Telefonica: Strong Start to Year, But Net Debt Rises and Free Cash Flow Dips in Q1 2026

In an update on Telefonica’s financial results for the first quarter of 2026, CEO Jose Maria Alvarez-Pallete highlighted the initial success of implementing the company’s new strategic plan through to 2026. Despite revenue remaining relatively stable at €10.1 billion, net debt rose by 7.7 per cent to €28.5 billion, largely due to the acquisition of a greater stake in its German unit. EBITDA also grew by 1.9 per cent to €3.2 billion, but free cash flow was negative at €41 million, a crucial metric for its new Growth, Profitability, and Sustainability plan.

Pallette noted that Telefonica had a strong start to the year, with the business reinforcing itself thanks to the implementation of a new roadmap and strategic plan, leading to improved revenue and commercial activity. He added that Telefonica is committed to achieving its goals under its new plan and is making progress towards them.

In addition to the financial figures, Telefonica announced a non-binding mobile network wholesale agreement with Romanian operator Digi Communications. A final agreement is expected to be disclosed in the coming weeks as their current deal is set to expire in September 2026.