(Bloomberg) -- Deutsche Telekom AG posted adjusted earnings that surpassed investors’ expectations, a beat the Europe’s largest telecommunications operator attributed to cost-cutting measures and strong demand in the US and Germany.

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Adjusted earnings before interest, taxes, depreciation and amortization after leases rose 6.4% from a year earlier to €11.1 billion ($11.7 billion) in the third quarter, the carrier said in a statement on Thursday. Analysts had forecast €11.05 billion, according to the average of estimates compiled by Bloomberg.

The German carrier is outperforming its peers in Europe, largely driven by its majority holding in US carrier T-Mobile US Inc., which earlier reported strong subscriber growth for the quarter and raised its 2024 earnings outlook. That stake, along with cost-cutting measures, has allowed the company to improve cash flow, raise its dividend, and invest in technologies such as artificial intelligence. US service revenue rose 4.2% to €15.2 billion.

In Germany, the company has been investing heavily in fiber networks and customer service, including a loyalty program for residential customers that’s helped reduce the churn rate. Service revenue in the country grew 2.1% to €5.65 billion for the quarter.

“The growth momentum continues unabated on both sides of the Atlantic,” said Christian Illek, chief financial officer of Deutsche Telekom in a statement. “At the same time, we have successfully brought our leverage ratio back down to below our target value.”

Organic net revenue for the quarter was up 3.6% to €28.5 billion compared to the same quarter last year.

What Bloomberg Intelligence Says:

Deutsche Telekom’s better-than-expected 3Q ex-US Ebitdaal performance across Germany, Europe and T-Systems — a 4.3% organic gain — underscores its 23-bp upgrade to full-year Ebitda, along with the robust US, boosting conviction in its midterm 4-6% group Ebitdaal annual-gain goal. Consensus is 36 bps above the upgraded 2024 group-Ebitda target after adjusting for currency, and 27 bps below the reiterated FCF aim.

— Erhan Gurses, BI telecoms analyst

Deutsche Telekom raised its 2024 adjusted Ebitdaal outlook slightly to €43 billion, up from €42.9 billion. It expects the same metric to grow by 4% to 6% a year through 2027, Chief Executive Officer Tim H?ttges told investors at its capital markets day last month. It also proposed a share buyback program of as much as €2 billion in 2025 and a record dividend of 90 cents per share next year for the current financial year.