freenet (FNTN) Q1 2025 earnings summary

Executive summary

• Revenues increased as expected in Q1 2025, with both Mobile Communications and TV/Media segments contributing positively.

• Adjusted EBITDA for Mobile Communications remained stable at EUR 126.1 million, while TV/Media showed significant growth.

• Free cash flow was EUR 75.8 million, trending in line with guidance and internal planning.

• Customer growth in both segments was moderate, with postpaid mobile subscriptions up 53,000 and waipu.tv surpassing 2 million customers.

• Subscriber base grew by 90.9 thousand to 10.24 million, despite a decline in freenet TV subscribers.

Financial highlights

• Group revenues rose 1.7% year-over-year to EUR 604.4 million; gross profit up 2.8% to EUR 236.4 million, with gross margin at 39.1%.

• Adjusted EBITDA was EUR 126.1 million, down 0.8% year-over-year, impacted by EUR 4 million in additional mobile marketing spend.

• TV/Media segment adjusted EBITDA increased by 8.4% to EUR 29.7 million, with margins around 60%.

• Free cash flow for Q1 2025 was EUR 75.8 million, exceeding consensus and prior expectations.

• CapEx at EUR 8.6 million, with full-year guidance at EUR 55 million likely difficult to reach.

Outlook and guidance

• Full-year 2025 guidance confirmed: adjusted EBITDA EUR 520–540 million, free cash flow EUR 300–320 million.

• Mobile Communications segment expected to deliver adjusted EBITDA of EUR 420–440 million; TV/Media segment EUR 115–135 million.

• Moderate growth anticipated in postpaid customers and revenues; noticeable growth in waipu.tv subscribers, with a continued decline in freenet TV subscribers.

• Dividend per share expected to increase, supported by stable free cash flow.

• 2028 ambition: EBITDA ≥ EUR 600 million, FCF ≥ EUR 330 million, assuming no M&A or major market disruptions.