Vodafone (VOD) Q1 2026 earnings summary

Executive summary

• Achieved 5.5% service revenue growth and 4.9% EBITDA/EBITDAaL growth in Q1 FY26, in line with expectations.

• Completed the Vodafone Three UK merger, forming the leading mobile operator, with integration and network improvements underway.

• Strong growth in emerging markets, especially Africa and Türkiye, with digital services and IoT contributing significantly.

• Germany showed sequential improvement, with churn at a four-year low and a focus on value over volume.

• FY26 financial guidance reiterated, including the impact of the UK merger.

Financial highlights

• Group service revenue grew 5.5% year-over-year to €7.9bn in Q1 FY26.

• Adjusted EBITDA/EBITDAaL increased by 4.9% year-over-year to €2.7bn, with margin up 0.2 percentage points.

• Africa delivered strong growth, with Egypt up 43.9% and Vodacom Internationals up 12.6% year-over-year.

• Double-digit free cash flow growth per share expected, supported by a significant buyback program.

• Operating profit down 34.3% to €1.0bn due to prior year one-off gain from Indus Towers sale.

Outlook and guidance

• FY26 guidance maintained: Adjusted EBITDAaL of €11.3–€11.6bn and adjusted free cash flow of €2.4–€2.6bn, including UK merger impact.

• UK merger expected to contribute €0.3bn EBITDAaL and -€0.2bn FCF for 10 months in FY26.

• Germany expected to return to service revenue growth during the year as negative impacts subside.

• Service revenue growth in other Europe expected to remain positive for the year, with stronger performance in the second half.

• Leverage ratio expected in the lower half of the 2.25–2.75x range.