Converge Information and Communications Technology Solution (CNVRG) Q3 2024 earnings summary

Executive summary

• Consolidated revenues for the nine months ended September 30, 2024, rose 14% year-over-year to ₱29.94 billion, driven by strong growth in both residential and enterprise segments.

• Net income increased 29% year-over-year to ₱8.21 billion, reflecting robust revenue growth and effective cost management.

• EBITDA grew 20% year-over-year to ₱18.25 billion, with EBITDA margin improving to 61.0%.

• The company declared its maiden special cash dividend of ₱1.31 billion (₱0.18/share) and adopted a dividend policy targeting a 25–30% payout ratio.

Financial highlights

• Residential revenues grew 13% year-over-year to ₱25.44 billion, supported by a 20.1% increase in subscribers.

• Enterprise revenues surged 19% year-over-year to ₱4.50 billion, with the customer base exceeding 60,000.

• Cost of services increased 19% year-over-year, mainly due to higher depreciation, rent, and maintenance, slightly reducing gross margin to 65%.

• General and administrative expenses rose 23% year-over-year, driven by higher service fees, promotions, and personnel costs.

• Finance costs declined 7% year-over-year due to loan repayments.

Outlook and guidance

• Management remains confident in sustaining growth, supported by strong cash flows, low leverage, and continued network expansion.

• The company is well-positioned to support its dividend policy and future expansion plans.