Deutsche Telekom Q2 Profit Climbs With Revenue Growth; Lifts FY25 Outlook Again

Deutsche Telekom AG reported a robust second quarter, with net profit surging 25.2% to 2.62 billion euros and EPS up 27% to 0.54 euro, alongside modest revenue and adjusted EBITDA AL growth. Significantly, the company raised its fiscal 2025 adjusted EBITDA AL guidance for the second time this year to over 45.0 billion euros, signaling strong operational performance and an improved outlook for the telecom major.

Analysis

Deutsche Telekom AG (DTEGY.PK) reported a robust second quarter, characterized by significant bottom-line expansion and an improved forward-looking guidance. Net profit surged 25.2% year-over-year to 2.62 billion euros, with earnings per share growing 27% to 0.54 euro. This contrasts with a more modest increase in adjusted net profit to 2.50 billion euros from 2.48 billion euros in the prior year. Top-line growth was muted, with total revenue up 1.0% to 28.67 billion euros, though organic net revenue growth was a healthier 4.0%. Similarly, adjusted EBITDA AL increased 1.7% to 11.0 billion euros, but showed stronger organic growth of 5.0%, indicating solid underlying operational performance. Critically, management raised its fiscal 2025 adjusted EBITDA AL guidance for the second time in 2024, now expecting the figure to be "more than 45.0 billion euros" compared to the previous forecast of "around 45.0 billion euros." This repeated upward revision signals strong management confidence in sustained operational momentum.

Key Decisions for Investors

• Investors should view the second upward revision to fiscal 2025 guidance as a significant positive signal, suggesting underlying strength and management confidence that may not be fully captured by the modest headline revenue growth.
• It is important to analyze the drivers behind the significant divergence between the 25.2% growth in reported net profit and the near-flat performance of adjusted net profit to assess the quality of earnings and the impact of any one-off items.
• Monitor the company's ability to maintain its strong organic growth momentum, particularly the 5.0% growth in adjusted EBITDA AL, as this is a key indicator of core operational health insulating performance from currency or M&A effects.