Good morning, ladies and gentlemen, and welcome to the freenet AG Conference Call on the Q2 2025 and Half-year Results. Currently, all participants are in a listener only mode. After the presentation, there will be an opportunity for you to ask questions. I will now hand over to Robin Harries, who is leading this earnings call for the first time as the new CEO of freenet AG.
Good morning, everyone. My name is Robin Harries, and I'm honored to speak with you today as the new CEO of freenet . I joined this exciting company at the beginning of June, and it's been a dynamic and inspiring start. Prior to freenet , I served as CFO of Trivago, a NASDAQ-listed company. Before that, I was a board member at 1&1, where I led marketing and sales for over five years. I'm no stranger to this industry, and it feels very familiar and energizing to be back. I would like to begin by sharing some of my impressions of freenet after these initial two months. What stands out immediately is the agility of the company. We have a strong competitive position in both mobile and TV services, supported by powerful and well-established sales infrastructure.
We are proud to have nearly 500 retail stores, which allow us to maintain daily direct contact with our customers. In addition, we benefit from numerous strong partnerships and a broad market presence, which gives us an excellent position to market our offerings effectively and with impact. Technologically, freenet is well positioned. We are already leveraging AI in key areas like pricing, customer management, and telesales, and the corporate environment is dynamic and full of potential. The team is highly motivated, and there are numerous opportunities to further develop the business. Culturally, freenet is built on openness, a willingness to change, a strong desire to grow and deliver. I can feel a lot of entrepreneurial passion in the company, and I really like that. I can tell you that I met a lot of talented, motivated, and hungry people.
Financially, we are in a solid position with high cash generation and low leverage. Our guiding principles, being customer-centric, demand-driven, and AI-first, are more important than ever and will continue to shape our strategy moving forward. Looking ahead, we've defined several key focus areas for the future, and I see many opportunities. First, we are committed to maintaining clear guardrails for change. This includes our 2025 guidance, our 2028 ambition, shareholder remuneration, and our financial policy. We stick to that. In mobile, our goal is to keep growing. Brick- and- mortar will remain a vital sales channel, but we're also changing our online approach. We are improving our user experience and conversion rates on our website. We see a lot of potential here. For example, when it comes to page speed, our websites are at the moment not fast enough.
For example, when you go to Megasim and want to order something, you see too slow loading times, and this also affects our other websites. We are working on that. We will improve that. When it comes to user experience, overall, the conversion rates on our online websites are not good enough. The market standard is higher, and we see huge potential here to further improve. We are preparing for performance-based brand marketing. We are in the process of that, and we are working on improving our churn rates, especially through AI tools. It will take some time, but we are seeing nice potential down the road. We are strengthening our own marketing channels. We have just restructured our leadership team in the telco pillar, and I'm truly excited to take this step into the future together with the whole management team.
I believe we make a fantastic team, and working together has already been a real pleasure. I'm glad to be working alongside some of the most capable people in the industry. Related to TV, we are continuing to support strong B2C growth. We have strong products that customers like a lot, and we have amazing teams that will further strive for success. Also here, we see a lot of potential and put focus on it. Internally, we are fostering a cost-conscious culture that is focused on performance, experimentation, and scalability. We are empowering our people to take ownership and make decisions. We've been building a flat organization structure with minimal bureaucracy, which supports this and gives us the agility to move fast. Our ambition is clear. We want to be the fastest player in the market. In the long run, this will only be possible with the help of AI.
