Explanations of items in the income statement

Due to the classification of the “AdTech” business field as a discontinued operation pursuant to IFRS 5, the corresponding contributions to earnings are disclosed separately in the income statement. The individual line items of the income statement include only the results from continuing operations. To ensure comparability, the prior-year figures have been adjusted retroactively.

5.  Sales/segment reporting

According to IFRS 8, the identification of operating segments to be included in the reporting process is based on the so-called management approach. External reporting should therefore be based on the Group’s internal organization and management structure, as well as internal financial reporting to the Chief Operating Decision Maker. In the United Internet Group, the Management Board is responsible for assessing and controlling the success of the various segments.

The Group’s operating business is divided into the two business divisions “Access” and “Applications”, which in turn are divided into the reporting segments “Consumer Access” and “Business Access”, as well as “Consumer Applications” and “Business Applications”.

A description of the products and services is provided in Note 2.1 in the explanation of revenue recognition. The segment “Corporate” comprises mainly management holding functions.

The Management Board of United Internet AG mainly controls operations on the basis of key performance figures. It measures segment success primarily on the basis of sales revenue, and earnings before interest, taxes, depreciation and amortization (EBITDA). Transactions between segments are charged at market prices. Information on sales revenue is allocated to the country in which the company is domiciled. Segment earnings are reconciled with the total amount for the United Internet Group.

Segment reporting of United Internet AG in fiscal year 2025 was as follows:

(1) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of December 31, 2025; prior year adjusted.

Segment reporting of United Internet AG in fiscal year 2024 was as follows:

(1) After accounting for Sedo as a discontinued operation in accordance with IFRS 5 as of December 31, 2025; prior year adjusted.

(2) Adjustment of employee numbers in 2024 due to changed calculation logic: Since July 2025, exempt employees and employees in the passive phase of partial retirement have been reported as inactive employees.

EBITDA corresponds to the operating profit (EBIT) reported in the consolidated statement of comprehensive income, plus the depreciation and amortization reported in Note 11, which must also be taken into account for the reconciliation to consolidated net income. The Reconciliation/Consolidation” column primarily comprises eliminations and consolidation effects and does not represent a complete reconciliation statement.

In the fiscal year 2025, revenue of the Consumer Access segment from contracts with customers includes hardware sales of € 762,138k (prior year: € 745,171k). Revenue of the Business Access segment from contracts with customers for the fiscal year 2025 includes hardware sales of € 7,874k (prior year: € 15,385k). The remaining revenue of the two segments is attributable to service revenue. The other business segments only generate revenue from services

In the reporting periods, there was no significant concentration of individual customers in the customer profile. As in the previous year, the United Internet Group did not generate more than 10% of total external sales revenue with any single customer. Foreign sales accounted for 9.6% (prior year: 10.5%) of total Group revenue.

In addition to investments, the highest management committee only monitors shares in associated companies, other non-current financial assets, and goodwill. The depreciation disclosed in the segments refers to other, non-monitored intangible assets, and property, plant and equipment, as these are largely determined automatically once the relevant useful life has been determined. Non-current assets, excluding financial instruments and deferred tax assets, amount to € 8,998.8m (prior year: € 8,657.6m), of which € 8,510.2m (prior year: € 8,143.5m) is attributable to domestic operations and € 488.6m (prior year: € 514.1m) to foreign operations.

Contract balances developed as follows in the fiscal year 2025:

The year-on-year decrease in contract assets is mainly due to reduced hardware sales in the fiscal year 2025.

In fiscal year 2025, revenue of € 184,019k (prior year: € 175,033k) was recognized which was contained in contract liabilities at the beginning of the fiscal year.

The total transaction price of performance obligations still unfulfilled at the end of the reporting period amounted to € 1,819,075k as of December 31, 2025. The following table shows the time bands in which the transaction prices from unfulfilled or partially unfulfilled performance obligations as of the reporting date are expected to be recognized:

(1) As a result of the sale and discontinuation of the "Energy" business field on October 15, 2025, there are no outstanding performance obligations in the "Consumer Applications" segment as of December 31, 2025.

