Orange Reports a 3.5% Increase in Revenue in Q1, but €100M in Exceptional Items Raise Questions
Orange claims a 3.5% increase in revenue and a 6.6% increase in EBITDAaL for the first quarter of 2026, benefiting from strong commercial performance in France, Africa, and Europe. However, the group acknowledges that this acceleration is partly based on exceptional items representing about €100 million in revenue (fiber network co-financing), which brings the real organic growth down to 2.5% in revenue and 3.5% in EBITDAaL.
Financial Performance Overview
The group's revenue reached €10,095 million, up by 3.5% over twelve months. This increase is supported by two main pillars: the growth in retail services (+2.9%) and, more significantly, the growth in services to operators (+6.1%), strongly boosted by French co-financings. EBITDAaL rose to €2,601 million, an increase of 6.6%, thanks to the robustness of retail services and operational efficiency efforts, but also amplified by an exceptional positive effect of about €75 million on EBITDA. Economic investments (eCAPEX) remain controlled at 15.3% of revenue, in line with the 2026 target. In retail activities, Orange consolidates its position as the leader in convergence in Europe with 9.3 million customers, growing by 1.9%. Africa and the Middle East continue their momentum with a double-digit growth of 12.7% (twelfth consecutive quarter), while France shows a progression of 2.3% and Europe 2.2%.
Impact of Exceptional Financial Items
The release explicitly reveals that without the €100 million in fiber co-financing in France (elements anticipated in the 2026 guidance but exceptional in nature), the group's growth would be limited to 2.5% in revenue and 3.5% in EBITDAaL. This 1-point gap in revenue and 3.1 points in EBITDA raises a major question: is the reported growth driven by an improvement in operational performance or by one-off effects? Orange Business, the enterprise services segment, heightens this concern with a 2.6% decline in revenue, still affected by the structural decline in fixed activities, although equipment sales and IT services are growing. Orange Cyberdefense, however, maintains a strong momentum with a growth of 9.2%. TOTEM, the telecommunications tower subsidiary, slightly declines by 0.5%, while international operator services decrease by 0.6% due to a drop in SMS, partially offset by good performance in voice and satellite traffic.
Strategic Developments and Future Outlook
Orange raises its EBITDAaL target for 2026 and confirms other financial goals, without yet incorporating the effects of the reconsolidation of MasOrange (acquisition planned for the second quarter of 2026, European Commission approval obtained in April). If finalized in Q2, the reconsolidation is expected to generate an accretive effect on organic cash flow generation, but also a temporary increase in the net debt/EBITDAaL ratio. Concurrently, Orange has announced, together with Bouygues and Free, its entry into exclusive negotiations with the Altice group for the acquisition of SFR, a transaction with no certainty of completion at this stage. Operationally, the group progresses in its digital ambitions with the launch of AI assistants (Sharlie for Sosh, MAIA for sales advisors), the continued decommissioning of 2G, and the industrial phase of copper dismantling (900,000 households closed in January). In terms of distribution, Orange proposes a dividend of €0.75 per share for 2025 and sets a minimum dividend of €0.79 for 2026, payable in 2027, subject to shareholder approval.
