Telefonica's Q4 Earnings Decline, Revenues Increase Y/Y

Core Viewpoint - Telefonica, S.A. reported a significant decline in net income for Q4 2024, with a year-over-year drop of 41.8% to €425 million, alongside a decrease in basic earnings per share (EPS) from €0.12 to €0.06 [1][2]. Financial Performance - Total revenues for Q4 2024 increased by 5.4% year over year to €10,701 million, driven by strong performance in key markets, with residential revenues up 6.5% and business segment revenues up 10% [2]. - For the full year 2024, revenues reached €41,315 million, reflecting a 1.6% year-over-year increase, surpassing the initial growth target of around 1% [2]. Business Unit Results - Telefonica Espana: Revenues increased by 1.3% year over year to €3,364 million, supported by an 8.9% rise in handset sales and a 1% growth in service revenues. Adjusted EBITDA grew by 1% to €1,255 million [3]. - Telefonica Deutschland: Revenues fell by 3.7% to €2,205 million, primarily due to weak mobile business trends, while adjusted EBITDA margin stood at 33.4% [4]. - VirginMedia-O2 U.K.: Revenues slightly decreased by 0.1% to €3,263 million, with an adjusted EBITDA margin of 36.6% [4]. - Telefonica Brasil: Revenues decreased by 7.4% to €2,350 million, impacted by foreign exchange headwinds, with adjusted EBITDA declining by 6.9% to €1,050 million [5]. - Telefonica Hispam: Revenues surged by 47.1% to €2,432 million, largely due to a lower comparison base from the previous year and other factors [8]. - Telefonica Tech: Revenues increased by 11.1% year over year to €612 million, driven by growth in cybersecurity and IoT sectors [7]. Cash Flow and Liquidity - For the year ending December 31, 2024, Telefonica generated €10,994 million in net cash from operating activities, down from €11,649 million the previous year. Free cash flow totaled €2,634 million, exceeding the target with a 14.1% increase from the prior year [10]. - As of December 31, 2024, the company held €8,062 million in cash and cash equivalents, with non-current financial liabilities amounting to €33,192 million [11]. Future Guidance - The company anticipates continued organic growth in revenues, EBITDA, and EBITDAaL minus CapEx for 2025. Free cash flow is expected to remain stable compared to 2024 [12]. - A cash dividend of €0.30 per share has been confirmed for 2025, to be distributed in two installments [12].