The total transaction price of performance obligations still unfulfilled at the end of the reporting period amounted to € 1,740,603k as of December 31, 2024. The following table shows the time bands in which the transaction prices from unfulfilled or partially unfulfilled performance obligations as of the reporting date were expected to be recognized:

The transaction prices shown relate to unfulfilled performance obligations from contracts with customers with an original contract term of more than 12 months. They relate to service components with period-based revenue recognition and to contracts for which a one-off fee has been invoiced and which are now recognized as revenue over the relevant original minimum contract term.

6.  Cost of sales

Cost of sales in relation to sales revenue increased year on year to 68.8% (prior year: 67.5%), resulting in a decline in gross margin to 31.2% (prior year: 32.5%).

The increase in cost of sales is primarily attributable to expenses related to the establishment and operation of the 1&1 mobile network, as well as wholesale costs arising from the national roaming agreement with Vodafone, and also reflects higher depreciation and amortization in the 5G segment. By contrast, data center operating costs decreased in fiscal year 2025. Together with logistics expenses, they account for the majority of other cost of sales. For further details, please refer to Note 11.

7.  Selling expenses

At 15.5% of sales (prior year: 16.2%), selling expenses as a proportion of sales decreased slightly. The decrease is primarily attributable to lower amortization of intangible assets from company acquisitions. Other selling expenses mostly comprise customer relationship costs and product management expenses.

8.  General and administrative expenses

The other general and administrative expenses mostly comprise expenses in connection with accounts receivable management, third-party services, insurance contributions, and auditing fees.

9.  Other operating income/expenses

9.1  Other operating expenses

Expenses from foreign currency translation mainly comprise losses from exchange rate changes between the date of origination and time of payment of foreign currency receivables and payables as well as losses from measurement as of the reporting date. Currency gains from these items are reported under other operating income. A net consideration of this item results in a net income of € 6,743k (prior year: net expense of € 5,985k). The increase in net foreign exchange effects from foreign currency transactions is due to the rise in the average exchange rate of the euro against the US dollar and the British pound in fiscal year 2025.

9.2  Other operating income

Income from foreign currency translation mainly comprises gains from exchange rate changes between the date of origination and time of payment of foreign currency receivables and payables, as well as gains from measurement as of the reporting date. Currency losses from these items are reported under other operating expenses.

Income from project grants mainly comprises cost contributions to projects in the Business Applications segment.

Income from deconsolidation of € 5.985k results from the sale of the “Energy” business field on October 15, 2025. For further details, please refer to Note 4.

10.  Impairment of receivables and contract assets

Impairment of receivables and contract assets comprised the following:

11.  Depreciation, amortization, and impairment

Depreciation, amortization, and impairment of intangible assets, and property, plant and equipment consist of the following:

The disclosed depreciation and amortization amounts do not include depreciation and amortization of the discontinued operation and therefore differ from the amounts presented in the cash flow statement, which include both business segments.

Depreciation and amortization also includes the amortization of capitalized assets resulting from business combinations. These are divided between the capitalized assets as follows:

Intangible assets with indefinite useful lives were subjected to an impairment test on the level of the cash-generating units as of the reporting date.

Amortization of capitalized assets resulting from business combinations is divided between the business combinations as follows:

The decrease in depreciation and amortization is primarily due to the scheduled completion of amortization of the customer base acquired as part of the initial consolidation of Drillisch AG in August 2025.

12.  Personnel expenses

Personnel expenses are divided among the various divisions as follows:

Personnel expenses include wages and salaries of € 700,482k (prior year: € 689,789k), and social security costs of € 126,261k (prior year: € 119,141k). The rise in personnel expenses is mainly due to salary adjustments. Personnel expenses in connection with employee stock ownership plans totaled € 9,277k (prior year: € 10,617k).

The number of employees decreased slightly from 10,783 in the previous year to 10,547 employees at year-end:

* Adjustment of employee numbers in 2024 due to changed calculation logic: Since July 2025, exempt employees and employees in the passive phase of partial retirement have been reported as inactive employees.

The average number of employees calculated in accordance with section 314 HGB (i.e., active employees, excluding board members, managing directors, trainees, trainees, interns, and students in dual study programs) amounted to 10,447 in fiscal year 2025 (prior year: 10,598), of which 8,413 (prior year: 8,647) were in Germany and 2,034 (prior year: 1,951) abroad. This figure also includes employees from discontinued operations.

