Telecom Italia (TIT) Q1 2025 earnings summary

Executive summary

• Poste Italiane agreed to acquire up to 24.81% of ordinary shares, becoming the largest shareholder and supporting long-term consolidation and governance alignment.

• Q1 2025 results were in line with expectations, with group revenues up 2.7% year-over-year and solid operational delivery across domestic and Brazil segments.

• Sparkle is treated as a discontinued operation, with sale agreement signed and disposal expected to close in Q4 2025.

• Guidance for 2025 is confirmed, with cash flow evolution on track and deleveraging progress supported by strategic partnerships.

• Domestic market stable, enterprise segment growing, and Brazil market remains rational and profitable.

Financial highlights

• Group revenues rose 2.7% year-over-year to €3.3 billion; EBITDA After Lease increased 5.4% to €1.0 billion.

• CapEX was €0.5 billion (13.9% of revenues); domestic CapEX at €0.4 billion, Brazil at €0.2 billion.

• Equity Free Cash Flow after lease improved to -€198 million from -€973 million year-over-year, mainly due to seasonal working capital absorption.

• Net debt after lease stood at €7.5 billion, leverage at 2.05x, with adjusted net financial debt up from €7.3 billion at end-2024.

• Group EBITDA margin (reported) at 28.7%, with domestic EBITDA margin at 47.3% and Brazil at 52.6%.

Outlook and guidance

• Full-year 2025 operational and financial guidance confirmed, with Q1 performance supporting confidence in meeting targets.

• 2025 guidance: group revenues expected to grow 2-3%, EBITDA AL 1-2%, CAPEX 12-13% of revenues, and leverage below 2.0x.

• 2024-2027 CAGR targets: revenues ~3%, EBITDA AL 2-3%, CAPEX 6-7%, and leverage <1.9x.

• Equity free cash flow expected to be broadly neutral in Q2 and clearly positive in the second half.

• Sparkle disposal expected to close in Q4 2025, reducing leverage by 0.2x.