial on how we go to market. These are the products. Outside those scopes, we'll still do those outside scopes, but we'll outsource some of those in some of the areas we're in around the world. That will enable us to deliver services. Instead of the six to eight months that is traditional, we can deliver a NaaS-in-a-Box or an overlay solution in 60 to 90 days for a new customer.
As Peter said, the key component here is how we deliver our services to our customers, as quickly as possible to get that contract to revenue. That's a big, I'm not going to say an issue, but that's been a concern previously with some of the customers that have signed in the past, is getting that order to revenue. We've come up with a scenario of a selling tool that we can do that. The core products and the people that we're talking to at the moment have certainly captured those products.
I would say that in the next 60-90 days, probably even earlier, with one particular customer, that we'll start seeing new contracts being delivered. These contracts primarily are not in Australia. These contracts are coming from international carriers. Carriers that have international arms across multiple continents, that have networks and that are sitting within data centers. In saying that as well, we're working with many data centers also to launch their own platforms, built on our NaaS-in-a-Box also. The pipeline is looking very strong.
Thanks, Mike. Luke is asking about insights into the recent announcement with FirstWave. Sounds exciting. Yes, it is exciting, Luke. The FirstWave, the announcement talked about ActivePort and FirstWave. The reality is that the four pieces of that puzzle are the GPUs from Sharon AI that are hosted in NextDC in Melbourne, the Telstra network that we're gluing to those GPUs on a secure gateway basis, ActivePort software to be that glue, and then FirstWave's relationship with Telstra as a wholesale provider to be able to package and present that solution to the larger customers on Telstra's network as a Telstra provided product.
The four pieces of that puzzle are very, very exciting. It's a model that we know we can replicate to other parts of the world. What you typically find in the telco sector is that every country has its dominant telco. In most cases, that telco used to be a government-owned telco. Customers who are looking for sovereign AI solutions that are hosted in country are usually happy to trust that major telco to be the provider of the communication service to those GPUs to be able to keep the data secure, and have usually got the bigger customers in those countries, especially the government customers on their networks.
The tie-up in Australia between Sharon AI and Telstra, and Telstra's customers to deliver a sovereign AI solution works in other countries as well, like Malaysia and Singapore and Vietnam and the Middle East with e& and British Telecom. All of these countries have a similar requirement for sovereign neocloud, we're proving it in Australia, and then we'll take it to the rest of the world. It's very, very exciting.
Mike, Angus has asked about the new Radian Arc owners and what that means for the partnership with ActivePort. It means that it doesn't change. For people who have been following our story, our GPU orchestration platform for cloud gaming, we license it exclusively to a group called Radian Arc, who then sells that to their telco customers, and Radian Arc is the one that buys the GPUs, and delivers that service. ActivePort is the enabler in the background. We license that software to Radian Arc. That contract continues for another two years, nothing changes. What we are seeing, though, is that Radian Arc was sold to a Spanish group called Submer back in February.
They sold that business for around AUD 158 million, which was very exciting for Radian Arc and very exciting for ActivePort as well, because with a bigger parent, Submer being a multi-billion dollar business in the data center space, with that bigger parent comes access to more capital for Radian Arc, and that means that they've been able to deploy more GPUs faster. Our license revenue from that agreement scales with the number of GPUs that are deployed. What we're seeing now is that the rollout of those GPUs has started to accelerate, especially in places like India, Thailand, Vietnam, places where there's a huge demand for cloud gaming. We're really excited about Radian Arc's new owners. They've all settled in now, and we're starting to see the benefits of that partnership between Radian Arc and their new owner, Submer.
Mike, I think, unless anybody else has any other questions, that is the end of the presentation. Thank you everybody for attending.
Thank you, everyone.
I appreciate everyone's time this morning. I think the market has opened strongly again today, which is a fantastic start to the day. We hope to be back with you in around a month to talk more about the successes that Mike's brought to ActivePort so quickly. Thanks, Mike. Welcome. Glad to have you here.
Thank you. Thank you. Good to be here.
Perfect. We'll see everybody soon. Thank you.
Thanks, everyone.