Vodafone Group lifted its full-year earnings guidance on July 27, 2026, aiming for the upper end of its projections after organic service revenue grew 5.2 percent in the first quarter ended June 30.
The British telecom operator posted a 9.8 percent increase in group service revenue to 8.63 billion euros, supported by cost-cutting measures, strong African growth, and the consolidation of Three UK.
Total revenue for the quarter rose 9.7 percent year-on-year to 10.29 billion euros.
Adjusted core earnings increased 6.7 percent to 2.93 billion euros as cost reduction initiatives eliminated 1,200 European jobs.
The company now expects full-year adjusted core earnings to reach between 13.0 billion euros and 13.3 billion euros, up from its previous target of 11.9 billion to 12.2 billion euros.
African Growth and Safaricom Consolidation
Revenue performance across Africa proved especially strong, driven by double-digit service revenue expansion of 15.1 percent to 1.79 billion euros alongside expansion in financial services and data traffic.
In Egypt, service revenue outpaced inflation, while M-Pesa mobile financial platform revenues climbed 23.6 percent to 137 million euros across Vodacom's international operations.
Vodacom finalized an effective 20 percent stake acquisition in Safaricom on June 30, buying 15 percent from the Government of Kenya for 1.36 billion euros and 5 percent from Vodafone for 450 million euros to bring its total holding to 55 percent.
Safaricom's financial results will be fully consolidated into Vodafone Group accounts starting July 1, 2026, expanding the company's footprint across Kenya and Ethiopia.
Vodafone Mozambique also secured a 5G license and acquired 210 MHz of spectrum for 56 million dollars during the first quarter.
"Following the completion of the Safaricom transaction, we are updating our guidance range to reflect the contribution from Kenya and Ethiopia," said Margherita Della Valle, chief executive of Vodafone.
"And after our good start to the year, we are expecting to deliver the upper end of the new group ranges," Della Valle added.
In the UK, organic mobile service revenue dropped 0.7 percent as customer contract numbers fell by 48,000 following regulatory changes to mid-contract price adjustments, though the firm added 34,000 broadband customers.
"For years, Vodafone has promised that its turnaround would eventually show through in the numbers," said Mark Crouch, market analyst for Etoro.
"This latest update suggests that promise is finally starting to become reality," Crouch said.
The company aims to reduce annual costs and capital spending by 700 million pounds by fiscal year 2030 through organizational streamlining and its joint venture integration with Three UK.
"While the headline revenue boost was helped by the consolidation of Three UK and Safaricom, the stronger message is that the underlying business is beginning to build momentum," Crouch added.
Analysts compiled by the company had previously estimated full-year adjusted core earnings of 13.1 billion euros and adjusted free cash flow of 2.78 billion euros incorporating Safaricom's performance.
