Telefónica (TEF) Q1 2026 earnings summary

Executive summary

• Revenue, adjusted EBITDA, and adjusted operating cash flow after leases (OpCFaL) grew year-over-year in both constant and current terms, reflecting solid execution of the Transform & Grow plan.

• Strong commercial momentum in Spain and Brazil, with Germany facing challenges from 1&1 migration but maintaining underlying profitability; VMO2/UK on track for guidance.

• Net financial debt reduced by €1.5bn to €25.3bn, with leverage ratio at 2.72x, progressing toward 2.5x target by 2028.

• Confirmed €0.15 per share dividend for 2026, with payment scheduled for June 2026/2027.

• Advanced exit from Hispam region, with completed or signed sales in Argentina, Peru, Uruguay, Ecuador, Colombia, Chile, and Mexico.

Financial highlights

• Q1 2026 revenue reached €8,127m, up 0.8% year-over-year in constant terms; adjusted EBITDA rose 1.8% to €2,836m; adjusted OpCFaL up 2.4% to €1,375m.

• CapEx-to-revenue ratio at 10.7% in Q1 2026; investment for the quarter was €866m.

• Free cash flow from continuing operations was €333m, reflecting typical Q1 seasonality.

• Adjusted net income from continuing operations was €482m, down 21.5% year-over-year; adjusted EPS at €0.07.

• Total accesses rose to 297.9 million, up 5.3% year-over-year; FTTH accesses increased 8.6%.

Outlook and guidance

• 2026 guidance reaffirmed: revenue and adjusted EBITDA expected to grow 1.5–2.5% at constant FX; adjusted OpCFaL to grow over 2%.

• CapEx-to-revenue ratio targeted at ~12%; free cash flow guidance for FY26 is ~€3.0bn.

• Dividend of €0.15/share confirmed for 2026.

• Leverage reduction on track toward 2.5x target by 2028.

• Mid-term (2025–2028) revenue and EBITDA CAGR of 1.5–2.5%; accelerating to 2.5–3.5% for 2028–2030.