Bezeq The Israeli Telecommunication (BEZQ) Q2 2025 earnings summary

Executive summary

• Core revenues grew 3.1% year-over-year to NIS 1.95 billion, driven by ARPU and growth across all key segments; adjusted EBITDA increased 11.3% to NIS 1.01 billion, and adjusted net profit rose 46% to NIS 427 million, mainly due to a yes valuation gain.

• Double-digit subscriber growth in fiber (31%), 5G postpaid (15%), and yes IPTV (11%), with yes posting its first quarterly subscriber increase since Q1 2023.

• Strategic focus on future growth engines, including potential acquisitions of Exelera Telecom and HOT Mobile, and ongoing investments in AI and infrastructure.

• Regulatory progress on wholesale tariff updates, removal of structural separation, and copper switch-off reform, reflecting a maturing, competitive market.

• Dividend of NIS 583 million (NIS 0.21/share) recommended, the largest semi-annual payout since 2017.

Financial highlights

• Adjusted EBITDA reached NIS 1.01 billion with a margin of 47.4%; adjusted net profit was NIS 427 million, up 46% year-over-year.

• Free cash flow increased 29% to NIS 230 million, mainly due to working capital timing.

• Net debt at NIS 4.9 billion, down 2.1% year-over-year; net debt/EBITDA ratio at 1.5x.

• Dividend payout policy at 80%, with NIS 583 million recommended for distribution.

• CapEx/Sales ratio at 20% for Q2-2025; CapEx expected to decline post-fiber rollout but remain elevated for 5G.

Outlook and guidance

• FY 2025 outlook raised: adjusted net profit expected at NIS 1.45 billion and adjusted EBITDA at NIS 3.85 billion.

• CapEx guidance unchanged at NIS 1.75 billion; fiber deployment target of 2.9 million homes passed.

• Midterm KPIs on track, including completion of fiber deployment and at least 40% take-up.

• Commitment to maintain high AA credit rating.

• Expecting at least 2% CAGR in EBITDA, with legacy high-margin revenue declines offset by OPEX improvements.