TPG Telecom (TPG) H2 2025 earnings summary

Executive summary

• Achieved a milestone year of transformation, simplification, and network enhancement, including successful regional network sharing and sale of fiber infrastructure and EGW Fixed operations, strengthening the financial position.

• Delivered market-leading mobile trading performance, with subscriber growth accounting for the majority of industry net adds and increased market share, especially via digital-first brands.

• Returned over AUD 3.3 billion to shareholders and paid down AUD 2.7 billion in debt, with dividends now franked at 30% and targeted to grow in line with profit and cash flow.

• Cash flow and ROIC momentum increased due to cost control, investment cycle completion, and debt reduction.

• Customer wellbeing initiatives were expanded, focusing on vulnerable customers and accessibility.

Financial highlights

• Service revenue up 2.2% to AUD 4.179 billion year-over-year, driven by strong mobile subscriber and ARPU growth.

• Mobile service revenue up 4.2% to AUD 2.423 billion; gross margin up 1.7% to AUD 2.002 billion; excluding regional sharing costs, gross margin up 3.6%.

• EBITDA (pro forma, excluding one-offs) up 2% to AUD 1.637 billion, above guidance midpoint; would have been 5.7% without regional expansion costs.

• Operating free cash flow nearly doubled to AUD 1.291 billion; free cash flow to equity was AUD 5.751 billion, enabling significant debt repayment and capital return.

• ROIC up 0.66 percentage points to 5.42% pro forma, driven by capital efficiency and asset sales.

Outlook and guidance

• FY26 EBITDA guidance: AUD 1.665–1.735 billion (midpoint AUD 1.7 billion, ~4% pro forma growth), driven by mobile revenue growth and cost discipline.

• CapEx guidance: AUD 750 million for FY26, with significant reductions expected from FY27 onward.

• Free cash flow to equity expected to reach around AUD 600 million by FY27, with ongoing dividend growth and further leverage reduction.

• Continued focus on organic cash flow generation, mobile service revenue growth, cost discipline, and capital efficiency to drive higher margins and ROIC.