Deep dive · Telecoms · Accounts to December 2025

Inside the accounts · How does Virgin Media O2 make its money?

Virgin Media O2 made £3.9bn before interest and write-downs, paid its owners £378m, and still lost £1.75bn before tax

VMED O2 UK Limited, trading as Virgin Media O2, is a 50:50 joint venture of Liberty Global and Telefónica. By its own estimate it has the UK's largest share of mobile and the third-largest of home broadband (p. 7). Its accounts for 2025 show £10.1bn of revenue and £3.9bn of adjusted EBITDA, almost unchanged. They also show a £1bn write-off on its broadband business, £21bn of debt, bills paid months later through lenders, and a rule that sends its spare cash to its two owners. Where a figure says something about how the business runs, we explain it.

CompanyVMED O2 UK Limited · 12580944

Accounts readAccounts to December 2025 PDF ↗filed 4 May 2026

ByJames Sproule · 4 November 2026

Reading time10 min read

£10.1bnRevenue, down 5%

£3.88bnAdjusted EBITDA, against £3.90bn

£1.75bnPre-tax loss, from a £2m profit

£378mDividends to its two owners; £850m the year before

In 60 words

The answer

Virgin Media O2 makes its money from monthly bills: mobile airtime and data, phones sold on contract, and home broadband and TV. In 2025 that brought in £10.1bn and £3.9bn of adjusted EBITDA. Depreciation took £3.0bn, interest £1.3bn, and a £1bn write-off on broadband did the rest: a £1.75bn pre-tax loss. Its owners still took £378m.

Since the accounts, from news reports

Since the accounts: job cuts

These accounts were signed on 14 April 2026 (p. 110). What follows comes from news reports, not from the accounts, and none of their figures appear anywhere else on this page.

3 November 2026: about £800m of cost cuts. Virgin Media O2 plans to "slash thousands of jobs in the UK under a push to cut its cost base by around £800m", with "around £300m of the total savings" to come from its "16,000-strong workforce", according to City AM. It hasn't said how many jobs will go.
Staff costs down about 30% by 2029. The company aims to "reduce its staff costs by around 30 per cent by 2029", and said it had "no plans to close any of its UK offices" (City AM). The accounts put 2025 staff costs at £1,234.5m (p. 126).
Still above its debt target. City AM quoted Bloomberg Intelligence: the cuts "could generate around £200m in annual gross personnel savings by 2028", with "net leverage potentially remaining close to 5.5 times earnings in 2028, above its target range of four to five times". That target comes from the owners' agreement (section 09).
No more fibre upgrades beyond what it has promised. With its results for July to September 2026, Virgin Media O2 said it will "halt investment in further fibre upgrades beyond its existing commitments to partners", and that any future fibre investment "will be supported off-balance sheet and only in non-altnet areas", according to ISPreview. The accounts put its full-fibre footprint at 8.3 million homes at the end of 2025 (p. 28).

Not in the accounts. The cost-cutting plan, the number of jobs or the cost of redundancies. The accounts' only cost target is about £600m of savings, valued in today's money, from merging O2's business arm with Daisy (p. 4).

How it is paid

Phones, broadband and a network it owns

Unlike a reseller, Virgin Media O2 owns its networks: a mobile network reaching 87% of the population with outdoor 5G, and a fixed network passing 18.8 million homes, 8.3 million of them with full fibre (pp. 3 and 28). It earns from them in four ways.

Mobile

Airtime and data

O2 and giffgaff, business mobile and wholesale to other providers. Connections rose 2.3% to 46.7 million, "driven by strong growth in IoT and wholesale connections", while contract and prepaid fell (p. 27).

£4.40bn of mobile service (our arithmetic, p. 30)

Handsets

Phones on contract

Phones are sold on instalments, and the company sells many of those instalment debts to banks, which pay it up front (p. 118). Handset revenue fell £108.4m, which the company calls "low margin" (pp. 28 and 30).

£1,178m of handset revenue (p. 30)

Home

Broadband and TV

Virgin Media's households. Revenue fell 1.1% "due to a lower customer base amid intense competition, as well as a decline in ARPU" (p. 30). Customers fell from 5.84 million to 5.79 million (p. 3).

£3,362m from homes (p. 30)

Owners' fibre

Build for nexfibre

nexfibre is a separate fibre company owned by Liberty Global, Telefónica and InfraVia. Virgin Media O2 builds its network for a fee and is its "anchor tenant" (p. 159).

