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Highlights:

  • Vodafone reported a 5.3% YoY rise in Q1 service revenue to GBP 7.9 billion.
  • Vodafone Group completed merger with Three UK; integration and customer benefits underway.
  • Vodafone reiterated FY26 EBITDAaL and cash flow guidance following UK consolidation.

Vodafone Group plc (LSE:VOD), a multinational telecommunications company headquartered in the UK, released its financial results for the first quarter of the financial year ending March 2026 (Q1 FY26). The Group reported total revenue of GBP 9.4 billion, reflecting a 3.9% increase year-on-year. The performance was driven by service revenue growth and the inclusion of results from the recently completed merger with Three UK. Foreign exchange movements partially offset the overall growth. The Group’s service revenue rose 5.3% year-on-year to GBP 7.9 billion, or 5.5% on an organic basis. The consolidation of three UK contributed positively to revenue growth, although the depreciation of currencies in some markets weighed on reported figures. Vodafone also confirmed the launch of a second GBP 0.5 billion tranche of its ongoing GBP 2.0 billion share buyback programme.

Germany, the Group's largest market, recorded a 3.2% decline in Q1 service revenue. Excluding the impact of the recent change in television distribution law, revenues were broadly stable. The business continued to face pricing and competitive pressures in mobile, although gains in wholesale revenues partially offset the declines. In the UK, organic service revenue increased by 0.9%, supported by growth in consumer and wholesale segments. This was tempered by lower revenue from business services due to the planned end of several managed service contracts. Other European markets, including Portugal and Romania, showed modest growth. In Türkiye, service revenue surged 29.6% in euro terms, supported by inflation-linked pricing and growing demand for mobile services.

In Africa, Vodafone delivered 13.8% organic growth in service revenue, with notable contributions from Egypt and Vodacom’s international operations. The region continues to benefit from uptake in mobile data and digital financial services. Vodafone confirmed that the merger with CK Hutchison’s Three UK was completed on 1 June 2025. The combined business, now operating as VodafoneThree, is fully consolidated in the Group’s results. Integration has begun, and customers have started receiving access to expanded network coverage and service improvements.

The merger is a significant strategic step aimed at improving scale and service efficiency in the competitive UK mobile market. Vodafone expects the integration to deliver operational synergies over time, though no detailed financial breakdown was provided in this update. Group adjusted EBITDAaL (Earnings Before Interest, Taxes, Depreciation, Amortisation, and Leases) rose by 4.9% on an organic basis to GBP 2.7 billion. Margin increased by 0.2 percentage points year-over-year to 29.3%.

The increase in EBITDAaL was driven by top-line growth across most regions, excluding Germany, and continued focus on commercial execution. Operating profit declined by 34.3% to GBP 1.0 billion, primarily due to the absence of prior-year gains from the sale of Vodafone’s stake in Indus Towers. No major asset disposals were reported in Q1FY26. Vodafone reiterated its full-year FY26 guidance following the UK merger. It expects adjusted EBITDAaL between GBP 11.3 billion and GBP 11.6 billion and adjusted free cash flow in the range of GBP 2.4 billion to GBP 2.6 billion. 

VOD shares were trading 0.65% lower at GBX 82.62 per share as on 24 July 2025.