2.3  Position of the Group

There were no significant acquisition or divestment effects on consolidated and segment sales and EBITDA in the fiscal year 2025. However, the decision of IONOS to sell Sedo and the disclosure of Sedo as a discontinued operation in accordance with IFRS 5 has resulted in significant changes in the net income statement, the cash flow statement, and the balance sheet.

In particular, the figures for 2025 and the prior-year figures in the net income statement have been adjusted in accordance with IFRS 5. Sales revenues and expenses relating to the discontinued operation are no longer included in the respective income statement items. The discontinued operation is disclosed separately with its net income for the period after taxes. The effects on the cash flow statement as of December 31, 2025, and December 31, 2024, are disclosed separately in note 16 of the Notes to the Consolidated Financial Statements. The effects on the balance sheet as of December 31, 2025, are presented separately within the balance sheet. The balance sheet as of December 31, 2024, however, is to be presented unchanged. This did not have any significant impact on the assessment of the asset position.

In the fiscal year 2025, there were also only minor negative currency effects at Group and segment level (mainly Business Applications segment) amounting to € -10.4 million for sales and € -3.8 million for EBITDA. The same applies to the Group’s asset position, for which there were no significant effects from currency fluctuations.

Group’s earnings position

In the fiscal year 2025, the total number of fee-based customer contracts in the United Internet Group was raised by 700,000 contracts to 29.72 million. Due to the high level of conversion to pay accounts, however, ad-financed free accounts were 250,000, or 0.6%, down on December 31, 2024 at 38.68 million.

After accounting for Sedo according to IFRS 5, and adjusted for the sales contributions of “Energy” and “De-Mail” (€ 26.2 million) in the previous year, as well as “Energy” in the fiscal year 2025 (€ 16.1 million), consolidated sales rose by 1.9% from € 5,990.8 million (comparable prior-year figure) to € 6,103.8 million in the fiscal year 2025. Despite negative currency effects, sales outside Germany rose by 4.0% to € 585.6 million (prior year: € 563.2 million).

The cost of sales increased significantly from € 4,063.9 million in the previous year to € 4,208.1 million. There was therefore a disproportionately strong rise in the cost of sales ratio from 67.5% (of sales) in the previous year to 68.8% (of sales) in the fiscal year 2025. The gross margin fell correspondingly from 32.5% to 31.2%, while gross profit declined by -2.1% from € 1,953.0 million to € 1,911.7 million. This decrease was mainly due to higher depreciation and amortization as a result of investments in the expansion of the 1&1 Versatel fiber-optic network and the 1&1 mobile network.

Sales and marketing expenses fell from € 975.0 million (16.2% of sales) in the previous year to € 946.5 million (15.5% of sales), while administrative expenses increased from € 283.9 million (4.7% of sales) to € 301.0 million (4.9% of sales).

Multi-period overview: Development of key cost items

(3) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025; previous year adjusted

(2) Including the out-of-period positive effect on earnings attributable to the second half of 2020 (effect: € +39.4 million)

Other operating expenses decreased slightly from € -23.1 million in the previous year to € -21.1 million in 2025. Other operating income increased from € 65.9 million to € 91.6 million. Impairment losses on receivables and contract assets were virtually unchanged at € -141.7 million (prior year: € -140.9 million).

Key earnings figures were influenced by the following special items in 2025 and 2024:

• The special item “Earnings contribution of Energy” results from the decision to discontinue the business fields “Energy and De-Mail”. Following the discontinuation of the “De-Mail” business field in 2024, the key financial figures for 2025 in the Management Report were only adjusted for the “Energy” business field, which was sold in mid-October 2025. Including the proceeds from the sale, the aforementioned business field had a positive impact on EBITDA, EBIT, EBT, net income, and EPS in 2025.
• The special item “Interest income from BFH proceedings 2025” results from a ruling of the German Federal Fiscal Court (BFH) in 2025 on a tax dispute between United Internet and the relevant tax authority in favor of United Internet. The decision resulted in interest income, which had a positive impact on EBT, net income, and EPS in 2025.
• The special item “Tax income from BFH proceedings 2025” also refers to the above mentioned matter and had a positive impact on net income and EPS in 2025 in the form of tax income.

