Reported net profit jumped 91.9% to $499m.
But on an adjusted basis, it fell 0.9% to $225m.
Adjusted ebitdai (earnings before interest, taxes, depreciation and amortisation) fell 2.4% to $1.04 billion.
Adjusted revenue was flat at $3.7b.
Spark paid out 100% of its free cashflow in an 8c dividend, taking the full-year dividend to 16c, at the midpoint of 15-17cps guidance.
It is lower than the 25cps for FY2025 and 27.5cps for FY2024, in line with expectations following the telco’s “dividend reset”.
Debt down, labour and other costs cut
Asset sales helped return the telco’s debt-to-operating earnings ratio from 2.2x to 1.7x or $899m, again in line with expectations.
Ongoing cost savings from labour, product and “other” operational costs reached $101m in FY2026.
Spark aims to expand that to a cumulative $110m to $140m during FY2027.
Some of the costs will be saved through the use of new technologies, some of which could also involve related staff cuts.
Spark received $462m in proceeds from the sale of its data centre business to Australia’s Private Equity Partners. Render / Spark
Flat forecast
Spark forecast flat operating earnings for FY27 and a full-year dividend of 16-18cps.
As Spark reaffirmed its FY2026 forecast a fortnight ago, Harbour Asset Management’s Shane Solly said it was an achievement to hold the line and meet guidance and the market’s “low” expectation, given the persistent economic slowdown.
Mobile growth, but more losses at the top end of town
As expected by analysts, there was growth in mobile (a key component of the “core” business set to stay with the company in its current restructure – more on which below).
Total mobile revenue increased 4.4% to $1.52b.
But service revenue was up just 1.1% to $998m and the segment saw a 7% fall in enterprise and government revenue to $93m. It’s a sector where analysts see 2degrees has been making inroads.
Spark blamed the fall in its government and big company business on “competitive pricing pressure”.
Year-on-year mobile market share by revenue. Source / Spark investor presentation, drawing on IDC data
It added, “The rate of decline has more than halved with the prior year and connections broadly flat”.
On a conference call, chief executive Jolie Hodson said consumer mobile plans had been increased by an average $3 per month from July with “low churn”.
The telco said its network competitiveness had been enhanced by its satellite-to-mobile partnership with SpaceX’s Starlink for connectivity in mobile blackspots.
Starlink’s share of New Zealand’s rural broadband market increased from 19% in the year to June 30, 2024 to a market-leading 27% in the year to June 30, 2025. Source / Commerce Commission 2025 Telecommunications Monitoring report.
Solly said the possibility that Starlink will expand to offer its own fully fledged mobile service (now heading toward a reality in the US) has weighed on the stock price of telcos worldwide.
“If you think about terrestrial networks, which mobile operators like us run, the amount of customers we serve per square kilometre is far greater than satellite could ever serve,” Hodson told the Herald. Gartner senior analyst Khurram Shahzad – a specialist in the satellite market, recently backed up that point, telling the Herald there were practical limitations, including rising space junk collision risk, that would prevent SpaceX from launching enough satellites to beat congestion issues in urban areas.
“So if they [Starlink] are going to enter into owning a terrestrial mobile network, there’s huge capital investment with spectrum, all those other things.”
In the US, SpaceX has paid billions to acquire spectrum rights for Starlink, paving the way for it to deploy its own cellsites on the ground to complement its satellites or “celltowers in the sky.”
Only Governments can own spectrum, which can be leased to telcos for fixed amounts of time.
“I think each government will have to consider their policy settings; how they think about that allocation of spectrum and national resilience,” Hodson said.
“We provide good national coverage, good resilience, and we’re here at the times where New Zealanders need it most. ”
How other divisions fared
Broadband revenue fell 2% to $596m. According to the Commerce Commission, Starlink has moved ahead of Spark to become number one in rural broadband market share.
Voice revenue fell 16% to $126m.
“Business connectivity” revenue (including managed data networks, IoT or internet of things and security) fell 10% to $327m.
In “Digital Services” (now judged non-core and potentially to be sold by the end of the calendar year):
Cloud revenue fell 1% to $233m.IT service management revenue fell 10% to $104m.“Other Digital Services”, including “digital identity” (presumably the “MATTR” unit) increased 2.9% to $35m.Total Digital Services revenue fell 3% to $372m.
Splitting in two
The FY2026 result is being delivered against the backdrop of the telco’s recent announcement that it is restructuring into two business units: “Connectivity” (including voice and broadband services for fixed and mobile and other “core” services) and “Digital Services” (cloud, IT services and other “non-core” products). The latter could be sold.
Some staff fear substantial layoffs after an email was sent to all staff late last week on another restructure. The telco confirmed to the Herald that consultation is underway but also that the “design is still underway”. The final shape of the new workforce will depend, in part, on whether a buyer is found for Digital Services.
Spark shares have recently hit their lowest point since the Chorus split on profit misses, the prolonged economic slowdown and a “reset” to lower dividends.
On Tuesday, Spark said ex-Mercury chief executive Vince Hawksworth would succeed the long-serving Justine Smyth as chair from November 5.
Earlier, Salt Funds’ managing director Matthew Goodson said: “I’d expect that [a new chief executive] will be on the agenda for the next chair.
“Jolie Hodson has had over seven years as CEO and has had senior roles at Spark since 2013, so it would be a natural time to transition to a new leader.”
There was no immediate news on further leadership changes this morning.
Bonus for CEO
The board approved a 3.4% increase in Hodson’s remuneration, according to Spark’s 2026 annual report, also released this morning.
The pay bump will take her base salary from $1.27m to $1.31m.
In FY2026, Hodson also received a short-term bonus of $859,908 and a long-term incentive payment of $26,368, taking her total remuneration to $2.2m.
The board also approved a one-off bonus, equivalent to 20% of Hodson’s salary, if “transformation performance targets” are met in FY2027.
“We never make changes to our people lightly. We have to adapt our business to the environment,” Hodson told the Herald in an interview after the result.
It was common for senior executives in New Zealand to have a big part of their remuneration as “performance pay, which is at risk,” Hodson said.
“In FY2024 and FY2025, where we didn’t achieve our performance targets, I got zero in those two years.”
Oversold?
Spark shares closed Wednesday at $2.02. Shares are down 21.4% over the past year.
Going into today’s result, Forsyth Barr’s Ben Crozier had a neutral rating and a $2.30 12-month target.
Crozier saw the Digital Services unit selling for around $500m, counterbalanced by the need to spend around $300m on renewing spectrum rights as the Government returns to commercial auctions.
Morningstar’s Brian Han reiterated his $3.60 valuation earlier this week.
Investors had materially undervalued the stock, in his view.
How peers are faring
Rival One NZ, 100%-owned by NZX-listed Infratil, chipped in $607.4m ebitdaf to its parent’s earnings for FY2026, from its year-ago $604m. Infratil forecasts One NZ ebitdaf of between $600m and $640m for FY27.
Chorus, whose dividends have swelled in its post-UFB build era, will report on Monday.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.