Telefónica (TEF) Q1 2025 earnings summary

Executive summary

• Achieved resilient operational progress in core markets, with organic revenue up 1.3% and EBITDA up 0.6% year-over-year, despite FX headwinds and portfolio changes; customer base reached 354 million accesses, with historic low churn and record NPS.

• Strategic review ongoing, with significant progress in reducing Hispam exposure via sales of Argentina, Peru, and a binding agreement for Colombia, reallocating capital to core markets.

• Fiber rollout reached 1.5 million new premises and 75% 5G coverage in core markets; legacy network shutdowns completed in Spain, Germany, and Uruguay.

• Free cash flow from continuing operations was -€205m in Q1, impacted by FX and seasonality, with improvement expected throughout the year.

Financial highlights

• Organic revenue grew 1.3% year-over-year to €9,221m, while reported revenue declined 2.9% due to FX impacts; service revenue up 1.5% organically.

• EBITDA increased 0.6% organically to €3,014m, but fell 4.2% reported; EBITDA margin at 32.7%.

• CapEx/Sales ratio at 10.1% (Q1 2025), with CapEx intensity declining year-over-year.

• Net financial debt reduced to €27.0bn, leverage at 2.67x ND/EBITDAAL as of March 2025.

• Free cash flow from continuing operations at -€205m in Q1, with improvement expected later in the year.

Outlook and guidance

• 2025 guidance confirmed: organic growth in revenue, EBITDA, and EBITDAAL-CapEx; CapEx/Sales to remain below 12.5% organically.

• Free cash flow expected to be stable and similar to 2024, with acceleration in the second half of the year.

• Dividend of €0.30 per share for 2025, split between December 2025 and June 2026.

• Strategic review conclusions to be communicated in H2 2025.