AI is not only the future; it's the present. At freenet , we are fully committed to becoming the flagship AI company in the telco industry. This is one of our top strategic priorities, and I can already feel a strong appetite for change and innovation across the organization. We're still at the very beginning of our AI journey, and it's too early to quantify the full impact, but one thing is crystal clear: we see tremendous potential ahead. Now let's look at our performance in the first half of 2025. Financially, we are fully on track. Postpaid and TV service revenues are growing. waipu.tv is contributing notably to EBITDA, and we also delivered strong quarterly free cash flow. On the customer side, growth is in line with expectations. Freenet TV is slowing its decline.
waipu.tv continues to grow strong in several marketing channels, and postpaid had a particularly strong second quarter. Here in mobile communication, we are seeing a nice development and accelerated growth in postpaid. We added 130,000 postpaid customers in H1 2025 compared to just 25,000 in H1 2024. Since we added around 80,000 postpaid, this growth reinforces our strong market position. However, we remain focused on profitability, not growth at any cost. Our next steps include scaling online channels, refocusing brand marketing on performance, and continuing to reduce churn. I talked about it earlier. For 2025, our guidance for postpaid subscribers remains moderate growth. Turning to TV and media, waipu.tv continues to show strong B2C development. Net adds were impacted by churn from the O2 TV base, but we expect growth to recover in the second half of the year. Our guidance remains unchanged.
Freenet TV saw a churn of just 3,000 in Q2, which gives us hope that we are approaching a stable base. Our next steps include retention and upselling of waipu.tv customers from the 2024 growth phase and the price increase for freenet TV. For 2025, we still expect notable growth in waipu.tv subscribers and a noticeable decrease in Freenet TV RGUs. With that, I'm happy to hand over to Ingo.
Yeah, thank you, Robin. Good morning, everybody, from my side. If you allow me, I would start with a few personal words because I think it was a very successful time, what we had together with Christoph. Now a new era starts here. Just to give you my first impressions after two months, I think, again, the organization Freenet was very welcoming, I think. From the first day when Robin started here, he was something like part of the organization. Therefore, I'm thankful to all the people working here. On the other side, I think, yes, life is faster than it was before, clearly. We see some very fast changes here. I think we gained pace again, which was necessary for the company. We have different views now and a totally different drive. I'm very happy that the Supervisory Board decided here to appoint Robin as CEO of the company.
I think we are already really a good team here. I'm very optimistic that the new era will be as successful as we were before. It will be different, but definitely good. After these words, I would like to start with an overview about the group results. I think everybody saw the share price this morning. I think some of you or some of the investors are disappointed, but definitely from my point of view, I was not disappointed about the results. I think we are totally on track to reach our guidance for the year, and we stick to what we promised, and we will not change it. If you look into the revenues, we see a slight increase only in the revenues, but on the other side, and we are focusing on this every time, this is based on higher margin revenues.
We increase the higher margin revenues, and we decrease the lower margin revenues. As a proof of concept, what you can see if you look into the gross profit, you see for the half year, there's an increase of gross profit by 3%. In the second quarter, there was an increase of 3%. Still, the increase of gross profit is much higher than the increase of revenues. Therefore, still, the revenue development is important for us, but it is not as important as the margin what we generate. This is with 39.8%, still very high and higher than before. Looking into the EBITDA, the adjusted EBITDA, it is EUR 257.4 million up to June for 2025. There is some work to do to reach the guidance, definitely. If you multiply the results at the end of June, if you multiply it by two, then you have only 550. This is obvious.
I think what we did in the first half of the year, we did a lot of marketing spending in mobile, so EUR 8 million more than last year. If we would just reduce it in the second half, then we are already in the guidance range. Therefore, I'm still optimistic that we will reach the guidance for the group. Moving to the mobile results, I think we stick here to what we published in the earlier quarters, but we changed it a little bit on the next page because if you look into the revenues, you see a slight decline of service revenues in the second quarter. For the first half, it is still growing, but I think it is misleading to follow these service revenues here because we focus our whole business on postpaid, on contract business.
What is here, a part of these figures, is also the prepaid and the no-frills business. There, we generate low, sometimes negative margins. Therefore, we cleaned here a little bit up. With the lower revenues, and this is what you can see, if we move to gross profit, the lower revenues do not translate into lower gross profit. The gross profit is quite fine. You see the increase of 2.4% in the gross profit. What you also see is that we have a lower ARPU. The whole market does have a lower ARPU. You can compare it with all the others. The difference here in our figures is, even with a lower ARPU, it translates in a higher gross profit. From my point of view, this is still a very healthy business, what we do have here. Therefore, I'm quite happy with these results.
