Vodafone FY 2026 earnings preview: Can Germany recovery and UK merger drive turnaround?
Vodafone reports full-year results on 12 May, with investors focused on German service revenue recovery, Three UK integration progress and African growth momentum.
Vodafone FY 2026 earnings preview: Can Germany recovery and UK merger drive turnaround?
Vodafone is set to report its full-year 2026 results on 12 May, with investors focused on whether chief executive Margherita Della Valle's restructuring strategy is finally beginning to deliver sustainable growth after several years of underperformance. The update comes at a pivotal moment for the telecoms group, as stabilisation in Germany, the integration of Three UK and strong African growth reshape the company's outlook.
Analyst expectations and ratings
According to LSEG Data & Analytics, Vodafone is expected to deliver revenue of €40.50 billion, up around 8% compared to FY 2025, but a slightly lower pre-tax profit of €3.21 billion (down around 2% compared to a year ago) but higher earnings per share of 9 Euro cents, close to 9% higher than a year ago.
Analysts are split when it comes to rating Vodafone, with eight rating the company’s shares as a ‘buy’, six as a ‘hold’ and six as a ‘sell’. Their mean long-term price target is at 108.44p, around 7% lower than at current levels (as of 6 May 2026).
TipRanks has a ‘7 Neutral’ Smart Score for Vodafone with a ‘hold’ rating
Germany remains the central story
The most important theme heading into the results remains Germany, Vodafone’s largest market and historically its biggest problem area. The division has been under pressure following regulatory changes that ended the bundling of TV services into rental contracts, severely impacting broadband and television revenues.
However, recent updates suggest conditions are beginning to improve. Vodafone reported that German service revenue returned to growth in the second quarter of FY 2026, marking a significant turning point after several weak quarters. The recovery has been supported by higher wholesale revenue, stabilising broadband trends and the annualisation of the regulatory impact.
Management has repeatedly described Germany as being on an “improvement trajectory”, and investors will be looking for confirmation in the full-year results that this recovery is sustainable.
UK merger and operational transformation
Another major focus will be the integration of Vodafone’s UK operations with Three UK, a transformational merger completed during FY 2026. The combined business is now the UK’s largest mobile operator, and management has emphasised the opportunity to accelerate network investment, improve customer experience and unlock significant cost synergies.
The market will be watching for updates on integration progress, expected savings and the pace at which the combined network can begin contributing to earnings growth.
Africa and emerging markets supporting growth
Vodafone’s African operations, particularly through Vodacom, have become an increasingly important growth engine for the group. Recent trading updates showed double-digit service revenue growth across Africa, driven by strong demand for mobile data and financial services.
Türkiye and Egypt have also delivered strong revenue expansion in euro terms, helping offset weakness in parts of Europe. This geographic diversification has become increasingly valuable as Vodafone attempts to reduce reliance on slower-growing mature markets.
Earnings, cash flow and shareholder returns
Vodafone has already indicated that it expects to deliver results toward the upper end of FY 2026 guidance, including adjusted EBITDAaL and free cash flow. The company previously guided toward adjusted EBITDAaL of approximately €11.3–11.6 billion and adjusted free cash flow of €2.4–2.6 billion.
The results will also be important for income investors. Vodafone recently introduced a more progressive dividend policy alongside ongoing share buybacks, reflecting growing confidence in cash generation and balance-sheet stability.
Competitive and macro pressures
Despite operational progress, Vodafone still faces a challenging environment. Competitive intensity remains high across European telecoms markets, particularly in mobile services, where pricing pressure continues to weigh on ARPU growth.
At the same time, higher energy prices and inflationary pressures continue to raise operating costs, while economic uncertainty may affect consumer spending and enterprise demand.
Technical analysis of the Vodafone share price
The Vodafone share price – up around 18% year-to-date – so far seems to be capped by its February peak at 120.95p.
Vodafone daily candlestick chart
While it remains above its mid-April low at 112.35p, though, the immediate uptrend is deemed to be valid. The medium-term uptrend will be in play while the Vodafone share price stays above its February-to-March lows at 104.25p-to-104.20p on a daily chart closing basis.
A rise and daily chart close above the February peak at 120.95p could lead to the July 2022 high at 132.05p being reached next.
Vodafone monthly candlestick chart
What investors will watch on 12 May
The market will focus heavily on several critical areas:
German service revenue trends and recovery sustainability
Pace of VodafoneThree integration in the UK
Sustainability of growth in Africa and emerging markets
Free cash flow generation and conversion
Capital allocation including dividends and buybacks
Guidance for FY 2027 regarding margins and returns
What the results mean for investors
Vodafone heads into its FY 2026 results with improving operational momentum but still faces important execution challenges. If Germany continues to recover and the UK merger begins delivering tangible benefits, investor confidence in the turnaround story could strengthen materially.
However, with competition intense and transformation costs still elevated, the 12 May results will be a key test of whether Vodafone can convert strategic restructuring into consistent long-term earnings growth.
How to invest in Vodafone shares
Investors interested in telecommunications sector exposure through Vodafone have several options. Here's how to approach investing:
Research Vodafone's latest results, strategic initiatives and sector trends thoroughly. Understanding telecommunications industry dynamics helps inform decisions. How to invest in stocks provides background.
Download IG Invest or open a share dealing account to access UK-listed shares. Vodafone trades under ticker VOD.
Search for Vodafone Group plc shares on the trading platform. Review pricing, dividend yields and turnaround progress.
Choose the number of shares or investment value based on your portfolio strategy. Consider whether to hold shares in a general account, ISA or SIPP for tax efficiency.
Place your trade and monitor your investment over time. Vodafone provides quarterly updates and annual results.
Remember telecommunications stocks face regulatory and competitive challenges. Diversification reduces concentration risk whilst maintaining exposure to UK telecoms sector and trading turnaround opportunities.
Important to know
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