Telefonica accelerated revenue growth, improved profitability and strengthened free cash flow in the fourth quarter of 2025, supported by broadband expansion, mobile subscriber gains and disciplined Capex and Opex management under its Transform and Grow strategy.
Source: EI Confidencial
Revenue and profitability performance
Telefonica generated revenue of €9,174 million in the fourth quarter of 2025, up 1.3 percent. Full year revenue reached €35,120 million, reflecting 1.5 percent growth.
Adjusted EBITDA increased 2.8 percent during the October to December period to €3,198 million. For the full year, adjusted EBITDA rose 2 percent to €11,918 million.
Adjusted operating cash flow after leases reached €1,281 million in the fourth quarter, up 12.9 percent in constant terms. For 2025, adjusted OpCFaL grew 5.9 percent to €5,081 million.
Free cash flow from operations accelerated to €1,402 million in the fourth quarter and totaled €2,069 million for the full year.
Adjusted net income from continuing operations stood at €2,122 million in 2025. However, the Group reported a net loss of €4,318 million due to non recurring restructuring costs, asset impairments and the impact of divestments in HispAm markets.
Subscriber base and broadband expansion
Telefonica closed 2025 with 326.1 million accesses, up 2.1 percent, supported by growth in fibre and 5G services.
The company’s fibre network passed 162.9 million premises, with 74.3 million FTTH premises, reflecting 7 percent growth. Telefonica maintained its leadership in ultra fast broadband infrastructure across its core markets.
5G population coverage reached 95 percent in Spain, 99 percent in Germany, 67 percent in Brazil and 87 percent in the United Kingdom, averaging 80 percent across its four core markets.
In Brazil, revenue grew 7.1 percent in the fourth quarter, driven by strong commercial momentum, with total accesses reaching a record 116.8 million.
In Germany, the O2 brand delivered a quarter on quarter net gain of 22.2 percent in mobile contract customers. In the UK, Virgin Media O2 met its full year revenue and EBITDA targets.
By business segment in Q4, B2C revenue was €5,408 million, accounting for 59 percent of total revenue. B2B contributed €2,158 million or 23.5 percent, while wholesale generated €1,608 million, representing 17.5 percent of total revenue.
Telefonica Tech recorded revenue growth of 18.9 percent in 2025 to €2,222 million, reflecting strong demand for digital, cybersecurity and cloud services.
Strategy: Transform and Grow
Telefonica’s performance reflects the execution of its new strategic plan, Transform and Grow, aimed at reshaping the Group into a more focused and profitable European telecom operator with scalable digital capabilities.
The company continued its divestment process in HispAm, completing exits from Argentina, Peru, Uruguay and Ecuador in 2025 and closing Colombia and Chile in early 2026. These moves are designed to simplify operations, strengthen the balance sheet and concentrate investment in core markets.
Chairman Marc Murtra said the company is entering a period of higher growth and profitability, supported by disciplined capital allocation and operational efficiency.
Capex and Opex discipline
Capex in the fourth quarter totaled €1,259 million, down 8.1 percent. Full year Capex was €4,340 million, a 7.2 percent decline, resulting in a Capex to revenue ratio of 12.4 percent, meeting the company’s target of below 12.5 percent.
For 2026, Telefonica expects a Capex to revenue ratio of around 12 percent, while targeting revenue growth of 1.5 to 2.5 percent, adjusted EBITDA growth of 1.5 to 2.5 percent and adjusted OpCFaL growth above 2 percent.
The company is also targeting cash flow of around €3,000 million in 2026 and further debt reduction toward its 2028 objective.
Net financial debt decreased by approximately €1,400 million in the fourth quarter to €26,824 million as of December 31, 2025.
With improving revenue momentum, broadband scale, mobile subscriber growth and tighter control over Capex and Opex, Telefonica has positioned itself for sustained growth and stronger cash generation in 2026.
BABURAJAN KIZHAKEDATH