Spark New Zealand (ASX:SPK) FY26 Adjusted EBITDAI Falls 2.4% and Free Cash Flow Rises 18.5%

Sonal Goyal

20 August 2026 09:53 AM AEST

Spark New Zealand (ASX:SPK) FY26 Adjusted EBITDAI Falls 2.4% and Free Cash Flow Rises 18.5%

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Key Highlights

Reported Revenue increased 6.0% to $3.949 billion, while adjusted revenue remained unchanged at $3.700 billion.
Adjusted EBITDAI declined 2.4% to $1.035 billion, despite mobile revenue increasing 4.4% and $40 million of productivity benefits.
Free Cash Flow increased 18.5% to $308 million, supporting a total FY26 Dividend of 16 cents per share.
FY27 guidance includes adjusted EBITDAI of $1.010 billion-$1.080 billion and free cash flow of $300 million-$350 million.

Spark New Zealand (ASX:SPK) reported FY26 financial results showing higher reported revenue, a significant increase in reported NPAT and stronger free cash flow, although adjusted operating Earnings and adjusted NPAT declined. The results cover the first year of the company’s SPK-30 strategy, with mobile services returning to revenue growth and portfolio changes continuing across its digital services operations.

Revenue Performance Across Core Segments

Reported revenue increased 6.0% to $3.949 billion, while adjusted revenue was unchanged at $3.700 billion. The difference reflects the treatment of the company’s data centre transaction and other items included in reported versus adjusted results.

Mobile revenue increased 4.4% to $1.517 billion, with mobile service revenue rising 1.1% to $998 million. The company reported higher average revenue per user in its consumer and SME segment, while connection and revenue trends in more price-sensitive categories also showed stabilisation.

Broadband revenue declined 2.0% to $596 million amid competitive pricing conditions. Business connectivity revenue fell 9.9% to $327 million, reflecting the divestment of Digital Island, the transition away from legacy managed data and network products, and the timing of IoT hardware sales.

Adjusted EBITDAI Declines

Reported EBITDAI increased 23.0% to $1.295 billion, with the increase primarily reflecting the gain from the data centre transaction. Adjusted EBITDAI, which provides a like-for-like comparison, declined 2.4% to $1.035 billion.

The adjusted decline reflected lower contributions from digital services, continuing reductions in legacy voice revenue and fewer months of data centre earnings following the sale during FY26. These effects were partly offset by mobile growth and $40 million of productivity benefits.

Within Digital Services, cloud revenue was broadly unchanged at $233 million. Public cloud revenue increased 20%, offset by the continued transition away from private cloud services. IT Services revenue declined 10.3% to $104 million as project activity remained subdued and legacy services continued to migrate.

NPAT and Cash Flow

Reported NPAT increased 91.9% to $499 million. Adjusted NPAT, however, declined 0.9% to $225 million, providing a different view of underlying year-on-year earnings after excluding specified transaction and other adjustments.

Free cash flow increased 18.5% to $308 million. Business-as-usual Capital Expenditure was $401 million, unchanged from FY25. The improvement in free cash flow supported the Board’s decision to declare a final dividend of 8 cents per share, taking the total FY26 dividend to 16 cents per share.

The total dividend represented 100% of FY26 free cash flow. The dividend is 50% imputed.

Data Centre Transaction and Balance Sheet

During FY26, Spark completed the sale of a 75% stake in its data centre business, generating $462 million in net proceeds. Spark retained a 25% interest in the business, leaving it exposed to future activity in the data centre sector while reducing its net Debt towards targeted levels.

The transaction also affected reported earnings through a $278 million gain on sale. This gain is excluded from adjusted results to provide a comparison of operating performance between periods.

Spark has also commenced a strategic review of areas identified as outside its core operations, including cloud and IT services within its Digital Services division. The review is expected to be completed during the first half of FY27.

FY27 Guidance

For FY27, Spark expects adjusted EBITDAI of $1.010 billion to $1.080 billion and free cash flow of $300 million to $350 million. Business-as-usual capital expenditure is forecast at $350 million to $380 million.

The company has also provided a dividend Payout Ratio guidance of 90% to 100% of free cash flow, alongside a target FY27 dividend range of 16 to 18 cents per share. Final dividend decisions remain subject to Board approval.

Conclusion

Spark’s FY26 results combine growth in reported revenue, reported NPAT and free cash flow with declines in adjusted EBITDAI and adjusted NPAT. Mobile revenue and mobile service revenue both moved higher, while broadband, business connectivity and parts of Digital Services recorded declines. The data centre transaction materially influenced reported earnings and strengthened the company’s Balance Sheet position, while FY27 guidance points to a continued focus on cash generation, capital discipline, productivity improvements and portfolio changes.

FAQs

Q: What was Spark New Zealand’s FY26 revenue?

A:Reported revenue was $3.949 billion, up 6.0%, while adjusted revenue remained unchanged at $3.700 billion.

Q: Did Spark’s adjusted EBITDAI increase or decrease in FY26?

A:Adjusted EBITDAI decreased 2.4% to $1.035 billion. Reported EBITDAI increased 23.0% to $1.295 billion, primarily due to the data centre transaction.

Q: How did Spark’s free cash flow perform in FY26?

A:Free cash flow increased 18.5% to $308 million.

Q: What dividend did Spark declare for FY26?

A:Spark declared a final dividend of 8 cents per share, taking the total FY26 dividend to 16 cents per share.

Q: What is Spark’s FY27 EBITDAI guidance?

A:Spark expects FY27 adjusted EBITDAI to be between $1.010 billion and $1.080 billion, subject to no material adverse change in its operating outlook.

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