Further details on the above mentioned special items are provided in chapter 2.2 “Business development” under “Special items in fiscal year 2025”.

• The special item “Earnings contribution of Energy and De-Mail” results from the decision to discontinue the business fields “Energy” and “De-Mail” and to adjust the key financial figures in the Management Report accordingly. The above mentioned business fields had a negative impact on EBITDA, EBIT, EBT, net income and EPS in 2024.
• The special item “ Non-cash impairment loss on the investment in Kublai ” results from a non-scheduled, non-cash impairment loss on the Kublai/Tele Columbus shareholding and had a negative i mpact on EBT, net income and EPS in 2024.
• The special item “One-off tax effects 2024” results from a one-off writedown of deferred taxes on loss carryforwards capitalized in previous years on the level of 1&1 Versatel GmbH. There was an opposing effect from direct netting of current losses of 1&1 Versatel on the level of United Internet AG due to a profit and loss agreement concluded with 1&1 Versatel in 2024. This special item had a negative impact on net income and EPS in 2024.

Reconciliation of EBITDA, EBIT, EBT, net income, and EPS from continued operations (acc. to net income statement) with figures adjusted for special items (operating)

(3) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025; previous year adjusted

(2) From continued operations

Adjusted for the above mentioned earnings contribution of “Energy” in the fiscal year 2025 and the earnings contributions of “Energy” and “De-Mail” in the fiscal year 2024, the Group’s key operating performance measures (EBITDA and EBIT) developed as follows:

Consolidated operating EBITDA amounted to € 1,282.0 million in the fiscal year 2025 and was thus 2.4% above the prior-year figure (€ 1,251.6 million). As in the previous year, expenses for the rollout of 1&1’s mobile network amounted to € -265.3 million.

As a result of increased depreciation and amortization, however, operating EBIT of € 585.3 million was down slightly by 1.9% on the comparable prior-year figure (€ 596.8 million). Due in particular to investments in the expansion of 1&1 Versatel’s fiber-optic network and 1&1’s mobile network, total depreciation and amortization included in this figure rose to € 696.7 million (prior year: € 654.8 million).

There was a corresponding increase in the operating EBITDA margin from 20.9% in the previous year to 21.0%, whereas the operating EBIT margin fell to 9.6% (prior year: 10.0%).

The number of Group employees declined by 2.2% to 10,547 in 2025 (prior year: 10,783).

Key sales and earnings figures of the Group (in € million)

(1) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025;

excluding the sales and earnings contribution from Energy (sales contribution: € 16.1 million, EBITDA contribution: € +7.8 million net including sales proceeds, EBIT contribution: € +7.8 million net including sales proceeds)

(2) Previous year adjusted after accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025;

excluding the sales and earnings contributions from Energy and De-Mail (sales contribution: € 26.2 million, EBITDA contribution: € -0.7 million, EBIT contribution: € -0.9 million); including out-of-period expenses for network expansion from 2022 and 2023 (EBITDA and EBIT effect: € -14.3 million)

Quarterly development ; change over prior-year quarter ⁽¹⁾

(1) Unaudited; see note ”Unaudited sections“ at the beginning of the management report

(2) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025; previous quarters adjusted; excluding the sales and earnings contribution from Energy (sales contribution: € 5.9 million, EBITDA contribution: € +0.2 million, EBIT contribution: € +0.2 million in Q1 2025; sales contribution: € 5.3 million, EBITDA contribution: € +1.0 million, EBIT contribution: € +1.0 million in Q2 2025; sales contribution: € 4.9 million, EBITDA contribution: € +0.7 million, EBIT contribution: € +0.7 million in Q3 2025; sales contribution: € 0.0 million, EBITDA contribution: € +5.9 million net including sales proceeds, EBIT contribution: € +5.9 million net including sales proceeds in Q4 2025)

(3) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025; previous quarters adjusted; excluding the sales and earnings contributions from Energy and De-Mail (sales contribution: € 6.3 million, EBITDA contribution: € -0.5 million, EBIT contribution: € -0.6 million in Q4 2024)

