This article first appeared on GuruFocus .
Vodafone Group Plc ( NASDAQ:VOD ) shares came under sharp pressure after the telecom operator reported fresh customer losses in Germany, the market that now sits at the center of its turnaround story. The company lost 77,000 mobile contract clients in Germany in the fourth quarter ending in March, bringing the yearly decline to 103,000, while broadband customers in the country fell by 90,000 last quarter. That weakness hit a sensitive part of the business: Germany represents nearly one-third of Vodafone's service revenue and has become more important as Chief Executive Officer Margherita Della Valle exits smaller markets and focuses the company around larger positions. Vodafone shares fell as much as 9.6%, their biggest intraday drop since May 16, 2023, and were down 8.8% to 109.85 pence at 2:51 p.m. in London, though the shares had still gained 11% this year.
The investor concern is not just the client losses, but what they could signal about Vodafone's largest market at a time when management is trying to show that a leaner portfolio can produce steadier growth. Analysts including Bernstein's Ulrich Rathe and Citigroup's Carl Murdock-Smith said the weaker German results raised questions about performance in that market. Still, Vodafone pointed to improving monetization, with organic service revenue in Germany rising 1.3% last quarter, ahead of estimates, as the company completed the migration of 1&1 customers onto its network from a wholesale deal. Della Valle said Vodafone had returned to top line growth in Germany alongside strong performances across Africa and Turkiye, adding that after three years of transformation, the company is now simpler with a stronger growth outlook.
The broader numbers gave investors a more mixed picture. Across the group, organic service revenue rose 5.1% last quarter to 8.6 billion, above the 4.9% average analyst estimate compiled by Bloomberg. Vodafone expects 2027 adjusted earnings before interest, taxes, depreciation, and amortization after leases of 11.9 billion to 12.2 billion, with adjusted free cash flow seen between 2.6 billion and 2.9 billion, while adjusted Ebitdaal rose 3.8% to 11.4 billion in fiscal 2026. The update lands days after Vodafone announced a 4.3 billion deal to buy CK Hutchison Holdings Ltd.'s stake in VodafoneThree, giving it full control of the UK's biggest operator, while Della Valle continues to reshape a company that has sold businesses in Italy and Spain, reduced its stake in VodafoneZiggo, monetized towers through Vantage Towers, and pushed toward a more asset-light, software-driven model with data center partnerships involving Microsoft Corp. and Amazon.com Inc.
