Deutsche Telekom AG - ADR

Strong Q1 Financial Performance: Deutsche Telekom reported a solid start to 2025 with a 3.5% organic service revenue growth and an impressive 5.3% organic EBITDA growth. Free cash flow increased by 50%, and adjusted earnings per share grew by 11%. These results reaffirm the company's commitment to its midterm targets and guidance.

U.S. Market Growth and Acquisition: T-Mobile U.S. saw an 8.4% growth in adjusted core EBITDA, driven by a 7.6% increase in post-paid service revenue. The recently closed acquisition of Lumos, aimed at enhancing their fiber service offerings, is expected to be accretive to service revenues but neutral to EBITDA in the short term, with a target footprint of 12 to 15 million U.S. homes by 2030.

Challenges in German Fixed Line Business: The German market is experiencing elevated competition, resulting in a slowdown in broadband customer growth, down by 7,000 in Q1. Despite this, the company is focused on increasing average revenue per user (ARPU) through upselling higher-speed broadband connections, with a target of maintaining broadband customer numbers flat throughout the year.