United Internet AG Reports Mixed Q1 Results Amid Net Expansion Costs

United Internet AG, a leading internet service provider based in Montabaur, Germany, has released its first-quarter results for 2025, revealing a complex financial landscape shaped by both growth and challenges. The company, which operates in the diversified telecommunication services sector, reported a revenue increase of 4.2% to €1.631 billion compared to the adjusted figures from the previous year. Despite this growth, the company faced significant pressures from the costs associated with expanding its 1&1 mobile network.

Net Expansion Costs Impact Results

The expansion of the 1&1 mobile network, a key subsidiary of United Internet, has been a double-edged sword. While the company has successfully attracted an additional 150,000 customers, bringing the total to 29 million, the transition has incurred substantial costs. These expenses have impacted the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA), which remained nearly flat at €342.6 million. The net expansion costs have been a significant factor, with the company experiencing a year-on-year increase in expenses related to the network upgrade.

Adjusted EBITDA and Financial Outlook

Despite the challenges, United Internet’s adjusted EBITDA saw a slight increase of 0.1% from the previous year’s €342.1 million. This marginal growth reflects the company’s ability to manage costs effectively while continuing to expand its customer base. In response to the strong start to the fiscal year, United Internet has revised its sales forecast upwards, signaling confidence in its long-term growth strategy.

Market Reaction and Stock Performance

The financial markets have reacted positively to United Internet’s performance and outlook. Despite a challenging period marked by a 52-week low of €14.58 in January 2025, the company’s stock has shown resilience. As of May 8, 2025, the close price stood at €21.04, reflecting investor optimism about the company’s future prospects. However, the price-to-earnings ratio remains negative at -72.22, indicating ongoing concerns about profitability.

Conclusion

United Internet AG’s first-quarter results highlight the complexities of managing growth in the telecommunications sector. While the company has successfully expanded its customer base and adjusted its financial outlook positively, the costs associated with network expansion continue to pose challenges. As United Internet navigates these hurdles, its ability to balance growth with cost management will be crucial in determining its future success in the competitive telecommunications market.