Record Dividend Proposal
Proposed dividend of EUR 1.00 per share — the highest in Deutsche Telekom's history — signaling strong cash generation and confidence in 2025 results.
Deutsche Telekom
· DTEGY
February 26th, 2026
Summary
- Earnings Call Date:
- 2026-02-26
- Change Since:
- -20.51%
- Next Earnings Date:
- 2026-08-06
Earnings Call Sentiment
PositiveThe call presents a predominantly positive operational and financial picture: group-wide organic revenue, adjusted EBITDA and free cash flow all improved in 2025; the company announced a record dividend, accelerated fiber rollout, strong U.S. performance, continued AI and data investments (including a sovereign AI factory), and an upgraded 2026 EBITDA target. However, several notable headwinds persist — broadband volume losses in Germany, FX-related drags from a weaker U.S. dollar, regulatory uncertainty across Europe, energy cost pressures, and operational frictions in fiber uptake and delivery — which temper near-term visibility. On balance the highlights (broad growth, investment, commercial momentum, and strategic initiatives) outweigh the lowlights, but management acknowledges pockets of execution and macro/regulatory challenges that keep some targets exposed to risk.
Company Guidance
Management guided for 2026 that adjusted EBITDA should grow ~6% to €47.4bn (guidance set at constant FX, USD/EUR 1.13), free cash flow should rise ~3% to €19.8bn and adjusted EPS should increase ~10% to ~€2.20; this follows a strong 2025 where group organic net revenue was up 4.2% to €119.1bn, service revenue +3.8% to €99.4bn, adjusted EBITDA +4.7% to €44.2bn, free cash flow +2% to €19.5bn and adjusted net profit +3.7%, with nearly €17bn invested in 2025 (Germany €5.9bn). Key operational metrics cited: Germany added 2.5m new fiber lines in 2025 (12.6m homes passed, ~600k net fiber customers, Q4 fiber adds 164k) and is on track for ~17.5m homes passed by 2027 and a 1m/year fiber run‑rate target; Europe added 1.1m FTTH homes (11.3m homes, 36% utilization, Q4 organic revenue +3.5%, FY service revenue +3.9% and EBITDA AL ~€4.8bn outlook), T‑Systems is scaling AI/cloud (targeting T‑Cloud public >€200m, selected verticals aiming for strong y/y growth), and the U.S. business reported service revenue +10.5% to $18.7bn, adjusted core EBITDA +6.8% to $8.4bn, with 2.4m Q4 postpaid net adds (churn ~1.02%).
Group Top-Line and Profit Growth
Organic net revenue up 4.2% to EUR 119.1 billion; service revenues up 3.8% to EUR 99.4 billion; adjusted EBITDA up 4.7% to EUR 44.2 billion; adjusted net profit grew ~3.7% (despite currency effects).
Free Cash Flow and Investment
Free cash flow increased 2% to EUR 19.5 billion in 2025 while group gross investments totaled ~EUR 17 billion (EUR 5.9 billion in Germany), demonstrating continued heavy capex alongside positive cash generation.
U.S. Performance and Customer Growth
U.S. reported service revenue (U.S. GAAP) rose 10.5% to USD 18.7 billion; adjusted core EBITDA up 6.8% to USD 8.4 billion; strong postpaid net adds of ~2.4 million in Q4; postpaid service revenue +13.9%.
Fiber Build-Out and Commercial Momentum in Germany
Built 2.5 million new fiber lines in Germany in 2025 (more than competitors combined); homes passed reached 12.6 million; ~600,000 new German fiber customers added in 2025; Q4 fiber net adds 164,000 (best-ever quarter); fiber penetration +11% YoY to 16.4%.
European Segment Strong Execution
Europe service revenue growth 3.9% in 2025; organic Q4 revenue +3.5%; 32nd consecutive quarter of organic EBITDA growth; added 1.1 million FTTH homes to reach 11.3 million and achieved 92% 5G coverage by end-2025.
T-Systems Turnaround and Growth Signals
T-Systems revenue +3% in 2025 with outstanding order intake and TRIM customer score of 93 (all-time high); targets to grow revenues in key public/health/defense verticals and scale T-Cloud public revenues to >EUR 200 million.
AI, Data and Sovereignty Initiatives
Launched 500+ AI and data projects group-wide; Frag Magenta chatbot engaged ~7 million times in 2025 resolving ~55–56% of inquiries autonomously; opened AI 'factory' in Munich with reported utilization ~40–50% and focus on sovereign, energy-efficient stack for industry and public sector.
Upgraded 2026 Guidance
Ambitious 2026 targets: adjusted EBITDA growth ~6% to EUR 47.4 billion, free cash flow +3% to EUR 19.8 billion, and adjusted EPS up ~10% to ~EUR 2.20 — management reiterates 2027 CMD trajectory is on track.
Philipp Schindera
Good morning, and welcome, ladies and gentlemen, colleagues. Welcome here in Bonn to our conference on Deutsche Telekom's financial statements. We get together once a year personally, too. And I'm pleased that we have the ladies and gentlemen of the press here personally. And I would also like to welcome all the staff who are following the conference on live stream. Great to have you. So we have some interesting things to tell you about today, and that's why we have more speakers than usual. I'd like to introduce the speakers for today -- for today and tomorrow.
On my right-hand side, Christian Illek, CFO at DTIG; then Tim Hottges, CEO; Rodrigo Diehl, also on the Board of Management of Deutsche Telekom in charge of the German business, Dominique Leroy, she's in charge of the Europe segment; and Ferri Abolhassan, who's in charge of T-Systems. So Tim, I'd say with that, you have the floor.
Timotheus Höttges
Thank you, Philipp. EUR 1. That's the dividend we are proposing for every share, more than ever before in the history of Deutsche Telekom, and that alone shows that 2025 was a very successful year for us. We delivered. And with that, a very good morning from my side. Someone recently said about me, this guy is Deutsche Telekom. But I choose to disagree quite clearly, we are Deutsche Telekom. Our results are a team effort.
197,000 employees have made that possible, and that's why more colleagues are sitting here beside me today. So I'm really glad that we have the various Board members here from Telekom Deutschland, Europe and T-Systems at today's conference. Srini is still in the U.S., and ...
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