NOS SGPS (NOS) Q1 2025 earnings summary

Executive summary

• Completed the Claranet acquisition, enhancing ICT and tech capabilities and expanding into the Portuguese ICT and corporate markets.

• Achieved consolidated revenue growth of 4.5% year-over-year, supported by operational transformation, AI adoption, and digitalization.

• Generated strong free cash flow, with recurring free cash flow up 9.9%, and maintained structurally lower investment needs.

• Maintained leadership in European patent applications for the second consecutive year, with 22 patents filed in 2024, mainly in AI.

• Launched Portugal’s first 5G standalone network and 5G+ (VONR) call, maintaining 5G leadership.

Financial highlights

• Consolidated revenue rose 4.5% to €421.4M, with Telco up 4.6% and Audiovisual & Cinema up 1.5%.

• EBITDA increased 4.3% to €192.3M, with margin slightly compressed by 0.1pp to 45.6%.

• Net income fell 13% to €59M due to lower extraordinary income; recurring net income up 20.8% to €55.2M.

• Free cash flow before dividends and investments grew 5.2% to €83.4M; recurring FCF up 9.9% to €64.9M.

• CapEx decreased 1.8% to €90.3M, mainly due to reduced telco expansionary investment.

Outlook and guidance

• Focus on scaling AI and digital solutions, with 125+ use cases identified and 250+ employees trained.

• B2B revenue growth expected to remain strong, while B2C faces headwinds from no price increases and increased competition.

• Further details on Claranet’s financial targets to be provided in the next quarter.

• Strategy to optimize capital allocation and maintain strong liquidity and leverage metrics.

• Continued operational transformation leveraging AI and digitalization for efficiency.