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Introduction & Market Context
Bezeq Israeli Telecommunication Corp Ltd (TASE:BEZQ) presented its second quarter 2025 results on August 6, showcasing solid performance across its business segments. The company’s stock has been performing well, with the share price at 634.7, up 2.73% and approaching its 52-week high of 669, reflecting investor confidence in the company’s strategic direction.
The telecom provider highlighted its continued success in fiber deployment and 5G adoption as key growth drivers, while also announcing plans for strategic acquisitions to strengthen its market position in the competitive Israeli telecommunications landscape.
Quarterly Performance Highlights
Bezeq reported core revenue growth of 3.1% to NIS 1.95 billion in Q2 2025, driven by improvements across all key group segments. More impressively, the company’s adjusted EBITDA increased by 11.3% with an adjusted EBITDA margin of 47.4%, while adjusted net profit jumped 46.2% to NIS 427 million.
As shown in the following chart of key financial results, the company demonstrated strong growth across its main financial metrics:
Free cash flow saw a significant increase of 29% to NIS 230 million, positively impacted by timing differences in working capital. The company also reduced its net debt by NIS 104 million, representing a 2.1% decrease.
Operating expenses decreased from NIS 812 million in Q2 2024 to NIS 679 million in Q2 2025, with lower salary expenses attributed to the sale of Bezeq Online and its deconsolidation. The company’s financial position remains strong, maintaining a net debt to adjusted EBITDA ratio of 1.5 times and high credit ratings (S&P Global Maalot:ilAA Stable, Midroog: Aa2.il Stable).
Strategic Initiatives: Fiber and 5G Expansion
Bezeq’s strategic focus on fiber deployment and 5G expansion continues to drive growth. The company’s fiber network now passes 2.81 million homes with 924,000 subscribers, representing a take-up rate of 33% (targeting 40% mid-term). Retail fiber customers reached 592,000, representing 58% of total retail subscribers.
The company’s technological roadmap shows significant progress in key strategic areas:
In the mobile segment, Pelephone reported 1.33 million subscribers on 5G plans, representing 58% of postpaid subscribers. The company added 14,000 net postpaid subscribers during the quarter, with cellular ARPU increasing by 4.5% to NIS 46.
Retail broadband ARPU grew by 5.4% to NIS 136, while yes TV ARPU for subscribers increased by 2.7% to NIS 189, demonstrating the company’s ability to extract more value from its customer base across segments.
Revised Outlook and Acquisition Plans
In a significant vote of confidence in its business trajectory, Bezeq revised its 2025 outlook upward, now expecting adjusted EBITDA of NIS 3.85 billion (up from NIS 3.75 billion) and adjusted net profit of NIS 1.45 billion (up from NIS 1.32 billion). The CapEx guidance remains unchanged at NIS 1.75 billion.
The company’s revised outlook reflects its strong performance and positive business momentum:
Bezeq also announced ambitious acquisition plans, signing a Memorandum of Understanding to acquire Excelera Telecom for $160 million and submitting a letter of intent to acquire Hot Mobile for NIS 2 billion. These strategic moves, if completed, would significantly strengthen Bezeq’s market position in the Israeli telecommunications sector.
In line with its dividend policy, the Board of Directors recommended distributing a dividend of NIS 583 million (NIS 0.21 per share) to shareholders, demonstrating the company’s commitment to returning value to investors.
Segment Performance
Bezeq Fixed-Line
The fixed-line segment reported a 4.5% increase in core revenues to NIS 979 million, with adjusted EBITDA up 1.6% to NIS 643 million. However, adjusted net profit decreased by 8.1% to NIS 216 million, primarily due to higher financing expenses resulting from the impact of the dollar-shekel exchange rate on hedging transactions.
Fiber deployment remains a key focus, with fiber subscribers representing 58% of total retail subscribers. The segment’s broadband revenues reached NIS 508 million in Q2 2025, showing growth despite the decrease in wholesale tariffs for use of the passive network.
Pelephone
Pelephone’s service revenues grew to NIS 361 million, up 3.7%, driven by continued growth in postpaid subscribers and increased ARPU. The mobile operator reported total revenues of NIS 496 million in Q2 2025.
The segment’s growth in 5G adoption has been particularly strong:
yes
The yes TV segment reported a 1.3% increase in revenues to NIS 320 million, with adjusted EBITDA rising 30% to NIS 56 million. The segment continues to transition subscribers to IP-based services, with 483,000 IP subscribers including over 100,000 fiber subscribers.
Bezeq International
Bezeq International is continuing its transition from consumer ISP focus to development of ICT business activity. The segment reported a modest 1% increase in revenues to NIS 263 million for the quarter.
Forward-Looking Statements
Beyond its revised 2025 outlook, Bezeq highlighted several regulatory developments that could impact its business, including a hearing on wholesale tariffs and the potential removal of wholesale tariff supervision. The company plans to continue its fiber deployment, targeting 2.9 million households by the end of 2025.
The planned acquisitions of Excelera Telecom and Hot Mobile represent significant strategic moves that could reshape the competitive landscape of the Israeli telecommunications market, subject to regulatory approvals and final agreements.
With strong performance across key metrics and an improved outlook for 2025, Bezeq appears well-positioned to continue its growth trajectory through the remainder of the year, leveraging its investments in fiber and 5G infrastructure while pursuing strategic acquisitions to strengthen its market position.
Full presentation:
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