£224m of building revenue, from £750m (p. 30)

Where the £10.1bn came from, 2025Mobile service is mobile revenue less handsets (our arithmetic). Bundles are split between services at their stand-alone prices (p30).

Mobile
Fixed line
Other

Mobile serviceairtime and data: O2, giffgaff, business, wholesale£4,402m

Home broadband and TVVirgin Media households£3,362m

Handsetsphones sold on contract£1,178m

Business fixed and wholesaleincluding O2 Daisy from August£551m

Building nexfibre£750m the year before£224m

Otherinsurance, smart meters, IT services£396m

Financial review, p30; note 5, p125.

−£526m

The fall in building work for nexfibre explains almost all of the £567m drop in revenue. Most of the cost went with it: "other direct costs" fell £431.5m, "primarily driven by a decrease in nexfibre construction volumes" (p. 32).

£1.37bn

of TV programming the group has committed to buy. "Payments to programming vendors have represented a significant portion of our operating costs" (note 31, p. 164).

What this means for Virgin Media O2The headline revenue fall isn't customers leaving. It's the company doing less building work for a sister company its owners control, and selling fewer low-margin phones. Mobile service revenue was flat at £4.40bn. The weak spot is home broadband: fewer customers paying less each, which is also the reason given for the write-off in section 05.

Not disclosed. Average revenue per customer, churn, or how many mobile connections are contract, prepaid or wholesale. The accounts send readers to the company's earnings releases for those (p. 27).

The income statement

The network company on one page

Revenue of £10,113m, less £3,151m of cost of sales, £835m of staff and £2,247m of other running costs, left £3,880m of adjusted EBITDA, against £3,897m. That is 38p of every £1 of revenue (our arithmetic). Below that line it all went (pp. 31 and 107).

From £10.1bn of revenue to £3.9bn of adjusted EBITDA, 2025Cost of sales is handsets, TV programming, interconnect and building fibre for nexfibre. Staff is after the cost of staff building the network, which is added to the network's value instead.

Totals
Costs and charges
Income and credits

Consolidated income statement, p107; financial review, pp31-32.

Then everything else: from £3.9bn to a £1.6bn lossEach bar is one step. Depreciation alone took £3.05bn: the network wears out about as fast as the business earns.

Totals
Costs and charges
Income and credits

Adjusted EBITDAbefore one-off items£3,880m

Depreciation and amortisation£876m of it on customer lists from the 2021 merger−£3,046m

Goodwill written offnon-cash−£1,022m

Restructuring and share awards−£129m

Interest on debton £21.2bn of borrowing−£1,291m

Currency and hedginga £363m gain the year before−£218m

Other items, netinterest received and other income£72m

Tax creditmostly deferred tax£136m

Loss for the yearstatutory−£1,618m

Income statement p107; note 25 p157; financial review p31; note 11 p128.

£3.05bn

of depreciation and amortisation: £1,782m on masts, cables and equipment and £1,264m on intangible assets (note 6, p. 126). £876m of it is amortisation of customer relationships and brands, an asset largely valued when Virgin Media and O2 merged in 2021 (p. 128).

£1.29bn

of interest on debt, slightly down from £1.34bn. The average rate is 5.58%, or 5.20% after hedging (note 16; going concern, p. 115).

What this means for Virgin Media O2The cash profit is large and steady, but so is the cost of owning the network. Depreciation of £3.05bn is about what the group spends each year to keep the networks current: "we've invested more than £2 billion annually in our networks and services" (p. 6), plus spectrum and the merger write-downs. EBITDA is the number the company and its lenders watch. Profit, on the statutory measure, is rarely there.

Not disclosed. How the £2,247m of other running costs splits between network, marketing, IT and customer service. The accounts give only year-on-year movements, such as network costs down £53.9m and marketing up £27.7m (p. 32).

The finding

A £1bn write-off and a currency swing made the loss

Broadband is worth less than the books said. The group tests its goodwill each year by forecasting its cash flows. At 31 December 2025 "the carrying value of £32.2 billion exceeded the value in use of £31.1 billion, resulting in a £1.0 billion goodwill impairment" (p. 129). The forecasts "continue to be negatively affected by the ongoing deterioration of the fixed-line broadband market" (p. 129).

A small change, a big number. With a discount rate 0.2 points higher, the write-off would have been £2.0bn, about double; with an EBITDA margin one point lower, £1.7bn (p. 130). The group's margin plan runs from 38.5% to 41.3% (p. 130).