If we move to the EBITDA, to the adjusted EBITDA, we see this slight decrease in the second quarter and also in the first half of the year. I would like to repeat what I said on the group level. These nearly EUR 8 million, what we spent for brand marketing in the first half, with no relation to gross ads, what we did. If we could reduce it in the second half, then we would be back to see an increase here. It is based on this football advertising and what we did. I think we cannot stop it totally in the second half, but we will definitely reduce it. Moving to some KPIs from the mobile area, on the postpaid side, I think it was a very, very successful quarter. We could increase the number of postpaid subscribers by 77,000.
If you compare it with the second quarter in 2024, it's something like 11x of what we did one year ago. I think very successful in the second quarter. On the other side, and this is the negative, what you are, yeah, where we have to, what is obvious. On the other side, you see the ARPU, which is decreasing. I think after in the call, after the first quarter, we were still a little bit more optimistic to generate a stable ARPU during the year. I think there's some truth, and there are some real figures. Therefore, I think to be open here and to be fair, this will not be possible to have a stable ARPU. Therefore, we changed the guidance. We are optimistic to find a stabilization on these new levels here. I think this is what we are working on during the year.
Digital lifestyle, back on track. I think we had some problems with accessories in the first quarter. Now we are back on track. The second quarter was quite fine. Therefore, we are happy. Moving to TV, yeah, on the revenue side, I think it is still maybe a little bit misleading that we mix the media broadcast, the antenna TV business, and the IPTV business, waipu.tv, because therefore, you do not see the good developments clearer from the waipu.tv. What we plan to do is, with starting into the year 2026, we plan to separate it, so make it more transparent for you. During this year, we will still report both parts together, but I will give you some hints what is based on the waipu.tv, on the IPTV development. In the revenue area, you see an increase of 6.5%. Only from waipu, it is a revenue increase of 25%.
I think this is important to know. If we move to gross profit, here we still have a margin of 60%, which remains as high as it was before. Moving to the adjusted EBITDA, here we do see an increase in the first half of the year by nearly 14%. If we would only watch into waipu.tv, there is an increase. There's an all-in in EBITDA of EUR 15 million in the first half, EUR 15 million higher than last year. I think all-in very successful still here. Definitely, it will not be the big topic to reach the guidance as we do focus also in IPTV more on profitable growth here. Moving to my last slide, which is the cash flow bridge. As usual, I do also give you some ideas of what I see up to the end of the year.
Working capital, we see a need of working capital by nearly EUR 17 million. This is much lower than the figure what we saw last year. I still stick to the guidance for the full year of -EUR 45 million here from working capital because we have some provisions to be paid during the second half of the year. We are just in some discussions internally if we should do more hardware bundles, which would mean we would need some working capital. Still EUR 45 million from working capital. On the other hand, in taxes, we guided for the full year -EUR 50 million. At the moment, we have EUR 22 million. We have one big effect, which we expect to see in the third quarter. It is a tax payment, a post-payment, that we have to pay for the years 2015 to 2018. It's value-added tax that we have to pay here.
It was already part of our guidance for the full year. Therefore, we still stick, maybe it is EUR 55 million at the end of the year instead of the EUR 50 million that we guided. On the other side, in CapEx, at the moment, we only spent EUR 16.5 million. There is some phasing, but typically during the year, it is not possible to do all the projects which are postponed. Definitely, I think last year, for the full year, we had a CapEx of EUR 38 million. Therefore, I think something around EUR 40 million looks possible for me. I think we have even some room in our free cash flow guidance here. I'm totally happy with what we have. On the other side, we have the EUR 13 million that we expect from the sale of some IP addresses. I think I'm very comfortable here.
Therefore, I would hand back now to the operator to start the Q&A, please.
