Announcement PDF 1 ASX : 5GG INVESTOR UPDATE Q3 FY25 16 APRIL 2025 2 DISCLAIMER IMPORTANT: You must read the following before continuing. Summary information in relation to Pentanet Limited. This presentation contains summary information about Pentanet Limited (ACN 617 506 279) (“Company”), its subsidiaries and their activities which is current as at the date of this presentation, unless otherwise indicated. The information in this presentation remains subject to change without notice, and the Company is not responsible for updating, nor does it undertake to update it. Industry data - Certain market and industry data used in connection with or referenced in this presentation, including in relation to other companies in the Company’s peer group, may have been obtained from public filings, research, surveys or studies made or conducted by third parties, including as published in industry-specific or general publications. 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This presentation and its contents must not be distributed, transmitted or viewed by any person in any jurisdiction where the distribution, transmission or viewing of this document would be unlawful under the securities or other laws of that or any other jurisdiction. 3 AGENDA 01 INTRODUCTION AND KEY HIGHLIGHTS STEPHEN CORNISH MANAGING DIRECTOR 02 STRATEGY UPDATE 03 FINANCIAL RESULTS MART DERMAN CHIEF FINANCIAL OFFICER 04 Q&A 4 INTRODUCTION AND SUMMARY OF RESULTS We’re pleased to share Pentanet achieved another positive EBITDA quarter in Q3, continuing positive financial growth momentum. This demonstrates that the company has a strong financial foundation to support our upcoming growth objectives. This quarter’s performance reflects the ongoing momentum across both core business segments and reinforces our confidence in the path ahead. STEPHEN CORNISH FOUNDER & MANAGING DIRECTOR 5 Key Financial Highlights from Q3 FY25 EBITDA increased 17% QoQ to $0.7m Second consecutive quarter +EBITDA Consolidated Revenue increase of 10% on PcP Consolidated gross profit increased 21% on PcP Gaming revenue up 29% on PcP EBITDA is a financial measure which is not prescribed by Australian Accounting Standard (‘AAS’) and represents the profit under AAS adjusted for depreciation, amortisation, interest and tax. Q1FY25 EBITDA included one-off restructuring costs of $0.25m 6 FY25 Key Objectives Establish and operate from a sustainably profitable foundation Expand network footprint to support future growth plans Increase NVIDIA cloud GPU optimisation and capacity headroom Increase revenue and margin as we set the stage for new growth Prepare for new 5G product launch 7 FY25 Strategic Delivery Amidst other operational initiatives, these were the key objectives completed which underpinned our forward strategy Accelerate 5G coverage expansion Implement operating cost efficiency Inventory swap to minimise 5G expansion cost End FY25 1H EBITDA+, Continue growth momentum across 2H Increasing Cash Implement next phase of CloudGG user monetisation to increase group profitability Work with NVIDIA to improve GPU optimisation Network & Software upgrades to drive automation and support future scalability Q3 FY25: Second consecutive EBITDA+ quarter Increasing Cash EBITDA is a financial measure which is not prescribed by Australian Accounting Standard (‘AAS’) and represents the profit under AAS adjusted for depreciation, amortisation, interest and tax. Incremental User Growth as 5G Coverage Scales Resources are focused on coverage and capacity expansion to facilitate returning to high growth Total Q2FY25 Q3FY25 17,732 17,856 Gross New Subscribers 791 823 Churn (667) (677) Closing Balance 17,856 18,002 Average Monthly Churn 1.2% 1.3% To drive a competive on-net offering in market, we need the Ultrafast capability of 5G The strategy is to cast a wider coverage net, to allow for broader marketing whilst further reducing CAC 5G subscribers are still being added as we go, with targeted marketing initiatives 5G QoQ Growth +192% PcP 709 801 Opening Balance Net subscriber growth is still present, but we must expand our catchment/coverage, and launch 5G at scale in market to return Telco to high growth. 