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- **Hispam Exit Acceleration**: Sold Uruguay, Ecuador, and Colombia, with Colombia closure nearing. Free cash flow hit by EUR 400 million in 2025, but 2026+ impact minimal.
- **Core Market Strength**: Spain and Brazil deliver EBITDA minus CapEx growth (4% and 1% Q3), despite global headwinds. Spain's ARPU remains market-leading at EUR 90.
- **Germany Challenges**: 1&1 migration weighs on Q3 EBITDA (-9.5% YoY), but B2B growth and ARPU stability signal underlying resilience.
- **Financial Discipline**: CapEx/Sales below 12.5%, debt cost 3.44%, and EUR 0.30 dividend per share reaffirmed despite free cash flow headwinds.

**【CEO Summary Section】**
- **Portfolio Transformation**: Accelerated exit of Hispam (Latin America) with sales of Uruguay, Ecuador, and Colombia. Remaining focus on Europe and Brazil.
- **Commercial Momentum**: Spain and Brazil show strong growth in fiber and mobile contracts. Spain's customer base reached 350 million, with ARPU at EUR 90, leading market share.
- **Network Leadership**: 82.6 million fiber premises passed and 78% 5G coverage. Germany's 5G coverage at 98% despite migration challenges.
- **Efficiency**: CapEx/Sales ratio below 12.5%, with EBITDA minus CapEx growth in Spain and Brazil.

**【CFO Financial Commentary】**
- **Financial Performance**: Q3 revenue and EBITDA growth, with EBITDA minus CapEx up 4%. Free cash flow guidance updated to EUR 1.5-1.9 billion due to Hispam exit costs, delayed tax refunds, and Germany's B2B drag.
- **Debt Management**: Net financial debt EUR 28.2 billion (EUR 26.5 billion post-Hispam sales). Average cost of debt 3.44%, with ample liquidity for next 3 years.
- **ESG Initiatives**: Signed 10-year PPAs in UK and Germany, reducing energy risk and supporting sustainability goals.

**【Q&A Highlights】**
- **Germany Challenges**: 1&1 migration accelerated Q3 EBITDA decline (9.5% YoY), but core business resilience seen in B2B growth and ARPU stability.
- **Working Capital**: Hispam exit reduced working capital efficiency, with 2025 contribution lower than expected. 2026 outlook to be detailed at Capital Markets Day.
- **Spain Dynamics**: Retail balance of volume/value maintained, with B2B growth driven by digital services. Competitive pressure in public administration contracts, but strong win rate maintained.
- **Telefónica Tech Write-Down**: EUR 250 million impairment due to sector multiples decline, WACC updates, and lower-than-expected company performance in UK and Germany.

Telefónica, S.A. (TEF) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

TEF

TEF fundamentals

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