Currency hedges swung the other way. Much of the debt is in dollars and euros, hedged back to pounds. Gains and losses on those hedges and on the foreign-currency debt netted to a £217.7m loss in 2025, against a £363.3m gain in 2024: a £581m swing (our arithmetic from note 25, p. 157).

£17.4bn

of goodwill still on the balance sheet, almost half of total assets of £38.1bn (pp. 109 and 128). It includes £703m added for O2 Daisy in August 2025.

£0

tax relief on the write-off. Goodwill impairment isn't deductible, which cut the tax credit by £255.4m (note 26, p. 157). The group still booked a £136.5m tax credit.

What this means for Virgin Media O2Neither item cost cash in 2025. The write-off records that the owners now expect less from the broadband business than they did; the hedging loss is the mirror of what the pound did against the dollar. But both say something real. The first is a forecast of fewer broadband customers paying less. The second shows how much of the group's result depends on markets it doesn't control, because so much of its borrowing is in other currencies.

Not disclosed. How much of the goodwill, or of the write-off, relates to broadband rather than mobile. The group reports as a single UK business (note 5, p. 125).

Where the money goes

Pay suppliers later, through a lender

£2.76bn of cash from operations, after £1.21bn of interest paid, down from £3.03bn (p. 112). Cash investment was £1.42bn (p. 112).

Bills paid months later. In 2025 £2,531.9m of day-to-day costs were paid by lenders on the group's behalf, and repaid later with interest. The arrangements stretch payment terms "from an average of 41 days to an average period that exceeds 180 days but which is less than 365 days" (pp. 134 and 142).

Kit bought the same way. £853.7m of network equipment was financed like this, so it never appears in the £1.42bn of cash investment. Total additions to the network and other assets were £2.39bn (p. 170).

Cash in and out, 2025: cash fell £555mCash went from £1,128m to £574m. Interest paid sits inside cash from operations, as the accounts present it.

Cash generated
Cash spent
Paid to shareholders

Cash from operationsafter £1.21bn of interest paid£2,763m

Investmentnetwork, IT and spectrum paid in cash−£1,383m

Supplier financing repaid, netbills and kit paid later through lenders−£933m

Borrowing, net£4.1bn raised, £4.3bn repaid−£226m

Leasescapital repaid−£176m

Hedging and other financing−£123m

Dividends to its two ownersLiberty Global and Telefónica−£378m

Dividends to minority holdersmostly the towers business−£105m

Consolidated cash flow statement, pp112-113.

£3.07bn

Supplier financing owed

At the year end, against £2.98bn. It is counted as debt and "generally due within one year" (p. 134).

£393m

"Adjusted free cash flow"

The company's own measure, down from £495m. It counts new supplier financing as cash in and repayments as cash out (p. 170).

£574m

Cash at the year end

Down from £1,128m. Liquidity, with undrawn facilities, was £1.95bn (p. 114).

What this means for Virgin Media O2Supplier financing works like a rolling loan: a bank pays the supplier on time, and Virgin Media O2 pays the bank half a year or more later. Each year about £2.5bn to £3bn goes through it, which is why billions of supplier bills appear in the cash flow statement under financing, not operations (p. 134). It flatters operating cash flow while it grows, and costs interest at about 6.3% (note 16).

Not disclosed. Which suppliers are paid this way, or which lenders provide it. Part of note 16, page 135, is missing from the copy filed at Companies House.

Borrowing

£21bn of debt, by design

£21.2bn of borrowing. £10.3bn of secured bonds, £6.3bn of bank loans, £3.0bn of supplier financing, £1.1bn of other bonds and £0.5bn more, plus £0.9bn of leases (p. 133). Net of cash, about £21.5bn: 5.6 times adjusted EBITDA (our arithmetic; the accounts print neither figure).

Refinanced all year. New dollar, euro and sterling loans and bonds pushed maturities out to 2032 and 2033; in January 2026 it refinanced more (pp. 141 and 170). Average remaining term: five years (p. 115).

No call on the owners. "It is the intention of the Shareholders that the Joint Venture ... remains a self-funding company capable of financing its activities on a stand-alone basis without recourse to either Shareholder" (p. 33).

When £21.3bn of debt falls due£3.0bn of the 2026 bar is supplier financing, which rolls over through the year. The rest of the debt runs to 2029 and beyond.

Debt due, £m

Note 16, p141.

