LONDON, November 10, 2026 — Vodafone raised its FY27 guidance for profit and cash flow after reporting faster service-revenue growth in the first half of its financial year, with stronger business services and African operations helping to offset a slower recovery in Germany. The revised outlook gives the British telecommunications group a higher earnings target for the year ending March 2027, but the results also show how uneven its turnaround remains across major markets.
The company said adjusted earnings before interest, tax, depreciation and amortisation after leases should reach between €13.2 billion and €13.4 billion in the full year, while adjusted free cash flow is expected to be between €2.8 billion and €3 billion, up from the previous €2.6 billion to €2.9 billion range. The profit range is above the previous €13 billion to €13.3 billion forecast. The upgrade followed six-month results in which organic service revenue increased 5.8% and adjusted core earnings rose 6.4% on an organic basis.
The results cover the six months ended September 30, 2026, and were announced on November 10. Vodafone reported total revenue of about €21.9 billion, with service revenue reaching €18.4 billion. Service revenue rose 12.8% on a reported basis, reflecting currency and portfolio effects as well as underlying growth; on an organic basis, which strips out those effects, the increase was 5.8%. The distinction matters because reported growth can move sharply when exchange rates or the structure of the group changes.
Adjusted EBITDAaL, the company’s measure of operating earnings after lease costs, was approximately €6.45 billion, up 12.6% on a reported basis and 6.4% organically. Its margin was 29.5%. Vodafone said stronger service revenue and improved operating leverage supported the result. The company has been trying to turn a period of portfolio reshaping into more consistent growth, using a smaller group of core markets and a larger emphasis on business connectivity, digital services and financial products.
The higher guidance should not be confused with a return to statutory profit. Vodafone recorded a reported net loss of roughly €3.6 billion for the half, compared with a profit in the previous-year period. The loss reflected large non-cash accounting charges, including an impairment linked to Germany and a write-down of deferred tax assets in the United Kingdom, partly offset by a gain associated with the Safaricom transaction. Those items affect reported earnings but do not represent the same thing as the operating performance measured by adjusted EBITDAaL.
Adjusted free cash flow was still an outflow of about €440 million in the first half, although it improved from the comparable period. Net debt stood at approximately €33.5 billion at the end of September. That means the higher full-year cash-flow target depends on stronger cash generation in the second half. Investors will want to see whether working capital, tax payments, capital spending and restructuring costs allow the improvement in operating earnings to reach the balance sheet.
Africa was the clearest growth engine in the regional breakdown. Organic service revenue in the region accelerated to 13.4%, with Vodafone pointing to growth across the markets operated by Vodacom. Demand for mobile data and financial services supported the performance. Mobile-money products are particularly important because they allow operators to earn revenue beyond basic voice and data plans, while giving customers access to payments and other services through mobile networks.
The group’s business-to-business operation also helped. Companies continue to buy connectivity, cloud-related services, managed networks and digital tools as they modernise their operations. Business revenue is strategically useful for a telecom operator because contracts can be longer-term and can cover several services rather than a single consumer mobile plan. Vodafone has been investing in that part of the portfolio as it looks for growth that is less dependent on retail price competition.
Chief Executive Margherita Della Valle said the group had made a strong start to a new growth phase and highlighted organic service-revenue growth of 5.8%. The company also reported particularly strong momentum in Vodafone Business. The figures do not mean every business unit is growing at the same rate, but they show why management was prepared to raise the full-year outlook even while Germany remains a concern.
The African performance is not risk-free. Vodafone’s results depend on economic conditions, exchange rates, regulation, network investment and the ability of customers to keep paying for data and financial services. Some markets also face currency volatility and differences in purchasing power. Strong organic growth is encouraging, but investors will look for evidence that it converts into sustainable cash flow rather than being absorbed by the cost of expanding networks and maintaining service quality.
Germany, one of Vodafone’s largest markets, remains the clearest problem area. Reuters reported that organic service-revenue growth in Germany was 0.4% for the first half, down from 1.2% in the first quarter. The Times reported a 0.5% decline in second-quarter service revenue, indicating that the market weakened as the period progressed; the figures refer to different reporting periods and should not be treated as directly comparable. The chief executive said Germany was not yet where it needed to be. The result is important because the German operation has historically been a major contributor to group revenue and cash generation.
