Pentanet Limited (5GG) Earnings Call Transcript & Summary

Good morning, everyone. Welcome. I'll just give it a few maybe a minute or so for everyone to join. Welcome to the results presentation for everyone joining now. Okay. Looks like most people should be in the room by now. So again, thanks, everyone, for joining this morning. We've obviously got our FY '26 results that we want to run through, and we're going to do a little bit more of a deep dive into that strategy that we have been discussing has been coming. So we'll sort of start at the top level, look at the business top down and look at all the different components and parts of what makes up the business and how we see them fitting and playing to what we see that we're going to do moving forward. And thanks all to everyone, for joining on the new Investor Hub platform. We have transitioned over here in all of our webinars, and that we'll be running through Investor Hub from here on, also in line with wanting to increase that cadence of market communication. It's a good platform for that. Okay. So for today, we're actually going to be starting off with Mart. She's going to be running through the FY '26 results. And once that's done, I'll hand it back to myself and we'll go into the strategy, and we'll close on all of the Q&A. These webinars are obviously a good opportunity to ask me things directly, and I see there's a few questions already. So the format is we can get to those at the end. And throughout the webinar, if you have any other questions, just feel free to post them and I'll address them at the end. Thanks Mart.

Thanks, Stephen, and thank you for joining us today. I will take you, if we can jump on to the first slide there, Steve. Next slide, there we go. So I will take you through the numbers behind FY '26, starting with the 3 things that defined FY '26 for us financially. So firstly, that is the operating leverage. Group revenue is up 8% to $24.4 million, and our EBITDA grew by 74% to $2.4 million. That gap between the two is the story of the year. Revenue growth landing on a cost base that did not grow with it. And it converted to cash. So our net operating cash inflow was up 17% to $1.6 million. The second is where the leverage came from. So gaming revenue grew 16% to $2.8 million at a 68% gross margin. That is 11 points better than last year and gaming EBITDA grew by 61% to $1.7 million. Gaming now accounts for about 46% of group EBITDA before corporate costs and that is up 35% in FY '27. Also on gaming, we are in advanced negotiations with NVIDIA under our alliance agreement to get Blackwell servers. We expect those to conclude soon. But as the footnote states, negotiations remain ongoing, and there's no certainty an agreement will be concluded. Then thirdly, steady subscriber growth, supported by the nbn Speed Boost and 15% growth in higher-margin 5G subscribers. It is the recurring revenue foundation that funds everything else. So in summary, growth in the higher-margin segment on a stable base converting to cash. So let's dig into those numbers. Next slide, please. So over the past 2 years, we have reset the cost base while continuing to grow the top line. And these results show a significant improvement in operating performance. So we had another year of revenue growth, up 8% and then EBITDA up 74%. 2 years ago, this line was a $1.3 million loss highlighting the significant operational turnaround. The composition also matters. Gaming contributed $1.7 million and telco $2 million, so $3.7 million in segment level approaching a near 50-50% contribution from both segments, less $1.3 million in corporate costs. And then operating cash flow, $1.6 million, up 17%. Next slide, please. So cash is where operating improvement shows up most clearly. Our operating cash of $1.6 million is up to 17% and that is a $2.2 million turnaround from FY '24's outflow. So the composition of the cash is the investing was an outflow of $2.3 million, that narrowed by 16% year-on-year. That is $1.8 million on intangibles, which include the final $1.6 million payment to ACMA for our 15-year spectrum license, $0.5 million of network equipment and the spectrum installment is now finally behind us and does not recur in FY '27. Financing was broadly neutral. We repaid $1.2 million borrowings and made $0.9 million of lease payments. This was offset by a $2.1 million facility that funded the spectrum. So you might ask what does the completed spectrum payment mean for FY '27 cash? Well, the ACMA obligation is discharged and does not recur but the spectrum payment was funded by the debt facility, so not out of cash reserves and that facility is still repayable. So it's not a clean $1.6 million release in FY '27. We've still got circa $0.5 million of debt and interest repayments in FY '27. So we closed the year with $1.5 million cash at bank. So in summary, operating cash flow positive, and this is improving our investment narrowed by 16% and borrowings got repaid. And the final spectrum installment is now behind us. Next slide, please. So now in terms of the cloud gaming segment. This is now positioned as a high-margin, high-growth potential segment, and this has now started showing through in the numbers. The revenue is up 16% year-on-year to $2.8 million, gross profit of $1.9 million, up 40%. So gross profit grew more than twice as fast as revenue. Margin expanded by 11 percentage points to 68%. That directly shows through to segment EBITDA of $1.7 million, up 61% year-on-year. The number I would point you to and last one is gaming now contributes 46% of group EBITDA before corporate costs, and that's up 35% in FY '27. The mix is shifting towards the higher-margin business and is expected to improve our operating leverage. Next slide, please. So what sits behind those numbers? Behind those margins is a change in what customers are choosing to buy as our loyal customers because customers choose the premium tier. So my ARPU is up $24 a month, that's 36% improvement, and that is a deliberate outcome. We retired the entry-level casual plan during the year and majority of subscribers moved up rather than away. 59% of the paying base is now on Ultimate -- the Ultimate plan, our top tier. That's up 39% a year ago. That's 20 percentage point movement in 12 months. So we are now generating higher quality revenue in our gaming segment. We recorded 32,000 paid activations during the year and around half of those were users returning