274 8 Every month, our free users play for over 20 million minutes on our infrastructure. That would equate to one person gaming 24 hours a day for FOURTY YEARS. NVIDIA Cloud Strategy Own & Operate the Largest Commercial Deployment of NVIDIA GPU’s in the Country, Profitably Profitable Gaming Platform Increase Market Awareness Adopt & Convert Users Increase value offering to gamers. Layer commercial GPU revenue on idle capacity. Scale. Expand. Optimise. Evolve Freemium to Paid conversion, as Captured Userbase Matures Demonstrate Margin Uplift at Each Optimisation inflection Oversubscription Efficiency & Margin Continually improves with Scale Scale Existing Infrastructure and expand Offering to enable 4K high FPS Freemium adoption to grow market awareness - Currently 696,000 Users Deploy and Launch service in Australia, Retaining exclusivity I wonder if there WILL BE other use cases FOR running hIGH-END NVIDIA GPU’s at scale IN THE NEAR FUTURE? 9 Revenue Uplift Remained Following Margin Optimisation Gaming Revenue $’000 $634 ARPU +29% PcP 1% QoQ +44% PcP 6% QoQ $638 $18 $501 $17 $12 $13 $259 Q3 FY23 Q3 FY24 Q2 FY25 Q3 FY25 Q3 FY23 Q3 FY24 Prior Comparative Quarters Q2 FY25 This Financial Year Monetisation strategy evolving—targeting retention, ARPU growth, and platform efficiency. Q3 FY25 10 11 EBITDA Momentum Continues as Gross Profit Improves Revenue ($m) Gross Profit ($m) +10% PcP ↔ QoQ $5.7 EBITDA ($m) +21% PcP 4% QoQ $5.7 17% QoQ $2.9 $2.8 $0.6 $5.2 $4.9 ($0.7) ($0.2) Q3 FY23 Q3 FY24 $0.7 $2.4 $2.1 Q3 FY23 Q3 FY24 Q2 FY25 Q3 FY25 Q3 FY23 Q3 FY24 Q2 FY25 Q3 FY25 Q2 FY25 Q3 FY25 Margin-accretive growth driven by operational efficiency and pricing strategy EBITDA is a financial measure which is not prescribed by Australian Accounting Standard (‘AAS’) and represents the profit under AAS adjusted for depreciation, amortisation, interest and tax. 12 FINANCIAL RESULTS Our Q3 performance reflects the benefits of disciplined execution and ongoing operational optimisation. We maintained stable revenue, delivered our second consecutive EBITDA-positive quarter, and continued to improve gross margins. Through careful cost control and strategic prioritisation, we preserved cash while supporting targeted growth across both core business segments. This quarter reinforces the strength of our financial foundations and our focus on sustaining momentum through the remainder of FY25. MART DERMAN CHIEF FINANCIAL OFFICER 13 Telco and Cloud Strategies Support Revenue Revenue ($m) +10% PcP ↔ QoQ $5.7 $5.7 Group revenue of $5.7 million, up 10% on PcP and stable QoQ Telecommunications recurring revenue up 9% on PcP and 2% QoQ to $5.1 million, supported by ongoing subscriber growth and network expansion Gaming revenue increased 29% on PcP and 1% QoQ, $5.2 driven by membership growth and pricing adjustments $4.9 Cloud Gaming ARPU up 6% QoQ to $18, reflecting improved monetisation from premium plans Q3 FY23 Q3 FY24 Q2 FY25 Q3 FY25 14 Consolidated Gross Profit Update Across Segments Gross Profit ($m) +21% PcP 4% QoQ $2.9 $2.8 Gross profit of $2.9 million, up 21% on PcP and 4% QoQ, reflecting strong operational execution Consolidated gross margin increased 2pp to 51%, driven by improvements across both business segments Telecommunications gross margin rose 1pp to 49%, supported by recurring revenue growth and NBN margin optimisation $2.4 GeForce NOW gross margin remained at 66%, benefiting from earlier pricing adjustments and platform efficiencies $2.1 Q3 FY23 Q3 FY24 Q2 FY25 Q3 FY25 15 Second Consecutive EBITDA-Positive Quarter EBITDA ($m) EBITDA increased 17% QoQ to $0.7 million, marking 17% QoQ $0.6 $0.7 Pentanet’s second consecutive EBITDA-positive quarter Segmental contribution remained strong, with Telecommunications EBITDA up 50% QoQ to $0.3 million and Gaming EBITDA up 2% to $0.4 million. ($0.7) ($0.2) EBITDA uplift driven by margin expansion, recurring revenue growth, and disciplined cost management Cost efficiencies from platform optimisation and supplier negotiations continued to support improved profitability Pentanet remains committed to sustainable cost discipline, while continuing to invest in strategic initiatives that Q3 FY23 Q3 FY24 Q2 FY25 Q3 FY25 support long-term growth. 