NOS: revenue up 5.1% in the third quarter, EBITDA margin down 1.8 points
In the third quarter of 2026, NOS reported consolidated revenue of €480.6 million, up 5.1%. This amount exceeds the average of €465 million expected by the three analysts in the consensus.
Growth was, however, only partially reflected in EBITDA, which rose 1.3% to €225.6 million, while the EBITDA margin fell 1.8 points, to 46.9%.
Net income, by contrast, rose 35.3% to €88.3 million, driven by lower depreciation and amortization and lower financial expenses.
Chief Executive Officer Miguel Almeida highlights cash generation: “Our priority on operational execution, combined with the end of the intensive investment cycle in network expansion, is translating into sustained growth in free cash flow.”
Equipment resales support sales and dilute the margin
The decline in the margin stems from the composition of growth. Operating expenses excluding depreciation and amortization rose 8.7% to €255.0 million. The group attributes this to the increased weight of the less profitable resale of equipment and licenses in the enterprise unit and in IT, as well as higher energy costs.
According to NOS, these two factors explain the 0.4-point decline in the telecoms EBITDA margin, to 51.0%, and the 1.5-point decline in the IT margin, to 11.9%. EBITDA after leases (EBITDAaL) rose 2.3% to €193.1 million, with the EBITDAaL margin down 1.1 points, to 40.2%.
The third quarter accentuates the two trends observed on a cumulative basis. Over nine months, revenue increased 2.3% to €1,399.1 million, while the EBITDA margin fell 0.2 points, to 45.4%.
IT and cinema drive growth, telecoms stable
Telecoms, which account for the bulk of the business, recorded revenue of €397.4 million, down 0.3%. The consumer unit was stable at €291.2 million, and the enterprise unit grew 4.0% to €79.8 million.
Conversely, wholesale and other activities fell 13.6% to €26.5 million, due to changes in business models that simultaneously reduce revenue and costs.
The telecom services base gained 111,000 units over the quarter, to 11.079 million. The consumer unit added 101,400 and the enterprise unit 9,600, with mobile benefiting from the summer holiday period.
Growth came mainly from the other two segments. IT revenue rose 39.2% to €58.8 million, driven by equipment and license sales (+137.3% to €25.9 million) linked to larger projects delivered during the period. IT services gained 5.1% to €32.9 million.
Cinema and audiovisual increased 36.7% to €35.3 million, with 2.8 million tickets sold, an increase of 43.8%. Segment EBITDA rose 32.5% to €15.9 million.
Lower investment boosts cash generation
The gap between the trend in the margin and that in net income arises below EBITDA. Depreciation and amortization fell by €13.7 million to €119.1 million. This decline is partly explained by lower investment levels and by an exceptional impairment of €10.4 million recorded a year earlier.
Net financial expenses decreased by €2.8 million to €14.3 million, and the contribution from associates increased by €3.6 million. Operating income (EBIT) thus rose 18.0% to €105.7 million.
Investments excluding leases fell 8.4% to €83.8 million, as next-generation fixed and mobile networks approach national coverage. Telecom investments represent 19.4% of segment revenue, compared with 21.4% a year earlier. EBITDAaL net of investments rose 12.5% to €109.3 million.
Total free cash flow before dividends reached €106.3 million, compared with €51.2 million. It includes €13.4 million of receipts related to legal proceedings, as well as tax refunds: taxes paid amounted to €0.7 million, compared with €38.6 million. Excluding non-recurring items, it rose 11.6% to €78.6 million.
Net financial debt stands at €975 million, representing 1.4 times EBITDA after leases, compared with 1.62 times a year earlier, following the €380 million refinancing completed in September on maturities of 4 to 6 years.
Over nine months, EBITDAaL net of investments rose 14.8% to €282.1 million. Free cash flow excluding non-recurring items increased 14.4% to €220.5 million, a faster rise than that of consolidated EBITDA (+1.9%).
