TLDR
- Vodafone stock rose 4.3% to 119.5p after a stronger-than-expected Q1 update
- Total revenue rose 9.7% to €10.3 billion for the quarter ended June 30
- Full-year adjusted core earnings guidance raised to €13–€13.3 billion
- Vodafone now expects to deliver at the upper end of both earnings and free cash flow ranges
- German service revenue came in 1.2% above consensus, described by Morgan Stanley as the key positive
Vodafone stock climbed 4.3% to 119.5 pence on Monday after the company posted a solid first quarter and lifted its full-year guidance.
Vodafone Group Public Limited Company, VOD
Total revenue for the quarter ended June 30 came in at €10.3 billion, up 9.7% year-on-year. Service revenue grew 9.8% to €8.6 billion, and rose 5.2% on an organic basis.
Adjusted EBITDAaL rose 6.7% to €2.9 billion, up 6.2% organically, driven by service revenue growth and improved operating leverage.
Vodafone Q1 2026 Earnings
-Service Rev. EU 8.63B (est EU 8.28B)
-UK Organic Service REV. +0.6% (est +0.54%)
-Organic Service REV. +5.2% (est +4.55%)
-Germany Organic Service Rev. +1.2%
-Sees FY Adj FCF High End Of EU 2.6B To EU 2.9B
-Sees FY Adj. EBITDA At High End Of EU 13.0B To…— LiveSquawk (@LiveSquawk) July 27, 2026
CEO Margherita Della Valle said the group had made a “good start to this financial year,” with broad-based growth across all segments.
Germany and Africa Lead the Way
Germany, Vodafone’s largest market, posted organic service revenue growth of 1.2%. Morgan Stanley flagged German service revenue of €2.74 billion as 1.2% above consensus — the standout in the results.
An expected growth slowdown in Germany did not materialize, which analysts noted as a clear positive.
Africa also impressed, with service revenue growth accelerating to 15% in Q1, up from 7% in the prior quarter. Egypt and Vodacom’s international markets were the key drivers.
UK service revenue also beat consensus by 70 basis points, helped by fixed-line strength.
Guidance Raised to Include Safaricom
Vodafone lifted its full-year guidance following the consolidation of Safaricom. Vodacom completed the purchase of an additional 20% stake in Safaricom on June 30, with full consolidation effective July 1, 2026.
The updated guidance now calls for adjusted core earnings of €13–€13.3 billion and adjusted free cash flow of €2.6–€2.9 billion for the year to March 2027. Vodafone said it expects to deliver at the upper end of both ranges.
Morgan Stanley noted the new guidance top end is 1.1% above consensus for core earnings and 4.3% above analyst forecasts for free cash flow.
Importantly, analysts said the guidance raise is “fully organic” — not just the result of adding Safaricom. Emerging markets performance, less macro disruption than expected, and energy hedges all contributed.
Morgan Stanley rates Vodafone “equal-weight” with a price target of 115 pence. The broker had forecast a 3–5% share price move following the update.
Restructuring and integration costs are expected to peak at around €700 million this year, including roughly €400 million tied to the VodafoneThree merger.
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