16 Positive operating cash flow, driven by improved EBITDA performance Net cash position improved by $0.1m, supported by positive operating cash flow Operating cash flow remained positive at $0.8m, reflecting EBITDA growth and improved working capital management Closing cash balance as of 31 March 2025 was $2.3m Q3 FY25 $m Q2 FY25 $m Change QoQ $m Cash and cash equivalents 2.3 2.2 +0.1 Net operating cash inflow 0.8 0.9 -0.1 Net cash used in investing activities (0.5) (0.3) -0.2 Net cash used in financing activities (0.1) (0.2) +0.1 Net cash movement 0.1 0.4 -0.3 17 Wrapping up, key takeaways Delivering Second EBITDA+ Quarter Aim to doubling of 5G coverage across FY25 is on track Increased NVIDIA Cloud GPU Optimisation We expect financial growth to continue across Q4 FY25 EBITDA is a financial measure which is not prescribed by Australian Accounting Standard (‘AAS’) and represents the profit under AAS adjusted for depreciation, amortisation, interest and tax. 18 Q&A 19 Glossary ARPU (Average Revenue Per User) A key performance indicator that calculates the average revenue generated per user or subscription over a specific period, often used to measure the revenue of individual customers. ARPU is calculated. GPU (Graphics Processing Unit) A specialised electronic circuit designed to accelerate the rendering of images, video, and 3D graphics, widely used in gaming, AI, and cloud computing applications. CAC (Customer Acquisition Cost) The total marketing cost associated with acquiring a new customer, including expenses for marketing and other related efforts, is divided by the number of new customers gained. PcP (Prior Corresponding Period) A comparison of a company's performance or metric in a given period to the same period in the previous year, providing insights into year-overyear trends. CPE (Customer Premises Equipment) Devices located at a customer’s premises and used to access telecommunications or internet services, such as routers, modems, or set-top boxes. Churn Churn is the rate at which customers discontinue their subscriptions or services with the company over a specific period, often expressed as a percentage. It is calculated by dividing the number of customers lost during a period by the total number of customers for that period. FPS (Frames Per Second) A measurement of how many individual frames are displayed per second in a video or game. Higher FPS typically results in smoother motion and better visual performance. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) A financial metric measures a company’s operational profitability by excluding the effects of financing and non-cash expenses. EBITDA is a financial measure which is not prescribed by Australian Accounting Standard (‘AAS’) and represents the profit under AAS adjusted for depreciation, amortisation, interest and tax. pp (Percentage Points): A unit used to describe the absolute difference between two percentages. QoQ (Quarter-on-Quarter) A comparison of a company's performance or metric between one fiscal quarter and the immediately preceding quarter, used to assess shortterm trends. Subscribers: The number of individuals actively enrolled in and paying for a company’s services on a recurring basis. YTD (Year-to-Date): A time-based metric that refers to the period starting from the beginning of the current calendar or fiscal year up to the present date. It is often used to measure performance or progress over the year.