Deep dive · Telecoms · Accounts to February 2025

Inside the accounts · How does TalkTalk make its money?

TalkTalk's wholesale arm made £296m; its consumer brand lost £13m, and the group lost £465m before tax

TalkTalk Telecom Group Limited runs two businesses: TalkTalk, which sells broadband to 2.3 million households, and PXC, which sells lines wholesale to 750 other providers over a network that reaches about 96% of UK homes. Its accounts for the year to 28 February 2025 were its last before administration. They show revenue down 7% to £1,412m, £274m of headline EBITDA that did not cover the cost of its leases and debt, a £466m loss, and a warning from the directors that it might not be able to carry on. Where a figure says something about how the business runs, we explain it.

CompanyTalkTalk Telecom Group Limited · 07105891

Accounts readAccounts to February 2025 PDF ↗filed 5 August 2025

ByJames Sproule · 27 October 2026

Reading time10 min read

£1.41bnRevenue, down 7%

£296mHeadline EBITDA at PXC, the wholesale arm; TalkTalk lost £13m

£466mLoss for the year, from £153m

£1.97bnNet debt including leases

In 60 words

The answer

TalkTalk makes its money from monthly bills: from 2.3 million households under its own brand and from 750 providers that rent lines from PXC, its wholesale arm. In 2024/25 revenue fell 7% to £1,412m. Headline EBITDA of £274m, nearly all of it from PXC, didn't cover £264m of depreciation and £201m of finance costs. With one-off charges, it lost £466m.

Since the accounts, from news reports

What happened next

These accounts were signed on 14 July 2025 (p. 41). No later accounts have been filed at Companies House. What follows comes from news reports, not from the accounts, and none of its figures appear anywhere else on this page.

5 October 2026: BT buys the businesses. BT Group said it had acquired TalkTalk Telecommunications Limited and PlatformX Communications Limited "on a debt-free basis", buying TalkTalk's consumer and wholesale businesses out of administration (The Register). Alvarez & Marsal Europe was appointed administrator, and the businesses were sold "through a pre-pack administration" (IBTimes UK).
About 2.5 million customers. "About 1.5 million retail customers and one million wholesale customers" (IBTimes UK). The accounts counted 3.19 million broadband customers 19 months earlier (p. 9).
About £400m, by BT's reckoning. BT put the "total cash impact" at "approximately £400 million in its current financial year", "including the acquisition consideration and other costs" (The Register). That is BT's cost, not a figure from TalkTalk's accounts.
Staff move to BT. "All 900 jobs across TalkTalk and PXC will transfer directly to BT", according to IBTimes UK. The accounts show an average of 1,570 employees in 2024/25 (p. 54).
A competition review. The Secretary of State, Lisa Nandy, issued a Public Interest Intervention Notice under section 42 of the Enterprise Act 2002, and the Competition and Markets Authority was asked to report to her by 19 October 2026. BT says the businesses "will operate separately and continue to compete pending the regulatory review" (The Register). The reports don't give the outcome.

Not in the accounts. The administration, the price BT paid and what TalkTalk's lenders recovered. None of the reports gives a figure for TalkTalk's debts at the time of the sale.

How it is paid

Rent the lines, sell them twice

TalkTalk owns equipment in more than 3,000 telephone exchanges but rents most of the lines that reach homes, chiefly from Openreach, "our biggest supplier" (pp. IFC and 5). It sells access to those lines in two ways, and since 1 March 2024 it has run them as two separate businesses (p. 2).

The network

Rent the last mile

It buys lines from Openreach and from fibre builders including CityFibre, Community Fibre and Freedom Fibre. 25% of its full-fibre customers are on these alternative networks (p. 5).

Cost of sales £720m (p. 40)

PXC

Sell wholesale

"PXC is the UK's largest wholesale aggregator platform and manages the Group's network" (p. IFC). 750 partners resell its broadband and Ethernet to homes and businesses (p. IFC).

76,400 Ethernet lines (p. 10)

TalkTalk

Sell to households

"The fourth largest ISP in the UK" (p. IFC), with 2.3 million customers. Average monthly revenue per on-net customer fell 28p to £25.46, "due to contractual price rises offset by the reduction of usage and boosts" (p. 4).

Monthly churn 2.0%, from 1.9% (p. 9)

Up front

Pay to win customers

Commissions to retailers and agents, and the cost of connecting each customer, are held on the balance sheet and spread over an expected 50 to 120 months (p. 49).

