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Investing.com -- Telekom Austria (OTC:TKAGY) stock dropped 3% following the company’s second quarter results, which revealed concerning weakness in its domestic business despite overall figures meeting expectations.
The telecommunications provider reported revenue of €1.370 million, slightly above consensus and representing a 4.1% increase YoY. EBITDA before restructuring charges came in at €539 million, just 0.4% above analyst expectations, showing growth of 3.2% YoY compared to 8.1% in the previous quarter.
While the headline numbers appeared solid, investors focused on troubling trends in the company’s Austrian operations. Domestic service revenue declined 2.5% YoY, marking the first significant drop in several years, while EBITDA before restructuring in Austria fell 8.3% YoY.
Adding to market concerns, Telekom Austria simultaneously reduced its financial reporting transparency by discontinuing disclosure of key metrics including mobile versus fixed-line service revenue trends, mobile ARPU, mobile postpaid subscribers, and broadband net adds. The company cited competitive reporting practices as justification for the change, though the timing coincides with deteriorating performance.
Management acknowledged a decline in mobile ARPU due to weaker pricing, continuing a negative trend that began in the first quarter when ARPU fell 1.9% YoY.
Strong performance in international markets helped offset domestic weakness, allowing the company to maintain its full-year 2025 guidance for 2-3% revenue growth and capital expenditure excluding spectrum of €800 million.
Equipment revenue showed particularly strong growth at 19.3% YoY, significantly accelerating from 7.0% in the first quarter, while service revenue growth slowed to 1.8% YoY from 3.5% in the previous quarter.
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