The company's revenue rose from £610 million in Q1 2023 to £664 million in the opening quarter of this year.
It also improved its margin by 9 per cent from £389 million in Q1 last year to £424 million in Q1 2024, boosted by various margin management initiatives.
In addition, Three's active customer base grew 3 per cent from 10.3 million to 10.6 million. Its active contract customer base also climbed 6 per cent from 8.6 million to 9.1 million.
However, the company’s capex fell 7 per cent from £140 million in Q1 2023 to £130 a year later.
Reflecting on the results, Three said that challenging economic conditions remain a determining factor for telecommunication customer spending. Despite year-on-year growth in revenue and margin, it said that the operation continued to be impacted by inflationary cost pressures, while EBITDA less capex remained negative (cash outflow since 2020), driven by network investments coupled with an increasing cost base.
The company attributed the year-on-year revenue and margin growth to the increase in certain customer segments as well as revenue initiatives. However, it added that growth remains challenging due to the shift of customer behaviour towards lower value products.
Three added that B2B and SMARTY continues to drive active customer growth, offsetting continued higher churn from traditional core business.
Capex, meanwhile, it said, primarily focused on delivering contractual and regulatory requirements (HRV and SRN programmes).
Robert Finnegan, chief executive officer of Three UK, said, "We have seen a solid start to the year, successfully growing our revenue and margin and adding 6 per cent to our active contract base. However, we continue to be impacted by inflationary pressures, and market conditions remain challenging. Our EBITDA-capex remains negative, as it has been since 2020, which is unsustainable long-term.
"I believe that merging with Vodafone is vital to give us the required scale to invest, grow and compete to create a best-in-class network for the UK."