Thank you. Ladies and gentlemen, if you would like to ask a question, please press nine and star on your telephone keypad. In case you wish to withdraw a question, press three and star on your telephone keypad. The first question is from Ulrich Rathe, Bernstein. Please go ahead with your question. Mr. Rathe, your line is open. You may ask your question.
Oh, sorry. Okay. I had a problem on my end. Thank you very much. I have four quick questions, please, if that's all right. The first one would be, Robin, you're saying you're sticking to targets and midterm targets. One of the midterm targets was for waipu.tv to get to 3.5 million subscribers by 2028. Simply, mathematically, that would require a quarterly customer intake of 125,000 per quarter. Given you have churn from O2, we know that, but still, it's zero now, and it would probably be fairly low in the second half. How confident are you that you can rack up the waipu.tv intake to that 125,000 per quarter, and what measures would you take to get there? Related to this, why is it the right management decision to stick to this EUR 35 million EBITDA goal for waipu.tv when the growth of subscribers has collapsed essentially by now?
The second one is, what exactly is holding back the mobile app? Could you talk a little bit more whether that's mix or whether it's retention offers you're giving, sort of below-the-line offers of discounted apples for contract extension loads, anything else, really? My last question to Ingo, the gross margin is up and it has been now also in the first quarter, but there is a little bit of the suspicion that this is a one-off on the new wholesale deals. This momentum that you have in the margin on relatively weak service revenue growth might just go away next year if it is just reflecting the new wholesale deals you've closed for this year. Could you comment on the dynamics behind that margin increase? Thank you very much.
Hi. This is Robin. Thanks for your question. Related to your first question with the ambition of waipu.tv, regardless of customer development until 2028, we assume that waipu.tv's EBITDA contribution of EUR 100 million remains a valid benchmark, and we stick to this. In terms of the customers, yes, at the moment, we see the churn of the O2 users, but in the other marketing channels, we see strong growth. Therefore, we are very confident about the outlook of waipu.tv. We believe that this is really a fantastic company, a great opportunity with a very strong team. They built this from scratch. They deliver. Also, when you look at the product, it's really good. The reviews are good. They outgrow the competition. We are very happy about it and very confident that we will reach our long-term EBITDA targets there.
The second question was why we believe that the EUR 35 million is good. Why shouldn't it be less, or why shouldn't it be more? I always think that it's good to show both. On the one hand, to have a company that is growing strongly, that's performing. On the other hand, also showing that you can earn money. For our business, it's important to earn money. Therefore, we believe that this is the right mixture, and we are confident that we are on a good track here. Your second question was related to the ARPU development. When you look into the market, you can see that prices are going down. Competition is tough everywhere in the market. It's a pressure that all companies in the industry feel at the moment. When we look at our own business, there are some components that influence it.
On the one hand, we have our discount brands, and then we have our bundled business. If you see a shift in mobile plans and bundled business, this also influences the ARPU. If you think about shifts between markets, where you have, on the one hand, a brand where you have maybe more premium customers, on the other hand, you have brands where you have more price-sensitive customers. This also influences this. At the moment, that's the way how we steer it. I think when you look into the broader market, the development here is reasonable. We believe it will be stabilized. There are some things that you can do to influence it, also to shift budget performance base between brands. We are looking into it. We are doing this, but we feel quite comfortable at the moment.
If you look at our subscriber growth, I think it's, I mean, the market is tough. You see prices going down, but overall, we are still able to grow. We grew by 130,000 subscribers in the first half of the year, and we increased the revenue with it. Overall, the effect is still positive. I already said that we see a lot of opportunities down the road, for example, improving our website, improving conversion rates, and starting performance-based brand marketing. In the past, there was also brand marketing, but I have a little bit different approach. Maybe you know Trivago. In the past, we did TV advertising in 50 countries worldwide at the same time, and we always did this very performance-based. That means that we look at direct response, reproduce spots that perform very well. That brings directly traffic to the websites and traffic that converts into orders.
