Highlights

  • TPG closed at $3.67 on 9 June 2026, up 1.10%; Macquarie Research maintains an Outperform rating with a $4.10 price target — implying approximately 12% upside.
  • FY25 EBITDA of $1,660 million rose 18.4% year-on-year; mobile subscribers grew by 228,000 in the year; $3 billion returned to shareholders and $2.7 billion in bank borrowings repaid.
  • FY26 EBITDA guidance of $1,665-1,735 million and capex of approximately $750 million; new Dividend policy targets increases in line with sustainable profit and Cash Flow growth.

 

TPG Telecom Limited (ASX:TPG) closed at $3.67 on 9 June 2026, adding $0.04 or 1.10% on the session. Macquarie Research maintains an Outperform rating with a $4.10 price target, implying approximately 12% upside from current levels. The stock has been gradually recovering from a period of significant corporate restructuring that reshaped the company asset base, Balance Sheet, and strategic identity over the course of 2025.

At $3.67, TPG Telecom is trading as a fundamentally different company from the one investors knew 18 months ago. The sale of fibre infrastructure Assets and the Enterprise, Government and Wholesale Fixed operations has converted a complex, multi-segment telco into a focused, mobile-led challenger telecommunications Business. The financial consequences of that transformation — $3 billion returned to shareholders, $2.7 billion in Debt repaid — are now visible in the balance sheet and are beginning to flow through to free cash flow metrics that support both the dividend trajectory and continued operational Investment.

FY25 Financial Results: A Transformational Year

TPG Telecom reported FY25 results on 27 February 2026. Service Revenue increased 2.2% to $4,179 million, with mobile service revenue growing 4.2% to $2,423 million. The mobile growth was underpinned by the addition of 228,000 mobile subscribers — the strongest growth since 2022 — supported by the regional mobile network expansion launched in January 2025 and targeted promotional activity across digital-first subscription brands.

EBITDA of $1,660 million rose 18.4% on the prior year, with the improvement reflecting both revenue growth and disciplined cost control. On a pro-forma basis, including the impact of new commercial agreements from the Vocus Transaction and excluding material one-offs, EBITDA was $1,637 million, a 2.0% increase and just above the midpoint of the prior guidance range. Net Profit After Tax was $52 million, compared to a loss of $140 million in FY24, with the improvement reflecting EBITDA growth, lower borrowing costs, and a $45 million non-recurring income tax benefit.

Operating Free Cash Flow was $1,291 million, up $642 million year-on-year. A substantial portion of the increase — approximately $687 million — reflected the proceeds of the handset receivables financing program initiated in October 2025, alongside a $118 million reduction in recurring Capital Expenditure. Cash capital expenditure fell 13.2% to $774 million, with lower ongoing capex expected to continue supporting cash flow growth as the business passes the peak investment cycle for network and IT systems.

Mobile Growth: The Strategic Core

Mobile is the definitive growth engine for TPG Telecom in its current form. The 228,000 subscriber additions in FY25 reflected strength across metropolitan, regional, and digital-first customer segments. Average Revenue per User grew to $35.51, up 49 cents on FY24, indicating that subscriber growth has been accompanied by maintained pricing rather than unsustainable discounting. CEO Iñaki Berroeta attributed the performance to the regional network sharing agreement, refreshed Brand positioning, and the expansion of digital-first channels.

Fixed Service Revenue of $1,702 million grew 0.7%, supported by growth in Fixed Wireless and a return to growth in Vision Network subscribers. The NBN market continues to face structural headwinds from high wholesale prices and intense competition from Volume-focused resellers, limiting the fixed revenue growth opportunity. TPG strategic decision to prioritise mobile — rather than compete aggressively for volume-based NBN subscribers — appears vindicated by the Margin profile of the mobile business versus fixed.

Capital Structure and Dividend Policy

The capital management executed during FY25 was the most significant in the company recent history. The pro-rata Capital Return of $3 billion, comprising $1.52 per Share Capital Reduction and a 9.0 cents per share Special Dividend, was funded in part by proceeds from the handset receivables financing program and combined with a $2.7 billion reduction in bank borrowings. The minority Shareholder ownership of the company was simultaneously increased.

TPG Board announced a new dividend policy in August 2025 targeting no change in Ordinary Dividends in FY25, with an intention to increase dividends over time in line with sustainable growth in profit and cash flow. Total dividends declared for FY25 were 27.0 cents per share, consisting of 18.0 cents per share of ordinary dividends and the 9.0 cents per share special dividend. The final dividend of 9.0 cents per share was paid on 2 April 2026.

FY26 Guidance and Broker Perspective

For FY26, TPG Telecom expects EBITDA of between $1,665 million and $1,735 million, with EBITDA growth driven by continued mobile business growth and operating cost discipline. Capital expenditure on an additions basis is expected to be approximately $750 million. The guidance range spans approximately $70 million, reflecting uncertainty in mobile subscriber trajectory, NBN market dynamics, and the pace of cost reduction from the simplified operating model.

Conclusion

TPG Telecom FY25 results and the ongoing execution of its mobile-led strategy present investors with a transformed business at a critical juncture. The balance sheet has been materially strengthened, mobile subscriber momentum is at multi-year highs, and free cash flow is growing from a lower capex base. FY26 guidance is constructive, with EBITDA growth expected to continue. Macquarie Outperform at $4.10 suggests the market has not fully priced the improved operating trajectory. The investment case for TPG at current levels centres on the durability of mobile subscriber growth, the Operating Leverage available from a simplified cost base, and the capacity of the business to translate EBITDA growth into sustained dividend growth over time.