Telstra Posts Strong FY25 Growth, Boosts Dividend and Launches $1B Buy-Back
Telstra has reported robust FY25 financial results, driven by underlying EBITDA growth across key segments and disciplined cost management, while announcing an increased dividend and a fresh $1 billion share buy-back.
- Underlying EBITDA growth across mobile, fixed consumer, and enterprise segments
- Core fixed costs reduced by 4.7%, continuing disciplined cost control
- Fully franked final dividend increased to 9.5 cents, total 19 cents for FY25
- Completed $750 million share buy-back and initiated additional $1 billion buy-back
- International business reset underway with strategic cost reductions and portfolio focus
Strong FY25 Performance Amid T25 Strategy Completion
Telstra Group Limited has delivered a solid financial performance for the fiscal year ended June 30, 2025, marking its fourth consecutive year of underlying growth. CEO Vicki Brady highlighted that the company’s momentum was underpinned by strong customer demand, effective cost control, and disciplined capital management. The reported growth outpaced underlying growth due to significant one-off costs in the prior year, primarily related to restructuring within the Telstra Enterprise business.
The company’s mobile division led the charge with an EBITDA increase of $235 million, driven by higher average revenue per user (ARPU) and sustained customer preference for Telstra’s network. Fixed Consumer & Small Business and Fixed Enterprise segments also posted healthy EBITDA gains of $109 million and $103 million respectively, reflecting ARPU growth and ongoing cost discipline. However, the international segment faced challenges, with EBITDA declining by $96 million amid restructuring and strategic refocusing efforts.
Cost Management and Capital Returns
Telstra’s commitment to cost efficiency was evident in a 4.7% reduction in core fixed costs, amounting to $306 million in savings for FY25 and a cumulative $428 million since FY22. This cost discipline has supported the company’s ability to return value to shareholders. The Board declared a fully franked final dividend of 9.5 cents per share, bringing the total dividend for the year to 19 cents; a 5.6% increase from the previous year.
Capital management initiatives included the completion of a $750 million on-market share buy-back earlier in the year, with an additional $1 billion buy-back announced to leverage the company’s strong earnings growth and balance sheet strength. These moves signal confidence in Telstra’s financial position and future prospects.
Resetting International Operations and Future Outlook
Telstra is actively reshaping its international business, focusing on cost reduction, connectivity services, and exiting most Network as a Service (NAS) products. While this segment’s recent performance has been subdued, the strategic review and restructuring efforts aim to position it for sustainable growth. The company’s infrastructure businesses also showed continued growth, reflecting robust customer demand for connectivity solutions.
Looking ahead, Telstra’s FY26 guidance introduces a new focus on Cash EBIT, a metric encompassing underlying EBITDA after lease amortisation, business-as-usual capital expenditure, and spectrum amortisation. This shift reflects a broader view of costs and cash flow management. The company’s Connected Future 30 strategy aims to capitalize on growing demand for digital infrastructure, emphasizing fibre networks and advanced mobile technologies to support Australia’s evolving digital economy.
CEO Brady emphasized Telstra’s ambition to remain Australia’s number one connectivity provider, underpinning the nation’s productivity and innovation. The company also called for supportive policy and regulatory frameworks to accelerate large-scale digital infrastructure deployment.
Bottom Line?
Telstra’s FY25 results and strategic reset set the stage for disciplined growth and shareholder returns amid evolving market dynamics.
Questions in the middle?
- How will Telstra’s international business reset impact profitability in FY26 and beyond?
- What risks could arise from the shift to Cash EBIT as the primary financial metric?
- How quickly can Telstra’s Connected Future 30 strategy translate into tangible growth?