We optimize on that, like other companies optimize online marketing. It's really performance-based. We want to start it again. We want to scale it with a clear target to get more orders and to increase our unaided brand awareness in the mid to long term. There are also other opportunities like reducing the churn. Also, when you look at our strongest brand at the moment, it's freenet. In the past, we did marketing in the mobile segment for freenet. Actually, when you type in the browser freenet, you end up on freenet.de, which is a news and a website portal. It's not the website where we sell mobile phones. There's also room for improvement. There's a lot of stuff that we can do. That will help us to further grow our subscribers.
There's a lot of room to or a lot of stuff that we can do to work on the ARPUs. Therefore, we are quite confident that.
Thank you. On this margin question, there is a margin uplift this year, and you're highlighting that the slow revenue growth is offset by strong gross margin growth. Is that not just the one-off on the new contracts?
Please hold one moment. Just one moment, please. We will get back to the conference in just a moment.
Can you hear us?
Yes, now we can hear you. Thank you.
Can you hear us?
Yes, we can hear you now. Please, you can continue.
Okay. So.
Next question, then.
Yeah.
Mr. Rathe had a follow-up to his question. Maybe, Mr. Rathe, you could repeat, please.
Yeah, I just repeated the question because I couldn't hear anything. I think Ingo is just about to answer that.
Yeah. Okay. With your question about the gross margin, the fast answer would be a no. Definitely, the contracts what we do have with the network help us to optimize our gross profit. This is clear. The contracts what we do have have a long running time from 5 to 10 years. Therefore, it's definitely not a one-off. It already started to help in 2024, and it's just ongoing in 2025 and in the following years.
Understood. Thank you very much for the answers.
Thank you Ulrich
The next question is from Polo Tang, UBS Investment Bank. Please go ahead with your question.
Hi. Thanks for taking the questions. Firstly, apologies. I missed the earlier part of the call. In terms of my questions, can you talk through what you're seeing in terms of competitive dynamics in both the mobile and the TV market? Specifically, in terms of waipu.tv net ads and the lack of growth in Q2, could you quantify the headwind from the O2 cancellations? Was it still around the - 50,000, - 60,000 run rate? Was there anything exceptional to call out or unusual in terms of seasonality to call out for waipu.tv in Q2? Just to follow up in terms of waipu.tv, prior commentary on net ads was for 300,000 net ads for 2025. Is this still achievable given the lack of growth in Q2? My final question is clarification in terms of the guidance because for H1, your EBITDA growth was about flat.
To hit the guidance, you need quite a notable acceleration in H2. Excluding one-off gains from IP sales, your guidance implies 3.5%- 7% EBITDA growth. Could you talk through the main drivers that are leading to this acceleration and what are the risks? I know that you commented quite a lot about lower marketing costs in mobile, but also implicitly waipu.tv. Can you reduce these costs in the second half given the competitive environment? Thanks.
Yeah. This is Robin. Thanks for your question. I will start with the competition in the mobile market. Yes, there's competition. We see competition everywhere, like in all our marketing channels and also our competitors. I think everybody at the moment has aggressive prices and is trying to get users. It's a dynamic market. I think it has always been a competitive market. At the moment, a lot of pressure. That's true. It's challenging. However, I think we find answers to this. If you look at that we drew 130,000 subscribers in the first half of the year, I think that's impressive. I think there will be more growth potential in the future. So far, we are working on several things. I mentioned this earlier. It will take some time, but the market is difficult, yes, but we are growing and we see a lot of room to further grow.
Maybe Ingo, you can elaborate on waipu.tv.
Yeah. Good morning, Polo. I think the biggest problem, I think the competitive environment in TV has not changed that much. It is still Magenta, who is the biggest competitor we do have here. You may have seen their figures in the morning. They are also slightly lower compared to the other quarters. There are no big changes. I think in 2024, there was some backwind from the Neben-Kosten-Privileg. This helped definitely. I think this push is not there in 2025. Without the effect from Telefónica, we are still growing. What we did in 2024 was that we gained something like 60,000- 70,000 gross ads with Telefónica. These gross ads are missing now, definitely. Otherwise, we would show a good growth, not as big as last year, but a very, very good growth. We are still fine. No changes in the environment here.
