The following is a summary of the United Internet AG (UDIRF) Q2 2024 Earnings Call Transcript:

Financial Performance:

• United Internet AG reported a revenue increase of 1.1% in the first half of 2024. Service revenue, which reflects the company's core earnings, grew by 3.8%, excluding regulatory effects, it would have marked a 4.4% increase.

• EBITDA in consumer access fell by 7.2% to €326.6 million due to mobile network expansion costs. However, business access and consumer applications saw an increase in EBITDA by 1.9% and 16.4% respectively.

• The company revised its forecast for annual revenue down to €6.4 billion and EBITDA to €1.38 billion, reflecting challenges in hardware and aftermarket revenues.

Business Progress:

• Broadband and mobile customer base grew by 90,000 in the first half of 2024, reaching 12.36 million mobile and 3.99 million broadband subscribers.

• United Internet is expanding its 1&1 Mobile Network, incurring significant startup costs but setting the stage for future growth.

• The company's growth in applications is moving from being solely email providers to comprehensive personal communication service providers, showing substantial growth in revenue and EBITDA in this segment.

Opportunities:

• The company's new business areas in 1&1 Versatel focusing on 5G and commercial area fiber expansions present significant growth opportunities.

• Continued investments in AI and digital solutions across the business spectrum including cloud services and personal communication applications signal ongoing innovation and market adaptation.

Risks:

• The aggressive pricing in the telecommunications market, especially from discount sub-brands and competitors, poses a risk to service revenue and margin sustainability.

• Regulatory changes and market dynamics such as potential frequency auctions might influence future financial flexibility and investment capabilities.

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