Telecom giant Vodafone Group Plc Sponsored ADR(VOD.US) returns to growth in Germany after years of decline, driving a 7.3% increase in total revenue in the first half of the year.

British telecom giant Vodafone Group Plc Sponsored ADR (VOD.US, Vodafone) released its latest performance report on Tuesday. The financial data shows that Vodafone Group Plc Sponsored ADR has returned to a growth trajectory in its most important German market after adding 1 & 1 AG, a domestic telecommunications company, as its largest wholesale customer. The British telecom operator stated in its performance report that its revenue from core services in the German market grew by 0.5% to 2.74 billion (approximately $3.2 billion) in the second quarter compared to the previous year. Analysts on Wall Street had expected the market service revenue to improve by 0.4% after a decline of over 3% in the previous quarter, making Vodafone Group Plc Sponsored ADR's latest performance exceed market expectations. 1 & 1 AG is a large telecommunications operator in Germany (fixed line + mobile network operator), belonging to the United Internet Group. It is both a "new player" with its own 5G mobile network in Germany and a crucial "wholesale and domestic roaming" customer for Vodafone in the German market. Total service revenue for Vodafone Group Plc Sponsored ADR in the second quarter of the 2026 fiscal year increased by 5.8% year-on-year, also surpassing the general Wall Street expectations. The revenue for the first half of the 2026 fiscal year, following the second quarter performance announcement, saw a total revenue increase of 7.3% to 19.61 billion for Vodafone Group Plc Sponsored ADR, slightly above general Wall Street expectations. With strong contributions from the German market, the total service revenue for Vodafone Group Plc Sponsored ADR in the first half of the fiscal year rose by 8.1% to 16.33 billion, and the adjusted EBITDAaL for the first half of the 2026 fiscal year increased by 5.9% to 5.73 billion. Benefiting from the strong performance exceeding expectations, Vodafone Group Plc Sponsored ADR's stock price rose by about 5.5% in early London trading on Tuesday. In pre-market trading on Wall Street, Vodafone Group Plc Sponsored ADR (VOD.US) surged by as much as 3%. Margherita Della Valle, CEO of Vodafone Group Plc Sponsored ADR, has been leading an ambitious turnaround plan for over two years, focusing on streamlining operations and selling redundant assets. She has divested Vodafone Group Plc Sponsored ADR's telecommunications services in the Italian and Spanish markets. Vodafone Group Plc Sponsored ADR also completed a large-scale merger with Three, owned by CK Hutchison Holdings Ltd., in its domestic UK market. Following the divestment of assets, the market's long-term focus has been on Germany, the largest market for the telecom operator. Competition and a major regulatory change in the telecommunications industry that led to the loss of millions of customers have been dragging down Vodafone Group Plc Sponsored ADR's service revenue in the German market. In particular, a law prohibiting landlords from bundling TV packages with rent caused Vodafone Group Plc Sponsored ADR to lose about half of its customers under such contracts. On Tuesday, Vodafone Group Plc Sponsored ADR stated that the impact of this legal change has now ended. The company also stated that with approximately 12 million 1 & 1 customers in the German domestic market migrating to its network infrastructure on a large scale, the wholesale business in the German market has significantly improved. Vodafone Group Plc Sponsored ADR has launched a new "progressive" dividend policy, with dividends expected to increase by approximately 2.5% in the current fiscal year. Regarding performance outlook, the company's management anticipates that profit and cash flow indicators for the current fiscal year (2026 fiscal year) will be at the upper end of their performance guidance range. Vodafone Group Plc Sponsored ADR had previously stated during an earnings conference call that adjusted EBITDAaL profit would range from 11.3 billion to 11.6 billion, and adjusted free cash flow would range from 2.4 billion to 2.6 billion. It is now expected that both indicators will be at the upper end of these ranges. These latest expectations have also boosted investors' outlook on Vodafone Group Plc Sponsored ADR's fundamentals, leading to significant increases in the stock price on the London Stock Exchange and in pre-market trading on Wall Street. The formal merger between Vodafone Group Plc Sponsored ADR and Three in the UK market has reduced the number of telecom operators in the country from four to three, a major positive outcome that European telecom companies have been lobbying for for years in order to achieve scale and sustained growth. Vodafone Group Plc Sponsored ADR and Three have committed to investing approximately 11 billion in the country over the next ten years. Vodafone Group Plc Sponsored ADR stated that the two companies have made a "rapid start" in integrating the two large organizations. In addition to the German market, which contributes the most, the company also relies on the continued strong growth of its telecommunications business in the African market. Its African business Vodacom Group Ltd. reported the largest profit increase in over a decade.