Koninklijke KPN (KPN) Q1 2026 earnings summary

Executive summary

• Group service revenue grew 0.6% year-over-year, led by Consumer (+1.3%), SME (+5.8%), and Wholesale (+0.8%), while Business service revenues declined 0.6% due to lower Tailored Solutions revenue (-14%).

• Adjusted EBITDA after leases (AL) rose 3.1% year-over-year to €653m, with margin up 40bps to 45.1%, driven by revenue growth and lower indirect costs.

• Net profit increased 19% year-over-year to €200m, mainly due to higher operating profit and the absence of prior one-off costs.

• Free Cash Flow declined 21% year-over-year to €101m, impacted by timing of interest payments and working capital, but operational FCF rose 10% to €374m.

• Maintained leadership in the Dutch fiber market, with 70% of the retail broadband base now on fiber, 79k new homes connected, and 58k homes activated in Q1 2026.

Financial highlights

• Adjusted revenues increased by 2.1% year-over-year to €1,447m, and adjusted EBITDA AL margin improved by 40bps to 45.1%.

• Operational Free Cash Flow increased 10% year-over-year to €374m, while Capex decreased 5.1% to €279m.

• Indirect expenses were EUR 3 million lower year-over-year, despite wage indexation.

• Liquidity position at €1,846m, with €771m in cash and short-term investments.

• Leverage ratio stable at 2.4x at quarter-end.

Outlook and guidance

• Full-year 2026 outlook and mid-term ambitions reiterated: adjusted EBITDA AL ~€2,670m, Capex ~€1.25bn, Free Cash Flow >€950m, and regular dividend per share of €0.20.

• Targeting 2–2.5% average annual growth in service revenues and up to €1bn share buyback for 2024–2027.

• Expect lower top-line growth in Q2, with momentum picking up in the second half of the year.

• B2B expected to recover in the second half, with SME growth around 5%.

• Wholesale growth for the year now expected around 2%, down from previous 3% target.