Sky NZ Reports $755M Revenue, 16% Broadband Growth, and 15.8% Dividend Rise
Sky Network Television Limited reported a solid FY25 performance within guidance, overcoming satellite migration challenges and economic pressures, while raising dividends and completing the acquisition of Discovery NZ.
- Adjusted FY25 revenue of $755.1 million, down 1.5%
- EBITDA of $148.5 million, a 3% decrease year-on-year
- Dividend increased 15.8% to 22 cents per share, fully imputed
- Successful completion of complex satellite migration project
- Acquisition of Discovery NZ positions Sky for digital and advertising growth
Solid Financial Performance Amidst Operational Challenges
Sky Network Television Limited (Sky) has released its FY25 results, demonstrating resilience in a tough economic environment compounded by a complex satellite migration. The company reported adjusted revenue of NZ$755.1 million, a slight 1.5% decline from the previous year, and an adjusted EBITDA of NZ$148.5 million, down 3%. Despite these pressures, Sky managed to increase its fully imputed dividend by 15.8% to 22 cents per share, reflecting strong free cash flow generation and disciplined cost management.
Navigating the Satellite Migration and Operational Priorities
FY25 was marked by the successful completion of a critical satellite migration project, dubbed 'Project Migrate', which involved transitioning over 450,000 customers to a new satellite following an early end-of-life notice for the previous one. This complex operation, completed in April 2025, caused some service disruptions and required significant resource reallocation, delaying certain revenue-generating initiatives. Sky expects the migration to be largely cash neutral by the end of FY26, supported by compensation agreements with Optus.
Growth Engines and Strategic Content Partnerships
Key growth drivers included a 16% increase in revenue from Sky Sport Now, a 34% surge in broadband revenue, and a 7% rise in advertising income. The company also secured important content rights deals, including a new five-year partnership with New Zealand Rugby (NZR) and SANZAAR Unions, ensuring exclusive access to major rugby events. Sky’s content strategy balances premium sports and entertainment offerings, supported by data-driven decisions and a refreshed entertainment approach.
Discovery NZ Acquisition and Future Outlook
In August 2025, Sky completed the acquisition of Discovery NZ (now rebranded as Sky Free), a move that significantly enhances its digital and advertising capabilities, including the popular BVOD platform ThreeNow. The integration of Sky Free is a key priority for FY26, with expectations of positive underlying free cash flow and incremental EBITDA contributions by FY28. Sky has paused its share buyback program to focus on this integration and ongoing NZ Rugby negotiations.
FY26 Guidance and Strategic Priorities
Looking ahead, Sky provided stand-alone FY26 guidance projecting revenue between NZ$745 million and NZ$770 million, EBITDA of NZ$142 million to NZ$162 million, and capital expenditure of NZ$60 million to NZ$70 million. The company targets a dividend of at least 30 cents per share, a 36% increase over FY25. Sky plans to reinvest in marketing, customer experience, and people, laying the groundwork for accelerated growth from FY27 onwards.
Bottom Line?
Sky’s FY25 results and strategic moves set the stage for a pivotal year ahead as it integrates Discovery NZ and navigates evolving market dynamics.
Questions in the middle?
- How will the integration of Discovery NZ impact Sky’s financials and operations in FY26 and beyond?
- What are the detailed terms and market implications of the new New Zealand Rugby broadcast deal?
- How will ongoing economic headwinds affect Sky’s revenue growth and customer retention strategies?
