United Internet (ETR:UTDI) confirmed its 2026 guidance after reporting growth in revenue, EBITDA and free cash flow during the first half of the year, supported by its IONOS cloud business and increased monetization at its Mail & Media division.
Chief Executive Officer Ralph Dommermuth said the company expects approximately EUR 6.25 billion in revenue, EBITDA of about EUR 1.45 billion and cash capital expenditures of EUR 600 million to EUR 650 million for the full year. “The first half of the year has panned out very positively,” Dommermuth said, adding that the company was looking positively toward the second half.
1&1 Customer Base Declines as Tariffs Shift
Dommermuth attributed the customer decline primarily to the discontinuation of particularly low-priced tariffs and reductions in included data allowances for higher-performance tariffs. The segment had 12.33 million mobile contracts and just under 4 million broadband connections at the end of the period.
1&1 revenue rose 1.6%, while service revenue declined 1.1% to EUR 1.805 billion. Other revenue increased 13.5% to EUR 464.8 million. EBITDA increased 5.1% to EUR 382.7 million, producing an EBITDA margin of 16.9%.
The company said its enterprise and network operations have more than 70,000 kilometers of fiber network across more than 350 cities, with 30,000 directly connected sites. Its fiber-to-the-home footprint reaches 77% of German households, while its enterprise and network segment reaches 34% of households, up from 27% at the end of 2025.
IONOS Adds Customers, Invests in Marketing and AI
IONOS added 500,000 customer contracts in the first half, including 5.57 million customers outside Germany and 4.98 million domestic customers. Revenue rose 6.9% to EUR 701.1 million, or 8.2% on a foreign-exchange-adjusted basis. EBITDA increased 2.6% to EUR 232.6 million, or 4.2% adjusted for currency effects, as higher marketing spending weighed on profitability. The EBITDA margin was 33.2%.
Dommermuth said United Internet remains a “proud and happy investor” in IONOS, in which it holds a 64% stake. He highlighted potential demand for artificial-intelligence tools designed for small and medium-sized businesses, including AI phone assistants, website chat assistants, marketing tools and website or app-building software.
According to Dommermuth, IONOS’ competitive position is supported by its own data centers, cloud infrastructure and sales channels across multiple countries. He said the company is in the early stages of rolling out AI offerings and refining products and sales channels.
Management also said IONOS’ EBITDA growth is expected to accelerate in the second half as customer additions and offers introduced earlier in the year become more fully monetized. At 1&1, further network monetization is also expected to support second-half EBITDA growth.
Mail & Media Converts Free Users to Paid Accounts
United Internet’s Mail & Media division reported a decline in total accounts but continued growth in paid products. The unit had 50,000 fewer accounts overall and 240,000 fewer free accounts than a year earlier, while adding 190,000 paid accounts. Paid accounts reached 3.54 million.
The division’s revenue increased 8.4% to EUR 161.4 million, driven by the monetization of free accounts and growth in paid accounts. EBITDA rose 16.7% to EUR 62.9 million, with an EBITDA margin of 32.9%.
Dommermuth said traffic across the group’s portals, including GMX and Web.de, continues to grow. He said United Internet benefits from direct login traffic rather than relying on Google referrals, which he said have become more challenging for websites as Google provides more answers through AI tools.
The company plans to begin testing eSIM offerings through its portals in the fourth quarter. Dommermuth said the offering is intended to combine eSIM activation with cloud storage and target younger users, a customer group that differs from 1&1’s more hardware-oriented customer base. He said the process, including customer identification, can now be completed in roughly three minutes as eSIM-enabled devices have become more widespread.
Cash Flow and Balance Sheet
Chief Financial Officer Carsten Theurer said group EBITDA increased 5.1% in the first half, while EBIT rose 20%, aided by the phaseout of purchase-price-allocation depreciation related to Drillisch. Earnings per share increased about 60% to EUR 0.775.
Free cash flow after leases totaled EUR 129.7 million, approximately EUR 100 million above the prior-year period. Theurer said the improvement reflected operating cash flow growth, lower tax payments and stable capital expenditures. Free cash flow before lease expenses was EUR 230 million, while lease expenses were EUR 83.5 million.
Bank liabilities increased by EUR 200 million to EUR 3.5 billion. Net debt stood at EUR 3.4 billion, with leverage of 2.57 times. Theurer said the balance sheet also reflected dividend payments, an IONOS share buyback package and continued investment in fiber and mobile networks. The equity ratio was 43.4%.
Management also discussed potential efficiency gains from AI across development, marketing and customer service. Theurer said employee numbers had declined from about 11,000 several years ago to roughly 10,400 currently, and he expects further reductions over time as automation and AI-assisted processes expand.
About United Internet (ETR:UTDI)
United Internet AG, through its subsidiaries, operates as an Internet service provider worldwide. The company operates through Consumer Access, Business Access, Consumer Applications, and Business Applications segments. It offers landline-based broadband and mobile internet products, including home networks, online storage, telephony, and IPTV for private users; and telecommunication products ranging from fiber-optic direct connections to tailored ICT solutions, which include voice, data, and network solutions, as well as infrastructure services to national and international carriers and ISPs.
