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Introduction & Market Context
Deutsche Telekom (OTC:DTEGY) (ETR:DTE) presented its Q1 2025 results on May 15, 2025, showcasing continued financial and customer growth across its operations. The German telecommunications giant, whose stock closed at €31.77 on May 14, reported strong organic growth in key metrics and raised its full-year guidance, reflecting confidence in its strategic direction.
The company highlighted its progress in network expansion, particularly in fiber and 5G deployment, while emphasizing its ongoing digital transformation powered by artificial intelligence initiatives across various business functions.
Quarterly Performance Highlights
Deutsche Telekom reported impressive financial results for Q1 2025, with organic service revenue growth of 3.5% and adjusted EBITDA AL (after leases) increasing by 5.3% year-over-year. Free cash flow AL saw a remarkable jump of 52.4%, while adjusted earnings per share grew by 10.8%.
The company’s performance excluding its US operations also showed solid growth, with service revenues up 2.5% and adjusted EBITDA AL increasing by 3.8% organically.
As shown in the following financial overview chart, T-Mobile US (NASDAQ:TMUS) remains the largest contributor to the group’s adjusted EBITDA AL, followed by the German segment:
The financial results demonstrate Deutsche Telekom’s continued momentum across all major segments, with particularly strong performance in the European segment, which achieved 7.2% organic growth in adjusted EBITDA AL.
Network Expansion and Digital Transformation
Deutsche Telekom continues to invest heavily in network infrastructure, extending its leadership in both fixed and mobile networks. In Germany, fiber-to-the-home (FTTH) coverage expanded significantly, with homes passed increasing from 8.2 million in Q1 2024 to 10.5 million in Q1 2025. Similarly, in the EU segment, fiber homes passed grew from 17.6 million to 20.9 million over the same period.
The company’s 5G coverage also improved, reaching 98% of the population in Germany (up from 97% a year ago) and 79% across its EU footprint (up from 68% in Q1 2024).
The following chart illustrates Deutsche Telekom’s network expansion progress:
Beyond physical infrastructure, Deutsche Telekom is accelerating its digital transformation through AI implementation. The company reported over 12.2 million active app users and more than 4.5 million unique monthly active users for its Magenta Moments program. AI initiatives span across multiple business areas, from HR and finance to network management and customer service, where AI chatbots now resolve over 50% of customer issues.
Segment Performance
T-Mobile US
T-Mobile US continues to deliver industry-leading growth in both financial and customer metrics. The US subsidiary, in which Deutsche Telekom’s stake has now reached 51.8% as of April 17, 2025, reported service revenue growth of 5.2% in Q1 2025, with core adjusted EBITDA (US GAAP) increasing by 8.4%.
Customer acquisition remains strong, with 1.3 million total postpaid net additions in Q1 2025, up from 1.2 million in the same period last year. High-speed internet net additions reached 424,000, while postpaid phone net additions were 495,000. Postpaid phone churn remained low at 0.91%.
The following chart shows T-Mobile US’s consistent customer growth trajectory:
Germany
Deutsche Telekom’s home market of Germany achieved its 34th consecutive quarter of EBITDA growth, with adjusted EBITDA AL increasing from €2,576 million in Q1 2024 to €2,634 million in Q1 2025, representing 2.2% organic growth. However, revenues declined by 1.3% organically, following a trend that began in Q4 2024.
Customer Growth
Deutsche Telekom’s customer base continued to expand in Q1 2025, though at a slightly slower pace in some segments compared to the previous year. Mobile net additions remained strong, particularly in the US where postpaid net adds increased from 1,220,000 in Q1 2024 to 1,337,000 in Q1 2025. Outside the US, contract mobile net adds decreased slightly from 466,000 to 397,000.
Fixed-line broadband net additions slowed from 95,000 to 61,000, which the company attributed to a slowdown in Germany. TV net adds also decreased from 101,000 to 36,000, impacted by a one-off effect in Hungary.
Forward-Looking Statements
Based on its strong Q1 performance, Deutsche Telekom raised its guidance for 2025. The company now expects adjusted EBITDA AL of approximately €45.0 billion, representing growth of about 4.5% compared to FY 2024 on a pro forma basis. Free cash flow AL is projected to reach around €20.0 billion (approximately 4% growth), while adjusted EPS is expected to be around €2.00, up about 9% from 2024.
The guidance update reflects the new T-Mobile US guidance, which is based on the midpoint of US$33.2-33.7 billion core adjusted EBITDA and US$17.5-18.0 billion free cash flow.
Deutsche Telekom also highlighted its progress on ESG (Environmental, Social, and Governance) initiatives, with improvements in customer satisfaction (increasing from 76.2 in 2023 to 77.6 in 2024) and employee satisfaction (rising from 78% to 80%). The company noted that its energy consumption outside the US decreased by 1% year-over-year, though group-wide consumption increased by 3%.
With its strong financial performance, continued network expansion, and accelerating digital transformation, Deutsche Telekom appears well-positioned to meet its 2024 Capital Markets Day ambitions and deliver sustained growth across its global operations.
Full presentation:
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