It is not based on competition that we are worse. It is based on the loss of Telefónica. I think up to the end of the year, we hope that we cleared this. Starting in 2026, it will be easier to follow the growth we have here. Moving to your question about the guidance, you were correct in your intro. This is something I already tried to explain during my presentation. You are correct. At the moment, we have something like EUR 257 million. If I double it for the whole year, linear, then it would be something like EUR 515 million. This is below the guidance range. On the one hand, we see the increase in customers. On the other hand, we will reduce the marketing spendings.
Robin already described that we will focus on performance marketing and that we spend less marketing on brand because from the investments in brand marketing, and it's based in the naming, we do not see any performance. This is what happened during the first half of the year. We cannot reduce it to zero because we have some contracts here which are still in place. We will definitely reduce it very strongly. I think subscriber based, on the one hand, less marketing spend, which does not have any influence on performance. Then we have some optimizations. You also see that we have a restructuring on the board level and that we reduce here our personnel costs starting on the 1st of September. I think we will optimize ourselves during the second half. We have some positions here also on the cost side, which we can optimize.
All in, we still stick to the guidance. Even if you just double the result of half year, it is not that far away to reach the guidance range.
The 300,000 net adds for waipu.tv for 2025?
I think there will be a noticeable increase. I would expect from today's point of view, 200,000 up to the end of the year because we expect a very strong fourth quarter, which we also saw in the other years. I think the third quarter, I just do not want to disappoint anybody here, but the summer quarter for TV is difficult every year. I think we could also be, this is linked to the question from Ulrich before. I think we are very, very good on the EBITDA side at the moment, and our offers are less aggressive than last year. It is also possible to be slightly more aggressive here. We were very, let me call it, conservative in the first half. I think without any negative EBITDA effect, we could push it in the second half, and this would definitely happen.
I think something like 200,000 for the year still looks reasonable for me.
Clear. Thanks.
The next question comes from Joshua Mills, BNP Paribas Exane. Please go ahead with your question.
Hi, guys. Thanks for the questions. I had a couple, please. The first one on mobile. You made the point that the market remains competitive, which I think all your competitors have done as well. On their conference call with Vodafone, you seem to be indicating they would be willing to cede some share on the mobile phones in order to encourage broader price rationality in the market. Historically, one of the ways that operators have tried to signal that and to deliver that kind of dynamic is by using third-party operators such as yourselves less. I'd just be interested to hear if there's been any change in the kind of volumes we are being offered by any of the MNOs or any of the commission terms which you're using.
Perhaps if they're now restricting some of the premium offers to their own channels and focusing more on the sub-brands through you, that would be very helpful, color. Secondly, it kind of goes back to what Ulrich was asking at the start of this call. Could you give us a bit more clarity on, firstly, what the overall O2 sub-number was within the viable base initially and how many are left? At what point do you expect the headwind from O2 sub-churn to be fully out of the base? That would be helpful for our modeling purposes. Finally, Robin, I think in your introductory slide, you talk about a priority being to find platform users to replace the O2 brand. How advanced are you in those discussions?
I'm going to say I'm not aware of any other big operator that could replace O2 on scale, but any detail you could give about alternatives would be great. Thank you.
Yeah. Joshua, thanks for your questions. Price rationality was the first question. If I got it correct, if there is a push from the networks in the shift to direct, this is nothing we can see. I think we are important for the networks as we were before. I think even in situations where the competition is a little bit higher, this is also the experience. What we have from earlier times is that they use us, especially if there is more aggressivity in the market. I think we have good partnerships with them. We have good contracts with them. We do not see that they are more aggressive in our direction or if anything has changed. I think this is all fine. Price rationality, I think what everybody is trying to do in the market is to avoid cannibalizing the base we do have.
