Jul 29, 2026 earnings call — Upgraded cash-flow guidance and regional results
Group upgraded adjusted operating cash flow after leases guidance from over 2% to over 3%.
Revenue $9.4B (est $9.4B) · EPS $0.10 (est $0.10)
Key quotes
"We are doing it through our Transform and Grow strategic plan which, as we will explain in this presentation, is turning our ambition into results through disciplined execution."
"We have registered the lowest churn rate ever, 0.7%, while convergent ARPU grew slightly and remains above EUR 91, the highest in the market."
"In this context, a provision of EUR 265 million has been recorded in Q2, and we expect additional restructuring provision of up to EUR 155 million to be booked most likely in H2 '26."
Analyst Q&A 7
Spain competition and growth outlook
Q (Andrew Lee · Goldman Sachs): He asked about competitive intensity in Spain and whether Q2 service revenue growth can continue into H2. He also asked about capital allocation and whether Telefónica will wait for French approval before making consolidation moves.
A: They see the same competitive trends and say their strong assets let them compete across segments. They highlight low churn, highest ARPU, sustainable B2C growth and improving B2B; on M&A they say EU guidelines are a big change, they won't discuss specific deals, any deal must have the right price and clear synergies.
"Let me say, too, that our offering the high-value base and our superior content strategy permit us to maintain the highest ARPU in the market, even in this quarter, being able to increase year-on-year." — Emilio Rodríguez (COO)
EBITDA guidance and Spanish savings
Q (Carl Murdock-Smith · Citi): He asked why EBITDA guidance was not raised despite stronger H1 results and whether management is being conservative. He also asked how much incremental benefit Spanish workforce restructuring delivered in Q2 and the update on savings.
A: They say Spain and Brazil performed strongly but Germany is mid-transformation, so they remain prudent and keep flexibility on guidance while aiming for the high end of the range. On restructuring, they reported EUR 20 million in Q1, are close to EUR 90 million in H1, and expect to reach the planned EUR 250 million by year-end, slightly ahead of plan.
"We want to be prudent at the same time, and we want to maintain some flexibility because the transformation of a company is not something that you can be sure when the things happen." — Emilio Rodríguez (COO)
VMO2 leverage and Germany partners
Q (Joshua Mills · BNP Paribas): He asked whether Telefónica would consider asset sales or third-party financing to reduce VMO2 leverage and about cash extraction/dividends. He also asked if Telefónica will lean more on third-party operators in Germany and for an update on freenet talks.
A: They say VMO2 is strategically important and Liberty and Telefónica are aligned; leverage at 5.8x needs faster deleveraging using OpEx/CapEx efficiencies and longer-term growth (B2B, FMC, wholesale), and they have no refinancing maturities until '29. On Germany, they remain focused on own customers but keep and seek partnerships (including Freenet and Aldi Talk) and are open to other partners.
"We are working closely also with VMO2 on updating the company's long-term rates plan, including organic and inorganic options." — Juan Azcue Vich (CFO)
Spain revenue drivers and FWA in Germany
Q (James Ratzer · New Street): He asked what changed in Q2 to drive the Spain retail revenue pickup and if it is sustainable. He also asked why Telefónica is not pushing FWA in Germany as a revenue source.
A: They say the Q2 pickup reflects better management of football subscribers (using AI and World Cup rights), plus product and service work, and they expect this to be sustained into Q3 and Q4. On FWA in Germany, they use it opportunistically where needed but will not ramp commercial FWA efforts in 2027 to avoid quality and capacity impacts.
"There is no magic behind the revenues of Spain." — Emilio Rodríguez (COO)
Data centers and German competition
Q (Emmet Kelly · Morgan Stanley): He asked where Telefónica stands on data center builds and whether it would invest more if consolidation happens, and for an update on German competitive dynamics and Q2 underlying EBITDA.
A: They say Telefónica exited the data center business years ago but is involved in sovereign projects: transforming sites into edge nodes, a Gigafactory consortium, and 17 edge nodes already implemented. On Germany, promotional activity is more disciplined, they see signs of improvement, expect H2 to be better than H1, and promote value-focused bundles (minimum EUR 30).
"What we have done is basically try to transform our copper central offices into data centers." — Borja Ochoa Gil (CEO)
Operator note — no substantive question
Q: The operator said there was time for one last question; no analyst question content followed in this exchange.
A: No analyst question was asked in this exchange and there is no management answer to summarize.
Brazil competition and H2 outlook
Q (Mathieu Robilliard · Barclays): He asked how the competitive environment in Brazil looks and what to expect for the second half given the strong results.
A: They say the competitive environment is similar to the previous quarter; some product launches looked competitive but prices were already in the market, so they don't expect a worse scenario. They add Vivo is delivering strong mobile, fixed, total revenue and EBITDA results, supporting confidence for H2.
"Then in terms of competition, we don't foresee a worse scenario." — Emilio Rodríguez (COO)