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Investing.com -- Vodafone (LON:VOD) on Thursday reported a 3.9% year-over-year rise in group revenue to €9.4 billion in its fiscal first quarter, boosted by the consolidation of Three U.K. and growth across Africa, sending shares up over 3%.
Group service revenue rose 5.3% to €7.9 billion, with organic growth in all regions except Germany. Foreign exchange movements partially offset reported gains.
In the U.K., total revenue climbed 14.5% to €1.9 billion, while service revenue rose 15.2% to €1.6 billion, following the May 31 completion of the Three UK merger.
The combined entity, VodafoneThree, is now the largest mobile network operator in the U.K..
Organic service revenue grew 0.9%, down from 3.1% in the prior quarter. Vodafone added 44,000 broadband customers but lost 46,000 mobile contract customers.
In Germany, service revenue declined 3.2% to €2.7 billion. Mobile service revenue rose 2.7%, supported by wholesale growth and customer migration from 1&1, while fixed service revenue fell 8% due to regulatory changes in TV contracts and reduced promotional activity.
Vodafone Business revenue in Germany declined 0.9%, and broadband customers fell by 23,000.
In Africa, total revenue rose 6.6% to €1.9 billion, with organic service revenue up 13.8%, driven by strong demand in South Africa, Egypt, and Vodacom’s international markets.
M-Pesa revenue increased to €112 million, now representing 28.7% of service revenue in those markets.
Vodafone Cash revenue in Egypt surged 55.1%, making up 7.6% of local service revenue. Egypt added 78,000 contract customers, and Vodacom’s international markets gained 1 million new mobile users.
In Türkiye, service revenue grew 22.1% in euro terms and 29.6% excluding hyperinflationary adjustments.
Business revenue jumped 72.7%, driven by pricing actions and strong demand for digital services. Vodafone added 200,000 mobile contract customers in the region.
In Other Europe (Portugal, Ireland, Greece, Romania, Czech Republic, and Albania), service revenue was flat at €1.2 billion.
Organic growth was 0.2%, with gains in Ireland and Business services offset by ARPU pressure in Portugal. The region added 28,000 mobile contract and 3,000 broadband customers.
Group adjusted EBITDAaL increased 4.9% organically to €2.7 billion, with a margin of 29.3%, up 0.2 percentage points year-over-year.
However, operating profit declined 34.3% to €1 billion, reflecting a one-time €590 million gain from the sale of Indus Towers in the prior year.
Vodafone reaffirmed its FY26 guidance, targeting adjusted EBITDAaL of €11.3 billion to €11.6 billion and free cash flow of €2.6 billion.
The British telecom company also launched the second €500 million tranche of its €2.5 billion share buyback program, instructing Goldman Sachs (NYSE:GS) International to repurchase shares on its behalf between July 24 and November 10, 2025, with the aim of reducing its share capital.