2degrees posts higher revenue & returns to profit

2degrees reported higher annual revenue and a return to pre-tax profit for the year ended 30 June 2026, extending its run of annual revenue growth since merging with Vocus in 2022.

Revenue rose 5.5% to $1.46 billion and trading EBITDA increased 6.5% to $421.1 million. Profit before tax reached $27.4 million, a $50 million turnaround as one-off integration effects and non-cash impacts from recent years continued to unwind.

The result follows the completion of a multi-year integration programme after the Vocus merger. Growth came across the Consumer, Business and Wholesale divisions.

Chief Executive Officer Mark Callander said the latest financial year marked a shift after several years spent combining the two companies.

"Four years ago, we brought together two outstanding businesses with a clear ambition to build a stronger platform for growth. Since then, we have successfully completed that integration, delivered record trading EBITDA and returned the business to pre-tax profitability, while continuing to deliver for our customers. Achieving this while navigating a challenging economic environment reflects the strength of our business, the resilience of our strategy and the dedication of our people," Callander said.

Business growth

2degrees pointed to continued gains in mobile, broadband and energy during the year. It also highlighted progress in its Business division, where it secured several large customer contracts in the enterprise and public sectors.

The segment has become central to 2degrees' growth plans as it looks to expand beyond its traditional consumer base. Recent wins, it said, showed it could compete for larger and more complex organisations across New Zealand.

"We are consistently winning business and building momentum with enterprise and government customers. This is a significant growth opportunity for 2degrees, and one where we are already delivering results. Organisations are looking for a partner that makes technology easier to navigate and more valuable to their business. They are choosing 2degrees because we bring together connectivity, technology, infrastructure and service, backed by our people who take the time to understand their needs and work alongside them," Callander said.

Technology focus

Alongside the financial results, 2degrees outlined changes to its technology operations as it enters the next phase of its strategy. During the year, it expanded its as-a-service portfolio and increased the use of artificial intelligence across its in-house development team.

The company said those changes helped speed up product development and supported the launch of new services. It also said control over key parts of its technology stack gave it more flexibility in developing services and responding to customer demand.

"Our technology capabilities give us more scope to move quickly, simplify how we work and improve the customer experience. AI is becoming an increasingly important part of how we do that, helping our teams turn ideas into practical improvements faster," Callander said.

2degrees also advanced its partnership with AST SpaceMobile, recently opening a ground station in Marton as part of preparations for direct-to-mobile satellite connectivity in New Zealand.

Strategy update

Chair Liz Coutts linked the result to the company's three-year 2d28 strategy, centred on growth, innovation, value creation and customer experience. She said the business had strengthened its foundations while managing a difficult economic backdrop.

"2degrees has continued to grow through a challenging economic cycle while successfully completing a complex integration programme and strengthening the foundations of the business for the future. These results demonstrate the progress we have made over recent years and provide a strong foundation for the next phase of our strategy," Coutts said.

Management said 2degrees entered FY27 focused on execution, customer gains and further expansion in the Business segment. It also plans to keep using technology to improve service and support growth.

"We have a strong network, modern platforms and a clear strategy for sustainable growth. Our focus is on winning customers, growing our Business portfolio and using technology to deliver better service and value. We have built a strong platform for growth. Now we are focused on realising its full potential while continuing to challenge the market and fight for fair for New Zealanders," Callander said.