Telefonica delivered stronger financial and operational performance in the first half of 2026, reporting revenue of €16.392 billion, up 1.7 percent, while adjusted EBITDA increased 3.8 percent to €5.768 billion.
Adjusted net income of Telefonica from operations reached €954 million, and free cash flow from continuing operations totaled €944 million.
Telefonica upgraded its 2026 adjusted operating cash flow after leases (OpCFaL) growth guidance to more than 3 percent, compared with the previous forecast of more than 2 percent, reflecting a 50 percent improvement.
Telefonica continues to target revenue and adjusted EBITDA growth of 1.5 percent to 2.5 percent, a Capex-to-revenue ratio of around 12 percent, free cash flow of approximately €3 billion, and leverage of 2.5x EBITDAaL by 2028.
During the second quarter, Telefonica generated €8.265 billion in revenue, up 3 percent, while adjusted EBITDA rose 6.4 percent to €2.933 billion. Residential (B2C) revenue climbed 5.6 percent to €4.885 billion, while B2B revenue increased 9.5 percent to €2.022 billion, highlighting continued demand for digital enterprise services.
Spain remained Telefonica’s strongest commercial market. Telefonica Espana reported Q2 revenue of €3.279 billion, rising 2.9 percent, while adjusted EBITDA increased 2.3 percent to €1.151 billion. Average revenue per user (ARPU) reached €91.1, and churn declined to a record-low 0.7 percent, reflecting strong customer loyalty. Mobile contract subscribers remained above 16 million, while IoT connections surged 197.9 percent year over year to 25.82 million, reinforcing Telefonica’s digital and connected services expansion.
Brazil continued to be another major growth engine. Telefonica Brasil ended the quarter with a record 118.9 million connections and expanded its Vivo Total convergent customer base by 29 percent to 3.8 million. Quarterly revenue increased 17.8 percent at reported exchange rates to €2.684 billion, while adjusted EBITDA jumped 21.6 percent to €1.168 billion, lifting the EBITDA margin by 1.4 percentage points to 43.5 percent.
In Germany, Telefonica Deutschland added nearly 30,000 postpaid mobile subscribers during the quarter and launched the new O2 Mobile Plus bundled offering while continuing its operating model simplification. In the UK, Virgin Media O2 remained on track to achieve its 2026 financial targets.
Telefonica invested €1.908 billion in capital expenditure during the first half of 2026, representing a 1.4 percent increase and resulting in a Capex-to-revenue ratio of 11.6 percent, aligned with its annual target. Net financial debt declined 8.4 percent year over year to €25.278 billion, while leverage improved to 2.68x.
The company also strengthened its broadband and fiber leadership. Total accesses increased 5.3 percent to 299.8 million, driven by 14.2 million FTTH accesses, up 8.3 percent year over year. Telefonica’s ultra-fast broadband network now passes 163.7 million premises, including 76.6 million FTTH premises, reinforcing its leadership in fiber infrastructure.
Across its core markets, 5G population coverage reached 96 percent in Spain, 99 percent in Germany, 72 percent in Brazil, 88 percent in the UK, and an average of 83 percent overall, supporting continued growth in broadband, digital connectivity, AI-enabled services, and next-generation network capabilities.
BABURAJAN KIZHAKEDATH
