Fiber broadband and technology provider Converge ICT Solutions, Inc. expects to increase its capital expenditures in 2025 as the company is looking to continue its strong performance in 2024. The company’s CAPEX budget will rise to approximately PhP20-billion to PhP25-billion mainly due to a couple of big projects including the two subsea cable systems named Bifrost Cable System and Southeast Asia Hong Kong-Hainan Express Cable System (SEA-H2X) as well as data centers in Caloocan and Angeles, Pampanga.
According to Dennis Anthony Uy, Converge CEO and co-founder, the integration of these state-of-the-art data centers will position Converge to support the growing demand for cloud and enterprise services, while the activation of the two subsea cable systems will enable the company to fully support its residential and enterprise customers as well as drive innovation across multiple sectors.
An emerging business unit of Converge, the data center business is expected to come online. It has been expanding its network of digital hubs to prop up the massive demand for content and cloud services. Converge employs a multi-edge strategy where multiple smaller data centers are deployed closer to endusers to enhance data delivery.
The Caloocan Data Center is designed to accommodate 300 racks and will serve the company’s operational needs. On the other hand, its data center project in Angeles, Pampanga, designed to accommodate 1,200 racks, is expected to meet the future requirements of both its residential and enterprise customers.
Converge chief finance officer Robert Yu said that to continue the company’s strong growth and performance, it is also expected to deploy additional ports (approximately 400,000 to 500,000 ports) that are included in the budget this year. Majority of these ports will be deployed to service new areas in Visayas and Mindanao.
Remarkable growth in the operation of Surf2Sawa, the affordable prepaid offering of Converge, together with BIDA fiber, resulted to the increase in subscriber base of approximately 150% in 2024. With this growth, Converge is looking to hit its mid-term goal of acquiring four million subscribers by 2027.
Converge is also into the creation of groundbreaking solutions that equip businesses to succeed in the digital landscape. One of these solutions is the Converge Content+, an Internet-based TV solution catering to the hospitality industry. Besides, the recent launch of the Fiber-to-the-Room technology at St. Luke’s Medical Center ensures the patient’s access to high-speed Internet. More technology collaborations are in the offing to beef up the Enterprise portfolio.
In 2024, Converge performed well and has achieved all its financial targets. Consolidated revenue expanded by 14.8%, which is above its 12% – 14% guidance, to reach PhP40.6-billion with residential segment contributing approximately 85% of the total. Residential revenue grew by 13.7% to reach PhP34.4-billion brought about by the growth in subscriber base. Similarly, all enterprise sub-segments contributed double digit growth, leading to a growth of 22% in enterprise revenue which reached PhP6.2-billion.
Profitability margins were also on the rise last year. EBITDA grew by 14.2%, ending the fiscal year 2024 with an industry-leading 60.5% margin that exceeded the company’s initial target of 60%. Net income after tax of Converge rose by 18.8% to PhP10.8-billion. With the favorable performance of Converge, its Board of Directors has approved a regular cash dividend payment of P0.43 per share to be paid on April 15, 2025 to common shareholders with a record date of April 2, 2025.
This year, Converge is targeting a growth rate of 14% to 16% in consolidated revenue and 61% – 62% EBITDA margin.