to the platform. Cloud gaming customer subscribes around content release. They pause in between. So the average subscription life cycle is 3 to 4 months. So the gross flows are large in both directions and returning users are a feature of this model rather than a leak in it. And behind the paying base sits an audience of 840,000 registered CloudGG users. That is the pool we are converting from. And it is also the reason conversion and utilization is the priority for FY '27. Next slide, please. So now the telco segment is that mature segment where we get good recurring revenue, cash generation part of the business. This enables us to invest in the emerging growth segment of cloud gaming. So telco revenue of $21.6 million is up 7% year-on-year. Gross profit of $9.8 million, that's up 2% year-on-year. And margin down 2 percentage points to 46% and segment EBITDA of $2 million, up 5% year-on-year. So the margin movement is mix, not pricing. Growth in the year came from off-net, nbn and OptiComm, which is more commoditized, lower-margin product. It is still profitable, it is still recurring and it still grows the base, but it does dilute the percentage. The offset to that is the on-net and particularly 5G, where margin is materially better. That is where the strategic focus sits. Next slide, please. So total subscribers is up 4% on the prior comparative period. So we're sitting at 18,936 at the end of June. Our off-net grew 13% to 12,799, and this was mainly helped by the nbn Speed Boost, which automatically upgraded eligible fiber and HFC connections in September 2025 at no additional cost. It lifted achievable speeds across several band tiers and drove stronger acquisition in our nbn base. On-net closed at 6,137 while our 5G subscriber base grew 15% to 1,039, the higher margin end of the network and where our attention is. The priority for us is filling the towers we have already built rather than building more. So in terms of the unit economics, our blended ARPU is at $96, our recurring revenue is up 2% to $92, and that was mainly driven by customers moving to higher speed plans. Our average monthly churn held at 1.3%. Next slide, please. So NPAT was affected by the impairment. But like you can see in the heading, there's still a bit more work to do. I want to dig a little deeper into the impairment expense reported in these results. On the left, the reported result, a loss after tax and other comprehensive income of $6.9 million against a $4.5 million in FY '25. And then on the right, the same year, excluding the impairment, an underlying loss of $2.9 million, a $1.6 million improvement on the prior year. That's 36% better. The entire difference between those charts is the $4 million impairment of Gen2 GPU hardware. Stephen will give some more background context around the migration of users from Gen2 to Gen3. I want to be clear about how we're presenting this. The reported net loss after tax of $6.9 million is the statutory position, and we are not asking anyone to look past it. But the underlying net loss of $2.9 million is the better guide to how the business actually traded this year. And the heading on this slide is deliberate. There's still more work to do before this line turns positive. With that, I will hand back to Stephen to take you through the Gen2 impairment and the strategy ahead. Thank you, Stephen.

Thanks, Mart. I'll jump next slide, please, even though I'm controlling it. Yes, look, I wanted to dig in a little bit to the Gen2 impairment before we move to the strategy just because obviously, it's a large one, but sort of setting that expectation, it was -- it's more or less a one-off type situation. If you think back to when we first deployed Gen2, we're -- sometimes I get asked, why do NVIDIA deal with you? How can they choose you over someone else? So, first and foremost, we're gamers. We want to get GeForce NOW into the hands of as many people as we can. But also, we wanted to make and meet the commitment that we are there and ready to meet what the potential demand was going to be. So it's sort of the ticket that we had to pay to hitch your wagon to NVIDIA. It was a way that we had our skin in the game to say whatever the amount of users bringing this new technology to market will need, we'll be there and ready to support it. By doing that, we are able to maintain our exclusivity status as well with them because we are there and committed. But as you can see, in 2021, that Gen2 was deployed, 2023 is when we shifted to Gen3. So there are 2 different sort of platforms. Gen2 is what you can sort of game at that 1080p, 60 frames per second. It was a very, very early day cloud gaming, and it's since evolved. And then we saw users were obviously like favoring and wanting to move to the higher-end plans. So running those 2 platforms simultaneously carries different costs and NVIDIA also because they're operating the 2 different platforms, it's better -- as the technology evolves, more people are showing interest in the Gen3, more users will move into the higher-end plans. That decision was made to sort of turn off the Gen2 and put a focus on Gen3. Gen3 is also forward compatible with Blackwell. So the new GPUs that can go in there, they're compatible with Gen3. So it makes sense for everyone to just be focusing on Gen3. But what it did land us with was quite a big impairment of that infrastructure. It's not useless infrastructure. It's just not being used for GeForce NOW anymore. So that decision to impair was made. And yes, any questions around that, feel free to put them in. But it was something that we had to do in the day, but that carry-through is still maintained by us. And by carry through, I mean, where we stand with NVIDIA and maintaining that exclusive partner for Australia. So if we look at the business, I guess, like I'm saying, we want to look at that top-down view. It's really -- I mean it's not a simple business, but looking at it simply, we've just got a higher capacity national network. We obviously have the Perth network. So we've got fixed wireless assets, towers, we've got 5G spectrum. We connect users on net. I'll give a 1-minute summary because I think there are a lot of new people starting to look at the Pentanet story as well. Our fixed wireless assets are -- they go around the Perth Metro area. It's like an nbn alternative technology. So we'll go and install a dish on the roof of someone's house, that connects to the tower. And