The TPG Telecom Ltd (ASX: TPG) share price is up around 4% after the company announced its FY26 half-year result.
TPG is a telecommunications business with a number of brands including Vodafone, TPG, iiNet, felix, Kogan and Lebara.
HY26 result
Here are the highlights for the six months to 30 June 2026:
- Service revenue grew 0.5% to $2.07 billion
- Gross profit increased 2.9% to $1.3 billion
- EBITDA (EBITDA explained) grew 4.7% to $821 million
- Underlying net profit (NPATA) improved $53 million to $70 million
- Net profit soared 275% to $35 million
- Operating free cashflow increased 16.4% to $199 million
- Dividend per share hiked by 11.1% to $0.10
What happened in this result?
TPG reported that mobile subscribers increased by 64,000 to 5.81 million, while mobile average revenue per user (ARPU) increased by 0.7% to $35.21. This combined to drive mobile service revenue higher by 3.1% to $1.2 billion.
In home broadband, the company’s subscriber count decreased from 1.98 million at the end of FY25 to 1.94 million in HY26. TPG noted that its fixed wireless returned to growth in the second quarter of 2026, with the NBN subscriber base “continuing to stabilise”. Home broadband service revenue declined 1.9%, while the gross profit margin fell 4.5%.
TPG was able to keep its costs largely flat (through simplification), despite the headwind of inflation, which is what led to the 4.7% rise of EBITDA.
Reduced borrowing costs were a key factor for the company’s large increase in net profit following debt reduction in the 2025 financial year.
Operating free cashflow improved so much because of higher cash earnings and lower cash capital expenditure.
Outlook for the TPG share price
TPG expects ongoing ARPU growth in the second half of FY26, as well as sustained ARPU growth and subscriber growth over the next few years.
It expects EBITDA to continue to track towards its guidance range of between $1.665 billion to $1.735 billion. In the longer-term, EBITDA is expected to grow faster than service revenue growth, with $100 million of operating expenditure savings (before inflation impacts) by FY29.
Capital expenditure is also expected to reduce to $750 million. Its ratio of capex to service revenue is expected to reduce in the coming years because the capex peak has been passed for the recent investment cycle.
Lower borrowing costs is also expected to help earnings in the coming reporting periods. TPG said it intends to grow its dividends over time in line with growth in profit and cashflow.
I think TPG is a solid business which could be one of the decent, defensive ASX dividend shares from here, but it’s not one of the stocks I’d buy today because of the slow growth rate and the fact it doesn’t have strong competitive advantages.