What this means for Virgin Media O2The debt is a choice, not a crisis. The owners' agreement sets a target of 4.0 to 5.0 times adjusted EBITDA, "including the completion of periodic recapitalisations and/or refinancings" (p. 159): borrow up to the target and pay the proceeds out. The auditor, KPMG, found no material uncertainty over the group's ability to carry on (auditor's report). The risk is in the word "periodic": the group has to keep refinancing, and says "no assurance can be given" that it will be able to (p. 34).

Not disclosed. The leverage figure as the owners' agreement and the loan terms define it, or how close the group is to its covenants. The accounts say only that they "do not anticipate any non-compliance" for at least 12 months (p. 34).

Staff and pay

17,058 people and £1.23bn of pay

£1.23bn of staff costs, up 16%Before £323m of staff time was added to the value of the network (our arithmetic). About £72,400 a head.

2024
2025

Wages and salaries£951m

Employer National Insurance£128m

Pensions£79m

Share awards£76m

Note 8, p126.

Who the 17,058 people areMonthly average employed in 2025. Each square is 1%.

Sales and service: 7,003
Network and technology: 6,939
Business: 2,070
Corporate: 1,046

Note 8, p126.

More people, mostly from Daisy. The average workforce rose 7% to 17,058, from 15,932 (p. 126). Staff costs rose "primarily due to (i) incremental costs related to the O2 Daisy Transaction, (ii) annual salary uplifts and (iii) increased headcount" (p. 32).

A shift to the network. Network and technology staff rose from 4,073 to 6,939 and sales and service staff fell from 8,952 to 7,003 (p. 126). The accounts don't explain the move; some of it may be how staff were classified.

About £72,400 a head. Total staff costs of £1,234.5m divided by the average workforce (our arithmetic from p. 126). £323m of that was added to the value of the network rather than charged as a cost (our arithmetic).

What this means for Virgin Media O2Staff are about £12 of every £100 of revenue (our arithmetic), more than at a reseller, because a network owner employs the engineers who build and run it. That is why the cost cuts reported in November 2026 (section 02) aim at staff costs first: they are the largest cost the company controls directly, after the network itself.

Not disclosed. Redundancy numbers. Restructuring charges fell to £16.7m from £51.0m, "primarily due to a reduction in planned restructuring programmes" (pp. 32 and 144).

Ownership and pay

Two owners, and a rule to pay them

50:50

Shareholders

Liberty Global and Telefónica, since the joint venture was formed on 1 June 2021 (p. 114).

£1.23bn

Dividends in two years

£378.0m on 22 December 2025 and £850.0m on 20 December 2024 (p. 127), paid while the group made a loss after tax in both years.

£0

Directors' pay from the group

"The Directors are not paid for their services ... by any company within the Group. Instead, they are directly remunerated by the Shareholders" (p. 127).

£552m

Sales to the owners' companies

"Primarily" charges to nexfibre and the Tesco Mobile joint venture, and commissions from Telefónica for handset insurance, down from £1,055m (p. 160).

£222m

Paid to the owners' companies

For staff, network and technology services, and "brand and licensing fees payable to Telefónica for use of the 'O2', 'O2 Refresh' and 'Priority' brands" (p. 160).

£25.1m

Key managers' pay

Including £12.1m of share awards, against £19.4m in 2024 (p. 127). The accounts don't name them.

A dividend policy that requires VMED O2 UK Limited, subject to certain exceptions, to distribute all unrestricted cash to the Shareholders as soon as reasonably practicable following each quarterly period.
Related parties, the shareholders' agreement, p. 159

What this means for Virgin Media O2The group is run to send cash up, not to build a cushion. That is why cash halved in 2025 while the business still produced £2.76bn from operations. It also trades with its owners in both directions: it builds fibre for nexfibre, then rents lines on it, and pays Telefónica to use the O2 name.

Not disclosed. What the O2 brand fee costs on its own. It is bundled into the £222.1m with staffing and network services (p. 160). Directors' pay is set and paid by the owners, and the group "does not have access to the details" (p. 127).

In the directors' words

What could go wrong

Trading headwinds are expected to continue into 2026, with a tough outlook particularly for consumer fixed.
Chief executive's review, p. 6

As our maturing debt grows in later years, we anticipate we will seek to refinance or otherwise extend our debt maturities. No assurance can be given that we will be able to complete these refinancing transactions.
Financial review, p. 34

It is alleged that the mobile operators ... have overcharged when their handset minimum term contract expired.
Legal proceedings, p. 165

£23.8m

Ofcom fine

Imposed on a subsidiary in the fourth quarter of 2025. Ofcom has another investigation open (p. 165).

