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, supported by strong customer engagement, record NPS, and low churn.

• Strategic review ongoing, with significant progress in reducing Hispam exposure through completed sales of Argentina and Peru and a binding agreement for Colombia.

• Customer base reached 354 million accesses, with historic low churn and improved NPS, reflecting operational efficiency.

• Free cash flow from continuing operations was -€205m in Q1, impacted by FX and seasonality; leverage temporarily increased to 2.67x.

Financial highlights

• Organic revenue grew 1.3% year-over-year, while reported revenue declined 2.9% due to FX impacts; EBITDA margin at 32.7%.

• EBITDA increased 0.6% organically; CapEx/Sales ratio at 10.1%, with CapEx intensity declining year-over-year.

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

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

• Net income from continuing operations: €427m (-26.0% y-o-y); adjusted net income €544m (-18.7% y-o-y).

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 versus 2024, with acceleration expected through the year.

• Shareholder remuneration: €0.30/share in 2025, split between December 2025 and June 2026.

• Strategic review conclusions to be communicated in H2 2025.