Core Insights - Telefonica, S.A. reported a significant decline in net income for Q3 2025, with a net income of €271 million from continuing operations, down 45.1% year over year, while basic earnings per share (EPS) decreased to €0.09 from €0.12 in the previous year [1][10] - The company's revenues for the third quarter were €8.96 billion ($10.47 billion), reflecting a 0.4% organic growth but a reported decline of 1.6% due to adverse foreign exchange effects, missing the consensus estimate by 0.35% [2][10] - Telefonica continues to execute its portfolio simplification and divestment plan in Latin America, having sold units in Uruguay and Ecuador, with the sale of Telefónica Colombia pending [3] Financial Performance - Revenues in Spain increased by 1.6% year over year to €3.2 billion, driven by service revenue growth and a 15.6% surge in handset sales, with fixed broadband net additions of 2.4% marking the best quarterly performance in nine years [4] - In Germany, revenues decreased by 6.6% to €1.96 billion, impacted by challenges in the partner business transformation, while the adjusted EBITDA margin was 32.1% [5] - In the UK, revenues fell 8% to €2.9 billion, with an adjusted EBITDA margin of 39% [6] - Brazil saw a revenue increase of 6.5% to €2.4 billion, supported by strong contract and FTTH revenue growth, with adjusted EBITDA rising 8.8% to €1.07 billion [7] - The submarine cable unit, Telxius, maintained profitability with an EBITDA margin of 48.8%, despite short-term revenue impacts from contract renewals [8] - Telefonica Tech reported a 21.6% year-over-year revenue increase to €567 million, driven by growth in managed and professional services [9] - Revenues in HispAm fell 3.6% to €1.02 billion, primarily due to weaker B2B performance in Colombia and reduced handset sales in Mexico, although EBITDA showed a year-over-year growth of 1.2% [10][11] Cash Flow and Outlook - For the nine months ended September 30, 2025, Telefonica generated €6.5 billion in net cash from operating activities, down from €7.2 billion in the prior year, with total free cash flow at €312 million [13] - The company reaffirmed its 2025 growth targets, expecting year-on-year organic growth in revenues, EBITDA, and EBITDAaL, while maintaining a €0.30 per share dividend [14]

Core Insights - KT Corporation (KT) reported a significant 105.4% year-over-year increase in operating profit to KRW 1,014.8 billion, with revenue rising 13.5% to KRW 7,427.4 billion, driven by strong performance in traditional telecom and AI initiatives [1][10] Financial Performance - KT Cloud achieved a 23% revenue growth, while KT Studio Genie saw a 6% increase, contributing to the overall performance and diversification of income streams [2] - Net income surged 78.6% year-over-year to KRW 733.3 billion, and EBITDA increased by 36.3% to KRW 1,990.7 billion [2] - Operating expenses rose 5.9% year-over-year, despite lower labor costs from real estate sales [5] Strategic Initiatives - The company is transitioning into an Artificial Intelligence and Information and Communications Technology (AICT) firm, launching its proprietary large language model (LLM), Mi:dm 2.0, in July [3][10] - KT has secured AI platform projects with major enterprises and public-sector clients, indicating a commitment to integrating AI across various applications [4] Competitive Landscape - KT faces execution risks during its transition to an AICT company, alongside competition from SK Telecom and Telefonica [6] - SK Telecom reported a consolidated revenue of KRW 4.34 trillion, with a significant decline in operating profit by 37.1% year-over-year [7] - Telefonica's operating income decreased by 6.7% in the second quarter of 2025, but it continues to expect organic growth in revenues and EBITDA for the year [8] Market Position and Valuation - KT stock has increased by 18.1% over the past year, compared to the Zacks Wireless Non-US market industry's 30% growth [11] - The stock is trading at a price/book multiple of 0.73X, significantly lower than the industry's 2.32X [12] - Estimates for KT have been marginally revised upwards for the current year [13]

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].