With regard to company pension plans, the Group only has defined contribution plans. The Company pays contributions to the state pension fund as a result of statutory obligations. There are no other benefit obligations for the Company after payment of the contributions. The current contribution payments are disclosed as an expense in the respective year. In fiscal year 2025, they totaled € 49,568k (prior year: € 48,529k) and mostly concerned contributions paid to the state pension fund in Germany.

As a result of contribution exemptions, an amount of € 0k (prior year: € 0k) of this total referred to contributions paid to related parties.

13.  Financial expenses

The subsequent valuation of purchase price liabilities and the valuation of embedded derivatives relate to the measurement through profit or loss of the purchase price liabilities and derivatives agreed in the course of the Warburg Pincus investment in the Business Applications segment, whose valuation depends in particular on the enterprise value of the IONOS Group SE. Warburg Pincus sold its entire stake in IONOS Group SE on March 27, 2025. As a result, the purchase price liability and embedded derivatives became due. For further information, please refer to Note 35.1.

The interest expense from deferral of spectrum liabilities results from the agreement with the Federal Ministry of Transport and Digital Network Infrastructure under which the payment obligation for mobile communications spectrum was extended to 2030. Please refer to Notes 24.1 and 35.3.

Please refer to Note 46 for an explanation of the financial expense from leases.

14.  Financial income

The valuation of embedded derivatives and the subsequent valuation of the purchase price liability refer to the measurement through profit or loss of the derivatives and purchase price liabilities agreed in the course of the Warburg Pincus investment in the Business Applications segment. Warburg Pincus sold its entire stake in IONOS Group SE on March 27, 2025. As a result, the embedded derivatives and the purchase price liability became due. For further information, please refer to Note 35.1.

Interest income from tax audit results from interest on refunded advance tax payments. The refunds were granted following a ruling of the Federal Fiscal Court in a legal dispute regarding corporate income tax for 2008.

Other financial income mainly comprises interest income from credit balances with banks. With regard to income from loans to associated companies, please refer to Note 43.

15.  Income taxes

The income tax expense is comprised as follows:

Under German tax law, income taxes comprise corporate income tax and trade tax, as well as the solidarity surcharge.

The effective trade tax rate depends on the municipalities in which the Group operates. The average trade tax rate in fiscal year 2025 amounted to approx. 15.67% (prior year: 15.55%).

As in the previous year, German corporate income tax was levied at 15% – irrespective of whether the result was retained or distributed. In addition, a solidarity surcharge of 5.5% is imposed on the assessed corporate income tax.

In addition to taxes on the current result, current income taxes include non-period tax income of € 30,806k (prior year: € 49k).

As of the balance sheet date, deferred tax assets and liabilities were revalued based on the tax rates that will apply in the future. This is due to the reduction in the German corporate income tax rate from the current 15% to 10% by 2032, which was decided in 2025 and will be implemented in stages starting in 2028.

Deferred taxes are recognized for tax loss carryforwards, interest carryforwards, and temporary differences if it is probable that taxable profit will be available against which the deductible temporary difference can be utilized.

Deferred tax assets for tax loss carryforwards in certain countries are shown in the table below:

In the previous year, deferred taxes for loss carryforwards mainly related to the tax loss carryforwards of an income tax group within the Group, to which the 1&1 Versatel Group was added in the fiscal year 2024. As of January 1, 2025, the 1&1 Versatel Group was transferred to another income tax group within the Group. In the previous tax group, the tax loss carryforwards not yet utilized in the previous year were fully utilized in fiscal year 2025. As a result, the deferred tax assets recognized on these loss carryforwards were fully reversed.

