Telekom Lifts Cash-Flow Target and Expands Buyback as Polish Fibre Deal Nears Completion

Deutsche Telekom lifts FY cash flow outlook to €20B, boosts buyback by €3B, and acquires Polish fiber firms Fiberhost and Inea.

The Bonn-based telecoms group has sharpened its full-year cash generation forecast to roughly €20.0 billion, up from an earlier projection of more than €19.8 billion, with the upgrade rooted in a second quarter that delivered organic growth across key operating metrics. The revised guidance accompanied the release of Q2 results on 6 August, which showed revenue of €29,933 million and earnings per share of €0.58.

The quarterly performance gives the more optimistic outlook its foundation. Organic revenue growth ran at 3.3 percent, matching the pace of service revenue expansion, while adjusted EBITDA AL climbed 7.3 percent organically to €11.8 billion. Free cash flow AL rose 3.1 percent to €5.0 billion, and adjusted net income advanced 11.1 percent to €2.8 billion. For the full year, management held its adjusted EBITDA AL target steady at around €47.5 billion, with adjusted earnings per share still expected to land at roughly €2.20.

What makes the cash-flow upgrade more than a routine revision is what the company is doing alongside it. Telekom has enlarged its 2026 share buyback programme by up to €3 billion, a move that signals sufficient financial headroom to return more capital to shareholders even as investment in network expansion and acquisitions continues. The programme, which has been running since the start of the year, was expanded rather than relaunched; since 10 August the group has already repurchased several million of its own shares, including around 1.54 million in the period from 17 to 21 August alone.

The improved financial position also underpins strategic moves beyond the core domestic business. On 17 August, Telekom confirmed the acquisition of Polish fibre operators Fiberhost and Inea from Macquarie Asset Management for an enterprise value of approximately €1 billion. Fiberhost reaches around 1.4 million households, while Inea serves more than 300,000 broadband and TV customers. Completion, which is subject to Polish competition approvals, is expected towards the end of the year. The deal underscores the group's ability to fund targeted expansion while simultaneously returning cash to investors — a combination that bolsters confidence in the upgraded guidance.

The Polish push sits alongside continued domestic rollout momentum. Recent additions include 15,000 households connected to the fibre network in Esslingen and a further 3,000 connections in Siegburg-Kaldauen, keeping network expansion a consistent investment theme that supports the operational substance behind the cash-flow targets.

Market participants have taken note. Barclays initiated coverage with an Overweight rating on 10 August, following publication of its assessment a day earlier. The stock has responded positively, closing Monday at €29.14 after a 0.8 percent daily gain, and is up 8.2 percent over the past 30 days — a move that reflects the favourable reception of the quarterly numbers, the cash-flow upgrade and the Polish transaction. The shares now trade comfortably above their 50-day average, suggesting the recent uptrend has gained traction. At €29.12, the stock sits marginally below the previous close but remains 15 percent off its 52-week high of €34.35, reached in late February.

Investors also drew reassurance from a 3 August announcement by T-Mobile US, which said it would no longer support potential merger plans with its German parent. The statement removed a lingering overhang — the prospect of a multi-billion-dollar acquisition debate with an uncertain outcome — that had weighed on the stock.

Looking ahead, the market's attention turns to the third-quarter figures due on 5 November, followed by an investor day on 22 November focused on the group's artificial intelligence activities.