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Telstra has reported a 3 per cent rise in earnings before interest, tax, depreciation and amortisation after leases (EBITDAaL) to $8.2 billion for the 2026 financial year, while flagging increased costs on its Aura Network infrastructure buildout and acknowledging lessons to be drawn from a network outage in July.
The telco’s net profit after tax rose 2.7 per cent to $2.4 billion, with earnings per share up 5.3 per cent to 19.9 cents.
Underlying results painted a somewhat different picture, with underlying EBITDAaL up 4 per cent to $8.3 billion, cash earnings per share climbing 14 per cent to 25.5 cents and underlying return on invested capital increasing 0.5 percentage points to 9 per cent.
Mobile continues to drive growth
Mobile service revenue grew across all product categories, including postpaid, prepaid, wholesale handheld, mobile broadband and IoT.
Average revenue per user increased across all categories, brands and segments, while the mobile subscriber base grew by more than 270,000 users, a 1.9 per cent increase.
Telstra CEO, Vicki Brady, pointed to the breadth of the result.
“Our mobile service revenue grew across all products – Postpaid, Prepaid and Wholesale handheld, mobile broadband and IoT,” Brady stated.
The company also grew EBITDA in its fixed consumer and small business divisions, which it attributed to cost management rather than revenue gains.
Dividend up but franking down
Telstra’s board declared a final dividend of 10.5 cents per share, bringing the full-year payout to 21 cents per share – a 10.5 per cent increase on a cash basis compared to the prior year’s 19 cents per share.
However, the dividend structure has shifted. The FY26 final dividend is 90.5 per cent franked, comprising 9.5 cents franked and 1 cent unfranked. By comparison, the prior year’s dividend was fully franked – a change that may affect the after-tax value for some shareholders.
New $1 billion buyback as capital structure shifts toward debt
Telstra completed a $1.25 billion on-market share buyback in June and announced a further buyback of up to $1 billion.
The company was direct about what this means for its balance sheet, describing the move as shifting its capital structure “toward more debt and less equity.”
Brady framed the buyback alongside the company’s investment program.
“Importantly, these buy-backs are alongside increased capex and strategic investment,” she explained. “Buy-backs allow us to lower our cost of capital and manage our sources of funding more efficiently.”
The company argued the approach supports earnings and dividend per share growth while demonstrating confidence in financial outlook.
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Aura Network costs rise by $200 million
Buried in the market release is a notable upward revision to Telstra’s infrastructure investment estimates.
The company now expects total strategic investment, including for its Viasat satellite partnership, to reach around $1.8 billion from FY23 to FY28. That is up from a previous estimate of around $1.6 billion – a $200 million increase attributed to “a combination of inflationary pressures and project-specific factors.”
Telstra is past the halfway mark on its Aura Network build, with more than 8,500 kilometres of fibre in the ground and six routes ready for service. The company has secured long-term contracts with Google, AWS, Firmus and Microsoft as foundational partners.
The sales pipeline for the Aura Network has increased over the past six months, and Telstra expressed confidence in the project’s returns, citing an expected mid-teens internal rate of return and a cash payback period of around nine years.
July outage acknowledged in passing
In the outlook section of the release, Brady made a brief but pointed reference to a network outage in July.
“We will remain disciplined on costs and capital allocation. As we continue to invest in network resilience and growth, including taking the lessons from our outage in July, we will maintain our focus on productivity, simplification and positive operating leverage,” she remarked.
The reference was not elaborated upon, and no detail was provided on the nature or impact of the outage.
Digital infrastructure demand and the AI factor
Telstra reported what it described as demand signals for digital infrastructure assets, driven by the growth of AI.
“And our Infrastructure business continues to grow, supported by rising demand in the AI era,” Brady observed.
The company has been signing long-term contracts across its Aura Network, subsea cable and long-haul fibre assets.
In its international wholesale and enterprise business, Telstra indicated it had made progress refocusing on digital infrastructure.
Fixed enterprise reset continues
The company continued to reshape its fixed enterprise business, with Brady noting a deliberate focus on core connectivity offerings and portfolio management.
“In Fixed Enterprise, we’ve continued to make strong progress to reset this business and focus on our core connectivity offerings. Our deliberate reshaping of this business, and focus on portfolio management is ongoing,” she told investors.
Customer experience metrics
Telstra’s strategic net promoter score increased to +20, while episode NPS reached +49. The company described these as its highest year-end results since it began measuring NPS.
Strategic NPS improved by one point over the past 12 months, while episode NPS rose by two points.
Network investment
Over FY26, Telstra upgraded nearly 1,200 mobile sites with 5G Advanced capability and built more than 150 new mobile sites. The company also upgraded more than 1,800 network sites with backup power.
It invested in satellite messaging and select satellite applications, and continued to expand product offerings for enterprise customers.
Connected Future 30 strategy
Brady described the past year as one of significant external change.
“The pace of change over the last 12 months has been extraordinary. We’ve seen significant shifts in geopolitics, economic pressures, policy and technology, with AI and global investment in digital infrastructure accelerating dramatically,” she told the market.
She positioned Telstra as playing a role in Australia’s digital infrastructure requirements, including sovereign capability.
“We must position ourselves to drive and participate in the value created by AI and the digital infrastructure boom, with sovereign capability and assets working in our national interest,” Brady added.
FY27 guidance
Looking ahead, Telstra guided for underlying EBITDAaL of between $8.5 billion and $8.8 billion in FY27.
Business-as-usual capex is expected between $3.35 billion and $3.65 billion, with the company flagging a lift in network investment. Cash EBIT is expected between $4.75 billion and $4.95 billion, while strategic investment is expected at $200 million to $300 million.
The guidance excludes material one-offs such as mergers, acquisitions, disposals, impairments, spectrum and restructuring costs.
Last Updated on August 13, 2026 by Nick Ross
