2degrees posts record $1.385bn revenue & unveils new growth strategy

2degrees has reported its financial results for the year ending June 30, 2025, with record revenue reaching $1.385 billion.

The total revenue rose by $42.9 million, a 3.2 percent increase year-on-year, marking the company's third consecutive year of billion-dollar revenue. Service revenue also grew by 3.9 percent over the period.

The annual results detail growth across the company's core segments. Mobile revenue climbed 4.8 percent to $581.5 million, up from $555.0 million in the previous year. Broadband revenue increased 3.9 percent, moving from $415.9 million to $432.3 million. Energy revenue saw the highest percentage rise at 8.7 percent, increasing to $133.4 million from $122.7 million.

Trading EBITDA rose by 11.5 percent to $395.3 million, an increase of $40.7 million over the previous year. This result reflects both cost management and continued revenue momentum, according to the company.

Chief Executive Mark Callander acknowledged the impact of broader economic challenges, as well as the contributions of staff across the company.

"Our business is doing very well and this result is a testament to the hard work from of a lot of passionate people across the company," said Mark Callander, 2degrees Chief Executive.

He highlighted the successful integration of 2degrees and Vocus, which was completed ahead of schedule, as a key factor in the company's improved performance. "Three years ago, we set a bold target to successfully integrate two great businesses, 2degrees and Vocus, into a single, powerhouse organisation. Our team has delivered on that ambition, ahead of schedule, setting us up well for the future."

Cash flow metrics improved for the year, with net cash from operating activities increasing to $237.3 million, compared to $169.4 million in the previous period. Callander commented on how this supports ongoing investment in infrastructure and staff.

Callander said, "Our financial health is represented in our cash flow, which has seen a sharp increase. Our net cash from operating activities jumped to $237.3 million, up from $169.4 million last year. This cash generation is what fuels our ability to continue investing in our network and our people to deliver for Kiwis and NZ Inc."

The company reported a statutory net loss before tax of $22.6 million for the financial year, compared to a loss of $4.8 million the year before. The company attributed this to non-cash valuation impacts and one-off integration costs, including fair value changes in energy contracts and loan hedging that reduced net profit before tax by $45.9 million year-on-year. A further $10 million reduction was attributed to non-recurring integration activity.

Callander said these factors masked what he described as a solid underlying year. "This result highlights the resilience of our business model, the benefits of integration, and our ongoing commitment to disciplined capital allocation, evident in our increase in cash generation."

Strategy and growth

With the integration of Vocus now complete, 2degrees has launched a three-year strategy focusing on growth, innovation, value, and customer experience.

Callander commented on the transition and the company's ambitions for the next phase: "This achievement marks a pivotal moment. We've successfully transitioned from a period of high change to a new era of innovation and accelerated growth. Our new three-year strategy is ambitious and clear: to be the number one telco in New Zealand by value, innovation and growth. This isn't just an aspirational goal; it's a bold and deliberate plan to leverage our new scale and technology to challenge the market like never before."

According to the company, execution of the strategy is underway, with 2degrees citing a partnership with AST SpaceMobile for satellite-connected mobile services and a major contract win with Network for Learning in 2024. The company is overseeing the onboarding of more than 2,500 schools under this arrangement.

"We have invested in building a fixed and mobile network that gives New Zealand the coverage it demands, and we have built a business that delivers services customers want at the best value," Callander said.

He also emphasised the company's competitive stance and vision for the wider sector: "Our network can go head-to-head with the incumbents, and we continue to challenge the market while staying hungry to innovate, focused on customer needs, and committed to enabling New Zealanders to use technology and productivity tools to drive the country forward."