Telecom Italia reported second-quarter results showing its core profitability in line with market forecasts and a return to quarterly net profit, driven by gains in its TIM Brasil operations and the enterprise segment.
For the three months ended June 30, the group recorded EBITDA after leases of 998 million, essentially matching the analyst consensus of 995 million. The reporting period was the first quarterly release after the company's board approved a takeover proposal exceeding 13 billion from its largest shareholder on July 18.
On a half-year basis for 2026, Telecom Italia posted group revenues of 6.8 billion, a 2% increase year-on-year. Excluding the mobile virtual network operator - MVNO - component, revenues rose 3.3% over the same period. Group EBITDA after leases reached 1.8 billion, up 1.2% overall and higher by 6.3% when MVNO activities are stripped out.
The company returned to net profit in the second quarter, reporting 88 million, compared with a net loss of 8 million in the year-earlier quarter and a first-quarter 2026 loss of 292 million.
Segment results varied across the group's businesses. TIM Consumer generated total revenues of 2.9 billion, down 2.7% year-on-year, with the decline attributed to the anticipated fall-off in MVNO activity. Within Consumer, fixed average revenue per user rose 2% to 33.0 per month in the quarter.
TIM Enterprise produced total revenues of 1.7 billion, an increase of 5.6% year-on-year. The enterprise divisions cloud business was a principal growth driver: cloud revenues expanded 18.1% and now represent 45% of service revenues for the segment.
TIM Brasil continued to contribute meaningfully to group performance, reporting total revenues of 2.3 billion, up 6% year-on-year, and EBITDA after leases of 0.9 billion, an increase of 5.5%.
From a cash and balance-sheet perspective, the group generated 0.7 billion of equity free cash flow after leases in the first half of the year. Adjusted net financial debt after leases stood below 7.3 billion as of June 30, with reported leverage of 1.94x.
Management confirmed its existing guidance for both 2026 and 2027.
Summary
Telecom Italia delivered second-quarter EBITDA after leases of 998 million, in line with expectations, and returned to quarterly net profitability with 88 million. Growth was concentrated in TIM Brasil and the enterprise cloud business, while consumer revenues declined due to MVNO contractions. The company produced 0.7 billion in equity free cash flow for the first half and reported adjusted net financial debt after leases under 7.3 billion; guidance for 2026 and 2027 was reiterated.
Key points
- Group EBITDA after leases in Q2 was 998 million, matching analyst consensus of 995 million - impacts the telecom sector and equity markets for the stock.
- TIM Brasil and enterprise cloud were primary growth engines: Brazil revenues rose 6% and enterprise cloud revenues grew 18.1%, now 45% of service revenues - impacts emerging market telecoms and enterprise IT services.
- Balance-sheet metrics showed 0.7 billion of equity free cash flow after leases in H1 and adjusted net financial debt after leases below 7.3 billion with 1.94x leverage - relevant to credit markets and lenders.
Risks and uncertainties
- MVNO-related revenue decline weighed on TIM Consumer results, introducing variability in the retail segment's top-line - relevant to consumer telecom services.
- Reported leverage of 1.94x and reliance on continued cash generation may influence financing flexibility and investor sentiment - relevant to fixed-income and bank lending markets.
Disclosure