Telefonica Raises Cash Flow Outlook Amid Strong Performance in Spain and Brazil
Telefonica raised its adjusted operating cash flow outlook for 2026 to growth of more than 3%, up from a previous target of over 2%. The improvement is attributed to stronger performance in Spain and Brazil, where service revenue and EBITDA saw notable increases. Despite this positive momentum, the company expects overall revenue growth to fall at the low end of guidance due to weaker handset sales, particularly in Germany. Group-level financials showed a second-quarter rise in service revenue by 0.9%, adjusted EBITDA up 2.7%, and free cash flow reaching €611 million—up from €333 million in Q1. Spain's business saw accelerating growth across key metrics, while Brazil reported an 11% increase in adjusted EBITDA and an 18% rise in operating cash flow after leases. However, Germany and the U.K. remain challenging markets for Telefonica. Telefónica Deutschland plans to cut around 1,100 jobs and close 60 stores due to ongoing difficulties, while Virgin Media O2 continues efforts to reduce leverage.
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