Nigeria’s Legend Internet revenue drops 19% as costs surge sharply

Legend Internet Plc, Nigeria’s first listed internet service provider, reported a sharp decline in half-year revenue thanks to rising operating costs, weaker broadband sales, and growing debt pressures.

Revenue fell 18.8% to ₦505.36 million ($368,000) in the six months ended January 2026, down from ₦622.64 million ($453,400) in the corresponding period in the previous year, according to the company’s financial results. The downturn marks a reversal from the growth momentum surrounding its April 2025 listing on the Nigerian Exchange (NGX).

The company’s financial performance highlights the mounting pressure on smaller broadband providers in Nigeria’s internet market, where rising operating costs, aggressive competition from telecom operators, and the growing presence of satellite internet provider Starlink are squeezing margins.

The revenue decline was driven largely by weaker performance in Legend Fibre, the company’s core broadband business. Revenue from the segment dropped to ₦198.3 million ($144,401) from ₦318.15 million ($231,676) in the previous year.

While revenue declined, operating costs moved in the opposite direction.

Legend’s administrative expenses rose 174.4% year-on-year to ₦457.62 million ($333,238). Personnel expenses doubled to ₦153.5 million ($111,778), while professional fees increased more than eightfold to ₦79.45 million ($57,855). 

The rising overheads sharply eroded profitability. Gross profit fell by 21.48%, while the company swung from a profit after tax of ₦239.85 million in the previous year to a net loss of ₦99.34 million ($72,339).

The decline comes after a relatively stronger 2025 financial year, when Legend reported a 4% increase in revenue to ₦1.19 billion ($866,557) and a 44% rise in profit after tax to ₦172.7 million ($125,760). 

However, quarterly filings had already shown slowing revenue growth alongside rising spending on personnel and marketing.

Those pressures appear to have intensified in the first half of 2026.

The company’s balance sheet also points to increasing reliance on debt financing to support operations.

Cash and cash equivalents rose sharply from ₦21.02 million ($15,306) in July 2025 to ₦269.13 million ($195,980) by January 2026. However, the improvement was largely funded through borrowing rather than operational performance.

The additional borrowing has helped preserve short-term liquidity but has also increased financial risk.

Cash flow data paints a similarly challenging picture.

Legend recorded a negative operating cash flow of ₦237.48 million ($172,932), a significant deterioration from the positive ₦18.43 million ($13,420) reported previously. The company spent more on prepayments, infrastructure-related costs, and general operations than it generated from broadband services.

Without external financing, the company would have faced severe liquidity pressure. Net cash from financing activities reached ₦382.04 million ($278,194), largely driven by commercial paper proceeds and other borrowings.

The company has also kept broadband pricing relatively stable despite inflation and currency pressures, a strategy aimed at retaining subscribers but one that has further compressed margins.

Spectranet merger may offer a lifeline

The company’s proposed merger with Spectranet has become increasingly important.

Announced in March 2026, the deal would create what the companies describe as Nigeria’s largest ISP. The merger is designed to combine Legend’s fibre infrastructure with Spectranet’s established wireless broadband customer base, creating a larger platform capable of generating economies of scale.

For Legend, the transaction could provide a path out of its current financial challenges. The merger offers opportunities to increase utilisation of its ₦2.45 billion ($1.78 million) fibre infrastructure assets, expand revenue through cross-selling, reduce duplicated administrative costs, and strengthen its balance sheet.

However, analysts expect integration costs and regulatory approvals to weigh on earnings in the near term, even if the combined entity gains a stronger position in Nigeria’s increasingly competitive broadband market.