1&1 (1U1) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw a slight decline in customer contracts and revenue, mainly due to ongoing migration to the company's own mobile network and competitive pressures, with 50,000 customers migrated daily from the Telefónica network.

• Service revenue remained stable, but hardware and other revenue declined, especially in smartphones.

• EBITDA and net income decreased year-over-year, reflecting increased expenses and network investments.

• Over 1,000 active antenna sites and all core and edge data centres are operational, with migration of over 12 million customers to the new network on track for completion by end-2025.

• Regulatory and legal developments include spectrum access conditions and a Federal Cartel Office assessment on delayed antenna site provision.

Financial highlights

• Revenue for Q1 2025 was €1,018.5m, down 0.6% year-over-year; service revenue stable at €821.9m.

• EBITDA in the Access segment was €222.9m, down 0.8%; Mobile Network segment EBITDA was -€67.0m, reflecting network rollout costs.

• Net income was €47.2m, down from €82.7m in Q1 2024; free cash flow declined to €15.8m from €78.5m year-over-year.

• Gross profit dropped from €299m to €261m, mainly due to increased costs in the mobile network segment.

• Operating profit was €73m, down from €118m in Q1 2024.

Outlook and guidance

• 2025 guidance is confirmed, expecting a stable contract base and service revenues at prior year levels (€3.3bn), with churn from migration to continue until year-end.

• EBITDA is projected to decrease by 3.4% to approximately €571m, mainly due to the expiration of the Telefónica roaming agreement and migration costs.

• Access segment EBITDA expected at ~€836m; Mobile Network segment EBITDA at ~-€265m, with migration and network service costs to decline after 2025.

• CapEx for 2025 is expected to be €450m, up from €291m in 2024.