Key Highlights

  • TPG Telecom's (ASX: TPG) HY26 service Revenue increased 0.5% to $2.071 billion, with Mobile service revenue rising 3.1%.
  • EBITDA increased 1.0% to $821 million, while NPAT rose to $35 million from $32 million in the prior corresponding period.
  • Operating Free Cash Flow increased 16.4% on a pro forma basis to $199 million, while Free Cash Flow to Equity rose to $93 million.
  • The Interim Dividend increased by 1.0 cent to 10.0 cents per share, with 25% franking.

TPG Telecom Limited (ASX:TPG) reported a modest increase in service revenue for the six months ended 30 June 2026, with revenue rising 0.5% to $2.071 billion from $2.060 billion in the prior corresponding period.

Mobile remained the principal source of growth. Mobile service revenue increased 3.1% to $1.224 billion, supported by an additional 64,000 mobile subscribers. The company reported particularly notable momentum across Digital First subscription brands and mobile virtual network operator customers.

Average revenue per user also increased, reaching $35.21, up 24 cents from the previous corresponding period. The combination of subscriber growth and higher ARPU contributed to the increase in Mobile service revenue.

Home Broadband Revenue Declines

The performance across TPG Telecom's consumer connectivity businesses was mixed. Home Broadband service revenue declined 1.9% to $827 million, reflecting continued competition in the National Broadband Network market.

The company reported that the pace of NBN subscriber reductions moderated during the half and expects further improvement in Home Broadband subscriber performance during the second half of FY26.

Fixed Wireless also showed a change in trajectory, returning to growth in the second quarter. The improvement followed the expansion of its addressable market through the introduction of standalone 5G services.

EBITDA Increases Despite Cost Pressures

TPG Telecom's reported EBITDA increased 1.0% to $821 million, compared with $813 million in HY25. On a pro forma basis, which adjusts for the commercial arrangements associated with the Vocus transaction, EBITDA increased 4.5% to $821 million, compared with $786 million.

Operating costs were broadly stable at $508 million, compared with $507 million previously. The 0.2% increase meant that the company contained cost growth despite the broader inflationary environment.

The Earnings result also incorporated the initial costs associated with new commercial arrangements following TPG Telecom's sale of its fibre network infrastructure Assets and Enterprise, Government and Wholesale fixed Business to Vocus Group in July 2025.

NPAT and Cash Flow Improve

Net profit after tax rose to $35 million, compared with $32 million in HY25. Higher EBITDA and lower net financing costs contributed to the increase, while a rise in income tax expense partly offset those gains following the absence of tax benefits recorded in the prior corresponding period.

On a pro forma basis, NPAT improved by $55 million, moving from a $20 million loss to $35 million.

Underlying NPATA increased 1.4% to $70 million on a reported basis. Pro forma underlying NPATA increased by $53 million from $17 million.

Cash generation also improved. Operating Free Cash Flow increased 16.4% on a pro forma basis to $199 million, compared with $171 million. A $42 million reduction in recurring Capital Expenditure contributed to the increase, although the company has begun making cash tax payments.

Free Cash Flow to Equity was $93 million on a pro forma basis, compared with a negative $15 million previously. Lower borrowing costs following the reduction in Debt after the Vocus transaction were a significant Factor in the improvement.

Interim Dividend Increases

TPG Telecom's board declared an interim dividend of 10.0 cents per share, up from 9.0 cents in the prior corresponding period. The dividend will be 25% franked and is scheduled for payment on 29 September 2026.

The increase is consistent with the company's stated policy of growing dividends over time in line with sustainable growth in profit and cash flow.

FY26 Guidance Remains Unchanged

TPG Telecom has retained its existing FY26 guidance. The company continues to expect EBITDA of $1.665 billion to $1.735 billion, assuming no material change in operating conditions and excluding material one-off items.

Capital expenditure on an additions basis is expected to be approximately $750 million.

The company also indicated that lower ongoing cash capital expenditure should continue to support cash flow as the major Investment phase associated with network and IT system improvements moves beyond its peak.

Conclusion

TPG Telecom's HY26 results show moderate revenue growth alongside improving earnings and cash generation. Mobile service revenue increased 3.1%, supported by subscriber additions and higher ARPU, while Home Broadband revenue declined 1.9% amid continued NBN competition. EBITDA rose to $821 million and NPAT increased to $35 million, with lower financing costs providing additional support after the 2025 debt reduction. The 16.4% pro forma increase in Operating Free Cash Flow and higher interim dividend indicate improving cash-generation capacity, while FY26 EBITDA and capital expenditure guidance remain unchanged.