Telefónica net profit rises 21.6% as group upgrades 2026 targets

Details: Manny Pham; Category: Operators; 12 November 2026; 1128 views

Telefónica reported a net profit of €1.33 billion from continuing operations in the first nine months of 2026, up 21.6% year on year, as stronger earnings and cash generation prompted the Spanish telecoms group to raise its full-year financial targets.

Revenue increased by 2.8% to €24.83 billion, while adjusted EBITDA grew by 4.6% to €8.85 billion at real exchange rates, its strongest increase in a decade. Adjusted operating cash flow after leases rose 6.1% to €4.02 billion, and free cash flow from continuing operations increased by 10.7% to €1.96 billion.

In the third quarter, revenue grew by 4.8% to €8.43 billion and adjusted EBITDA rose by 6.2% to €3.08 billion. Net profit from continuing operations reached €860 million, up 151.3% on the same period last year.

Telefónica has raised its 2026 growth target for adjusted EBITDA to slightly above 2.5%, from a previous range of 1.5% to 2.5%. Its target for adjusted operating cash flow after leases has increased to above 3.5%, while its free cash flow forecast has risen to approximately €3.1 billion from €3 billion. The group has also introduced a target for service revenue growth of around 1.5%.

Performance was driven primarily by Spain and Brazil. Telefónica Espana increased third-quarter revenue and adjusted EBITDA by 2.6%, with churn falling to a record low of 0.7%. Its revenue grew by 2.5% in the first nine months, the strongest rate in more than 15 years.

In Brazil, third-quarter revenue rose by 7.2% at constant exchange rates, while adjusted EBITDA increased by 9.7%. The business ended September with a record 120.3 million accesses, including 4 million customers on its Vivo Total converged offering.

Germany continued to face declines in revenue and EBITDA, although it recorded its fifth consecutive quarter of net customer additions across mobile and fixed broadband. In the UK, Virgin Media O2 reaffirmed its 2026 financial targets and announced a transformation programme targeting annualised cost savings of around £800 million by 2029.

Telefónica reduced net financial debt by €1.6 billion during the first nine months, leaving it at €25.19 billion at the end of September. The company said this was its largest debt reduction over the first nine months of a financial year since 2021.

Group customer connections increased by 5% year on year to 302.1 million, while its fibre footprint reached 164.1 million premises. Telefónica also confirmed a cash dividend of €0.15 per share for 2026, payable in June 2027.

Executive chairman Marc Murtra attributed the results to the execution of the group's Transform & Grow plan, which saw the operator withdraw from Spanish speaking Latin markets. It is currently looking to sell its Venezuelan footprint but no formal deal has been signed.

Murta said the strategy has delivered simultaneous growth in its key financial metrics for four consecutive quarters. He said the improved performance had given Telefónica confidence to raise its full-year earnings and cash flow outlook.