• Customer receipts grew 53% year-on-year to $72.9m in 1H FY26
• Operating cash flow declined $9.1m, mainly due to reduced payables
• Free cash flow declined $12.4m, impacted by technology investment
• Targeting 8-10% gross margin improvement in FY27 through supplier renegotiations and operating leverage

Swoop Holdings Ltd (ASX: SWP) has released its quarterly activities report and Appendix 4C for the three-month period ended 31 December 2025 (Q2 FY25). Customer receipts continued to grow strongly, reaching $72.9m in 1H FY26, up 53% on the prior corresponding period. This was driven by accelerating growth in NBN and Mobile products, as well as contributions from the Melbourne Fibre Project. Excluding one-off project revenues, customer receipts increased 37% year-on-year. Operating Cash Flow (OCF) for the half declined by approximately $9.1m, primarily due to a significant reduction in the accounts payable position at 31 December. OCF for 1H FY26 was -$4.1m. Free Cash Flow (FCF) declined by $12.4m for the half compared to the prior corresponding period, finishing at -$14.9m, with only a minor impact from the Melbourne Fibre Project capex of ~$1.5m. The decline is mainly attributable to the OCF movement and a one-off investment of ~$3.0m in Swoop's technology platforms to support core consumer business growth and future margin expansion. Gross Margin for the core business was 25.2% in 1H FY26, slightly lower than the prior corresponding period. Swoop is targeting an improvement of 8-10% in Gross Margin over the next 18 months, supported by supplier contract renegotiations (including an industry wide deal on NBN commencing 1 July 2026), growth in the core consumer business and increased operating leverage across the network. Momentum in the core business remains strong, with monthly recurring sales up 198% and monthly revenue up 39% on 31 December 2025 compared to the prior corresponding period.

Swoop is targeting an 8-10% improvement in gross margin over the next 18 months, supported by supplier contract renegotiations and growth in the core consumer business.

Swoop remains focused on driving growth in its core NBN and Mobile business, while also investing in technology platforms to support future margin expansion. The company closed 1H FY26 with $16.0m in available funding, providing a solid platform to complete the Melbourne Fibre Project and accelerate growth in the core business.