This article first appeared on GuruFocus .
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Revenue:Group revenue increased by 3.3% year-over-year in the first half of 2026.
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EBITDA:Group EBITDA grew by 5.1% to EUR676.77 million.
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EBIT:EBIT increased by 20% year-over-year, benefiting from the phase-out of PPA depreciation from the Drillisch acquisition.
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Earnings Per Share (EPS):EPS increased by approximately 60% to EUR0.775 per share.
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Free Cash Flow:Free cash flow after leasing reached EUR129.7 million, an increase of about EUR100 million compared to the prior year.
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Cash Flow from Operating Activities:Net cash from operating activities increased by 22.7%.
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Capital Expenditures (CapEx):CapEx remained stable year-over-year at EUR280 million (gross).
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Net Debt:Net debt stood at EUR3.4 billion, with a leverage ratio of 2.57.
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1&1 Segment Revenue:Revenue increased by 1.6%, with service revenues down 1.1% to EUR1.805 billion and other revenues up 13.5% to EUR464.8 million.
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1&1 Segment EBITDA:EBITDA increased by 5.1% to EUR382.7 million, with an EBITDA margin of 16.9%.
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1&1 Customer Contracts:Total customer contracts decreased by 140,000, driven by a loss of 150,000 mobile contracts and a gain of 10,000 broadband connections.
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IONOS Revenue:Revenue increased by 6.9% to EUR701.1 million (8.2% growth adjusted for foreign exchange).
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IONOS EBITDA:EBITDA increased by 2.6% to EUR232.6 million (4.2% adjusted for FX), with an EBITDA margin of 33.2%.
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IONOS Customer Contracts:Added 500,000 new customer contracts in the first half, totaling 5.57 million abroad and 4.98 million domestic.
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Mail and Media Revenue:Revenue increased by 8.4% to EUR161.4 million, driven by increased monetization of free accounts and strong growth in pay accounts.
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Mail and Media EBITDA:EBITDA increased by 16.7% to EUR62.9 million, with an EBITDA margin of 32.9%.
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Mail and Media Pay Accounts:Pay accounts grew by 190,000 to 3.54 million, while free accounts declined by 240,000.
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FY 2026 Guidance:Revenue of approximately EUR6.25 billion, EBITDA of approximately EUR1.45 billion, and cash CapEx of EUR600 million to EUR650 million.
Release Date: August 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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United Internet AG ( UDIRY ) confirmed its 2026 guidance with revenue expected to reach approximately EUR6.25 billion and EBITDA around EUR1.45 billion, indicating confidence in future performance.
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The IONOS segment showed strong growth, adding 500,000 new customer contracts in H1 2026 and increasing revenue by 6.9% (8.2% FX-adjusted), driven by AI initiatives and a broad product portfolio.
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Mail and Media segment demonstrated robust financial performance with revenue up 8.4% and EBITDA up 16.7%, driven by successful conversion of free accounts to pay accounts (190,000 additional pay accounts).
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The company is leveraging AI to reduce costs and improve efficiency, leading to a reduction in headcount from 11,000 to 10,400, with expectations of further decreases.
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United Internet AG ( UDIRY ) is expanding its fiber optic network, reaching 34% of households (up from 27% at end of last year), and plans to launch an eSIM service via its portals in Q4 2026, targeting younger customers and creating new growth opportunities.
Negative Points
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The 1&1 segment experienced a net loss of 140,000 customer contracts in H1 2026, primarily due to the discontinuation of low-cost tariffs and reduced data allowances.
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IONOS EBITDA margin decreased slightly to 33.2% from the previous year, attributed to significantly higher marketing expenses in H1 2026.
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Mail and Media saw a decline in total accounts, with 240,000 fewer free accounts, although this was partially offset by growth in pay accounts.
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Group net debt increased by EUR200 million to EUR3.5 billion, with leverage at 2.57, partly due to dividend payments and share buybacks.
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The company faces challenges in fully automating customer support with AI, as complex cases still require human intervention, indicating that full cost savings from AI will take time to materialize.