we get quite a good margin on that product, but you need line of sight. You can't get it with everyone and I'll go more deeply into fixed wireless in a minute. So we've got that layer. We've got local telecommunications through fixed wireless. We do nbn locally, where we fit in the nbn market is that, that local provider, we can go out there and help fix homes and set people up and it's got that local look and feel and touch. And then we've also got our NVIDIA business. So we have got a lot of the NVIDIA GPUs that mostly they were in Perth and Sydney, since the Gen2 got switched off, only Perth had exposure to Gen2. So that's now no longer in service. So all of our GPUs are in Sydney at the moment. But to support that cloud gaming network, we've got quite a substantial backbone. When you supply Internet, it's not just around -- it's not just selling a plan and that sort of thing. Actually there's a substantial amount of infrastructure on the back end to deliver Internet services. And in our case, it's quite substantial because not only does it deliver Internet to customers, but it has to deliver cloud gaming, which is probably one of the most intensive things you could do across the network in terms of like bandwidth and latency and performance. And so our network is built to support that. So it's a very capable network that is -- manages traffic nationally and internationally. It's not -- our telco capability isn't just around Perth because that's where our customers are at the moment. So I just want to make that clear. So if you look at the -- again, just boiling down what is our business, what makes up the different things. We've got our fixed wireless business. So if you look at it on the XY chart, like it's good, fixed wireless is good. It generates cash for the business. But you can see in the numbers, it's sort of declining. It's a hard one at the moment, which I'll talk to. We also sell enterprise. So these are partners that work for us or people that need fiber connections. Given that we're a telco, we have access to all other telecommunications networks and their fiber footprint. So we're able to sell fiber connectivity to small business and small enterprise and that sort of thing here in Perth. We've got a partner team and an enterprise team. So that business is good, like it doesn't really require a lot of capital outlay. The margins are okay. And it's growing and doing its thing. So that's good. Then we've got on the faster emerging side of the business is there's obviously nbn. So nbn is a tricky one. It's generating cash and it's a good business in itself, but nbn has quite lean margins. I mean they're not super lean. They're okay, but nbn really is a scale game. And so we can see a lot of our growth and revenue growth is coming from nbn. So that's good. But albeit smaller margins than we're used to dealing with across the fixed wireless connections. And then lastly, we can see cloud gaming for us is really emerging as like it's the fastest-growing segment, the margins are getting very healthy. And what I want to do in this presentation is sort of bring everyone to the decision like about how we have landed, where we've landed and what we're going to do moving forward. And just sort of put that robustness to the case. So everyone has confidence as to why we made the decision to do what we're doing. But I'll go into everything a bit more granularly here. So nbn, like I was saying, it's -- they've done their speed upgrades. nbn is a pretty good product now. They've built fiber everywhere. They've recently, you would have seen last year, they did the Speed Boost. So if you're on a 100 meg, triples up and you get faster speed. What it's really done is it has created a challenge for us in the fixed wireless business and competing with it, given that it's not a bad product and I guess, if you're looking at this as a business segment, okay, there's a lot of new competition coming into market. The price is coming down year-on-year. Like it's not something that stands out as like, "Oh, yes, I'm going to go and run after that opportunity." But there is one thing that we could do differently with nbn to maximize that segment for us. It's not something we were running after with both hands, but we've already sort of got one hand there. So we're just going to add the other. nbn is dominated by the scale players. So we've always been hamstrung as a local provider only selling nbn regionally, like in 1 state, you are hamstrung because the way that nbn is built and the way that it's set up, there's nothing really stopping you from selling it nationally. It wasn't always the case. This is sort of -- it sort of shifted once CVC got changed and removed, it sort of opened up the landscape to allow more competitors into the market. So we haven't -- we never sold it nationally intentionally because it was quite cost prohibitive because we've been doing it for a while. But nbn has evolved to like change that landscape and how you operate on there. And then the other thing is that you do sort of need an edge, like if you're going to go operate nationally, most people just do that based on price. We're not like -- if we wanted to go and build nbn nationally, it's -- it wouldn't be a decision to go and do that at the same pricing as everyone else and put Internet billboards up and that sort of thing. That wouldn't make sense for where we want to be spending our dollars. But there's an obvious huge opportunity there that we've already paid and captured all of these gaming users. In the past, it's been a challenge for us to get to them via nbn, like selling their nbn connection. But with some advancements, like I was mentioning with CVC with new sort of automations and that sort of thing, it's not a huge burden anymore if we want to deliver nbn to those users. So that's what we're aiming to go and do. That's one of the key parts of the strategy, which I'll summarize at the end. But we will be enabling nbn for our CloudGG user base nationally. What that product looks like and how we do it, I'll be talking to that later and closer to when it gets done. But it's effectively just going to help, hopefully, you're going to grow revenue, albeit at a lean margin, but it just helps build up scale, and it's a customer base that we already have. Not to mention their actual cloud gaming experience would be best directly to us. So if you are going to run cloud gaming and you're doing it on a