Telefónica (TEF) Q4 2025 earnings summary

Executive summary

• Delivered on all 2025 financial commitments, with accelerating Q4 momentum, strong B2B and commercial performance in Spain and Brazil, and robust O2 brand in Germany.

• Strategic focus on core markets (Spain, Brazil, Germany, UK), simplification, and operational efficiency, including significant portfolio transformation and workforce restructuring.

• Continued investment in network leadership, digital services, and customer experience to drive growth.

• Transform & Grow plan and CMD framework execution on track, with a strong foundation for 2026-2030 profitable growth.

• Confirmed €0.30/share dividend for 2025, with €0.15/share paid in December and €0.15/share to be paid in June 2026.

Financial highlights

• FY25 revenue reached €35,120m (+1.5% y-o-y constant FX), adjusted EBITDA €11,918m (+2.0%), adjusted OpCFaL €5,081m (+5.9%).

• Free cash flow for FY25 at €2.8bn, exceeding guidance; Q4 FCF accelerated to €1.4bn.

• Net financial debt at €26.8bn, down €0.3bn y-o-y; leverage at 2.78x in December.

• CapEx to sales at 12.4% for FY25.

• Adjusted net income from continuing operations at €2,122m (-19.0% y-o-y).

Outlook and guidance

• 2026 guidance: revenue and adjusted EBITDA growth of 1.5–2.5% y-o-y, CapEx/revenue ~12%, FCF upgraded to ~€3.0bn.

• Adjusted OpCFaL expected to grow >2%; leverage target of ~2.5x by 2028.

• Dividend policy: €0.15/share in 2026, 40–60% of FCF base for 2027–2028.

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