Legend Internet Navigates Profitability and Cash Burn in Nigeria’s ISP Market
Legend Internet Plc, the first internet service provider (ISP) in Nigeria to go public, has announced its financial results for the year ending July 31, 2025, revealing a mixed bag of successes and challenges. While the company showcased increased profitability, the report highlights the significant hurdles it faces in a fiercely competitive telecom market. This performance offers insights into the broader African technology landscape, where achieving sustainable growth is often a complex undertaking.
Profitability amidst Rising Costs
The financial figures reveal that Legend Internet saw a 4% revenue increase, reaching ₦1.19 billion ($799,000). Gross profit also improved, climbing to ₦761.4 million ($511,000) compared to ₦677.4 million ($455,464) the previous year. This translated to a 44% surge in profit after tax, reaching ₦172.7 million ($116,000), attributed partly to more efficient cost management. Earnings per share also increased to 9 kobo, up from 6 kobo in 2024. Despite these positive indicators, the company faces substantial operational difficulties. The IPO provided investors with a unique opportunity to invest in Nigeria’s rapidly evolving internet sector. However, the report emphasizes dependence on short-term borrowing to cover operational expenses, increasing personnel costs, and negative cash flows, painting a picture of financial instability. The third quarter alone saw profit after tax plummet by more than half, to ₦32.9 million ($22,085), while operating expenses nearly tripled.
In conclusion, Legend Internet’s performance underscores the intricate dynamics of the Nigerian ISP industry. While the company has demonstrated an ability to generate profits, its reliance on short-term debt and cash burn creates ongoing challenges to scaling its business model. As Nigeria continues its digital transformation, Legend’s performance will be a crucial indicator of how local tech companies are working to compete in a high-growth but capital-intensive sector.
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