- Record Dividend: Declared EUR 1 per share dividend, highest in company history, signaling confidence in 2025 performance.
- Revenue Growth: Net revenue rose 4.2% to EUR 119.1 billion; adjusted EBITDA increased 4.7% to EUR 44.2 billion.
- Fiber Expansion: Added 2.5 million new fiber lines, targeting 17.5 million homes passed by 2027 and 1 million fiber customers by 2027.
- US Market Strength: Service revenue surged 10.5% to USD 18.7 billion, driven by 2.4 million postpaid customer additions in Q4.
- AI & Digital Focus: Launched over 500 AI/data projects, aiming for EUR 700 million in AI-related revenue by 2026.
Guidance and Outlook
The company has set ambitious targets for 2026, including adjusted EBITDA growth of 6% to EUR 47.4 billion and free cash flow growth of 3% to EUR 19.8 billion. Adjusted EPS is expected to increase by around 10% to EUR 2.20. For 2027, Deutsche Telekom targets a significant increase in earnings, free cash flow, and EPS. As CEO Tim Höttges emphasized, the company is focusing on digitalization and improving customer relationships to drive future growth.
Operational Highlights
In Germany, Telekom Deutschland's organic revenues grew 2.8% in Q4, driven by service revenue growth and strong revenues from fiber joint ventures. The company added 2.5 million new fiber optic lines, reaching 12.6 million homes passed, and doubled its fiber customers compared to 2023. In Europe, service revenue growth was 3.9% in 2025, driven by B2C and B2B. T-Systems achieved revenue growth of 3% and improved profitability, with 1,500 AI experts and almost 500 AI and data projects.
Valuation and Metrics
Deutsche Telekom's current valuation metrics indicate a P/E Ratio of 16.72, P/B Ratio of 2.58, and EV/EBITDA of 5.81. The Dividend Yield stands at 2.71%, and Free Cash Flow Yield is 13.86%. With an ROE of 15.62% and ROIC of 6.83%, the company demonstrates a strong ability to generate returns. Analysts estimate next year's revenue growth at 3.3%, which is slightly lower than the company's guidance. The current valuation appears reasonable, considering the company's growth prospects and dividend yield.
Future Initiatives
Deutsche Telekom is focusing on expanding its data center business, with a new data center in Munich and plans to consolidate its data center operations in the future. The company is also investing in AI, with a target of generating EUR 700 million in revenue from AI products and projects in Germany, Europe, and T-Systems. With a strong pipeline of initiatives and a commitment to digitalization, Deutsche Telekom is well-positioned for future growth.