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Service Revenue: Up 2.2% to $4.179 billion. Mobile Service Revenue: Increased by 4.2% to $2.43 billion. Gross Margin: Up 1.7% to $2.02 billion; pro forma gross margin would have been up 3.6%. EBITDA: Up 2% to $1.637 billion on a pro forma basis, excluding material one-offs. Net Income (NPATA): $69 million. Earnings Per Share (EPS): $0.037. Ordinary Dividends: $0.18 per share, franked at 30%. Return on Invested Capital (ROIC): Increased by 0.66 percentage points to 5.42% on a pro forma basis. Operating Free Cash Flow: Almost doubled to $1.91 billion. Total Subscriber Growth: 228,000 customers, or 4.1%. Digital First Subscription Brands Growth: 10.7% increase. Net Bank Borrowings: Reduced from $4.1 billion to $1.361 billion. CapEx: Pro forma outcome of $771 million; expected to be about $750 million in FY '26. Guidance for FY '26 EBITDA: Between $1.665 billion and $1.735 billion.

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Release Date: February 26, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

TPG Telecom Ltd (ASX:TPG) achieved a milestone year with the successful launch of a regional network sharing arrangement, doubling its coverage area and increasing population coverage to 98.5%. The company reported strong mobile service revenue growth of 4.2% to $2.43 billion, driven by subscriber growth and higher ARPU, particularly in digital-first subscription brands. TPG Telecom Ltd (ASX:TPG) returned more than $3.3 billion to shareholders, including ordinary dividends and debt repayment, significantly reducing financial risk. The company maintained cost discipline, with operating costs flat excluding one-offs, and achieved a 5.7% increase in EBITDA on a pro forma basis. TPG Telecom Ltd (ASX:TPG) is positioned for continued EBITDA growth in 2026, driven by mobile service revenue growth and operating cost discipline, with a positive outlook for cash flow and dividends.

Negative Points

The broader market experienced a significant slowdown, impacting overall industry growth despite TPG Telecom Ltd (ASX:TPG)'s strong performance. The NBN subscriber numbers declined year-on-year due to aggressive competition from non-telco players and volume-driven resellers. The company faced initial costs from the regional mobile network expansion, which preceded the additional revenue growth from the expanded network. There is uncertainty in the handset market due to potential price increases and supply chain issues, which could impact mobile business performance. The regulatory environment poses challenges, with TPG Telecom Ltd (ASX:TPG) advocating against large upfront spectrum renewal payments that could divert capital from network investments.

Story Continues

Q & A Highlights

Q: Can you confirm if $600 million of free cash flow for FY '27 is a fair estimate, and how much of that will be returned to shareholders versus kept for spectrum payments? A: John Boniciolli, CFO: For FY '26, we expect free cash flow to equity around $400 million to $430 million. With EBITDA growth and CapEx reduction, reaching $600 million in FY '27 is feasible. We aim to grow profits and dividends, and are comfortable absorbing spectrum costs.

Q: Are there any one-offs in the MVNO acceleration, and do you see the same trend continuing into early CY '26? A: Inaki Berroeta, CEO: There were no one-offs; the growth is organic, driven by improved distribution and online activity. The trend continues positively into the new year.

Q: How do you plan to sustain ARPU growth in the digital-first segment? A: Inaki Berroeta, CEO: We focus on simple pricing and plan structures, allowing customers to upgrade to higher-tier plans through the app, which drives ARPU growth.

Q: What impact do you expect from the ACMA's spectrum license renewal proposals? A: Inaki Berroeta, CEO: The expected payments are significant but lower than historical amounts and spread over a longer period, making them manageable.

Q: Can you discuss the impact of recent back book price increases on postpaid ARPU growth in FY '26? A: Inaki Berroeta, CEO: It's too early to quantify the impact as it involves only some customer cohorts. We expect continued ARPU growth driven by mobile service revenue and cost discipline.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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