SPK Posts EBITDA Declines Amid Cost-Cutting and Fraud Prevention Collaborations

• Spark NZ reported a 15.5% year-over-year decline in adjusted H1 EBITDA to NZD 448M in FY2025.
• The company cut FY25 EBITDA guidance to NZD 1.04B–1.1B due to persistent recessionary headwinds and enterprise mobile shrinkage.
• Management is addressing these challenges through a NZD 110M–140M cost-out program to reduce operating costs and a long-term data center co-investment strategy.

Spark NZ's full FY2025 results show an 8.9% drop in adjusted EBITDA, driven by lower IT services demand and increased mobile competition. The company aims to stabilize EBITDA in FY2026, supported by $85M in cost savings and a strategic reset.

Management plans to maintain a 100% dividend payout of free cash flow as part of its performance improvement strategy.

New Zealand's top telcos—Spark, One NZ, and 2degrees—are collaborating on common fraud and scam prevention APIs under the GSMA Open Gateway initiative. These APIs aim to verify phone numbers and detect SIM swaps, enhancing digital trust for sectors like banking and e-commerce. The initiative follows guidelines from CAMARA, an open-source initiative by the GSMA and Linux Foundation, and will launch later this year.

What is driving Spark's EBITDA decline?

Spark NZ's EBITDA decline in FY2025 was primarily driven by persistent recessionary conditions in New Zealand. Enterprise mobile shrinkage, coupled with lower demand for IT services, further contributed to the 8.9% drop in adjusted EBITDA. The company has also faced increased competition in the mobile services sector, which is impacting its revenue streams.

What is Spark doing to address these challenges?

Spark is implementing a NZD 110M–140M cost-out program to reduce operating costs and improve profitability. In addition, the company is focusing on a long-term data center co-investment strategy to drive value creation. For FY2026, Spark is aiming to stabilize EBITDA through $85M in cost savings and a strategic reset that includes improved performance and a 100% dividend payout of free cash flow.

What is the impact of the telco collaboration on fraud prevention?

The collaboration between Spark, One NZ, and 2degrees under the GSMA Open Gateway initiative is expected to enhance digital trust and reduce identity theft. By developing common APIs for fraud detection, such as number verification and SIM swap detection, the telcos aim to protect customers and support sectors like banking and e-commerce. These APIs, aligned with global standards, will improve customer trust and provide a consistent secure digital experience.

The APIs are in development and expected to launch later this year, reflecting the telcos' commitment to innovation and customer protection. This collaboration builds on previous initiatives, such as the Anti-Scam Alliance, and aligns with a global ecosystem of mobile operators.