£384m held; £142m charged in the year (pp. 49, 53)

What this means for TalkTalkRevenue moves with the number of lines and the price of each. In 2024/25 the broadband base fell by about 420,000, about 277,000 of them at TalkTalk, "due to our decision to refocus our acquisition strategy and deliberately retrench from unprofitable segments and customers" (p. 4). Price rises didn't make up for the lost customers: revenue fell £106m. Because much of the network is rented, a smaller base cuts costs too, and cost of sales fell £52m (p. 40).

Not disclosed. How revenue splits between broadband, phone, TV and Ethernet, how much TalkTalk pays Openreach, or what PXC charges TalkTalk for its lines. The only split is by business, before £526m of sales between the two are taken out (p. 53).

The income statement

The broadband company on one page

Revenue of £1,412m, less £720m of cost of sales and £418m of running costs, left £274m of headline EBITDA, up from £251m. Below that, depreciation, finance costs and £317m of one-off ("non-headline") items turned it into a pre-tax loss of £465m, and £466m after tax (pp. 5 and 40).

From £1.41bn of revenue to £274m of headline EBITDA, 2024/25Cost of sales is mostly what TalkTalk pays network owners such as Openreach for lines. Running costs are before one-off ('non-headline') items.

Totals
Costs and charges
Income and credits

Consolidated income statement, p40; business and financial review, p5.

Then everything else: from £274m to a £466m lossEach bar is one step. The costs and charges below EBITDA came to £762m; IP address sales brought in £22m.

Totals
Costs and charges
Income and credits

Headline EBITDAbefore one-off items£274m

Depreciation and amortisationincluding leased network assets−£264m

Interest and feeson debt and leases−£153m

Impairmentsmostly £177m of goodwill−£181m

Separation and other projectsincludes a £19m contract penalty−£78m

Refinancing feeswritten off in the year−£48m

Copper to fibrerunning old and new networks−£32m

IP address salesone-off income£22m

Joint ventures and taxYouView and tax−£6m

Loss for the yearstatutory−£466m

Consolidated income statement, p40; non-headline items, p6; note 6, p57.

£177m

of goodwill written off: £124m for PXC and £53m for TalkTalk. Both businesses were valued at a multiple of earnings, with a mean multiple of 7, and both came out below their book value (pp. 3 and 60).

£72m

of the £201m of net finance costs was interest on leases, against £85m on notes and loans. Another £48m was refinancing fees and written-off costs (note 4, p. 55).

What this means for TalkTalkThe company reports a "headline" result that strips out one-off items, and its managers are paid on it: "Senior management compensation schemes are based on financial performance measures presented in this report" (p. 5). On the statutory basis, EBITDA was £5m, not £274m (p. 40). Cutting costs did lift headline EBITDA: running costs fell £77m, "mainly due to cost transformation activities" (p. 4). But the £274m was less than depreciation and interest together. TalkTalk paid no corporation tax in cash (p. 42), and has £578m of past tax losses it hasn't been able to use (p. 57).

Not disclosed. What the £418m of headline running costs is spent on. The accounts give £118m of staff costs (p. 54) and a few other lines, but no breakdown of the rest, such as marketing, IT or customer service.

The finding

PXC earns it, TalkTalk loses it

The wholesale arm made the money. PXC had revenue of £1,169m, gross profit of £473m, up from £404m, and headline EBITDA of £296m (p. 53). Its revenue includes the lines it sells to TalkTalk.

The consumer brand didn't. TalkTalk's revenue fell from £805m to £769m and its gross profit from £342m to £239m. Its headline EBITDA was a loss of £13m, after a loss of £22m the year before (p. 53).

Fewer, better customers. The company says shrinking TalkTalk's base is "a more profitable and cash generative outcome for the business" (p. 4). Its recommendation score (NPS) rose 6 points to +21.7, and 22% of the base is now on full fibre, from 15% (p. 4).

Two businesses: PXC wholesale and TalkTalk consumerBefore £526m of sales between the two are removed. PXC made £296m of headline EBITDA; TalkTalk lost £13m.

PXC (wholesale)
TalkTalk (consumer)

Revenue£769.0m

Gross profit£239.0m

Note 2, segmental reporting, p53.

123,000

household subscribers on older GFast and FTTC lines were sold on 30 June 2025, for an estimated £30m. Origin's customers went on 18 March 2025, for about £20m. In both cases "the customers will continue to utilise network services from the Group through a wholesale relationship" (p. 79).

