Bezeq The Israel Telecommunication (BEZQ) Q1 2026 earnings summary

Executive summary

• Core revenues grew 2.6% year-over-year to over NIS 2.03 billion, driven by growth in Fixed-Line, yes, and International segments, with Comp Net Profit up 4.2% to NIS 300 million.

• Free cash flow surged 74% year-over-year to NIS 455 million, mainly due to a tax refund, working capital improvements, and enhanced core activities.

• Fiber infrastructure reached 3 million households, with a 35% take-up rate, 1.04 million fiber subscribers, and 19% growth in fiber subscribers.

• 5G subscriber plans grew 12% to 1.45 million (61% of postpaid base), with a target of 300,000 5G MAX subscribers by year-end.

• Strategic initiatives include new subsea cable projects to Europe and a telecom corridor connecting east and west via Israel.

Financial highlights

• Q1-2026 core revenues reached NIS 2.03 billion, representing 94% of group revenues.

• Comp EBITDA increased 1.2% to NIS 928 million with a margin of 43%, and Comp Net Profit rose 4.2% to NIS 300 million.

• Free cash flow was NIS 455 million, up 74% year-over-year, driven by a tax refund and improved operations.

• Net debt reduced by NIS 122 million to NIS 4.57 billion; net debt to Comp EBITDA ratio at 1.4x.

• Group CapEx slightly up due to timing differences, despite an 8.2% decline in fixed-line CapEx; CapEx/Sales margin at 20%.

Outlook and guidance

• 2026 outlook unchanged: Comp EBITDA expected at NIS 3.7–3.8 billion, Comp Net Profit at NIS 1.0–1.1 billion, CapEx at NIS 1.6 billion.

• 2029 targets: Core revenues NIS 8.7–8.9 billion, Comp EBITDA NIS 4.2–4.4 billion, CapEx NIS 1.5–1.6 billion, Net Profit NIS 1.3–1.4 billion.

• Expect continued ARPU growth as customers migrate from copper to fiber and adopt higher speeds.

• Double-digit annual free cash flow growth anticipated, supporting flexibility for M&A and further investments.

• Focus on maintaining AA rating and increasing shareholder remuneration.