£79m

Class action claim

Against Telefónica UK, reassessed from £256m after the tribunal ruled claims before October 2015 out of time; £1.4bn against all four networks (p. 165).

£2.0bn

nexfibre's next deal

In February 2026 nexfibre agreed to buy Substantial Group, owner of YouFibre and Brsk; Virgin Media O2 would take its retail customers and sell some fibre assets to nexfibre (p. 171).

In plain termsThis isn't a business near the edge. The auditor gave a clean opinion with no going-concern warning, and the directors' test still worked with adjusted EBITDA less capex 10% lower (p. 115). The risks are slower: broadband customers going to cheaper fibre rivals, prices that can't keep rising, and a debt pile that has to be refinanced again and again.

Not disclosed. Any provision for the class action. The accounts describe the claim but give no estimate of what it might cost.

Two years side by side

Year on year

2025 against 2024Percentage change, one scale. Profit is left off: a £2m pre-tax profit became a £1,754m loss.

Revenue£10,680m → £10,113m-5%

Handset revenue£1,287m → £1,178m-8%

Home broadband and TV£3,400m → £3,362m-1%

Adjusted EBITDA£3,897m → £3,880m-0%

Depreciation and amortisation£2,853m → £3,046m+7%

Interest on debt£1,343m → £1,291m-4%

Mobile connections45.7m → 46.7m+2%

Broadband and TV customers5.8m → 5.8m-1%

Average employees15,932 → 17,058+7%

Cash from operations£3,028m → £2,763m-9%

Dividends to owners£850m → £378m-56%

Income statement p107, cash flow pp112-113, notes 5, 8 and 25, highlights p3.

Show the figures as a table

Measure	2025	2024
Revenue	£10,113m	£10,681m
Mobile revenue	£5,580m	£5,687m
Fixed-line revenue	£3,913m	£3,852m
Other revenue	£620m	£1,141m
Adjusted EBITDA	£3,880m	£3,897m
Depreciation and amortisation	£3,046m	£2,853m
Goodwill written off	£1,022m	£0
Operating (loss)/profit	−£317m	£928m
Net finance costs	£1,474m	£935m
(Loss)/profit before tax	−£1,754m	£2m
Loss for the year	−£1,618m	−£17m
Cash from operations	£2,763m	£3,028m
Borrowing (principal)	£21,239m	£21,121m
Cash at year end	£574m	£1,128m
Net assets	£10,776m	£12,808m
Mobile connections	46.7m	45.7m
Broadband and TV customers	5.79m	5.84m
Average employees	17,058	15,932
Dividends to owners	£378m	£850m

O2 Daisy is included from 1 August 2025, adding £117.2m of revenue (p. 124).

Quick answers

Questions about Virgin Media O2

How does Virgin Media O2 make its money?

Is Virgin Media O2 profitable?

Before interest, depreciation and one-off items, yes: adjusted EBITDA was £3,879.5m in 2025, almost unchanged on 2024. After £3,045.5m of depreciation and amortisation, a £1,021.7m goodwill write-off and £1,474.4m of net finance costs, it made a pre-tax loss of £1,754.1m and a loss after tax of £1,617.6m. In 2024 it made a £2.0m pre-tax profit.

Who owns Virgin Media O2?

VMED O2 UK Limited is a 50:50 joint venture of Liberty Global and Telefónica, formed on 1 June 2021. Its directors are paid by the two shareholders, not by the group, and the accounts don't say how much.

How much debt does Virgin Media O2 have?

£21,238.8m of borrowing at 31 December 2025, plus £878.6m of leases, against £573.5m of cash: about £21.5bn net (our arithmetic; the accounts print no net debt figure). That is about 5.6 times adjusted EBITDA. The owners' agreement targets 4.0 to 5.0 times.

Does Virgin Media O2 pay dividends?

Yes. It paid £378.0m to Liberty Global and Telefónica on 22 December 2025 and £850.0m on 20 December 2024. The shareholders' agreement requires it to pay out all unrestricted cash after each quarter, subject to keeping a minimum cash balance and meeting its loan terms.

Is Virgin Media O2 cutting jobs?

On 3 November 2026 City AM reported that Virgin Media O2 plans to cut thousands of UK jobs as part of about £800m of cost savings, with about £300m to come from its workforce. That is from the report, not the accounts. The accounts show an average of 17,058 employees in 2025.

→

Keep going