Telefonica Reports Strong Results for 2Q26

Spain-based Telefonica reported strong second quarter results, driven by results from its home market and Brazil. The company also raised its cash flow outlook for the rest of the year.

Revenue in Q2 increased 3% year-on-year to €8.3 billion and net income dropped 20.6% to €473 million due to a €265 million provision for restructuring in Germany. Domestic revenue increased 3% to €3.3 billion, attributed to lower customer churn and a boost from TV subscribers during the recent FIFA World Cup tournament. Brazil was also a bright spot, with revenue up 17.8% to €2.7 billion and the unit ending the period with a record of almost 119 million accesses as momentum continues for its Vivo total converged offer.

In Germany, revenue declined 11.1% to €1.8 billion. Last week, the company announced plans to cut 1,100 jobs and close 60 retail stores in the country. Telefonica maintained its full-year outlook for revenue and adjusted core profit growth of 1.5% to 2.5%, while capex is expected to be around 12% of revenue.

Telefonica CEO and chairman Marc Murtra said that the company’s Transform and Grow strategic plan continues to yield results. He stated that ambitious, rigorous and effective management, along with strong momentum and improving operating leverage, led Telefonica to upgrade its adjusted operating cash flow after leases from more than 2% to more than 3%. He explained that this is perhaps the most important metric for a telecom company, as it reflects the performance of the core business.