Vodafone reported adjusted EBITDA growth of 7.8% year-on-year in fiscal 2025, driven by robust free cash flow generation of £7.4 billion. Revenue rose by 4.9% organically, reflecting successful cost discipline and efficiency measures that reduced operating expenses by 3.2%. Despite these stellar results, the company’s current valuation stands at nearly 15x forward P/E, above its 20-year average, limiting further upside potential for investors.

Vodafone’s recent UK merger contributed to a 3.5% increase in service revenue on an organic basis, while its fastest growth came from African markets, where revenue climbed 11.2% thanks to subscriber additions in Nigeria and Egypt. These gains offset a 1.8% decline in legacy European operations, notably in Spain and Italy, where intensified competition and regulatory headwinds weighed on ARPU and market share.

Analysts expect organic service revenue growth to moderate to around 4.5% for fiscal 2026, with EBITDA margin expansion of approximately 50 basis points driven by network-sharing agreements. Vodafone’s dividend yield currently sits below 3.7%, reflecting the company’s commitment to reinvest in 5G rollout and digital infrastructure, though this yield also underscores limited near-term income appeal relative to peers.

Investor sentiment has been tempered after a recent revenue miss in Turkey led to a short-term share price drop, yet the stock remains up over 110% from its 2024 lows, reflecting confidence in CEO Margherita Della Valle’s turnaround plan. Vodafone has reiterated guidance to deliver at the upper end of its adjusted EBITDA and free cash flow targets, underpinned by planned cost synergies of £1.2 billion from network integrations across key markets.