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Investing.com -- Freenet (ETR:FNTGn) stock dropped 5.7% after the German telecommunications company reported second-quarter results showing declining mobile service revenue and stalled subscriber growth in its Waipu TV streaming service.
The company posted revenue of €609 million, 1.5% below consensus estimates, while EBITDA came in at €129 million, missing expectations by 1.4%. Mobile service revenue showed a marginal year-over-year decline, with management revising its full-year ARPU (average revenue per user) outlook downward from "stable" to a "moderate decrease."
Despite these challenges, Freenet maintained its full-year 2025 guidance, projecting "moderate growth" in revenues, adjusted EBITDA of €520-540 million excluding a €14 million one-off for IP addresses, and free cash flow of €300-320 million including the one-off.
The second quarter results marked the first reporting period under Freenet’s new CEO, who committed to existing short and mid-term targets, including financial policy and shareholder remuneration plans. The company also reported strong mobile net adds and free cash flow of €83 million, which exceeded consensus by 9.4%.
"While current trends deserve scrutiny, the change in leadership is boding well so far," noted analysts at Bernstein.
Freenet also implemented a minor accounting change, now recognizing certain costs and revenues associated with open-ended contracts over an estimated lifetime rather than upfront as previously done.
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