The following time limits apply for the use of tax loss carryforwards in different countries:

• USA: 20 years for loss carryforwards incurred before 2018, indefinite for loss carryforwards incurred from 2018 onwards


• Germany: Indefinite, but minimum taxation

Tax loss carryforwards for which no deferred tax assets have been formed, refer to the following countries (excluding Germany):

* Tax rate 21.0%

** Tax rate 0.2%

A breakdown of income tax types results in the following loss carryforwards for Germany for which no deferred taxes have been formed:

Loss carryforwards in Germany for which no deferred taxes have been formed mainly refer to loss carryforwards of the 1&1 Versatel Group, as well as 1&1 Mail & Media Inc., 1&1 Energy GmbH, and we22 Solutions GmbH. The loss carryforwards of 1&1 Versatel GmbH, for which in part no deferred taxes were formed in the previous year, were fixed on joining the UI income tax group in fiscal year 2024 and can be used again at a later date.

The so-called “interest cap” enshrined in German tax law limits the deductibility of interest expenses for the assessment of company income taxes. Interest expenses that cannot therefore be deducted are carried forward indefinitely to the following fiscal years (interest carryforward).

As of December 31, 2025, deferred taxes were recognized on all of the Group's interest carryforwards. Deferred taxes were newly recognized on the interest carryforward of € 1,138k, and an interest carryforward of € 29,037k was utilized, for which an existing deferred tax asset of € 8,236k was reversed. In the previous year, the interest carryforward on which no deferred taxes were recognized amounted to € 13,259k.

In the fiscal year 2025, loss carryforwards of € 95,621k were utilized (prior year: € 0k), for which deferred taxes had been recognized in the previous year.

No deferred tax liabilities were recognized for temporary differences of € 329.8m in connection with shares in subsidiaries, as it is not considered likely that these differences will reverse in the foreseeable future.

Deferred taxes resulted from the following items:

The net balance of deferred tax liabilities of € 279,771k in the previous year decreased to a net balance of deferred tax liabilities of € 280,389k. As a result, the total change in the net balance of deferred taxes amounted to € 12,007k (prior year: € -65,850k). This change was mainly due to the following factors:

• Decrease in deferred tax assets on loss carryforwards of € 14.4m and on interest carryforwards of € 4.4m;
• Decrease in deferred tax liabilities from intangible assets in connection with the amortization of assets from company acquisitions of € 23.0m;
• Decrease in net balance of deferred tax liabilities of € 18.8m due to revaluation of deferred tax assets and liabilities based on the gradual reduction of corporation tax in Germany from 15% to 10% between 2028 and 2032;
• Decrease in deferred tax assets on provisions for employee stock ownership plans of € 10.5m as a result of payments made in fiscal year 2025.

The change in the net balance of deferred taxes compared to the previous year is reconciled as follows:

The deferred tax effects recognized in equity result mainly from the employee stock ownership plans, which are recognized in equity.

The aggregate tax rate is reconciled to the effective tax rate of continued operations as follows:

The tax reconciliation for the previous year has been adjusted in accordance with the presentation in the income statement and now discloses the effect from the discontinued operation separately.

The item “Non-taxable result from the loss of significant influence over associates” is in connection with the impairment of the stake in Kublai GmbH in the previous year (see also Note 4.3).

The item “Value adjustment of tax loss carryforwards capitalized in previous years” in 2024 refers to deferred tax assets formed in previous years for loss carryforwards of the 1&1 Versatel Group. These loss carryforwards were fixed in the fiscal year 2024 due to the group joining the UI income tax group with a corresponding reversal of the deferred tax assets.

The item “Non-taxable at-equity results” mainly relates to the prorated results of the associated company AWIN AG and in the previous year additionally of Kublai GmbH.

The anticipated tax rate corresponds to the tax rate of the parent company, United Internet AG.

In accordance with IAS 12 International Tax Reform - Pillar Two Model Rules, the United Internet Group applies the temporary, mandatory exemption from the recognition of deferred taxes resulting from the introduction of global minimum taxation.

Of the jurisdictions to be included for Pillar Two purposes, the following have already enacted final implementing legislation: Germany, France, Canada, Poland, Austria, Spain, Romania, Singapore, and the UK.

A comprehensive analysis of the financial figures of the fiscal year 2025 shows that, as things stand, no country within the Group qualifies as a low-tax country for Pillar Two purposes. Consequently, no additional tax liability is expected in the fiscal year 2025.

As in the previous year, income tax claims mainly relate to receivables from tax authorities in Germany and amounted to € 91,229k (prior year: € 93,119k) as of the balance sheet date.

