Telekom Austria AG (TKMAF) Q3 2025 Earnings Call Prepared Remarks Transcript

Telekom Austria AG (A1) reported a 3% year-on-year increase in group revenues and EBITDA for Q3 2025, primarily driven by robust international performance that mitigated declines in the challenging Austrian market. The company demonstrated strong customer acquisition, with mobile postpaid subscribers growing by 12%, internet at home by 5%, and TV customers by 8%, fueled by demand for high-speed broadband and B2B digital services, including its Exoscale cloud offering. A1 also highlighted strong free cash flow generation of EUR 529 million in the first nine months, supporting ongoing investments in growth and internal transformation initiatives.

Analysis

Telekom Austria AG (A1) reported a 3% year-on-year increase in Q3 2025 group revenues and EBITDA, primarily driven by robust international market performance. This growth successfully mitigated challenging conditions in Austria, where both revenues and EBITDA declined. The company demonstrated strong free cash flow generation of EUR 529 million in the first nine months, underscoring its capacity to fund strategic initiatives.

A1's customer base expanded significantly, with mobile postpaid subscribers growing by 12%, Internet at home by 5%, and TV customers by 8%. This expansion is fueled by strong demand for high-speed broadband and B2B digital services, including its European sovereign cloud solution, Exoscale. The company continues to invest in these areas to maintain relevance and anticipate evolving consumer technology.

Despite the difficult Austrian market, A1 is leveraging its financial flexibility to invest in subscriber growth and internal transformation. The ongoing consolidation of non-customer-facing functions into 19 competence delivery centers and the development of a service delivery center for digital/IT services aim to create synergies and drive automation. This strategic focus positions the company for continued growth in digital services.

Key Decisions for Investors

• Monitor the continued strength of international operations and digital service adoption, which are critical for offsetting domestic market challenges
• Assess the sustainability of free cash flow generation to fund ongoing subscriber growth and strategic transformation initiatives
• Evaluate the potential for stabilization or recovery in the Austrian market, as its current weakness impacts overall group performance