Telecom Italia Q2 Earnings Meet Forecasts as Company Returns to Profitability

Telecom Italia (TIM) reported second-quarter core earnings that met analyst expectations and swung to a net profit, buoyed by sustained growth in its Brazilian and enterprise units and signs of stabilization in its domestic consumer business. The results, released Wednesday, offer a positive signal as the company navigates a major takeover offer from its largest shareholder.

Q2 Performance Highlights

TIM's earnings before interest, tax, depreciation, and amortization after leases (EBITDA-AL) for the three months ending June 30 reached €998 million ($1.14 billion), slightly ahead of the analyst consensus of €995 million, according to the company's report.

The company posted a net profit of €88 million for the quarter. This marks a significant turnaround from a loss of €8 million in the same period last year and a €292 million loss recorded in the first quarter of 2026. For the first half of the year, group revenues increased by 2% year-on-year to €6.8 billion.

Enterprise and Brazil Divisions Drive Growth

Performance was strong across key growth segments, offsetting a slight decline in the domestic consumer market. The results were driven by:

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• TIM Enterprise: Revenues grew 5.6% year-on-year to €1.7 billion, propelled by an 18.1% increase in its cloud business.
• TIM Brasil: The Brazilian subsidiary continued its solid performance, with revenues rising 6% to €2.3 billion.
• TIM Consumer: The domestic consumer division saw revenues decline by 2.7% to €2.9 billion, which the company attributed to its mobile virtual network operator (MVNO) business. However, fixed-line average revenue per user (ARPU) increased by 2% to €33.00 per month, indicating some pricing power.

Financial Health and Outlook

TIM reported generating €0.7 billion of equity free cash flow after leases in the first half of the year. Its adjusted net financial debt stood below €7.3 billion as of June 30, with a leverage ratio of 1.94x.

Looking ahead, the company confirmed its financial guidance for 2026 and 2027, signaling confidence in its performance trajectory. This is the first earnings report since TIM's board approved a takeover offer exceeding €13 billion from Poste Italiane on July 18.