As in the previous year, income tax liabilities relate primarily to liabilities to tax authorities in Germany and amounted to € 63,054k (prior year: € 48,004k) as of the balance sheet date.

16.  Net income after taxes from discontinued operations

In September 2025, the United Internet subsidiary IONOS Group SE decided to sell Sedo GmbH, including its subsidiaries (“Sedo”), and thus the IONOS business field “AdTech” (formerly: “Aftermarket”). According to management's current planning, the sale is expected to be completed in the third quarter of 2026. In accordance with IFRS 5, the individual items in the income statement were reclassified for the first time in September 2025 under the item “Net income after taxes from discontinued operations”; the prior-year comparative figures of the income statement were adjusted accordingly.

The following section summarizes the impact of the discontinued operation on the income statement, balance sheet, and cash flow statement.

The following table breaks down net income after taxes from discontinued operations. The figures show the business activities of the discontinued operation with third parties. Eliminations from the consolidation of expenses and income were allocated to the discontinued operation, as this most accurately reflects the circumstances surrounding a future sale.

The currency translation differences disclosed in consolidated equity include cumulative currency translation differences of € -1,321k attributable to the discontinued operation.

As of December 31, 2025, the assets and liabilities from the discontinued AdTech business segment are as follows:

The following amounts in the cash flow statement are attributable to the discontinued AdTech business:

17.  Earnings per share

As of December 31, 2025, capital stock was divided into 192,000,000 registered no-par shares (prior year: 192,000,000 shares) each with a theoretical share in the capital stock of € 1. On December 31, 2025, United Internet held 19,162,689 treasury shares (prior year: 19,162,689). These treasury shares do not entitle the Company to any rights or proportional dividends and are thus deducted from equity. The weighted average number of shares outstanding used for calculating undiluted earnings per share was 172,837,311 for fiscal year 2025 (prior year: 172,837,311).

As of the reporting date, the employee stock ownership plans of subsidiaries had a dilutive effect (prior year: a negative dilutive effect due to the negative result, which triggered the anti-dilution provision).

The calculation of the dilutive effect from conversion is made by first determining the number of potential shares. On the basis of the average fair value of the shares, the number of shares is then calculated which could be acquired from the total amount of payments (par value of the rights plus additional payment). If the difference between the two values is zero, the total payment is exactly equivalent to the fair value of the potential shares and no dilutive effect need be considered. If the difference is positive, it is assumed that these shares will be issued in the amount of the difference without consideration.

Based on an average market price of € 22.70 (prior year: € 20.28), this would result in the issuance of 159,437 shares (prior year: 408,086) without consideration. In addition, the employee stock ownership plans of IONOS and 1&1 had a dilutive effect of € -1,646,843 (prior year: € -3,261,482) on diluted net income. The number of shares used to calculate diluted earnings per share for the fiscal year 2025 is therefore 172,996,748 (prior year: 173,245,397).

The following table shows the underlying amounts for the calculation of undiluted and diluted earnings:

18.  Dividend per share

The ordinary Annual Shareholders' Meeting of United Internet AG on May 15, 2025 voted to accept the proposal of the Management Board and Supervisory Board to pay a dividend of € 1.90 per share. The total dividend payment of € 328.4m was made on May 20, 2025.

In accordance with section 21 of the Company’s articles, the Annual Shareholders' Meeting decides on the allocation of unappropriated profit. For the fiscal year 2025, the Management Board will propose to the Supervisory Board a dividend of € 0. 50 for each share entitled to dividends for the past fiscal year 2025.

The Management Board and Supervisory Board will discuss this dividend proposal at the Supervisory Board meeting on March 18, 2026.

Pursuant to section 71b AktG, the Company does not accrue any rights from treasury shares and thus has no pro-rated dividend rights. As at the date of signing the Consolidated Financial Statements, the United Internet Group holds 19,162,689 treasury shares (prior year: 19,162,689). The number of shares with dividend rights may change before the Annual Shareholders' Meeting. In this case, a proposal will be made to the Annual Shareholders' Meeting to maintain the dividend of € 0.50 per entitled no-par value share with a corresponding adjustment to the proposal for the appropriation of profit.