Vodafone expects its fiscal 2026 adjusted earnings before interest, taxes, depreciation, and amortization after lease expenses (EBITDAaL) to be between €11.3 billion and €11.6 billion, with adjusted free cash flow projected between €2.4 billion and €2.6 billion. The company confirmed that it anticipates these figures will fall at the upper end of these ranges. This re-affirmation of guidance comes as Vodafone continues its transformation efforts and builds momentum.
For the third quarter, Vodafone reported a revenue increase to €10.45 billion, up from €9.81 billion in the same period last year. This growth was driven by a robust increase in service revenue, which rose to €8.51 billion from €7.93 billion. Key contributors to this service revenue growth included strong performances in Africa, with a 13.5% increase, and the consolidation of Three UK and Telekom Romania assets. However, Germany's service revenue growth of 0.7% (on an organic basis) missed some forecasts, and UK service revenue declined by 0.5% due to a prior year one-off project revenue.
Despite the mixed regional performances, the overall positive trend led Vodafone to launch a new share buyback program of up to €500 million ($590 million). This buyback is part of an ongoing strategy to return value to shareholders, with €3.5 billion in share buybacks already completed since May 2024. The company also announced its intention to raise the annual dividend by 2.5% for fiscal year 2026, marking the first increase since 2019.
Analysts had largely forecast Q3 revenue of €10.76 billion, falling slightly short of Vodafone's reported €10.45 billion. Although the strong top-line growth bolstered confidence in the company's full-year outlook, some market observers expressed skepticism due to the slower-than-expected growth in Germany, Vodafone's largest market. This overshadowed more robust performances in other regions, such as Turkey with 3.7% growth, raising questions about the long-term resolution of regulatory issues in the German market.
