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Core Revenue: Grew 4% to over ILS2 billion in Q2.

Comp Net Profit: Grew 38% in Q2, driven by higher revenues and lower financing and operating expenses.

Comp EBITDA: Increased 6.2% to ILS978 million in Q2.

Dividend: Board recommended a dividend distribution of ILS415 million, representing 80% of 2026 first half profits.

Share Buyback: Launched a new buyback plan of ILS100 million, part of a multiyear program of ILS800 million.

Fiber Subscribers: Up 17%, with take-up reaching 35% and over 3 million home passed.

5G Subscribers: Pelephone grew 5G subscriber plans to 1.49 million; 5G Max subscribers grew to 217,000.

Broadband ARPU: Retail broadband ARPU grew 4.4% year-over-year to ILS142.

Net Debt: Increased slightly by ILS303 million to ILS5.2 billion, with net debt to comp EBITDA ratio at 1.6x.

Fixed-Line Core Revenue: Increased 1.9% to ILS999 million.

Fixed-Line Comp EBITDA: Rose 6.1%.

Fixed-Line Comp Net Profit: Grew 20%.

Fixed-Line CapEx: Down by 10%.

Fixed-Line Free Cash Flow: In the first half of 2026 was ILS624 million compared to ILS150 million in the corresponding period.

Fiber Home Passed: Approximately 3.04 million, with almost 1.1 million active subscribers.

Broadband Revenue: Down 1.2% due to Ministry of Communication decrease in wholesale tariff.

Transmission and Data Revenue: Grew 2.6% to ILS317 million.

Digital and Cloud Revenue: Increased 3.3%.

Other Revenue: Rose 19% due to higher revenues from infrastructure projects.

Fixed-Line Operating Expenses: Decreased by 18% due to lower expenses of fiber installation and materials.

Pelephone Postpaid Subscribers: Increased by 21,000.

Pelephone 5G Postpaid Subscribers: Grew by 48,000, reaching approximately 1.5 million or 63% of postpaid subscribers.

Pelephone ARPU: Declined modestly year-over-year to ILS45, a decrease of 2.2% or ILS1.

Pelephone Comp EBITDA: Grew 2.2%.

Pelephone Comp Net Profit: Grew 6.3%.

yes Revenue: Grew 8.7% to ILS348 million, the highest quarterly revenues since Q4 2018.

yes ARPU: Reached a record of ILS204.

yes Fiber Subscribers: Increased to 150,000.

Bezeq International Business Customer Revenue: Increased 9% year-over-year to ILS252 million.

Bezeq International Comp EBITDA: Grew 5.4%.

Bezeq International Comp Net Profit: Totaled ILS11 million compared to ILS3 million in the corresponding quarter last year.

Release Date: August 05, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Core revenues grew 4% to over ILS2 billion, with comp net profit up 38% in Q2 2026.

Fiber subscribers increased 17% year-over-year, with take-up reaching 35% and over 3 million home passed.

Pelephone’s 5G subscriber plans grew 12% year-over-year, reaching 1.49 million, and 5G Max subscribers are on track to hit 300,000 by year-end.

yes delivered its highest quarterly revenues since Q4 2018, with ARPU reaching a record ILS204.

The company announced a dividend of ILS415 million and a new ILS100 million buyback, part of an ILS800 million multiyear program.

Negative Points

Mobile ARPU declined 2.2% year-over-year to ILS45 due to war-related roaming revenue impact.

Broadband revenue in Fixed-Line decreased 1.2% due to a Ministry of Communication wholesale tariff reduction.

Net debt increased by ILS303 million to ILS5.2 billion in Q2.

The company faces uncertainty from the government tender for telecom services, which may impact future results.

Regulatory decisions on structural separation and other initiatives are delayed due to geopolitical and political backdrop.

Q & A Highlights

Q: How does the group view the growth in fiber subscribers across Bezeq Fixed-Line and yes, and is there any cannibalization between the two? What is the latest on the regulatory front regarding the removal of structural separation?A: Tomer Raved (Executive Chairman) explained that the group views total fiber subscribers across Bezeq Fixed-Line and yes combined, which shows consecutive growth. There is no de facto cannibalization because the wholesale rate yes pays to Bezeq is a wash from a group perspective, and the group gains incremental TV revenue from yes. Nir David (CEO of Bezeq Fixed-Line) added that the process to remove structural separation is close to completion, with professional dialogue ongoing with the Ministry of Communication, Ministry of Finance, and antitrust authorities. They hope for an announcement in the coming weeks, though geopolitical and political timing could cause delays.