Multi-period overview: Development of key sales and earnings figures

(1) Excluding the out-of-period positive effect on earnings attributable to the second half of 2020 (EBITDA and EBIT effect: € +39.4 million) and excluding a non-cash valuation effect from derivatives (EBITDA and EBIT effect: € +3.0 million)

(2) Excluding a non-cash valuation effect from derivatives (EBITDA and EBIT effect: € -0.5 million) and excluding IPO costs IONOS (EBITDA and EBIT effect: € -8.8 million)

(3) Excluding the sales and earnings contributions from Energy and De-Mail (sales contribution: € 27.3 million, EBITDA contribution: € -2.7 million, EBIT contribution: € -2.8 million) and excluding IPO costs IONOS (EBITDA and EBIT effect: € -1.7 million net (IPO costs and offsetting pro rata assumption of costs by the IONOS co-shareholder))

(4) Previous year adjusted after accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025; excluding the sales and earnings contributions from Energy and De-Mail (sales contribution: € 26.2 million, EBITDA contribution: € -0.7 million, EBIT contribution: € -0.9 million); including out-of-period expenses for network expansion from 2022 and 2023 (EBITDA and EBIT effect: € -14.3 million)

(5) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025; excluding the sales and earnings contribution from Energy (sales contribution: € 16.1 million, EBITDA contribution: € +7.8 million net including sales proceeds, EBIT contribution: € +7.8 million net including sales proceeds)

Additionally adjusted for the non-cash impairment loss on the investment in Kublai/Tele Columbus (disclosed in the “Result from the loss of significant influence”) in 2024 and interest income from the BFH proceedings in 2025, operating earnings before taxes (EBT) of € 425.7 million – based on the slight decline in operating EBIT as explained above – were also down slightly on the previous year (€ 432.7 million).

After final adjustment for the one-off tax effects in 2024 and the one-off tax refund from the BFH proceedings in 2025, the Group’s other key operating performance measures developed as follows:

By contrast, operating consolidated net income from continued operations rose from € 241.0 million to € 311.5 million. This increase was primarily due to significantly lower tax expenses (in particular following a revaluation of deferred taxes based on the gradual reduction in the corporate income tax rate in Germany from 2028 onwards).

The same applies to operating consolidated net income attributable to shareholders of United Internet AG from continued operations, which rose from € 149.7 million to € 211.8 million.

As a result, operating EPS from continued operations improved correspondingly from € 0.86 to € 1.23.

Group’s financial position

Cash flow before changes in balance sheet items (subtotal) improved from € 1,128.9 million in the previous year to € 1,192.2 million in the fiscal year 2025.

Cash flow from operating activities rose significantly from € 954.1 million to € 1,236.8 million. This was primarily due to the absence of the annual advance payment made for the last time in the previous year under the contingent agreement with Deutsche Telekom.

Cash flow from investing activities in the reporting period led to a net outflow of € -698.8 million (prior year: € -765.6 million). This resulted mainly from capital expenditures of € -730.8 million (prior year: € -774.6 million). In addition, there were subsequent payments received and opposing payments made related to business combinations in connection with the exit of Warburg Pincus with a net total of € 20.9 million (prior year: € 5.6 million), as well as interest received of € 20.7 million (prior year: € 1.8 million).

United Internet’s free cash flow is defined as cash flow from operating activities, less capital expenditures, plus payments from disposals of intangible assets and property, plant, and equipment. In the fiscal year 2025, free cash flow improved significantly from € 184.5 million in the previous year to € 508.3 million in the fiscal year 2025.

After deducting the cash flow item “Redemption of lease liabilities” – disclosed in cash flow from financing activities since the initial application of the accounting standard IFRS 16 – free cash flow (after leases) also improved significantly from € 47.4 million in the previous year to € 320.6 million in the fiscal year 2025.

In the fiscal year 2025, cash flow from financing activities was dominated by the assumption of loans (€ 426.2 million net; prior year: 356.7 million), payments for interest (€ -157.2 million; prior year: € -149.5 million), the redemption of lease liabilities (€ -187.6 million; prior year: € -137.1 million), dividend payments (€ -328.4 million; prior year: € -86.4 million), and payments made to minority shareholders during two share buyback programs of Group subsidiary IONOS Group SE and the purchase of shares in Group subsidiary 1&1 AG made by United Internet AG (€ -303.1 million; prior year: € -22.3 million).

