Vodafone (VOD) Q4 2025 earnings summary

Executive summary

• FY2025 results met expectations, with service revenue up 5.1% year-over-year and Adjusted EBITDAAL up 2.5%, driven by a transformation agenda focused on customers, simplicity, and growth.

• Portfolio reshaped through sales of Spain and Italy, UK merger approval with Three, and Vantage Towers monetisation; capital structure reset and balance sheet strengthened.

• Customer experience improved, with NPS leadership/co-leadership in 9 of 15 markets, record NPS and reduced churn in key markets like the UK and Germany, and over 7,700 role reductions for simplification.

• Digital and financial services expanded rapidly, with 205 million IoT connections and 88 million financial services customers.

• Two-thirds of adjusted free cash flow now comes from growth markets, with Germany as a turnaround priority.

Financial highlights

• Delivered FY2025 group guidance for both EBITDA/EBITDAAL and adjusted free cash flow, with Adjusted EBITDAAL at €11.0bn, up 2.5% year-over-year, and Adjusted FCF at €2.5bn, exceeding guidance.

• UK EBITDA/EBITDAAL grew 8% year-over-year, with record-low churn and NPS leadership.

• Returned €2 billion to shareholders via buybacks and €1.8 billion in dividends; total capital return of €3.7bn in FY25, with new €2 billion buyback program initiated.

• Vantage Towers and Vodafone Investments contributed strong dividend flows.

• Statutory results show a net loss of €3.7bn, mainly due to a €4.5bn impairment charge.

Outlook and guidance

• FY2026 guidance (pre-UK merger): Adjusted EBITDA/EBITDAAL €11–11.3 billion, Europe €7.2–7.4 billion, Adjusted FCF €2.6–2.8 billion.

• UK merger with Three UK expected to close H1 2025, adding €400 million EBITDA/EBITDAAL but €200 million adjusted free cash flow drag in FY2026 due to integration investments.

• Full run-rate of £700 million annual cost and CapEx synergies from UK merger expected by year five.

• Medium-term outlook targets sustainable adjusted free cash flow growth and per-share growth, with 67% of FCF from growth markets.