Telefónica Cash‑Flow Upswing

Telefónica SA has raised its 2026 adjusted operating cash flow outlook to growth of more than 3%, citing stronger operating leverage and momentum in Spain and Brazil. The company maintains other targets, but revenue growth is expected at the low end of guidance due to weaker handset sales, particularly in Germany. In the second quarter, service revenue rose 0.9% year over year, supported by accelerating growth in Spain and Brazil. Adjusted EBITDA increased 2.7%, while adjusted operating cash flow after leases grew 2.9%. The company also maintained its adjusted EBITDA outlook and expects to finish at the high end of that range. Telefónica's group financial performance shows improved momentum, with free cash flow reaching €611 million in the second quarter. Net financial debt declined to €25.3 billion, and net debt to EBITDA stood at 2.78 times at the end of June. The company reiterated its target of reducing leverage to 2.5 times by 2028. The Spanish operation recorded accelerating growth across main financial measures, with revenue rising 2.9% year over year in the second quarter. In Brazil, Vivo continued to deliver revenue and EBITDA growth ahead of inflation, while Germany and the U.K. remained areas of pressure. Telefónica Deutschland plans to cut about 1,100 jobs and close 60 stores, while Virgin Media O2 faced declining service revenue and EBITDA.