Deutsche Telekom’s Earnings Call Highlights Growth and Strategic Initiatives

Deutsche Telekom ((DTEGY)) has held its Q3 earnings call. Read on for the main highlights of the call.

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Deutsche Telekom’s recent earnings call exuded a generally positive sentiment, underscored by notable achievements in growth metrics, strategic initiatives, and shareholder returns. Despite encountering some challenges in the German market, the company demonstrated resilience and strategic foresight.

Consistent Growth Metrics

Deutsche Telekom showcased robust performance with a 3.7% growth in organic service revenue, 4.4% increase in organic EBITDA, 6.8% rise in free cash flow, and a 9.5% growth in adjusted earnings per share for the first nine months of 2025. These metrics underscore the company’s strong financial health and operational efficiency.

T-Mobile US Performance

T-Mobile US delivered impressive Q3 results, reporting a 9.1% growth in service revenue and a 5.6% increase in core EBITDA. The company exceeded expectations with 2.3 million postpaid net additions, highlighting its competitive edge in the U.S. market.

Dividend and Share Buyback

The Board of Management proposed an 11% increase in dividends to EUR 1 per share for 2025 and announced plans to buy back EUR 2 billion worth of shares in 2026. This initiative aims to return nearly EUR 7 billion to shareholders, reflecting the company’s commitment to enhancing shareholder value.

Fiber Expansion in Europe

Deutsche Telekom made significant strides in fiber expansion, passing 3.6 million additional European homes with FTTH over the past year, reaching nearly 23 million homes. This expansion is pivotal in strengthening its infrastructure and service offerings across Europe.

Moody’s Credit Rating Upgrade

Moody’s upgraded Deutsche Telekom’s credit rating to A3, acknowledging the company’s disciplined financial execution. This upgrade is a testament to Deutsche Telekom’s robust financial management and strategic initiatives.

AI Initiatives and Partnerships

In a significant move towards AI-driven digitization, Deutsche Telekom launched Europe’s first industrial AI cloud in partnership with NVIDIA, with a combined investment of EUR 1 billion. This initiative marks a substantial advancement in the company’s digital transformation efforts.

T-Systems Growth

T-Systems reported an impressive 11.7% year-to-date EBITDA growth, driven by AI-driven digital solutions and sovereign cloud services. This growth highlights the division’s pivotal role in Deutsche Telekom’s overall strategy.

Challenges in German Market

The German market faced a weaker quarter with a 1.8% decline in headline growth, attributed to challenging prior year comparisons and cost phasing, including wage increases. This underscores the competitive and economic pressures in the region.

Broadband Net Additions in Germany

Deutsche Telekom experienced a slight customer loss in Germany’s broadband market, influenced by competitive pressures and a sluggish German economy. This challenge highlights the need for strategic adjustments in the domestic market.

Forward-Looking Guidance

Deutsche Telekom raised its guidance to reflect T-Mobile’s improved performance, maintaining its full-year DT ex U.S. guidance. The company plans to increase its dividend by 11% to EUR 1 per share for 2025 and buy back EUR 2 billion worth of shares in 2026, aiming for a shareholder return of nearly EUR 7 billion. Strategic progress in Germany with record fiber build and AI initiatives across Europe were also highlighted.

In summary, Deutsche Telekom’s earnings call reflected a positive outlook with strong growth metrics and strategic initiatives, despite some challenges in the German market. The company’s commitment to shareholder returns and strategic investments in AI and fiber expansion are key takeaways, positioning it well for future growth.