Q & A Highlights
Q: How does United Internet view its 64% stake in IONOS, and what is the outlook for its AI-driven initiatives and competitive position in Europe? A: CEO Ralph Dommermuth expressed strong confidence in IONOS, calling it a "proud and happy investment" with significant growth potential. He highlighted IONOS's competitive advantages, including its own data centers, cloud infrastructure, and a robust sales force that can educate small businesses on AI tools. He cited new AI products like a phone assistant and AI-supported marketing tools as key growth drivers. Dommermuth stated that if IONOS maintains its current figures with a normal EBITDA multiple of five, the share price should be around 60, not 30, and he believes the business could realistically double over the next few years.
Q: What is the strategic rationale for keeping Mail and Media within the United Internet portfolio, and are there plans to spin it off or list it? A: CFO Carsten Theurer explained that Mail and Media is a capital-light, cash-generative business that provides strategic synergies, particularly for the 1&1 mobile segment. He highlighted a major opportunity to leverage the portals' 25 million active apps to sell eSIM contracts directly, a process that can be completed in three minutes without physical SIM cards. This, combined with cloud storage bundles, targets younger demographics and could make the portals an even more important sales channel. Theurer emphasized that the group is focused on integrating and expanding this business rather than separating it.
Q: What is the timeline for implementing the GMX eSIM opportunity, and why hasn't it been done before? A: CFO Carsten Theurer stated that the eSIM initiative will launch in the fourth quarter of 2026. He explained that the delay was due to the need for a critical mass of eSIM-enabled devices and the development of a streamlined process that includes customer identification, which can now be completed within three minutes. The company wanted to perfect the process before communicating it publicly and investing in marketing.
Q: What is driving the expected step-up in EBITDA in the second half of 2026? A: CFO Carsten Theurer attributed the H2 EBITDA acceleration to two main factors. First, IONOS's significant customer growth in H1 will begin to monetize in the second half. Second, the 1&1 segment will benefit from the monetization of its expanding network infrastructure, providing additional tailwinds to EBITDA growth.
Q: What are the cost reduction potentials from AI across the group, and how is this being managed? A: CEO Ralph Dommermuth stated that AI-driven cost reduction potential is "huge" across development, marketing, and customer service. He noted that the company's headcount has already decreased from 11,000 to 10,400 and expects it to fall further. He detailed progress in written customer communication and the use of AI in call centers, where a "concierge function" handles initial customer queries and AI monitors calls to suggest real-time solutions to agents. While complex cases still require human intervention, the efficiency gains are expected to roll out over several years.
Q: Can you provide details on the IFRS 5 classification and its impact on the group's balance sheet? A: CFO Carsten Theurer confirmed that the IFRS 5 non-consolidation is related to the AdTech business. He acknowledged that the 12-month period for the sale is a factor, but stated that the company expects to have clarity on the future of AdTech in the coming months. The cash flow statement still includes a negative EUR6 million impact from this business.
Q: How is Mail and Media performing in terms of user engagement and traffic, given the loss of free accounts? A: CEO Ralph Dommermuth reported that traffic is still growing. While big-screen traffic has historically declined, this drop is now flattening out and is being offset by growth in mobile/small-screen traffic. He emphasized that the portals generate their own login-based traffic and are not dependent on Google for referrals, which insulates them from the impact of AI-generated search answers that don't link to websites.
Q: What are the key financial highlights for the first half of 2026? A: CFO Carsten Theurer reported group revenue growth of 3.3% and EBITDA growth of 5.1%. EBIT grew by 20%, partly due to the phase-out of PPA depreciation from the Drillisch acquisition. Earnings per share increased by approximately 60% to EUR0.775. Free cash flow after leasing increased by about EUR100 million to EUR129.7 million, driven by lower tax payments and improved working capital. Net debt stood at EUR3.4 billion with a leverage of 2.57.
Q: What is the company's outlook and guidance for the full year 2026? A: CEO Ralph Dommermuth confirmed the company's guidance for 2026, projecting revenue of approximately EUR6.25 billion, EBITDA of approximately EUR1.45 billion, and cash CapEx in the range of EUR600 million to EUR650 million. He stated that the first half of the year has panned out positively and the company is looking ahead positively to the second half.
Q: How is the 1&1 segment performing, and what is driving the customer contract changes? A: CEO Ralph Dommermuth reported that the 1&1 segment saw a net decrease of 140,000 customer contracts, primarily due to the discontinuation of low-cost tariffs and reduced data allowances in high-performance tariffs. However, the segment added 10,000 new broadband customers. Revenue increased by 1.6% and EBITDA grew by 5.1% to EUR382.7 million, with an EBITDA margin of 16.9%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
