Telefónica cuts H1 loss 75% to €338M, raises 2026 cash flow target after Spain and Brazil drive revenue growth

Results overview

Telefónica reported a net loss of €338 million for the first half of 2026, a 75% reduction from the €1.355 billion loss in the same period of 2025. The result was weighed down by a €1.001 billion charge from the sale of its Chilean operations and a €265 million provision for restructuring at its German unit. Revenue grew 1.7% in real terms to €16.392 billion (0.4% at constant exchange rates), while adjusted EBITDA rose 3.8% to €5.768 billion. In the second quarter alone, the company returned to profit with net income of €73 million, as revenue climbed 3% to €8.265 billion and EBITDA jumped 6.4% to €2.933 billion. The quarterly figures beat the Bloomberg consensus, which had forecast EBITDA of €2.881 billion and revenue of €8.239 billion.

Continuing operations and one-offs

Excluding discontinued assets, the picture brightens. Telefónica said profit from continuing operations reached €954 million, though an adjusted net figure cited by some outlets was €474 million. The difference reflects the treatment of exceptional items. The discontinued operations, mainly the Chile exit, generated a loss of €812 million in the half. The German restructuring plan involves cutting around 1,000 jobs, or 15% of the workforce, and the €265 million provision covers those costs.

Geographic drivers

Spain and Brazil powered the top line. Telefónica España posted revenue of €6.513 billion, up 2.5%, while Brazil delivered €5.195 billion, a 12.5% increase in real terms (7.5% at constant exchange rates). The company noted that the second quarter marked its third consecutive quarter of simultaneous growth across all main financial indicators, both in real and constant terms.

Balance sheet and shareholder returns

Net financial debt fell to €25.278 billion at the end of June, an 8.4% decline from June 2025. Telefónica confirmed a cash dividend of €0.15 per share for the 2026 financial year, payable in June 2027 pending shareholder approval. In June 2026, it paid the second tranche of the 2025 dividend, also €0.15 per share.

Raised outlook

Citing the momentum, chairman Marc Murtra said the company is raising its target for adjusted operating cash flow after leases (OpCFaL) for 2026.

The second quarter of the year has been another one of delivery and execution of our strategy. We continue to deploy our Transform & Grow plan, which is yielding the expected results. We are implementing ambitious, rigorous and effective management that leads us to revise upward the 2026 target for adjusted OpCFaL. This is perhaps the most important parameter in a telecom company, as it reflects the performance of the core business. The rest of the operational and financial metrics are on track to meet our 2026 objectives.

The company did not quantify the new cash flow target, but the upgrade suggests that the core markets are offsetting the drag from the Latin American exit.