Deutsche Telekom Beats Q1 Profit Forecast, Raises 2025 Outlook

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Deutsche Telekom reported a stronger-than-expected performance in the first quarter of 2025, with its core profit (EBITDA AL) rising to €11.3 billion, slightly above the €11.1 billion expected by analysts. The results were boosted in part by a stronger U.S. dollar and solid contributions from its American unit, T-Mobile US.

The German telecom giant also slightly raised its full-year 2025 guidance, now projecting:

  • Core profit of approximately €45 billion (up from €44.9 billion)

  • Free cash flow after leases of €20 billion (previously €19.9 billion)

CEO Tim Höttges emphasized the group’s resilience amid economic challenges, noting that free cash flow for Q1 jumped 52.4% year-on-year, beating expectations by over €1 billion.

Highlights by Region:

  • United States: Continued strength from T-Mobile US, which recently raised its own profit forecast despite lagging in wireless subscriber growth.

  • Germany: Faced pressure, losing 7,000 broadband customers amid intense competition in a slowing broadband market. Analysts suggest platforms like Check24 may be aiding competitors like Vodafone.

  • Europe (excluding Germany): Performed well, with an organic revenue increase of 3.7%, supporting the company’s overall growth momentum.

Despite the positive results, Deutsche Telekom shares were down 0.2% at 07:20 GMT. However, they remain up about 9% year-to-date, reflecting continued investor confidence in the group’s long-term strategy and international diversification.

Ubisoft Shares Plunge 20% as Game Delays Increase Cash Burn

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Ubisoft shares tumbled nearly 20% on Thursday, marking the company’s biggest single-day drop in over a decade, after the French video game maker announced it would burn more cash to extend development timelines for major titles.

In an earnings statement, CEO Yves Guillemot revealed that Ubisoft is allowing “additional development time to some of our biggest productions,” which will push the release of significant content into the next two years. The move, while aimed at improving game quality, has rattled investor confidence.

Key Financial Outlook:

  • Ubisoft now expects to break even in operating profit for the fiscal year ending March 2026.

  • Net bookings for the current fiscal year (to March 2025) fell by 20.5%, due to both delayed releases and underperformance of major titles.

  • The company aims to return to positive cash flow next year, but analysts are skeptical.

Barclays analysts had projected €96 million in free cash flow this year, but said Ubisoft’s latest guidance falls “well below” expectations. “Investors will believe in the free cash flow when it is in front of them,” the bank noted.

Game Performance and Delays:

  • The much-anticipated Assassin’s Creed: Shadows has been delayed multiple times.

  • Star Wars Outlaws, another flagship title, received a lukewarm reception.

  • Morningstar analysts expressed doubt that Shadows will be enough to turn Ubisoft’s fortunes around in 2026, given the current outlook.

To manage soaring development costs, Ubisoft has launched a joint venture with China’s Tencent, targeting the production of blockbuster franchises such as Assassin’s Creed, Far Cry, and Rainbow Six.

Despite long-term hopes pinned on these franchises, the short-term outlook remains bleak. By 08:23 GMT on Thursday, Ubisoft shares were down 19.5%, putting the company on track for its sharpest decline since 2013.

Microsoft’s Office-Teams Unbundling May Help Avoid EU Antitrust Fine

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Microsoft appears poised to avert a significant EU antitrust penalty as regulators are likely to accept its latest concessions regarding the bundling of Office and Teams, according to three sources familiar with the situation. This development follows sustained pressure from European competitors and comes amid growing transatlantic tensions over the EU’s scrutiny of American tech giants.

The case dates back to a 2020 complaint from Slack, owned by Salesforce, which accused Microsoft of gaining an unfair competitive edge by bundling its Teams app with its dominant Office productivity suite. German rival alfaview filed a similar complaint in 2023, intensifying the European Commission’s investigation.

In response, Microsoft unbundled Teams from Office in 2023, initially offering a 2-euro price reduction for Office without Teams and setting a 5-euro monthly price for Teams as a standalone product. After criticism from rivals that this pricing strategy was inadequate, Microsoft adjusted the terms again in February 2024 to widen the price gap and address antitrust concerns.

Sources indicate that Microsoft’s latest proposal also includes enhanced interoperability to allow rival platforms to better integrate with Microsoft’s ecosystem — a key demand from competitors seeking a level playing field.

The European Commission is expected to launch a market test in the coming months to gather feedback from industry stakeholders before issuing a final decision. While outcomes may still shift depending on this feedback, the current offer appears likely to satisfy EU regulators.

Despite having already paid over €2.2 billion in fines for bundling practices and other competition violations in the past, Microsoft has not commented publicly on the current negotiations.

This case unfolds against a backdrop of geopolitical friction, as former U.S. President Donald Trump has threatened retaliatory tariffs on countries that impose penalties on American tech firms, adding a layer of diplomatic complexity to the EU’s enforcement actions.