Spark NZ Reports 10% EBITDAI Growth, 1.6% Mobile Revenue Rise in H1 FY26
Spark New Zealand’s H1 FY26 results reveal a strong rebound in profitability driven by mobile service revenue growth and disciplined cost reductions, alongside the strategic sale of its data centre business.
- Mobile service revenue up 1.6%, stabilising ARPU and connections
- Reported EBITDAI rises 10.3%, adjusted EBITDAI up 5.1%
- Net profit after tax surges 82.9% on reported basis
- Sale of 75% stake in data centre business completed, proceeds to reduce net debt
- Interim dividend declared at 8 cents per share, FY26 guidance reaffirmed
Strong Mobile Momentum and Cost Discipline
Spark New Zealand Limited has reported a solid first half for FY26, showcasing a return to profit growth despite a slight decline in overall revenue. The company’s reported revenue dipped by 1.2% to NZ$1.893 billion, yet its EBITDAI climbed 10.3% to NZ$448 million, reflecting effective cost management and a focus on high-value mobile services.
Mobile service revenue grew by 1.6%, underpinned by strong average revenue per user (ARPU) growth in consumer and SME pay monthly segments, and stabilisation in prepaid and enterprise connections. This performance is a testament to Spark’s SPK-30 strategy, which prioritises core connectivity and customer experience enhancements.
Data Centre Divestment and Capital Management
A significant milestone during the period was the completion of the sale of a 75% stake in Spark’s data centre business to Pacific Equity Partners. The transaction, finalised on 30 January 2026, generated initial cash proceeds of approximately NZ$453 million, with potential deferred payments contingent on performance targets. This divestment is expected to materially reduce Spark’s net debt in the second half of FY26, improving its balance sheet flexibility.
Capital expenditure for the half was NZ$271 million, slightly higher than the prior year, driven by strategic investments in data centre assets. However, business-as-usual capex declined by 9%, reflecting the maturation of the 5G rollout. Spark reaffirmed its FY26 guidance, targeting adjusted EBITDAI between NZ$1.01 billion and NZ$1.07 billion, free cash flow of NZ$290 million to NZ$330 million, and BAU capex of NZ$380 million to NZ$410 million.
Customer Experience and Innovation
Beyond financials, Spark highlighted progress in customer satisfaction, with its net promoter score rising by five points. Investments in AI are accelerating product development and customer support efficiency, including AI-driven coding automation and enhanced customer care prioritisation. Network coverage leadership was maintained, with over 100 cell site upgrades completed and plans for further expansion in the second half.
Sustainability efforts continue to advance, with Spark on track to meet its science-based emissions reduction targets and maintaining a top quartile ranking in corporate sustainability assessments. The company’s Skinny Jump broadband initiative now supports over 34,500 households, reinforcing its commitment to digital inclusion.
Outlook and Strategic Positioning
CEO Jolie Hodson emphasised disciplined execution and market momentum as key drivers positioning Spark well for the future. With early signs of economic stabilisation, the company is focused on leveraging its network and customer experience investments, while managing costs and capital prudently. The dividend payout of 8 cents per share, declared for the half, reflects confidence in cash flow generation and shareholder returns.
Bottom Line?
Spark’s H1 FY26 results mark a pivotal step in its SPK-30 strategy, balancing growth and capital discipline as it reshapes its portfolio and customer offerings.
Questions in the middle?
- How will the data centre sale proceeds be deployed to optimise Spark’s capital structure?
- What impact will AI-driven initiatives have on Spark’s competitive positioning over the next 12 months?
- Can Spark sustain mobile revenue growth amid intensifying competition and market share pressures?