different network, we can't really help or determine what that traffic is doing once it leaves our network or where it's getting routed around to. So really, it's sort of us taking a step up and saying, "Okay, if you do want the best experience with GeForce NOW, it's going to be on our network." So fixed wireless, look, like I was saying it covers the Perth Metro area. It's good. It gives us like good margin and that sort of thing at the moment, but we do have to address that the growth is declining and look at why and really, it just comes down to the cost per megabit per second. nbn has really changed that dial with the Speed Boost. So the landscape is different. It makes competing challenging. It's not that we can't compete, but in order for us to compete, it would mean building more coverage, getting more -- changing up the plan types and that sort of thing. But ultimately, if a user is just looking at the speed, it's sort of -- and arguably, as a telco operator, users don't really need gigabit and that sort of thing on, but that's another conversation. But everyone wants it. So when it comes down to that price per megabit second, it's obviously a challenge. But I will say that the way that our fixed wireless network has been engineered, so we've got all the towers and they're all fiber-backed. So capacity on our network is never really the issue. Where the bottleneck comes from is actually the radio that goes on the tower. So with the current generation that we have access to from the vendors, which is the -- for 5G and what's available with spectrum, we can do around that 200, 250 megabit per second. But that's not going to be the case forever. So wireless technology and vendors, they improve year-on-year sort of thing what speeds they can do, how many users you can put per radio and that sort of thing. We are -- we have some gear on hand that we are using, and I wouldn't say this unless we had done this testing, but there is some product coming that can do gigabit wireless. It's just something that's been worked on, but it's not ready now. And so the decision for now is that we just want to hold the fixed wireless network as it is. It's obviously going to be a big part of our cash generation. We're not going to be expanding it or spending any money, building new radios and that sort of thing. And the intention is because there's probably better gear just around the corner, that would be better suited and you have to remember as well that -- so nbn, the cost of nbn, it does sort of ratchet up every year, year-on-year. So that's historically year-on-year, it's gone up with CPI. We would expect that, that would continue. So although we're at that convergence point at the moment where fixed wireless is difficult to compete against nbn, it's also a moment in time because it's also where nbn is currently priced, but that won't always be the case. So what people pay per megabit second today won't necessarily be what they pay in some years to come. And you can see probably where we'd see like a potential future product fit would be if we could do that gigabit type offering, utilizing our existing tower footprint, but be able to price that really aggressively in market that business model would sort of get reengaged. And so until that time, we're just going to sit and wait on it. We're going to maintain it. We're going to keep our customers happy. And I'm not saying that we're going to go and do a big expansion. Like at every step and stage along the way, we are obviously going to reassess and assess where we're spending our dollars, but it will be something to consider and look at when that moment in time and that window opens. And now lastly, looking at the cloud gaming business. So the way that we see cloud gaming and what the data here, I hope backs up and supports is that it's still so early. But there's a lot of tailwinds starting to converge on the market. But what we can see, even -- we've only got around that 10,000 paid users. We don't usually talk about the paid users behind the platform, but I'm happy to start with being a bit more open around it as long as I explain what the mechanism is behind it. So you can see there's 10,000 paid users on the platform with the Gen2 hardware has gone. So all of this is now operating off just the Gen3 solely. So Gen3 become -- it's more efficient than the last generation. And if you actually look at what that business is generating from the amount of infrastructure, it's pretty solid and pretty healthy. And it's demonstrating that even at subscale, that the unit economics are really good for this type of business. So we can see even just looking at a granular level of scale of where we see this industry going like it works out. So it's obviously something that we want to focus on. And now you've got all these industry tailwinds like coming in. So obviously, there's AI, and that's just soaking up all the memory and increasing the price of ownership. So it's making the cloud look very attractive. And there's no current -- there is a focus on the consumer GPUs, but it's not looking to launch any time soon. So historically, NVIDIA have released like a consumer graphics card year-on-year and it gets faster and faster. But sort of the focus and energy is in making the like cards and GPUs and processing for AI. And the obvious part about this business as well that stands out is we've got a lot and like I said at the beginning of the call with that impairment, and like it's something that we've definitely paid the price to have, but we retain that. So if you're looking at all the different business units that we have and can operate and play in, you've got telecommunications, which is highly competitive, it's changing and nbn can flip the script like they did with the speeds and that sort of thing. But when you look at this other business with the GPUs, which is arguably really like, if not the same or better economics than fixed wireless, and we've got exclusivity over that. And it's going to emerge into a much bigger industry. So just -- I'll talk a little bit about GeForce NOW because I think a lot of these calls have a lot of new people on there as well. So apologies if you've heard a lot of this before, but I'm going to talk about it again. But we are NVIDIA GeForce NOW alliance partner. So we're that for Australia and New Zealand. So what it means is that we are the sole operator of GeForce NOW. So GeForce NOW, and I think