Amid strong demand from investors, Converge closed September with nearly 2.46 million residential subscribers, split between over 2.2 million postpaid and about 241,800 prepaid accounts, the company said in a stock exchange filing on Wednesday.
Revenue jumped 14.1 percent to P29.9 billion, fueled by strong double-digit growth in both residential and enterprise segments.
Residential revenue climbed 13.2 percent to P25.4 billion, driven by subscriber growth, and FiberX saw its best quarterly gross adds in 10 quarters.
Better margins, lower debts
Earnings during the period were also lifted by a net income margin of 27.4 percent, an improvement from 24.3 percent during the same period last year. It also maintained its industry-leading return on invested capital (ROIC) at 18 percent from 17.3 percent in the last quarter.
Furthermore, the company lowered net debt from P15.8 billion in June to P14.1 billion by September this year.
Management’s view
“We are really thankful to all shareholders who have believed in our mission to provide world-class connectivity services to the Filipino people,” said Converge CEO and co-founder Dennis Anthony Uy.
“We are committed to ensuring that we deliver value to our shareholders as we continue to improve our performance,” he added.
Top gainer
Converge, trading under the stock symbol CNVRG, is one of the top gainers this year, nearly doubling its share price since early 2024 as the company began paying dividends.
The company’s board earlier approved a dividend policy to maintain a payout ratio of 25 to 30 percent of net income. It also declared a special cash dividend of P1.31 billion or P0.18 per share, which was paid to shareholders last Sept. 24.
“With the continued strength of the earnings growth and operating cash flow generation at Converge, we remain well positioned to support the dividend policy going forward,” company president and co-founder Maria Grace Uy said.
“The approval of this dividend policy reflects the company’s commitment to delivering value to shareholders while investing in the continued growth of the business,” she added.
Analyst view
Mark Angeles, head of research at First Metro Securities, rates Converge a “buy” with a price target of P20.50 per share due to its growth prospects and potential for higher dividend payments.
“While [capital spending] remained elevated, we think it has peaked. Alongside a strong balance sheet and [free cash flow] generation, we think there is room to increase capital returns to shareholders,” he said in a recent report.
Speed boost, Netflix deal
Converge also launched Boost Mode, giving all FiberX plans a free 100 megabits per second speed boost, among other upgrades.
“At Converge, our vision has always centered on giving amazing digital experiences. With our subscriber base exceeding 2 million this year, we want to continue providing customers with substantial speed increases,” said Converge executive vice president and chief commercial officer Benjamin B. Azada.
It also announced a new partnership with Netflix, offering a Converge Netflix Bundle that gives FiberX customers both internet and Netflix plans.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
