Koninklijke KPN (KPN) Q4 2025 earnings summary

Executive summary

• FY 2025 service revenues grew 2.7% year-on-year, with all segments contributing to growth and adjusted EBITDA AL rising 5.1% to €2,636m, exceeding guidance.

• Free cash flow increased 5.8% to €952m, supported by strict cost control and a €10m reduction in indirect OpEx.

• Record net additions in consumer broadband, strong SME-driven business growth, and wholesale growth led by sponsored roaming.

• Fiber footprint expanded by 440,000 homes passed and 399,000 connected, reinforcing market leadership.

• Strategy focused on network investment, digital transformation, customer base growth, and operational simplification, supporting ambitions for 3% annual service revenue and EBITDA growth, and 7% free cash flow growth.

Financial highlights

• Adjusted revenues up 3.5% year-on-year to €5,829m; Q4 adjusted revenues up 2.7% to €1,484m.

• Adjusted EBITDA AL margin improved to 45.2% (+70bps); net profit for FY 2025 was €855m (+0.9% y-o-y), aided by lower taxes and financing costs.

• Free cash flow per share increased 7.1% to €0.247; free cash flow margin over adjusted revenues up nearly 40bps.

• Capex for FY 2025 was €1,263m, representing 21.7% of adjusted revenues.

• ROCE improved to 14.7%, up 30bps year-on-year; leverage ratio stable at 2.4x.

Outlook and guidance

• 2026 guidance: service revenue growth of 2–2.5%, adjusted EBITDA AL ~€2,670m, Capex ~€1.25bn, and free cash flow over €950m.

• Dividend per share to grow 10% to €0.20 in 2026, with a €250m share buyback planned.

• Capex to fall below €1bn by 2027, supporting strong cash generation; mid-term ambitions reaffirmed for 3% CAGR in service revenue and EBITDA, 7% in free cash flow.

• Dividend payout around 80% of FCF as of 2026, with progressive DPS growth and share buybacks.

• Targeting €100m in annual net indirect OpEx savings by 2030.