freenet (FNTN) Q1 2025 earnings summary

Executive summary

• Revenues increased as expected in Q1 2025, with both Mobile Communications and TV/Media segments contributing positively and free cash flow in line with guidance.

• Adjusted EBITDA remained stable at EUR 126.1 million, while TV/Media showed significant growth.

• Customer growth in both segments was moderate, with postpaid mobile subscriptions up by 53,000 and waipu.tv surpassing 2 million customers.

• Brand repositioning and increased sports sponsorships improved brand recognition and future purchase likelihood.

• Q1 2025 results confirm full-year guidance of EUR 520–540 million adjusted EBITDA.

Financial highlights

• Group revenues rose 1.7% year-over-year to EUR 604.4 million; gross profit up 2.8% to EUR 236.4 million, with gross margin at 39.1%.

• Adjusted EBITDA was EUR 126.1 million, nearly flat year-over-year due to higher mobile marketing spend.

• Free cash flow for Q1 2025 was EUR 75.8 million, exceeding expectations and supporting annual guidance of EUR 300–320 million.

• CapEx at EUR 8.6 million in Q1, with full-year guidance at EUR 55 million likely difficult to reach.

• Consolidated profit from continuing operations fell 32.8% to EUR 58.7 million; EPS at EUR 0.48.

Outlook and guidance

• Full-year 2025 guidance confirmed: adjusted EBITDA EUR 520–540 million, free cash flow EUR 300–320 million.

• Mobile Communications expected to deliver adjusted EBITDA of EUR 420–440 million; TV/Media EUR 115–135 million.

• Moderate growth anticipated in postpaid customers and revenues; waipu.tv to show noticeable growth, freenet TV to decrease.

• Dividend per share expected to increase, supported by stable free cash flow.

• 2028 ambition: EBITDA ≥ EUR 600 million, FCF ≥ EUR 330 million, assuming no M&A or major disruptions.