Everybody is doing it with separate brands, and this is also us. Still, also the networks are using us because we are something like a separate brand for them. Is it rational what we see there? Some of the offers, definitely no. I think the market all in is still rational. Especially, again, in the discount part of the market, it is less rational than in the, let me say, classic part of the market. You asked for more clarity about Telefónica and the O2 subs based on waipu.tv. I think I'm repeating it. I'm sorry about it. We are not allowed to give the full figures. The only thing I can repeat now is that last year, in the first half of the year, we gained something like 130,000 customers under the O2 brand.
As we do not have a partnership in this area now, we do not have these gross ads. I'm sorry about it, but this is the only figure that I can give you.
Yeah. This is Robin. To your third question, I'm not sure if I really got it. It would be great. Can you repeat it, please?
I think on slide four, no, four, it's slide number five, you talk about looking for platform users to replace Telefónica on the IPTV side. My question was, how advanced are those talks? Are there other players in the German market which are big enough to make that replacement for Telefónica, or do you need to find several partners to make up for the lower O2 numbers?
We don't talk about specific discussions with partners and what we are doing there. We have partnerships with the telco providers, and we try our best to offer great products to our users, to give a wide range of products. Therefore, for us, it's important to have good relationships to them to get good products.
Maybe one follow-up, Joshua, because I think I'm sorry, but I think it was a slight misunderstanding here on our side. I think you asked about the waipu.tv platform. We lost Telefónica, and we are definitely in talks with some other players in the market to replace it. Today, we are not in a situation to publish anything. It is still promising, the talks that we do have. We do not only talk with one possible partner. It's also something which could not be realized in the next two or three months. If it works, and yeah, we are hopeful here, it would start at the beginning of 2026 or something like this.
Okay, thank you.
The next question is from Lars Vom Cleff, Deutsche Bank . Please go ahead with your question.
Yes. Thank you very much. Good morning. Apologies, but one more question on waipu.tv and net ads and gross ads. Completely understood that you're not allowed to give us the exact figures. Nevertheless, waipu.tv's customer base grew by 2,000 customers quarter on quarter. Could the reason be that more O2 customers left? Was it about the same level of O2 customers leaving like in Q2 and only the new customer base growing slower than in the past?
Yeah, it would be an easy answer for me to say yes. I think I'm honest in these calls. The reduction of gross ads from Telefónica, it is slightly higher, but it is not significantly higher, the gross ad figure what we lose here. It is still a lower figure than in the first quarter, all in. From all in, but from Telefónica, I already said it is something like 130,000 in the first half. It was more or less 50,000 in the first quarter and 80,000 in the second quarter. I think this is more or less the split of it.
50,000, 80,000, is that the number of customers leaving the platform or the number of customers you are missing if they were coming on the platform last year?
This is the number of customers that we gained last year and that we have not gained this year.
We would need to have the number of customers that are leaving the platform.
Yes, this is what I'm only allowed to tell you, the gross ad figures.
Okay. Understood. Okay. Perfect. Thank you. Your guidance unchanged, profitability guidance unchanged, much appreciated. While ARPU is lower and now expected to also be lower for the remainder of the year, we see you're increasing the number of your customers or the customer base. Are you also focusing more on unbundled and unlimited tariffs than during the last two to three quarters? Is it the name of the game still chasing discount tariff customers?
No, it's the name of the game that we do both bundled and unbundled tariffs. We are just, as we have some room in our working capital, discussing if we do more bundled tariffs in the second quarter. This would definitely help to stabilize or slightly increase the ARPU. All in for the whole year, even with doing more bundles in the second half, we see a decrease in the ARPU.
Okay. Understood. I guess marketing spend you already talked about, and that includes TV and media, where you said that a decision on the authentic spending will be taken during the summer break. I guess you already covered that with your comments. Go on. Okay. Perfect. Thank you very much. I'll go back to the line.