I've got a slide that explains it a yes. So every GeForce NOW use in our region or our territory comes to us via CloudGG. So you can do it now while you're on the call or we may be do it after so you keep listening. But if you go to Cloud.GG like the website, that's this business. And so that's a platform that users go and register for. And then that's what manages their account, who they are linking of the Steam library and everything like that, does all the billing. So it's really that customer ownership is through CloudGG and if anyone wants to use GeForce NOW in our territory, they're directed to that CloudGG. So if you go and turn your TV on, go to the gaming hub and get GeForce NOW, when you click on that, it will direct you to us. That's sort of like the mechanism. The other thing it does is sort of being a GeForce NOW alliance partner, we are in the camp, so to speak, with NVIDIA in terms of like the ecosystem. We have access to GPUs. They want us to grow. We're a good, valuable partner. We've been working with them for a long time. So it's also -- we're in an advantageous position as well by being that GeForce NOW alliance partner. GeForce NOW as well, it's growing, like globally, you can see there's over 46 million users registered in the last few years. So we would make up about 1 million of those in our part of the world. But what -- just to sort of explain what cloud gaming is and that's what this graphic is for anyone that isn't across it yet, so yes, we've got all these GPUs in the cloud, right? And GeForce NOW basically takes away the need to own a computer or own a console. So people that want to game, historically, you would have had to go and build a gaming PC or buy a gaming laptop or buy a gaming computer or get a console. You'd actually need that hardware next to you. And the reason is because you need a GPU or a graphics card or graphics processor to render that game. And the type of graphic processor that you use based on cost will be how well you can render that. So whether you're gaming at 1080p resolution or 2K resolution or 4K resolution and then how many frames per second you're rendering that resolution at, that's all determined on what GPU you are using. So that's why there's a varied cost of GPUs or graphics card or the cost of a gaming computer can be different. It's based on how powerful it is. And the thing -- the metric in the computer that you're changing for better experience is it's basically that resolution and framework. So everyone in gaming is always chasing the highest resolution and the highest framework, that's sort of -- that's the game. And so what GeForce NOW does and how we operate it, is that you no longer need that, you don't need that hardware. You don't have to go out and buy or build the computer. You just go to CloudGG and you sign for a subscription, and we give you direct access to the GPUs in the cloud. So when you want to game, providing you have an active subscription, it will just spin up -- it will spin up like a little virtual computer for you in the cloud and allocate a virtualized graphics card depending on how much you're paying, so to allocate a certain amount of memory and everything to a virtual card because these are data center cards, right? These aren't the things you go and buy from the shop. So it's actually carving up a little bit of our capacity and using that to serve that user session based on what they're paying and allocating a little bit of our large power to their little session based on what they're paying to simulate the experience of what type of card we're simulating. So we used to do 2080, 3080 and 4080 series cards. Now we just do the 30 and 40 series. But that's really what GeForce NOW is. So it's a market that's growing. We can see that, and we're pretty well positioned for cloud gaming in Australia. A little -- a few little details on the numbers. So yes, over the 5 years that we've been operating, there's been close to 40 million unique sessions. That's like unique gaming sessions. And we recently passed 1 billion minutes played. And I mean there's a fun fact there. If 1 person was gaming 24/7 on our GPUs or for the amount of time that's been played, it would be the equivalent of someone doing that since the height of the Roman Empire. We're quite proud of that. But what I'm really pointing to here is our GPUs get used. And with everything to do with this industry, it's all about are your GPUs getting consumed? And is the GPU time getting consumed? So we've demonstrably shown that people do use the infrastructure that we put down. It's just our little difference is how we're paying for that. And historically, users haven't paid for it because we've been trying to grow the market. But at the moment, all of that GPUs and consumption has been by a free play or it's been through the monthly subscription, right? And as we'll talk to when I go into how the subscribers work, there is probably a value gap missing there because there's a potential gap that we want to explore that maybe a subscription isn't for everyone, how they want to come and interact with a platform for them and their particular use case, maybe that subscription doesn't fit or maybe the way that subscription is done helps maybe as a motivator for the churn and that behavior around the platform where it users churn, but then come back. So just to call out and point there, it's like -- our GPUs are popular, they get used and how we charge for that use can evolve over time. Now yes, talking here, it's like gaming is on the rise. I'm sure everyone here is aware that gaming is a huge market. It's growing. And the generation is coming through like I mean, as NVIDIA have been saying a few years like everyone born today is a gamer. And so I just wanted to put some interesting stats there. Again, this is all the data and detail that are adding weight to the strategic direction and decision that we've made. I just want to make sure it's all relayed. But you can see 82% of Australians game, and you can see the different segments here now of what they're gaming on. So arguably, there's millions of potential gamers and users who are using a PC at the moment. So that's sort of our target. Console, I think, is always going to have it sort of space. That's pretty casual. But for the PC gaming market, that's sort of -- it's not -- we're not competing in the space, but we're giving them a better access and a cheaper way to access GPUs -- a huge market. It's not going to slow down. Gaming is here to stay, and it's going to be growing. And the way that we've got these 2 different types of customers. So we call it the 35-year-old gamer. That's sort of how it's labeled in gaming. So you've got that 35-year-old gamer, and that's the demographic that -- that's me. I'm a bit older than 35. But I grew up gaming and building my own computer, and I've got that relationship with wanting to own the hardware and own the disk and have the colored lights and everything like set up next to me and that sort of thing. It's just -- it's been my identity with gaming. And I've built my first computer when I was 12, so I could play games and I've been doing that since. So like me, there are others where we probably have the purchasing capacity to buy the plans, and we do see most of our higher ARPU customers are this demographic. But there is still that psychological barrier to the cloud, like you still want to have your gaming computer, but that is now starting to erode like convenience changes markets and also now you've got the added fuel to that with the hardware costs that are just rising and rising. So that decision is just getting more and more attractive and especially as the technology gets better and better, which it is doing. And as we're talking to here, we're about to make it seriously better as well with introducing Blackwell. So we see that sort of barrier for this user and more of those users to come in and start paying is reducing. And then you've got the other Generation Z. So these are the digital natives. They don't mind cloud gaming because it's just what they've known. So this is the generation. So they're the ones who never owned a DVD player, right? So they've got no barrier to play in the cloud. They just want to jump in. They want to play. Cloud gaming has always worked for them. They don't know anything else that why it shouldn't because it does as opposed to the incumbents who are thinking that it might be slower or whatnot. That obviously goes away when they use it. But so these digital natives, it's just that their demographic is younger. So there's a lot of users in this demographic on the platform. But obviously, year-on-year, they age and they mature and they get more closer to being able to afford things. And they will have a card that they can use. They don't have to ask to use their mom and dad's credit card and mom and dad are like what is this thing? And so all of those points are sort of converging. So we've got the incumbent gamer, they typically who are paying for it now. We want to get more of them on and using it, because they've got the money to pay. And then there's a whole new generation that we're going to come through and as they age, they're going to have higher purchasing capacity. You can see here like clearly, the hardware at home is just becoming more expensive. So this is largely driven from memory. It's all just getting soaked up and moved into AI and so the flow on is that GPUs just need to get faster and faster. Like in terms of GPUs for gaming, like they're pretty well there, 4K, 120 frames per second. As games get better, they're going to be harder to run at that sort of level. But you can game at 4K, 120 frames per second. That's sort of like where monitors go to, right? Unless you want to start buying like once 8K and high refresh rate 8K and stuff comes out, you're not really -- you don't have access to the screen to be trying to power it higher than that anyway. But the reason why cards just -- the chips have to just keep getting faster and faster now it's -- well, they're doing something very different. So GPUs were obviously invented for gaming. But what they do now is they're powering AI, and AI is so hungry in terms of its requirements for speed and so that's why these things are just going to keep getting faster and faster, but -- because they're serving the different market. But obviously, the flow on is that hardware at home is just becoming really expensive. Looking at the consumer economics. So I just wanted to show you like these are some little monthly pricing examples. If we're going to be charging $20 a month versus a budget build. You can see -- sorry, my headset jumped. Yes, just showing some scenarios that like really at every step along the way, whatever we're charging, whether it's $20 or $40 or $30, it does make a lot of sense for the end user. And these are all the little granular economics that are going to start painting that better picture for that incumbent gamer. Now this is the market that we've already captured. So -- I'm sorry, I'll try to get a move on. We've actually got 1.15 million e-mails who have opted into CloudGG. There's 840,000 registered users. Almost 0.5 million have played a session, but the number that I just want to point to here is that 83,000 people have paid to use the platform. It just that they all don't pay at the same time. So this is that value gap issue that we see. It's how do we get more of those users paying at the same time? And -- because it's just -- that's just how they play. It might be seasonal or they might come and play the game and finish the game or maybe for their use, their particular use, it's only -- they only want to play for a few hours or a lot more casual and there's no real option that serves them at the moment. So when we say later on, we want to go out and we want to -- we've got a goal. We want to get 100,000 paid users on the platform. It's not some fantasy number. It's actually like it's sort of just getting the customers who are already customers on there, like making them more sticky. How we do that we will have to talk to you later, but there's obviously going to be some changes with the plans and the product and that sort of thing, but this is where we want to put our focus. But you can see that 10,000 monthly active paying, it's really just -- they're not all the same users every month is what I'm trying to say. They're constantly rotating. It's just sort of how the levels seem to fall. So it's a good problem to have because we know that the customers are there and they want to play. We just need to give them the access how best they can do that. So this is going to be our strategic focus moving forward. So telco, we're viewing telco now. It's our predictable cash generator, okay? It's -- we're going to make sure it does its job. We don't want it to go backwards. We want to