£22m

from selling internet (IPv4) addresses "which are surplus to our needs", down from £44m. It is counted as one-off income (p. 6).

850,000 fewer broadband customers in four yearsOn-net broadband customers at each February year end. FY21 was an eleven-month year.

Broadband customers, millions

Key performance indicators, p9.

What this means for TalkTalkThe group was selling households and keeping the lines. Customers sold to other providers still pay PXC through their new supplier, so wholesale revenue stays while the cost of serving the customer goes. That fits the numbers: the consumer business lost money before interest, the wholesale business didn't. It also explains the £124m goodwill write-down at PXC: even the profitable half was valued below its book value (p. 3).

Not disclosed. How much of PXC's £1,169m came from TalkTalk and how much from outside partners, and how the £296m of PXC's EBITDA would look if it charged TalkTalk a different price. The sale price of the 123,000 subscribers is an estimate, partly "contingent on timely migration and the churn of the customers" (p. 79).

Where the money goes

Leases came first

£154m of cash from operations. Down from £268m, largely because TalkTalk paid down what it owed suppliers: trade payables fell from £470m to £344m (pp. 42 and 71). The working-capital outflow of £86m was "largely driven by the repayment of a material supplier" (p. 7).

£211m on leases. TalkTalk leases "network equipment, properties and co-location space at exchanges and data centres" (p. 66). Lease payments, £139m of capital and £72m of interest, came to more than all the cash its operations produced (p. 42).

Borrowing made up the gap. Net new borrowing of £171m, and £147m repaid by its parent companies, covered leases, investment and £95m of interest and finance costs. Cash still fell £26m to £67m (p. 42).

Lease payments took more cash than the business generatedCash in 2024/25. Cash fell £26m to £67m.

Cash generated
Cash spent
Cash raised

Cash from operationsafter £115m paid down to suppliers£154m

Lease paymentsnetwork circuits, exchange space, offices−£211m

Investmentsoftware, network, routers−£101m

Interest and finance costson borrowings, including fees−£95m

Paid for Origin and Virtual1bought from its own parent−£81m

Net new borrowing£424m drawn, £253m repaid£171m

Repaid by parent companiesintercompany loans£147m

Consolidated cash flow statement, p42.

£77m

"Free cash flow"

The company's own measure, down from £113m. It is calculated before £211m of lease payments and £119m of interest and fees (p. 7).

£101m

Capital expenditure

7.4% of revenue, down from 8.8%, mostly on full fibre and the network that links its exchanges (p. 7).

£15m

Headroom

Undrawn committed facilities at the year end, from £76m (p. 72). Net debt excluding leases rose £221m to £1,206m (p. 7).

What this means for TalkTalkBecause the network is largely leased, much of its cost sits below EBITDA, as depreciation and interest on leases, and never in "running costs". The cash still goes out. Suppliers had also been paid late: "medium term working capital support" was needed for "a normalisation of current extended payment terms" (p. 45). The average credit period on trade payables was 75 days, down from 85 (p. 71).

Not disclosed. Which supplier was repaid, or how much was overdue to suppliers at the year end.

Borrowing

£1.27bn of debt, refinanced and repriced

A deal in December 2024. £1,014m of borrowings were due within a year in February 2024, including £685m of senior notes (p. 72). On 19 December 2024 the group refinanced with "existing shareholders and lenders", who extended the debt to September 2027 and March 2028; shareholders put in £235m in cash (p. 2).

Six layers. £562m of first-lien notes at 8.25%, an £88m first-lien loan, £332m of second-lien notes at 11.75%, a £52m second-lien loan, a £181m second-lien "new money facility" and £58m drawn on a receivables facility: £1,273m in all (pp. 72 and 73).

Interest can be added to the debt. The second-lien interest "can be fully capitalised", and the first two first-lien payments could be made in kind for a 0.5% premium (p. 73). The average interest rate rose to 7.8% from 6.1% (p. 55).

What the market thought TalkTalk's bonds were worthThe second-lien notes were valued at 29p for every £1 owed, the first-lien at 82p (our arithmetic).

Owed
Market value at 28 February 2025

First-lien notes, 8.25%due September 2027£463m

Second-lien notes, 11.75%due March 2028£96m

Note 16, p72.