Vodafone has faced tougher competition in Germany, customer losses and pressure on prices. The market is also changing as households move between cable, fibre and mobile broadband products. The end of the former bulk television-contracting arrangement in apartment buildings altered the economics of the cable business, while rival networks and alternative providers have competed for customers. The company’s challenge is not simply to add subscribers; it must retain customers while protecting the value of each connection.
Vodafone Deutschland announced plans on November 9 to cut about 2,300 jobs as part of a cost-reduction drive. The company has described the restructuring as an effort to simplify operations and respond to a more competitive market. The job reductions add to a wider programme of cost savings across the group. They also underline the social consequences of the turnaround: improved margins may require fewer roles and a different mix of skills, particularly as operators automate customer service and network-management tasks.
Cost cutting can improve profitability, but it cannot substitute indefinitely for a stronger customer proposition. Vodafone will need to show that service reliability, network quality and customer support improve as the organisation becomes leaner. If customers continue to leave or downgrade, savings may be offset by lower revenue and higher costs to win them back. Germany is therefore a test of whether the group can repair an established market without relying solely on reductions in its cost base.
In the United Kingdom, organic service revenue grew 0.9%, supported by fixed-line growth and higher mobile wholesale revenue, according to Reuters. The market also reflects the integration of Vodafone’s UK business with Three. Combining networks can create scale and allow more efficient investment, but the benefits depend on execution, regulatory commitments and the time needed to integrate systems and customers. The group has presented the UK operation as a growth opportunity, although integration costs and the pace of synergy delivery remain important to the outlook.
Vodafone’s decision to raise its adjusted free-cash-flow forecast is important because cash generation determines how much room the company has to invest, reduce debt and pay shareholders. Accounting earnings can improve without an equivalent increase in cash if customers pay late, inventories or working capital rise, taxes are due or restructuring requires upfront spending. The first-half cash outflow shows why the annual target needs to be assessed alongside the cash-flow statement, not just the headline revenue and earnings growth.
The group also increased its interim dividend by 2.5% to 2.306 euro cents per share. A higher dividend signals confidence in the medium-term cash outlook, but it creates another claim on funds that could otherwise be used for network investment or debt reduction. The balance between shareholder returns and investment will be watched closely as Vodafone continues to reshape its European operations and expand in Africa.
Vodafone has spent several years changing the shape of the business, including the sale of its operations in Spain and Italy and the combination of its British business with Three. The strategy is intended to concentrate management attention on markets where the company believes it can improve returns. That approach can make the group simpler, but it also increases the importance of execution in the remaining core markets. Weakness in Germany matters more when the company is relying on fewer large operations to deliver growth.
The telecom sector faces a difficult investment equation. Operators must keep spending on 5G, fibre, spectrum, cybersecurity and network resilience while customers expect reliable service at competitive prices. Business customers increasingly want integrated connectivity and digital services, while consumers can switch providers when coverage or value disappoints. The ability to turn network investment into higher-value services is therefore central to Vodafone’s long-term profitability.
For customers, the financial results do not automatically mean immediate changes to tariffs or service availability. Those outcomes depend on local competition, regulation and the operator’s commercial decisions. In Germany, the restructuring may change how the business is organised, but customers will judge the company on network performance, customer support and the price of the services they use. In Africa, expansion in data and mobile financial services may widen access, provided products remain affordable and networks keep pace with demand.
The next reporting period will test whether Vodafone can maintain growth outside Germany while stabilising its largest European market. Investors will focus on service-revenue trends, the pace of cost savings, the delivery of UK integration benefits and whether the improved full-year cash-flow outlook is achieved. They will also watch how much of the reported loss is driven by non-cash accounting charges and whether those charges recur as the group continues to reorganise its portfolio.
Vodafone’s upgraded forecast is a positive signal, but it does not close the debate over the company’s turnaround. Africa and business services are providing momentum, and the group has improved its operating leverage. Germany remains weak, first-half free cash flow was negative and the balance sheet still carries substantial debt. The test is whether the stronger guidance becomes a durable improvement in cash generation and customer performance across the markets that remain central to the business.