Q: Why is the company’s 2026 comp EBITDA guidance of ILS3.7-3.8 billion so cautious given the strong first-half performance? Are there any pressures expected in the second half?A: Nir David (CEO) stated that the company does not expect any softness in H2 and feels very strong about its guidance. The company will update the market if there is a deviation of more than 10% from the midrange, per their disclaimer. They feel very confident with the trends and tailwinds from Q2 going into Q3, especially if the geopolitical situation remains stable, particularly regarding roaming revenues.

Q: Why isn’t the successful migration of 4G subscribers to 5G translating into higher ARPU for the mobile business?A: Nir David (CEO) noted that ARPU is stable, with impacts from reduced roaming revenues and one-off transitions in the business sector, especially government customers migrating after a large tender. Yochai Benita (CFO) added that ARPU had grown around ILS1 per year for the past three years, but the war’s impact on roaming caused a slight ILS1 decline this quarter. However, roaming is returning as Israelis travel again, and they believe roaming revenues will recover to pre-war levels.

Q: What is the company’s strategy regarding its balance sheet and leverage, given the increase in net debt this quarter?A: Nir David (CEO) clarified that the company does not have deleveraging goals and is comfortable with its current leverage level of 1.5-1.6x net debt to EBITDA, which supports its AA rating. The company maintains financial flexibility to pursue M&A and investment opportunities, including subsea cables and the Wecom acquisition, while also increasing shareholder returns via dividends and incremental buybacks.

Q: Can you explain the significant 18% decline in Fixed-Line operating expenses? Is this a sustainable run rate given the ongoing fiber rollout?A: Yochai Benita (CFO) explained that the decrease is partly due to lower costs related to fiber activity, as more homes are already connected, reducing the cost to connect new customers. Additionally, internal connection fees that existed in the past have ended, and there was a decrease in Bezeq store activity, which was compensated by other revenues. Part of this expense reduction is expected to continue.

Q: What is the risk that the structural separation removal gets delayed or deprioritized due to the upcoming elections? Could a different government outcome change the preferred scenario?A: Tomer Raved (Executive Chairman) stated that the structural separation process is not a government or parliament decision but sits within an interministry team. Elections should not impact the decision-making process or the essence of the resolution, though they could potentially cause minor timing delays. The company does not expect the elections to change the actual decision.

Q: What is the contribution of the Partner and yes collaboration to the strong revenue growth at yes, and how significant is it going forward?A: Ilan Sigal (CEO of Pelephone and DBS) stated that the Partner deal, which began in Q4 2025, has been working well for two consecutive quarters. It is a nearly nine-year deal that is very good for yes and contributes to revenues. The revenue growth also comes from fiber subscribers and collaborations with international companies like Netflix and HBO Max, which are now on yes billing.

Q: Can you provide more color on the strong growth in the business customer segment and updates on the submarine cable projects? Are these included in the 2029 targets?A: Tomer Raved (Executive Chairman) highlighted trends in demand for additional bandwidth, AI, and cyber needs, which drive value-added services for business customers. On subsea cables, the company is progressing rapidly on three new cable systems, connecting East to West (Gulf and India through Israel to Europe), with demand growing exponentially. Crucially, he confirmed that nothing related to subsea cable forecasts, structural separation, or M&A is included in the 2029 targets, representing potential upside.

Q: What impact will the recent government tender have on Pelephone’s ARPU and subscriber growth in the coming quarters?A: Ilan Sigal (CEO of Pelephone and DBS) stated that the impact of the tender is not yet visible and will likely be seen in the next few quarters. The tender will not significantly impact ARPU, which is driven by 5G migration and customer gains. While Pelephone has 60% of government customers, the tender’s impact on ARPU is expected to be limited.

Q: What are the expectations for roaming revenue recovery, and how does July’s performance compare to historical levels?A: Tomer Raved (Executive Chairman) noted that Israeli passengers are returning in July, and July 2026 looks very similar to July 2023. If the war remains stable, roaming revenues are expected to return to pre-war levels, which should positively impact ARPU.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.