Airtel Nigeria’s revenue grows 44.6% but EBITDA margin slips to 57.5%

Profitability pressure despite revenue growth

Airtel Nigeria reported a mixed financial performance for the six months ending September 2026, with strong revenue growth but a decline in operating margins. The company’s mobile-services revenue rose 44.6% to $1.008 billion, while underlying EBITDA increased 49.2% to $586 million. However, the EBITDA margin fell sequentially from 58.8% to 57.5% in the second quarter of its 2027 financial year, reflecting rising operational costs and investments.

The half-year EBITDA margin improved slightly to 58.2% from 56.3% the previous year, indicating some progress in cost management, though the sequential drop signals ongoing challenges.

Customer growth and data demand drive revenue

Airtel Nigeria’s customer base grew 15.1% year-on-year to 61.7 million, with data consumption per customer rising from 12.7GB to 16.7GB per month. Data revenue increased 33.8% in constant currency, while average revenue per user (ARPU) reached $2.80, up 28.3% in reported currency and 12.3% in constant currency.

The company’s pricing strategy, described as "more for more," aims to balance affordability with revenue growth, though it must navigate rising costs to sustain profitability.

Rising costs and investments strain cash flow

Airtel Nigeria’s capital expenditure surged 139.9% to $177 million in the first half of 2026, reflecting heavy investments in network expansion to meet growing data demand. Operating free cash flow rose 28.2% to $409 million, but normalized free cash flow for Airtel Africa declined from $368 million to $280 million due to accelerated cash investments.

Fuel prices in Nigeria doubling since the start of the financial year and currency fluctuations—despite the naira strengthening from ₦1,553 to ₦1,360 per dollar—have added to the cost pressures. Excluding currency effects, mobile-services revenue grew 26.6%, and EBITDA increased 30.7%.

Management focus on efficiency

Airtel Africa CEO Sunil Taldar emphasized the need for disciplined spending and operational efficiency to sustain profitability amid rising costs and investments. The company’s ability to balance growth with cost control will be critical as it scales its network to support higher data consumption.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

Airtel Nigeria’s results highlight a common tension for telecom operators in high-growth markets: rapid customer and data demand expansion can drive revenue, but scaling infrastructure and managing operating costs often erode margins. For founders and operators, this is a case study in the challenges of balancing growth with profitability. The drop in EBITDA margin despite revenue growth suggests that cost control—and not just customer acquisition—will determine long-term success. Similarly, the impact of external factors like fuel prices and currency fluctuations underscores the importance of agile financial planning, especially in volatile markets. Airtel’s emphasis on operational efficiency is a signal to operators that disciplined spending, not just investment, is necessary to sustain cash flow and profitability.

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