Due to closing-date effects, cash and cash equivalents amounted to € 48.0 million as of December 31, 2025, compared to € 114.9 million on the balance sheet date of the previous year.

Development of key cash flow figures

(1) Free cash flow is defined as cash flow from operating activities, less capital expenditures, plus payments from disposals of intangible assets and property, plant and equipment

(2) 2025 including the repayment portion of lease liabilities (€ -187.6 million), which have been reported under cash flow from financing activities since the fiscal year 2019 (IFRS 16)

(3) 2024 including the repayment portion of lease liabilities (€ -137.1 million), which have been reported under cash flow from financing activities since the fiscal year 2019 (IFRS 16)

For further details on guarantees, leases, and other financial obligations, please refer to chapter 2.2 “Business development”, “Liquidity and finance”, as well as note 46 of the Notes to the Consolidated Financial Statements.

Group’s asset position

The balance sheet total increased from € 11.936 billion on December 31, 2024 to € 11.978 billion as of December 31, 2025.

Development of current assets

Current assets fell from € 1,989.3 million as of December 31, 2024 to € 1,767.8 million on December 31, 2025. Cash and cash equivalents disclosed under current assets decreased from € 114.9 million to € 44.8 million due to closing-date effects. Current trade accounts receivable fell from € 515.8 million to € 473.5 million. Due to the current slower customer growth in the Consumer Access segment (compared to previous periods), as well as a shift from current to non-current contract assets, current contract assets fell from € 630.3 million to € 572.0 million. Inventories declined slightly from € 119.7 million to € 93.8 million. Mainly as a result of conditional purchase price payments made after the exit of Warburg Pincus from IONOS, current other financial assets fell from € 106.1 million to € 75.8 million.

The balance sheet items current prepaid expenses, income tax claims, and other non-financial assets were all largely unchanged.

Development of non-current assets

Non-current assets rose from € 9,946.4 million on December 31, 2024 to € 10,196.0 million as of December 31, 2025. Due in particular to a change in the fair value of Kublai GmbH recognized in other comprehensive income, non-current other financial assets decreased from € 85.9 million to € 40.1 million. C apital expenditures in the reporting period (especially for the 5G network rollout as well as the expansion of the fiber-optic network in the Consumer Access and Business Access segments) led to a strong increase in property, plant and equipment from € 3,145.0 million to € 3,584.4 million, while intangible assets declined from € 1,879.8 million to € 1,791.3 million, primarily as a result of increased amortization. Due mainly to the introduction of new contract models by 1&1 with 24-month terms and 36-month device payments, non-current contract assets rose from € 187.9 million to € 232.1 million, while non-current prepaid expenses fell from € 801.2 million to € 724.8 million due to the cessation of prepayments made to advance service providers and closing-date effects.

The items shares in associated companies, goodwill, non-current trade accounts receivable, contract assets, and deferred tax assets were all largely unchanged.

Assets held for sale amounted to € 14.7 million (prior year: € 0).

Development of current liabilities

Current liabilities increased strongly from € 1,881.6 million on December 31, 2024 to € 2,645.6 million as of December 31, 2025. Due to in particular to phasing effects from 2024, current trade accounts payable decreased from € 798.1 million to € 630.9 million. There was an opposing effect from the strong increase in current liabilities due to banks from € 356.5 million to € 1,235.3 million, resulting from reclassifications in line with due dates. Other financial liabilities also increased due in particular to reclassifications from non-current liabilities (especially spectrum liabilities) from € 305.8 million to € 358.6 million. By contrast, other non-financial liabilities fell from € 165.9 million to € 133.7 million due to the decline in sales tax liabilities.

The balance sheet items income tax liabilities, current contract liabilities, and current other accrued liabilities were largely unchanged.

