Vodafone Group PLC (VOD.US) shares surged 5.13% in pre-market trading on Tuesday, following the release of its latest earnings report that showcased a return to growth in its key German market and the announcement of its first dividend increase in several years.

The British telecom giant reported a robust performance for the first half of fiscal year 2026, with total revenue increasing 7.3% to €19.61 billion. The company's service revenue, a crucial metric in the telecom sector, climbed 8.1% to €16.33 billion, while adjusted EBITDAaL grew 5.9% to €5.73 billion. Notably, Vodafone's German operations, its largest market, returned to growth with a 0.5% year-over-year increase in organic service revenue for Q2 FY2026, reaching €2.74 billion.

Investors were particularly encouraged by Vodafone's announcement of its first dividend increase in seven years, with plans to raise payouts by approximately 2.5% for fiscal year 2026. The company also upgraded its full-year outlook, expecting to achieve results at the upper end of its guidance range. This includes adjusted EBITDAaL between €11.3 billion and €11.6 billion, and adjusted free cash flow between €2.4 billion and €2.6 billion. The positive results and outlook reflect the progress of CEO Margherita Della Valle's transformation strategy, which has involved simplifying operations, divesting non-core assets, and focusing on key markets.