£1,966m

Net debt with leases

£1,273m of borrowings and £760m of lease liabilities, less £67m of cash, up from £1,785m (p. 72).

£48m

Cost of refinancing

£40m of costs on the refinancing, all expensed, and £8m of old fees written off (p. 55).

£235m

From shareholders

Cash raised in the refinancing (pp. 2 and 55). No new shares were issued: share capital and premium are unchanged at £685m (p. 43).

What this means for TalkTalkThe lenders' own market told the story. At 28 February 2025, ten weeks after the refinancing, the £562m of first-lien notes had a market value of £463m and the £332m of second-lien notes £96m (p. 72): 82p and 29p for every £1 owed (our arithmetic). Lenders had agreed new covenants, including a minimum cash test that needed a 13-week cash forecast every month (p. 73).

Not disclosed. Who the lenders are, which facility the shareholders' £235m sits in, or how much interest was added to the debt rather than paid.

Staff and pay

1,570 people and £118m of pay

£118m of staff costs, down 5%Excluding £13m of staff costs counted in one-off items. £75,200 a head (our arithmetic).

2023/24
2024/25

Wages and salaries£102m

Employer National Insurance£11m

Pensionsdefined contribution£5m

Note 3, p54.

Who the 1,570 people areMonthly average employed in 2024/25. Each square is 1%.

Administration: 1,154
Sales and customer management: 416

Note 3, p54.

A quarter fewer people. The average workforce fell 24% to 1,570, from a restated 2,065. Sales and customer management halved, from 828 to 416 (p. 54). At the year end there were 1,705 employees (p. IFC).

£75,200 a head. Staff costs fell 5% to £118m, so cost per average employee rose from £60,000 (our arithmetic from p. 54). A further £13m of staff costs, against £4m, sits in one-off items (p. 54).

Real living wage. "The Group pays all employees the real living wage" (p. 29).

What this means for TalkTalkStaff are a small part of TalkTalk's costs: £118m against £1,412m of revenue, about £8 in every £100 (our arithmetic). The bigger costs are the lines it rents and the leases on its network. Separating PXC and TalkTalk brought "employee related provisions, IT platform related provisions and advisory costs" of £60m (p. 6).

Not disclosed. How the employees split between PXC and TalkTalk, or how many redundancies the separation involved.

Ownership and pay

Who owns it, and what they take out

No majority

Shareholders

"TalkTalk Holdings is owned by a number of private equity investors, none of which has a majority shareholding" (p. 44).

£0

Dividends

None in 2024/25 or the year before, "due to insufficient distributable reserves" (p. 7).

−£458m

Net liabilities

Total liabilities of £2,737m against assets of £2,279m, from net assets of £74m a year earlier (p. 41).

£842k

Highest-paid director

£516,875 of salary, a £284,000 bonus, £17,025 of benefits and £24,089 of pension, against £618,903 the year before (p. 54). The accounts don't name the director.

£126m

Sales to owners' companies

Network and transitional services to TalkTalk Business Direct and TFP Telecoms 2, "ultimately owned by the major shareholders" of the parent (p. 79).

£81m

Paid to its parent

For Origin and Virtual1, transferred from TalkTalk Finco Limited in the refinancing (p. 50). TFP Telecoms 2 was bought from shareholders for £6.5m (p. 79).

What this means for TalkTalkThe group traded heavily with companies its owners control. It sold TalkTalk Business Direct to a related party in September 2023, then supplied it and TFP Telecoms 2 with £117m of network services in 2024/25 (p. 79). Some of its properties are leased from a company "of which the Chairman is a controlling owner", on terms the directors consider "to be at market rates" (p. 79). Its auditor's fees were paid by TalkTalk Holdings Limited "and not recharged" (p. 53).

Not disclosed. Which private equity investors own TalkTalk Holdings, or their stakes; the accounts name neither. They also don't give the audit fee.

In the directors' words

Going concern: a warning in the accounts

What the accounts said was comingQuarters from December 2024. The second-lien debt is due in March 2028, beyond the right-hand edge.

In the year
After the year end
Due dates

Dec 24Mar 25Jun 25Sep 25Dec 25Mar 26Jun 26Sep 26Dec 26Mar 27Jun 27Sep 27

Refinancing

19 Dec

Customer books sold

Mar and Jun

Accounts signed

14 Jul

Going-concern period

to July 2026

First cash interest, first lien

May

First leverage test

31 Aug

First-lien debt due

Sep

Strategic report p2; note 1 p45; note 16 pp72-73; note 25 p79.