Development of non-current liabilities

By contrast, non-current liabilities decreased from € 4,509.4 million on December 31, 2024 to € 4,093.6 million as of December 31, 2025. This was mainly attributable to non-current liabilities due to banks, which declined from € 2,457.2 million to € 2,009.4 million – despite the use of existing and new long-term credit facilities (promissory note loan 2025) – due to reclassifications to current bank liabilities in line with due dates. Deferred tax liabilities decreased from € 350.7 million to € 329.0 million, primarily as a result of a revaluation of deferred taxes based on the gradual reduction in the corporate income tax rate in Germany as of 2028. Non-current other financial liabilities increased from € 1,597.6 million to € 1,637.1 million, mainly due to higher leasing additions (IFRS 16).

Non-current trade accounts payable, non-current contract liabilities, and non-current other accrued liabilities were all largely unchanged.

Liabilities associated with assets held for sale amounted to € 12.1 million (prior year: € 0).

Development of equity

Consolidated equity capital declined from € 5,544.7 million as of December 31, 2024 to € 5,227.2 million on December 31, 2025. Despite the good net income result, the Group’s accumulated profit – comprising the past profits of the consolidated companies, insofar as they were not distributed – fell from € 2,851.5 million to € 2,726.8 million in the fiscal year 2025. This was primarily due to the dividend payment (consisting of a regular dividend and a one-off catch-up dividend), which totaled € 328.4 million. Non-controlling interests decreased from € 763.5 million to € 546.6 million, mainly due to the share purchase from the voluntary public tender offer to the shareholders of 1&1 AG, as well as the further purchase of 1&1 shares in early April and late August. There was a corresponding significant decline in the consolidated equity ratio of 2.9 percentage points from 46.5% to 43.6%.

Net bank liabilities (i.e., the balance of bank liabilities and cash and cash equivalents) increased from € 2,698.8 million as of December 31, 2024 to € 3,200.0 million on December 31, 2025. The year-on-year increase in financing requirements was primarily due to the higher dividend payment in 2025 (including a one-off catch-up dividend) totaling € 328.4 million (prior year: € 86.4 million) and the acquisition of 1&1 shares totaling € 247.0 million (prior year: € 0).

Multi-period overview: development of relative indebtedness

(1) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of September 30, 2025; prior year adjusted

(2) Net bank liabilities = balance of bank liabilities and cash and cash equivalents

Further details on the objectives and methods of the Group’s financial risk management are provided under note 44 of the Notes to the Consolidated Financial Statements.

Multi-period overview: development of key balance sheet items

(1) Decrease due to withdrawal of treasury shares (2023)

(2) Decrease due to the non-cash writedown of the investment in Kublai and the reclassification/rededication of the investment (resulting from the loss of significant influence) to non-current other financial assets (2024)

Management Board’s overall assessment of the Group’s business situation

In its latest economic outlook, the International Monetary Fund (IMF) reported growth of 3.3% for the global economy in 2025, based on preliminary calculations. For Germany – United Internet’s most important market by far with a sales share of around 90% – the IMF’s calculations are in line with the preliminary figures of the country’s Federal Statistical Office, which also reported only a slight increase in (price-adjusted) gross domestic product (GDP) of 0.2% for 2025 (prior year: -0.5%).

Despite the adverse macroeconomic conditions, United Internet’s stable and largely non-cyclical business model ensured that its customer contract figures, as well as its sales and earnings, continued to make good progress in the fiscal year 2025. The Company was able to increase contracts by 700,000 in total to 29.72 million and raise sales by 1.9% to € 6.104 billion. Operating EBITDA of € 1.282 billion was 2.4% above the prior-year level. This figure includes expenses for the rollout of 1&1’s mobile network of € -265.3 million, which were thus unchanged from the previous year.

The performance once again highlights the benefits of United Internet’s business model based predominantly on electronic subscriptions with fixed monthly payments. This ensures stable and predictable revenues and cash flows, offers protection against cyclical influences and provides the financial scope to win new customers, expand existing customer relationships, and grasp opportunities in new business fields and new markets – organically or via investments and acquisitions.

As of the reporting date for the Annual Financial Statements 2025, and at the time of preparing this Management Report, the Management Board believes that the United Internet Group as a whole is well placed for its further development. It regards the financial position and performance – subject to possible special items – as positive and is optimistic about the Group’s future prospects.