keep our options open with fixed wireless. And we've obviously got nbn like that's an easy thing to grow. But we're not going to be investing like new dollars into new tower builds and that sort of thing, which isn't really new information anyway. But the new information is where is the cash going to go and where is our investment going to go? So obviously, fixed wireless is holding. We're going to enable that nbn national reach. It's low margin, sure, but it's going to be low touch. And I won't talk too deeply onto what that product will look like, but this isn't a product that necessarily that comes back to our call center and that sort of thing in Perth. So we are still going to have that Perth local provider, that heritage will stay and the way that we service those Perth customers will stay. But how we service that national product for the gaming, it's going to be different. So the view is we don't really want it to be like an increased overhead type thing. It's just going to be like a low touch. And in terms of the marketing, it's like send 1 million e-mails out and see what buys. I'm not promising or saying what amount of customers will get. I'm just saying that's what we're going to do. So we look forward to doing that and just seeing what comes in. But again, it should be good revenue growth, but lean margin. I'm more interested in the fact that it gives our users the best experience, especially with the introduction of Blackwell and the 50 Series plan. And so all of this work and effort is all just then going to go into triple down. I don't mean it literally, but triple down on Blackwell, literally that I'm looking to -- we're not planning to spend triple what we have day 1 in time, sure. But every incremental dollar of free cash is going to be prioritized towards NVIDIA GPU capacity. Going into that, just so everyone's across how that works. So the old way of our deployments was done in blocks, and it led to things that we saw earlier, which is like the impairments. But that was an early way of having to do it. Early days, we had to go and build a lot of infrastructure and before we knew what was going to come and also just the way that, that infrastructure and control stack was built. It was sold in bulk sort of blocks. But how Gen3 works, which is great for us, it's done incrementally. So we've got Gen3 control plane. So each generation has a control plane. It's got your storage, you're switching and all that sort of stuff. The servers just get added either side to that. That's the same for both gens. But the way Gen3 works is that we can incrementally add servers to it. And we can operate the Gen3 -- the current GPUs that we have in there as well, which are L40s as well as the Blackwell. They can work together. So that's good for us. It means that things are just smooth. It can just flow right in. And it also means we don't have to go and make huge lumpy capital outlay decisions. We can just deploy the servers as they are needed. And that just works really well and it flows all the way through the business because day 1, they get turned on, maybe later that day, they're full of the users. And appropriate depreciation cycle and that sort of thing can go straight from that day as opposed to having to hold stock and turn things on and off and install stuff and -- yes, anyway. So look, in conclusion, business vision moving forward. So the decision has been made and I hope everything that I'm talking to support that, and you can see why, but this is what we're going to do. We're making the decision -- we're going to upgrade to Blackwell. It's going to allow us to have a 5080 plan in market. It's going to cater a lot more to those incumbent gamers, the ones that can afford it. And it's a 50 Series graphics card, like that's sort of like where it's at with gaming at the moment. Like I consider myself like a pretty keen avid gamer, not that I get much time to do it anymore, but I don't even have a 50 series graphics card at home. So we're going to be having a 5080 plan or whatever that plan comes to be, but likely that. So that will be in market, and that's a huge -- that's a really tough card to get a hold of from a shop. So we're going to be upgrading Blackwell. The next sort of focus and horizon is, okay, how do we go from 10,000 paid users to 20,000 at the same time, like that's going to be what we're going to do and focus on and turn on that national nbn and to see what that does as well. And then Horizon 3 is, okay, how do we push and scale and get 20,000 to 100,000 users? We know that they're there, and I'm confident that in time, like there's just going to be more and more people that like I think that cloud gaming and GeForce NOW is going to just be the default way to game in the future. But it's just around like getting there. I'm a firm believer in that. But the next horizon is just going to go, okay, how do we get from 20,000 to 100,000 paid users. There have been 80,000 users who are paid. We know they're there. It's just how do we serve them to get them paying. And really what we're trying to build and get into is all along the line of like doing this, what we are building is a pretty meaningful GPU deployment. And I know -- I get a lot of questions like there's AI and yes, like I get questions, are we going to use these for AI? The answer is like we can. But what I'm building is I'm building GPUs at scale with an existing customer base who use it at peak as opposed to just coming out and I could put AI and everything all through this deck and that sort of thing, sure, but it wouldn't really serve us right now because I don't want people to lose focus from what the actual gaming market, and that is going to do. And that's -- the focus for us to even -- before we can even talk about AI and inference and all these things, we need to have like a decent amount of scale. And what I'm talking to today is how we get there through fundamentally what is a market that makes a lot of sense, and it's a reason to be building that scale as you go anyway, like we've demonstrated that it's a good business segment. So what we do down the track, we'll talk to down the track, but until I've got sales teams out there doing that thing, I probably just don't need to talk about it ahead of time. Because I just wanted to touch on that because I do get a lot of questions. But with that, okay, so thanks. And I think that's the last one. So I'll go into some of the Q&A now.