The Directors therefore acknowledge that these risks represent a material uncertainty that may cast significant doubt upon the Group's ability to continue as a going concern.
Note 1, going concern, p. 45

The Group would require a waiver of its minimum liquidity covenant as well as potentially additional funding, which is currently being discussed but is not currently committed.
Note 1, going concern, p. 45

The Group's ability to fund the first cash interest payment under its first lien financing facilities due in May 2026.
Note 1, going concern, a key risk, p. 45

In plain termsSeven months after the refinancing, the directors said the group could run short of cash. Their plan relied on selling "certain non-core assets", agreeing payment schedules with key suppliers, further cost cuts and "the continued support of the Group's key financial stakeholders, including its shareholders and secured creditors" (p. 45). If those failed, it would need lenders to waive its cash covenant and probably new money. The group "was fully compliant with all its debt covenants during FY25" (p. 4). The auditor flagged the same material uncertainty; its opinion is not modified (p. 37).

Not disclosed. The minimum cash level the covenant requires, the forecast cash at its lowest point, or which non-core assets were to be sold beyond the two customer books sold after the year end.

Two years side by side

Year on year

2024/25 against 2023/24Percentage change, one scale. Profit is left off: the pre-tax loss went from £153m to £465m, and net assets of £74m became net liabilities of £458m.

Revenue£1,518m → £1,412m-7%

Gross profit£746m → £692m-7%

Headline running costs£495m → £418m-16%

Headline EBITDA£251m → £274m+9%

Net finance costs£135m → £201m+49%

Broadband customers3.60m → 3.19m-11%

On-net ARPU£25.74 → £25.46-1%

Average employees2,065 → 1,570-24%

Cash from operations£268m → £154m-43%

Borrowings£1,078m → £1,273m+18%

Income statement p40, balance sheet p41, cash flow p42, notes 3-4 pp54-55, KPIs pp9-10.

Show the figures as a table

Measure	2024/25	2023/24 (restated)
Revenue	£1,412m	£1,518m
PXC revenue	£1,169m	£1,205m
TalkTalk (consumer) revenue	£769m	£805m
Gross profit	£692m	£746m
Headline EBITDA	£274m	£251m
Statutory EBITDA	£5m	£242m
Operating loss	−£264m	−£18m
Net finance costs	£201m	£135m
Loss before tax	−£465m	−£153m
Loss for the year	−£466m	−£153m
Cash from operations	£154m	£268m
Borrowings	£1,273m	£1,078m
Lease liabilities	£760m	£800m
Cash at year end	£67m	£93m
Net (liabilities)/assets	−£458m	£74m
Broadband customers	3.19m	3.60m
Average employees	1,570	2,065
Dividends paid	£0	£0

The 2023/24 figures are restated: Origin and Virtual1 are included as if they had always been part of the group, and leases of exchange space are corrected. As first reported, 2023/24 revenue was £1,472m and the pre-tax loss £127m (p. 50).

Quick answers

Questions about TalkTalk

How does TalkTalk make its money?

Was TalkTalk profitable?

No. In the year to 28 February 2025 it made a pre-tax loss of £465m and a loss after tax of £466m, against £153m the year before (restated). Before one-off items its headline EBITDA was £274m, but that didn't cover £264m of depreciation and amortisation and £153m of headline finance costs.

Who owned TalkTalk?

TalkTalk Telecom Group Limited's ultimate parent is TalkTalk Holdings, which its accounts say 'is owned by a number of private equity investors, none of which has a majority shareholding'. The accounts don't name them.

How much debt did TalkTalk have?

£1,273m of borrowings at 28 February 2025, after a refinancing in December 2024, plus £760m of lease liabilities. Net debt including leases was £1,966m. The market value of its £332m of second-lien notes was £96m, and of its £562m of first-lien notes £463m.

Did TalkTalk pay dividends?

No. None was paid in the year to February 2025 or the year before, 'due to insufficient distributable reserves'. The group had net liabilities of £458m at the year end.

Who bought TalkTalk?

BT Group. News reports on 5 October 2026 said BT had acquired TalkTalk Telecommunications Limited and PlatformX Communications Limited (PXC) out of administration, on a debt-free basis, with a cash impact for BT of about £400m. That is from the reports, not from TalkTalk's accounts, which were signed in July 2025.

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