United Internet H1 2025 slides: revenue up 4.3%, confirms full-year guidance

United Internet AG (ETR:UTDI) presented its first-half 2025 results on August 7, revealing revenue growth of 4.3% despite ongoing investments in its mobile network infrastructure. The German internet services provider maintained its full-year guidance while reporting mixed performance across its business segments.

Executive Summary

United Internet reported group revenue of €3.23 billion for H1 2025, representing a 4.3% increase compared to the same period last year. EBITDA rose by 2.0% to €675.6 million, while EBIT declined by 8.5% to €317.8 million. Earnings per share decreased by 3.3% to €0.59.

The company added 290,000 customer contracts during the period, bringing its total to 29.31 million. However, this growth was uneven across segments, with Business Applications showing strong momentum while Consumer Access faced challenges.

As shown in the following comprehensive overview of the group’s key performance indicators:

"We confirm our guidance," stated the company in its presentation, maintaining its 2025 outlook with projected revenues of approximately €6.45 billion (up from €6.30 billion in 2024), EBITDA of approximately €1.35 billion (up from €1.30 billion), and capital expenditures of approximately €800 million.

Detailed Financial Analysis

United Internet operates through two main business areas: Access (Consumer and Business) and Applications (Consumer and Business). The company’s structure encompasses approximately 10,800 employees, a 67,000 km fiber network, 5G mobile infrastructure, and over 100,000 servers.

The company’s diverse portfolio of brands and investments spans across multiple digital service categories as illustrated below:

Consumer Access Performance

The Consumer Access segment, which includes fixed-line and mobile services under the 1&1 brand, reported a slight revenue decline of 0.5% to €2.01 billion. Service revenues increased marginally by 0.1% to €1.65 billion, while other revenues (primarily low-margin smartphones) decreased by 3.0% to €359.9 million.

EBITDA in this segment fell by 13.1% to €283.9 million, significantly impacted by €130.6 million in costs related to the rollout of the 1&1 mobile network (compared to €111.0 million in the prior year). The EBITDA margin contracted to 14.1% from 16.2% a year earlier.

The following chart illustrates the EBITDA breakdown between core Access operations and mobile network development:

The company reported 16.33 million customer contracts in the Consumer Access segment, a decrease of 60,000 from December 2024. This included 3.89 million broadband connections (down 60,000) and 12.44 million mobile internet contracts (unchanged).

Business Access Performance

Business Access, operated through 1&1 Versatel, showed positive momentum with revenue growth of 1.4% to €287.3 million. The segment’s EBITDA increased by 2.2% to €80.4 million, despite €12.0 million in start-up costs for new business areas including 5G and commercial area expansion (down from €16.4 million in the prior year). The EBITDA margin improved slightly to 28.0% from 27.8%.

The company highlighted its extensive fiber optic network spanning 67,221 km across more than 350 German cities, with 28,753 directly connected sites.

Consumer Applications Performance

The Consumer Applications segment, which includes email and cloud services under the GMX, WEB.DE, and mail.com brands, reported revenue growth of 3.1% to €148.9 million. EBITDA remained unchanged at €53.9 million, with the margin declining slightly to 36.2% from 37.3%.

Total (EPA:TTEF) consumer accounts decreased by 220,000 to 41.75 million, with free accounts declining by 360,000 while pay accounts increased by 140,000. This shift toward premium services reflects the company’s strategy to monetize its user base more effectively.

Business Applications Performance

Business Applications emerged as the standout performer, with revenues surging by 19.1% to €895.0 million. This growth was attributed to increased customer acquisition, successful up-selling and cross-selling, and strong performance in the AdTech segment.

The segment’s EBITDA jumped by 24.6% to €258.4 million, with the margin expanding to 28.9% from 27.6%. Customer contracts increased by 210,000 to 9.80 million, with growth both domestically (+80,000 to 4.71 million) and internationally (+130,000 to 5.09 million).

The following chart demonstrates the robust growth in Business Applications customer contracts:

Financial Position

United Internet maintained a solid financial position despite ongoing investments. The company’s detailed balance sheet and cash flow statement provide insight into its financial health:

The EBITDA to free cash flow bridge reveals how operating earnings translate to available cash after investments and working capital changes:

Cash flow from operating activities showed strong improvement, increasing to €400.9 million from €175.1 million in the prior year. However, cash and cash equivalents decreased to €30.2 million from €114.9 million at the end of 2024, while liabilities to banks increased to €3.19 billion from €2.81 billion.

Strategic Initiatives

United Internet continues to focus on several key strategic initiatives:

1. Mobile network development: The company is building Europe’s first Open RAN, fully virtualized mobile network. Migration of existing customers from wholesale contracts began in January 2024 and is expected to be completed by year-end.

2. Fiber network expansion: The Business Access segment continues to extend its fiber optic network, which now spans over 67,000 km.

3. Business Applications growth: IONOS is positioned as Europe’s leading digitization partner for small and medium-sized enterprises, with operations in 15 European countries plus North America.

4. Premium service adoption: In Consumer Applications, the company is successfully converting free account users to paid subscriptions, with 140,000 new pay accounts added in H1 2025.

Forward-Looking Statements

United Internet confirmed its full-year 2025 guidance:

• Revenues: approximately €6.45 billion (2024:€6.30 billion)
• EBITDA: approximately €1.35 billion (2024:€1.30 billion)
• Cash-CAPEX: approximately €800 million (2024:€774.6 million)

This outlook aligns with the company’s Q1 2025 guidance and suggests management’s confidence in continued growth despite ongoing investments in network infrastructure.

The company’s stock closed at €25.18 on August 7, 2025, down 1.07% for the day, but remains near its 52-week high of €25.88, indicating overall positive market sentiment toward United Internet’s long-term strategy despite short-term profitability challenges.

Full presentation:

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