Okay. So I've got a question. So Microsoft holds -- so we're talking about Xbox Game Pass. So yes, Game Pass and Xbox Game Pass, that's like a competing cloud gaming platform. So the question is, so the hyperscale operators, GeForce NOW, requires users to already own their games. So yes, sorry, okay. I'll break down what the question is asking. So you got Microsoft to do the cloud gaming and then they also own the IP, so they own all the publishers. And the Game Pass, which is the thing you pay a month, it includes a lot of the games. So a lot of the games come in and go on rotation. So the question is really saying, how do we compete against that given that GeForce NOW, it requires you to already owning the games. So you connect your Steam library or your Epic or you'll connect to Game Pass, mind you. So you can be on Game Pass and use those games in GeForce NOW. My answer to the question is, I think that GeForce NOW, nothing really comes close to the experience, like, so if you want to be gaming 4K, 120 frames per second, having a 50 series card, it's -- that's done on GeForce NOW, like that's done with NVIDIA. Yes, Microsoft own all the IP, like they own the publishers and own the game studios rather. But by owning that, like how it works at the high end like they need to be able to share that content. So it's not like they can make that content -- some stuff is exclusive here and there. But really, it's about the performance of GeForce NOW, like that's its outlier. So you can bring your game pass and that sort of thing anyway, and gamers are sort of used to owning their titles. In fact, we prefer to. So a lot of people already have their existing Steam libraries, and that's just how we interact with ownership. But I think yes, GeForce NOW, and its fit in the market is that it's best in class by a long mile. And I think even Microsoft sort of know this, and that's why they just went and bought all the publishers and brought them onto the platform. That's sort of they're aligned actually powering and running the games, that's an NVIDIA thing, where we're aligned. The other question, is Starlink a threat to the business, especially the telecom side? Look, Starlink is -- I wouldn't say -- I mean it's there, right? But I think Starlink is designed to be a pretty good option like full LEO satellite connectivity. So it improves satellite connectivity if satellite connectivity is your thing. It's still satellite, right? And the technology does get better. But I think even the industry would see it as there's not really going to be a better option for like terrestrial networks, the local Internet. Like if you got access to fiber, if you got access to towers that are closer, I mean, arguably, it's similar technology right, even with fixed wireless. But our tower is 3 kilometers away instead of 300 or whatever the Starlink are coming down to now. So I think Starlink is not a huge threat. It's another operator in telco. I think people who have Starlink in urban areas, they're probably just like a pretty -- like a fan of wanting it. There's no real reason that you would need Starlink in a city unless like you'd want it as a backup connection or you were just following the Starlink journey or you wanted that theme because it is still inherently going to have higher latency because it still has to go through space. So I don't think it's a huge threat, not as so much as like, say, the shift that we saw with what nbn did like with fixed wireless. So I hope that answers that one. I've got another, what's holding Pentanet back from selling nbn services nationally? And nothing -- I think a lot of these questions came in prior to the call. So it's actually good because they're quite aligned with everything that I have just explained. And lastly, I've got a question, what is the vision? If we're having this results presentation and strategy update in 5 years, what would it look like? I want us to be a decent -- obviously, I want the business to be much bigger. I think if you're entering Pentanet today as a shareholder, I think you're getting an incredible amount of value because all the things that have been built and what we own and the assets we're sitting on and where we sit strategically in different areas like we're well placed. So I think it represents incredible value to enter now. But it will come down to like what we execute on and when. And what we're focusing on executing today is obviously the NVIDIA side. So where would I want us to be in 5 years' time? I would want us to be -- I would like to see that cloud gaming is sort of like the natural way to adopt gaming. We have oodles amount of capacity. We have a lot of different variable plans. It's access to it is a lot easier. And we have a hyperscale amount of GPUs, which we can determine what else we're going to be using those GPUs for at that point. And be a relevant player in that market. And then in terms of telecommunications, like yes, we want to have all of our users connecting to us through telco or across the nbn to us, have a good local Perth brand here doing different things. But again, I'm probably talking too much on it. Like really, the -- we just want to laser in and focus in on this thing for now. But anyway, all the different parts can fit into it and play into it, but it really just comes down to like what we can afford to do and where it makes the most sense to invest the dollars for the best return. Okay. So another question. It's confusing the market since the market thinks it's just a telecom company instead of cloud gaming. Yes. Look, I mean, sure, like the telco and cloud gaming, they're sort of -- they've been in the halo of each other. You couldn't have one without the other. I guess this is the first time that we're sort of converging them by allowing our cloud gaming users onto our telco network. But yes, if it's confusing that we're a telco and a cloud gaming company like -- I'll try to do better in having to -- in how we explain and build these decks and that sort of thing to explain it. But at the end of the day, like our telco network is there and it's utilized and we're going to be needing it and requiring it. So we see telco as a vessel for us to generate good cash, and we want to put that into where we see the best value of where to spend dollars now, which is GPUs. So hopefully, that confusion erodes over time. But yes, I'm not sure how else to answer that one. I think that is all the questions. So with that, and I think we're at 10. So yes. No, I appreciate everyone coming. I will be open and accessible for any one-on-ones for the next few days or whenever suits. And yes, I think we're excited because we just wanted to clearly deliver and define the strategy because we've been getting asked for a long time, what's the strategy, what I couldn't really talk to it. because I needed to get to this point to explain. It's sort of the first time we've had oxygen by being profitable, to like think and hone what that strategy is. So now that we've delivered that we can really start to now increase the cadence of communication and everything along this plan, which we hope there will be a lot more to come very soon. But I appreciate everyone joining. Thanks to all the holders over time. And hope that you're aligned with the journey and what we plan to do. And again, I'm open to any one-on-ones if anyone wants to drill into anything more specifically happy to do that. But thanks, everyone, for your time.