The country’s leading fiber broadband provider Converge ICT Solutions Inc. has grown its revenues by 40% to P7.75 billion in the first quarter of the year compared to the same period last year, on the back of continued strong residential subscriber increase and accelerating demand from enterprise clients.
In its first quarter financial and operations briefing to the media, Converge disclosed that it registered gross subscriber adds of 188,000 during the quarter, up 15% from the last quarter in 2021, leading to a cumulative subscriber count of 1.8 million, higher by 53% compared to its year-ago level.
Meanwhile, core net income grew to almost P 2.0 billion in Q1 2022 representing a core net income margin of 25.4%.
“We are seeing a solid growth of our financials in the first quarter of 2022 and we expect to hit our full-year targets as we remain aggressive in our network rollout and marketing activities both in the residential and enterprise segments,” notes Converge CEO and Co-Founder Dennis Anthony Uy.
Further propping up revenue growth is the continued increase in its Enterprise business which encompasses small and medium enterprises (SMEs), Corporates, Large Enterprise, and Wholesale. The reopening of the economy and gradual thriving of SMEs has aided the segment’s growth. Revenues for the Enterprise business amounted to P935.5 million in Q1 2022, 25% higher versus P749.7 million in Q1 2021. SMEs contributed 20% to the total, and by itself grew by 118% year on year. SME subscribers of Converge reached 25,810 as of March 21, 2022 – a growth of 200%.
“The revival of the economy and the return of businesses – especially SMEs – has given our enterprise business a push in the first quarter of the year. Moving forward, we hope to offer more value to SMEs as they continue to recover,” said Converge President, Chief Resource Officer, and Chief Risk Officer Maria Grace Y. Uy.
Converge continues to ensure Filipinos enjoy high availability, aggressively rolling out its fiber ports in Q1 2022 and reaching 6.5 million ports as of March 2022. This puts it on track to reach the accelerated target of 7.5 million to 8 million ports by 2023.
Nationwide household coverage as of Q1 2022 is at 47%. In terms of homes passed, 12.2 million homes in the Philippines are serviceable by Converge, which is 70% higher than the same period in 2021.
Despite its massive network investments, Converge maintained an industry-leading return on invested capital (ROIC) of 17.3%, due to the company’s disciplined approach in deploying capital to expand its fiber network and tracking key capital efficiency indicators such as port utilization ratios.
In the first quarter of the year, Converge acquired the Alaska Aces franchise and officially entered the Philippine Basketball Association (PBA) under its own team, the Converge FiberXers in a bid to become a household name.
Recently, Converge was included in the exclusive and highly-watched MSCI Global Standard Indexes, the only Philippine company to be included in its latest rebalancing announced May 12, 2022. This inclusion will become effective on May 31, 2022. This further broadens the exposure of Converge to international passive investors and stands as further proof of its strong market position.