Digi Communications Q1 2025 presentation: Revenue surges 19% amid international expansion

Introduction & Market Context

Digi Communications N.V. (BVB:DIGI) presented its Q1 2025 financial results on May 15, 2025, highlighting substantial revenue growth and customer acquisition across its expanding European footprint. The telecommunications provider, which currently trades at 67.40 RON (up 0.77% from previous close), continues to pursue an aggressive growth strategy in both established and new markets.

The company’s stock has performed well over the past year, trading near its 52-week high of 69.80 RON, reflecting investor confidence in its expansion strategy despite the significant capital expenditures required to support this growth.

Quarterly Performance Highlights

Digi reported impressive top-line growth for Q1 2025, with revenues and other income increasing 19% year-over-year to €532 million. This growth was primarily driven by strong performance in Spain and continued steady expansion in Romania. The company’s Revenue Generating Units (RGUs) grew 17% year-over-year to reach 28.8 million, representing an addition of 4.1 million RGUs compared to Q1 2024.

As shown in the following financial highlights chart, revenue growth was particularly strong in Spain, which saw a 22% increase, while Romania grew by 11%:

However, profitability metrics showed more modest improvements. Adjusted EBITDA increased by 5%, while EBITDA excluding IFRS 16 effects grew by just 0.4% to €140 million. This suggests that the company’s aggressive expansion is currently prioritizing market share and customer acquisition over immediate margin expansion.

The company’s RGU growth was distributed across all business lines, with mobile services showing the strongest performance at 21% growth year-over-year:

Strategic Initiatives

Digi continues to execute on its multi-market expansion strategy, with significant developments across all of its operating territories. The company is pursuing three key strategic initiatives:

1. Sustained RGU growth across all markets, with particularly strong performance in Spain and Italy

2. Continued network expansion, including enhancing 5G coverage in Romania and transitioning from MVNO to MNO status in Spain

3. Development of new markets in Portugal and Belgium, which were launched in 2024

The company’s market highlights demonstrate the varying stages of development across its geographic footprint:

Digi has been particularly successful in attracting customers from competitors, as evidenced by its strong portability numbers. In Q1 2025, the company gained 190,916 mobile customers through portability in Romania and 341,967 in Spain, with net portability gains of 226,160 in the Spanish market.

To support its ambitious growth plans, Digi secured several significant financing agreements in early 2025:

• Two export credit facility agreements totaling €54.8 million for Digi Romania
• A €275 million syndicated credit facility with a 5-year tenor for Digi Spain
• An additional €200 million facility for Digi Romania with a 5-year maturity
• An €84 million facility agreement with a 7-year maturity for Digi Andalucia S.L. in Spain

Detailed Financial Analysis

Digi’s financial profile as of March 31, 2025, reflects its growth-oriented strategy, with significant debt financing supporting its expansion efforts. The company reported total gross debt of €1,471.8 million and total net debt of €1,426.7 million.

The company’s capital expenditures amounted to €169 million in Q1 2025, representing 32% of revenue. This high level of investment reflects Digi’s commitment to infrastructure development across its markets, particularly in Spain, Romania, and Portugal.

The debt maturity profile shows a relatively balanced distribution of repayments over the coming years:

Despite the high debt levels, Digi has announced a dividend proposal of RON 1.35 per share, with payment scheduled for July 15, 2025.

Forward-Looking Statements

Looking ahead to the remainder of 2025, Digi outlined specific strategic priorities for each of its markets:

In Romania, the company plans to continue enhancing its mobile network performance, expand coverage, and maintain a strong position in fixed services. Romania remains the company’s most mature and profitable market, contributing €121.8 million to adjusted EBITDA in Q1 2025.

Spain is expected to remain the main growth driver for the company, with a focus on increasing operational efficiencies and completing the transition from MVNO to MNO status. The Spanish operation contributed €34.4 million to adjusted EBITDA in Q1 2025.

In Portugal, Digi aims to expand network coverage, improve mobile service quality, and integrate the recently acquired Nowo to unlock synergies. The Portuguese operation is still in investment mode, with a negative EBITDA contribution of €15.4 million in Q1 2025.

Belgium represents the newest market for Digi, with plans to accelerate network expansion through strategic partnerships and infrastructure investments. The company reported 53,000 RGUs in Belgium as of Q1 2025.

As Digi continues its expansion across Europe, investors will be watching closely to see if the company can translate its impressive customer acquisition and revenue growth into stronger profitability metrics in the coming quarters.

Full presentation:

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