Shares in Perth-based telco Pentanet (ASX: 5GG) regained six months of declines in a single session on the ASX today after the company announced it had jumped into underlying profitability in the first half of FY25.

Pentanet, which delivers high-speed internet through its private fixed-wireless network, has recorded a $1 million turnaround in its performance over the first six months of this financial year, converting a first quarter EBITDA loss of about $400,000 into a $600,000 profit in the second quarter.

The news led to a doubling of Pentanet’s shares to a peak of 6c today, although they pulled back later in the day to close at 5c per share – up 2c or 66.6 per cent. This was the highest close for Pentanet’s shares since July last year.

Pentanet, which was founded in 2017 by Stephen Cornish, recorded a 7 per cent increase in consolidated revenue to $11.1 million for the first half compared to a year earlier.

Consolidated gross profit rose 6 per cent to $5.2 million, with the pace of growth rising quarter-on-quarter by 17 per cent to $2.8 million.

Cornish, the Pentanet CEO, describes the financial results as a “significant turning point” for the company.

“Our business turned EBITDA positive in the quarter and for the half, marking the fruition of our strategic focus over the past several quarters,” he says.

“Our commitment this year to double our 5G coverage is on schedule and will bolster our ultrafast bandwidth capabilities and set the stage for sustainable competitive growth and profitability for our Telco division.

“As we continue to build and expand our 5G capacity, we've simultaneously increased optimisation of our NVIDIA Cloud division, showing our ability to increase monetisation of our CloudGG platform in stages effectively.

“This achievement is built on the foundation of scaling up from our freemium service strategy, and we're now positioned to leverage our increased capacity to deliver even greater value to our customers and further growth for stakeholders.”

Pentanet has been working with US tech giant NVIDIA since 2021 delivering high-speed internet and cloud services to gamers across Australia and New Zealand.

Through an agreement secured early last year to facilitate entry into NIVIDIA’s Graphics Delivery Network, the company has expanded its existing GeForce NOW alliance targeting gamers to bring on board new revenue opportunities. The company now owns and operates the largest commercial deployment of NVIDIA GPU (graphics processing units) in Australia.

Pentanet says it targeted an acceleration of its 5G network expansion in the second quarter as a key element of its telecommunications strategy.

The company has so far upgraded 14 towers to 5G, with five more scheduled for completion in the second half of FY25 – a move that will double Pentanet’s 5G coverage this financial year. This is expected to lay the groundwork for the launch of an “ultrafast, competitive on-net offering at scale”.

Pentanet has recorded steady growth in 5G subscribers, reaching 709 customers, which is a 17 per cent quarter-on-quarter improvement.

To support its 5G rollout and minimise the cash impact, Pentanet has secured 25 5G base stations and 423 customer premises equipment units via a stock swap arrangement with its main equipment supplier.

The company says this has “significantly reduced capital expenditure requirements, improving the overall cash cost of the network upgrade program and allowing resources to remain focused on expanding coverage and capacity”.

Pentanet continued to drive growth and optimise operations for GeForce NOW in Q2 FY25, advancing its strategy to monetise and expand the platform.

Increased NVIDIA Cloud GPU optimisation improved service delivery, enabling the company to reduce costs while improving user experience

GeForce NOW Cloud Gaming recorded a 26 per cent quarter-on-quarter revenue increase, with a monthly record high of $241,000 achieved in December.

Gaming revenue growth in the first half is up 31 per cent compared with a year earlier to $1.1 million and up 27 per cent quarter-on-quarter.

Pentanet says revenue was driven by membership growth and pricing adjustments across key monthly plans.

The company had net cash of $2.2 million at the end of December, up $400,000 from the first quarter of FY25.

In the FY24 full year, Pentanet posted a 6 per cent increase in consolidated revenue to $20.9 million and a 13 per cent increase in consolidated gross profit increased to $9.6 million.

Last financial year, the company recorded an EBITDA loss of $1.3 million, which was down 59 per cent from the previous year, an improvement driven by margin and cost improvements.

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