Thank you, Lars.
The next question is from Simon Stippig, Warburg Research. Please go ahead with your question.
Hi. Good morning. Thank you for the presentation. Firstly, the key focus areas you presented, in that regard, I wonder where do you see the biggest lever for freenet 's business on especially revenue and the cost side? Then tied into that question would be time-wise, where do you see the low-hanging fruits and also where do you see the most sustainable positive change for the business? Secondly, I saw that you tendered your stake in the economy. Obviously, you will get some liquidity out of that. Is there already a plan to deploy that cash? Would it, for example, be an option to increase your currently running share buyback program? Thank you.
Hi. This is Robin. Thanks for your questions. Maybe let me start with the so-called low-hanging fruits.
I think it's obvious if you improve the conversion rates on all your websites that this has a direct impact on your subscriber growth. Since we have some brands and some websites where we do see potential, which are below market standard, I think this is something which maybe is a good opportunity for us. We are already working on this. We already improved one website. It takes some time, but we are with full focus working on this. Those are, I think, opportunities that can maybe show impact in the next couple of months. Furthermore, we are shifting budgets from marketing channels or marketing campaigns that were not so performance-based, where we didn't or where we haven't seen the impact right away. We take the money, we put it into performance-based channels. Also, I mentioned this, we change the way how we do brand marketing.
What we don't do is spend money into stuff where we don't see a direct impact. We rather start producing TV commercials that drive traffic immediately, that drive sales immediately, and then also help to build the brand awareness. When we look at our brands, we have a strong aided brand awareness. If we compare freenet with our competitors in terms of unaided brand awareness, there's a lot of room for potential, and that's a huge opportunity. To get there, you need to do performance-based brand marketing. We are preparing for this. We will test this shortly. This is much more cost-efficient than what we have been doing in the last couple of months. Shifting budgets, improving conversion rates, shifting budgets to performance and marketing channels. In terms of churn, we are looking into it. We are applying AI tools.
We really try to better and better understand why we lose customers. I think there shouldn't be a reason why customers leave this fantastic company. We are working on this and try to reduce churn. I think we have really good opportunities here. This might be also something where we see impact in the near to midterm. If we do our work here and work hard and move forward step by step, I think that's a chance to increase the revenues on the cost sides. We also cut costs. We stopped, I said, we stopped stuff that doesn't pay in. In terms of your third question, the economy stake, yes. We were approached. We signed a revocable. We followed the recommendation of the management and the other shareholders because they are our partners. We have a very good partnership with them. We support this.
In terms of the money, we still don't have the money. The management expects closing at the beginning of 2026. Until then, it's still some time. If this becomes reality, then we will also inform you.
Thank you. Maybe two follow-up questions. First one would be in regard to your brand marketing contracts. When would they expire, or usually, how long do they run? Would you expect a direct cost savings when you reallocate to your performance marketing? Because you mentioned it's just more cost-efficient.
We have commitments until next year. There's no way to get out of it. We have to spend it. Those brand markets, it's like sponsorships. We have contracts until, I think, until next year. I think there's also one thing that is a little bit longer. Besides those sponsorships, there was also brand marketing or brand spend invested into, for example, TV campaigns.
This was something that we also stopped at the beginning of June. Now we are optimizing it, trying to produce better performing TV spots, try to find better ways where we can do the advertising. This is also stuff that we shift.
Thank you. If I may, one follow-up in regard to the economy . Your business relationship with economy, will it be the same, or do you foresee any changes there?
No, I don't foresee any changes. We have a multi-year contract. We're happy about the partnership. I think this has been lasting for over 30 years now. We have very good relationships with them. I would say it's a win-win situation. Therefore, I don't foresee any changes there.
Great. Thank you very much.
Thanks a lot.
As we do not have any more questions, I thank you for the participation in the call today. I think Tim and team are available for further questions. Robin and I are also available if you would like to contact us. I think our lines are basically open. Have a good time. Have a good day, and thanks a lot.