Key Highlights

• Telstra reported its FY26 result in August 2026 for the year ended 30 June 2026.

• Underlying EBITDAaL, the company's preferred measure of operating profit after leases, rose 4.0 per cent to A$8.34 billion.

• Cash Earnings rose 11.6 per cent to A$2.88 billion.

• In FY26, mobile income was A$11.4 billion, up 3.2 per cent, and mobile service Revenue rose 4.8 per cent to A$8.92 billion.

Why is Telstra Group Limited (ASX:TLS) drawing attention after its latest full-year result? Because the telco combined earnings growth with a higher Dividend and a fresh Capital return, while guiding to further EBITDA growth in FY27 even as it keeps spending on network and strategic projects.

Telstra reported its FY26 result in August 2026 for the year ended 30 June 2026. Underlying EBITDAaL, the company's preferred measure of operating profit after leases, rose 4.0 per cent to A$8.34 billion. Cash earnings rose 11.6 per cent to A$2.88 billion.

What Telstra does and where the money comes from

Telstra is Australia's largest telecommunications company. It sells mobile services, fixed broadband, bundles and data, and enterprise connectivity, and it owns extensive network infrastructure that other providers also use on a wholesale basis.

Mobile is the engine. In FY26, mobile income was A$11.4 billion, up 3.2 per cent, and mobile service revenue rose 4.8 per cent to A$8.92 billion. Mobile EBITDA was A$5.44 billion. Telstra ended the year with 14.8 million mobile handheld users, including 8.9 million postpaid handheld services in operation, 3.1 million prepaid handheld users and 2.9 million wholesale users.

Pricing is part of the story. Postpaid handheld average revenue per user rose 3.8 per cent to A$56.20 a month, while prepaid handheld ARPU rose 7.2 per cent to A$37.50. Not every product line is growing, however: bundles and data services in operation fell 3.7 per cent to 3.06 million, and data and connectivity services slipped 2.2 per cent to 133,000.

The FY26 result in detail

Total income was A$23.4 billion, down 0.9 per cent, so the earnings improvement came from margins and cost control rather than from the top line. Reported EBITDAaL was A$8.2 billion, up 3.0 per cent. Cash EBIT rose 8.0 per cent to A$4.66 billion.

Net profit after tax was A$2.41 billion, up 2.7 per cent, and underlying net profit was A$2.46 billion, up 4.9 per cent. Earnings Per Share were 19.9 cents, while cash earnings per share, which Telstra emphasises, were 25.5 cents, up 13.8 per cent. Underlying return on invested capital improved by 0.5 percentage points to 9.0 per cent.

Shareholders received a total dividend of 21.0 cents per share, up 10.5 per cent, franked at about 90.5 per cent. Telstra also completed a A$1.25 billion buy-back during FY26, equal to 2.2 per cent of shares on issue, and announced a further buy-back of up to A$1 billion.

Guidance and the Connected Future 30 strategy

For FY27, Telstra guided to underlying EBITDAaL of A$8.5 billion to A$8.8 billion, business-as-usual Capital Expenditure of A$3.35 billion to A$3.65 billion, and cash EBIT of A$4.75 billion to A$4.95 billion. Strategic Investment is expected to be A$0.2 billion to A$0.3 billion. The guidance excludes material one-off items, and the company says it does not provide guidance beyond the current financial year.

Longer term, the Connected Future 30 strategy targets mid-single-digit compound growth in cash earnings through to FY30, underlying ROIC of 10 per cent and positive operating leverage. In FY26, Operating Leverage was 2.0 percentage points positive, meaning earnings grew faster than costs.

Part of the strategic spending relates to the Aura Network and the Viasat arrangement. Strategic investment in those projects was A$457 million in FY26, up 40.6 per cent, and Telstra lifted the expected Aura investment across FY23 to FY28 to about A$1.8 billion.

Balance sheet and funding

Net Debt was A$17.3 billion at 30 June 2026, compared with A$16.4 billion a year earlier. Telstra's presentation puts debt servicing at 2.0 times, inside its 1.75 to 2.25 times comfort range, although a footnote cites 1.9 times on an underlying EBITDA basis, so the presentation uses two figures.

The average cost of debt was 4.8 per cent. Liquidity included A$1.1 billion in cash and A$3.2 billion of unused committed facilities.

The Balance Sheet is relevant because dividends, buy-backs, capital expenditure and strategic projects are all funded from the same cash flows.

Sector conditions and competitive position

Australian mobile is concentrated, with three national network operators and a number of resellers. Telstra's scale is visible in its 26.0 million retail mobile services and 2.9 million wholesale users.

That position is not unchallenged. Telstra's own risk disclosures point to competition, regulation, technology change, cyber security and supply-chain pressures. Growth in mobile has to offset declines in legacy fixed and enterprise lines, and the fall in bundles and data services illustrates how uneven the portfolio is.

Regulation also shapes the economics, because wholesale access, spectrum and network resilience obligations can affect costs and returns. Telstra's disclosures identify legal and Regulatory Risk as a material factor, though they do not quantify its effect on the FY27 outlook.

Risks and what to watch

Several uncertainties stand out. The FY27 guidance depends on mobile pricing holding, cost savings being delivered and competition remaining rational. Capital expenditure and strategic investment could rise if projects expand, as the Aura estimate already has.

Cyber security, geopolitical instability, exchange rates and Supply chains are listed among the group's risks, as are climate impacts on network and energy resilience. Telstra also points to the responsible scaling of artificial intelligence and to the execution risk of its transformation programmes and planned cost savings.

Upcoming developments include progress on the new buy-back, ongoing updates on Aura and Viasat, and the first-half FY27 result.

Telstra's FY26 numbers show a Business growing profit and returns from a flat revenue base, but sustaining that depends on execution across several fronts. The company's own guidance provides the clearest benchmark against which to judge the next set of results.