Deutsche Telekom AG (DTEGY) Q3 2025 Press Conference Call Transcript

Deutsche Telekom reported strong Q3 2025 results, with organic service revenue up 3.7%, EBITDA up 4.4%, and adjusted EPS up 9.5%, primarily driven by robust performance at T-Mobile US. Consequently, the company raised its full-year guidance for EBITDA AL, free cash flow AL, and adjusted EPS, while also announcing a record-high dividend of EUR 1 and a new share buyback program of up to EUR 2 billion. Strategically, DT is accelerating fiber optic deployment and investing heavily in AI, including a new "AI factory" in Munich, aiming for over EUR 1 billion in cost savings by 2027, reinforcing its commitment to infrastructure leadership and shareholder value.

Analysis

Deutsche Telekom (DTEGY) reported robust Q3 2025 results, with organic service revenue growing 3.7%, EBITDA up 4.4%, and adjusted EPS increasing 9.5%, significantly driven by T-Mobile US (TMUS) which recorded 2.3 million postpaid net additions. This strong performance led the company to raise its full-year guidance for EBITDA AL to approximately EUR 45.3 billion, free cash flow AL to EUR 20.1 billion, and adjusted EPS to EUR 2.

In a clear signal of confidence, the Board plans a record-high dividend of EUR 1 for 2025 and a new share buyback program of up to EUR 2 billion, aiming for a total shareholder return of nearly EUR 7 billion. Strategically, DT is accelerating its fiber build-out, passing 1.7 million homes in Germany in the first nine months, and is heavily investing in AI, including an "AI factory" in Munich with partners like NVIDIA (NVDA) and SAP (SAP).

Despite overall group strength, the German broadband market faces slow growth and intense competition, resulting in a 25,000 year-on-year decline in broadband lines, though FTTH customer additions were a record 155,000. The company targets over EUR 1 billion in AI-driven cost savings by 2027 and is actively engaging with the government for support in fiber deployment and the adoption of its 5G SA network for public safety, highlighting both opportunities and regulatory dependencies.

Key Decisions for Investors

• Investors should consider the increased capital returns, including the record EUR 1 dividend and EUR 2 billion share buyback, as a strong indicator of management's confidence and commitment to shareholder value.
• Monitor the execution and monetization of Deutsche Telekom's strategic investments in fiber infrastructure and AI, particularly the take-up rates for FTTH in Germany and the realization of targeted cost savings.
• Evaluate the continued strong performance of T-Mobile US as a primary growth driver for the group, while also assessing potential competitive pressures and regulatory developments in the German and European markets.