"It's an execution year": Aussie Broadband CFO on how hard work has set up a promising FY27

In a broadband market where pricing is tight and competition is fierce, and in a year where the big focus was on migrating connections from More, Tangerine and AGL, Aussie Broadband (ASX: ABB) managed to post beats on earnings and dividends in its FY26 results. But while FY27 guidance implied impressive double-digit growth, it came in below estimates.

According to CFO Darren Rowland, it's an exciting time for the business, with FY27 shaping up to be a "bumper year" for the fast-growing business.

I recently interviewed Rowland on the key takeaways from Aussie's FY26 results, how the company is set up for even more growth next year, and why he's confident it can excel in a competitive market.

FY26 key results

Please note all comparisons are to Ord Minnett estimates:

• Revenue up 9.2% to $1,295.4m vs $1,303.9m ests (in line)
• Underlying EBITDA up 19.6% to $165.3m vs $164.9m ests (in line), with EBITDA margin up 1.2ppt to 12.8%
• Underlying NPATA up 25.8% to $70.2m vs $68.5m ests (3% beat), with EPSA of 23.9c vs 23.5c ests (2% beat)
• Reported NPAT of $35.3m vs $38.1m ests (7% miss), dragged by a $17.2m loss on the Digital Sense divestment
• Fully franked FY26 dividend of 6.0c vs 5.0c ests (20% beat), alongside a buyback of up to $115m and net leverage of 0.9x
• FY27 underlying EBITDA guidance of $205m to $215m implies 24% to 30% growth but sits about 4% below $219.4m ests

Dissecting the results

Rowland says what interests him about the results is how positive numbers in one area of the business have translated into positive numbers elsewhere. 

"There's a flow here that's interesting," he said. "We've had our EBITDA margins expanding as the business has increased scale. That's then translated into quite a significant increase in the cash generation of the business, and we've also had a significant uplift in EPS. Those three things together are a pretty nice set of results to present as a CFO, I've got to say."

But the work the company has done that he's proudest of is the work that doesn't appear on the results sheet. 

"The team have executed the largest migration in the history of the NBN, and then back-to- back to that, the second largest migration in the history of the NBN, which is halfway through and going really well. 

"It has been an extraordinarily busy period for the business, but actually all of that translates into earnings in the next year. The busy-ness is something we're most proud of. We've been able to manage those migrations, keep the customers happy and really set ourselves up for a bumper year next."

The forward outlook 

With much of the hard work done, Rowland says the key focus going forward is improving operational leverage. 

"Once we bring these two large customer books on, the business grows quite significantly in scale," he said. "That gives us a lot of opportunities to continue to accelerate that operating leverage."

The year ahead will be a culmination of the work already done, with earnings also likely to kick up a gear. 

"FY27 is an exciting year because we get two things," he said. "We get the continued organic growth of the business, which has been strong for many years in a row and will continue, and then we get to add to it the acceleration in earnings coming from these strategic transactions that we've completed in FY26."

"We're excited about quite a significant uplift in the earnings profile into FY27, but really it's an execution year for us. We've done these deals, we've done the migrations, we've got to finish those off, we've got to embed those transactions, and really start to unlock the leverage opportunities, and then accelerate earnings at the back end of FY27 into FY28. So it's a pretty exciting time to be in the business of Aussie Broadband."

Staying competitive

In Aussie Broadband's earnings call, CEO Brian Maher said the broadband market was "tough", and suggested there was no sign of pricing rationality coming back. 

Rowland says the competitiveness is something the company is willing to embrace. 

"Competition is always a good thing. I like it - it keeps everyone sharp," he said. "We're not shying away from the competitive environment at all."

"From our perspective, we're just really focused on profitable growth. We are a growth business. We want to increase the base. We've got a great brand. We've got a great service. We've got great network performance." 

While Aussie has raised prices on some plans, Rowland says the focus is on delivering for customers.

"We don't feel like we need to be the cheapest in the market by any stretch," he said. "We just need to deliver really good value for money and focus our marketing efforts on profitable subscriber growth, so that's what we're doing, and you know others have different strategies, and that's totally fine too."