PLDT Full Year 2025 Earnings Call - Free Cash Flow and Maya Profitability Anchor Deleveraging Plan

Jinggay Nograles, Head of Investor Relations, PLDT: Good afternoon, everyone, and thank you for joining us today. I’m Jinggay Nograles, Head of Investor Relations here at PLDT, and it’s my pleasure to welcome you to our full year financial and operating results briefing. Joining us today to share insights into PLDT’s performance and strategic direction, we have PLDT’s CFO, Mr. Danny Yu; PLDT’s Chief Operating Officer, Mr. Manny Jimenez; our Chief Legal Counsel, Attorney Joan De Venecia-Fabul; our Corporate Secretary, Attorney Marilyn Victorio-Aquino. We also have our business unit heads, our Head of Consumer Business - Home, Mr. John Palanca, our Head of Enterprise, Mr. Blums Pineda, and our OICs for Smart Communications, Mr. Marjorie Garrovillo and Mr. Lloyd Manaloto. We also have online with us, ePLDT and VITRO President, Viboy Genuino.

Before we begin, I’d like to remind everyone that we will have a Q&A session after the presentation. You may submit your questions via MS Team’s Q&A panel here. Or if you would like, you can also unmute your mic later in the session. All right, to start, I’d like to invite our Chief Financial Officer, Mr. Danny Yu, to walk us through PLDT’s financial performance.

Danny Yu, Chief Financial Officer, PLDT: Good afternoon, everyone, and thank you for joining us today. Please allow me to present PLDT’s financial and operating highlights for the full year 2025. Our gross service revenues reached PHP 212.2 billion, up 2% or PHP 3.8 billion. Net service revenues reached PHP 196.2 billion, marking a record. Cash OPEX, subsidies, and provisions came down to PHP 84.9 billion, down 1%, reflecting our focus on spending control even as we support the growth areas. EBITDA, excluding MRP costs, rose 3% to PHP 111.2 billion, with margins steady at 52%. Telco core income was PHP 33.9 billion, down 3%, mainly due to higher financing costs and depreciation as we continue to invest in network upgrades. Core income improved to PHP 34.6 billion, up 1%, supported by Maya’s swing to profitability.

Overall, our fiscal year results show a stable top line, resilient EBITDA, improving contribution from our digital business, and stronger cash as CapEx came down. Our consolidated service revenues reached PHP 196.2 billion, up 1% or PHP 1.5 billion year-on-year. If we exclude legacy services, revenue would have grown 3% or PHP 5.5 billion to PHP 176.9 billion. This now makes up about 90% of total service revenues versus 88% a year ago. For wireless, mobile data and fixed wireless reached PHP 77.2 billion, up 1%, making up 91% of wireless revenues versus 89% last year. Wireless consumer revenues were PHP 85 billion, steady year-on-year. For Home, fiber continues to lead the story.

Fiber revenues grew 6% to PHP 59.4 billion, accounting for 98% of Home revenues versus 92% a year ago. As a result, Home revenues reached an all-time high of PHP 61 billion, up 3%. For Enterprise, corporate data and ICT grew 3% to PHP 36.3 billion, now 75% of Enterprise revenues versus 72% last year. ICT only up 25% year-on-year. Overall, Enterprise revenues grew to a record PHP 48.4 billion. By and large, the continued shift towards fiber, wireless data, and ICT is what is driving the growth and offsetting the decline in legacy services. To close the year, we ended fourth quarter stronger versus three quarter, Q3, building on the momentum that we saw last quarter. Consolidated service revenue in the fourth quarter were PHP 50.3 billion, up 3% quarter-on-quarter.

Wireless consumer revenues were PHP 21.8 billion, up 4%, driven by mobile data and fixed wireless access. Enterprise revenues were PHP 12.7 billion, up 5%, led by corporate data and ICT. Home was flat quarter-over-quarter due to multiple major calamities in the fourth quarter, including 2 earthquakes and 4 super typhoons, which affected installation activity as resources were diverted to repair and restoration. Let’s take a closer look at each of the business units. As mentioned earlier, Home delivered record revenues in 2025. On this slide, I will focus on the drivers behind the performance. Subscriber growth stayed strong and quality led. Fiber net adds reached 392,000 in 2025, up 98% year-on-year, bringing total fiber subs to 3.76 million.

This was supported by faster installs, improved service reliability, and more affordable fiber options that helped broaden adoption. Customer economics stayed healthy, supported by our bundling strategy. ARPU was stable at PHP 1,447 for the full year. Churn remained very manageable at 1.82%. We continued to strengthen our content bundles with Cignal, Netflix, and HBO Max. We also expanded beyond streaming into home services through HomeLife, which offers starter kits for home security and everyday living. Through IGV Game Pass, we give subscriber access to over 200 PC games. Overall, we continue to grow home in a disciplined way, turning CapEx into stronger revenues while keeping margins resilient. Wireless consumer revenue held steady in a highly competitive market. Here, I’ll focus on key drivers of the business, particularly hyper-personalization, 5G adoption, and fixed wireless access.

Worth noting is that the gains in the third quarter were carried on to the fourth quarter, as we streamlined offers and customer management while continuing to invest in network quality. We also saw sequential ARPU improvement, with Smart Prepaid up 4% quarter-on-quarter, and TNT up 3% quarter-on-quarter, supported by better targeting and more relevant offers. Usage continued to rise. Mobile data traffic grew 7% to 5,900 petabytes in 2025, and active data users reached 43.2 million as of end of December. 5G adoption also continues to expand, and this supports revenues as 5G users typically consume more data and take up bigger plans. 5G devices were up 35% to 11.2 million, while 5G data traffic rose 88%. 5G devices now make up 19% of the total base.

As more traffic moves to 5G, it also helps decongest LTE, improving the experience across the network. Fixed wireless access remains a key. Fixed wireless revenues were up to 22% year-on-year, supported by the shift from 4G to 5G fixed wireless access, which improves service and help us use network capacity more efficiently. Lastly, our core modernization is now underway. This strengthens analytics and targeting, improves marketing efficiency, and supports ARPUs. Enterprise delivered its highest revenues in 2025, and we ended the year stronger. In Q4, revenue rose 5% quarter-on-quarter, supported by ICT contract wins and better delivery momentum. The mix continues to shift beyond pure connectivity, with more customers taking the solution-led services alongside core connectivity. ICT is the key growth driver.

ICT revenues grew 25% for the full year, led by managed IT services, which jumped 211%, and data center colocation, which expanded by 15%. In Q4, ICT was up 19% year-on-year and 15% quarter-on-quarter, supported by contract wins and better delivery. We also strengthened our securities hub with SmartSafe SilentAccess, a network-powered sign-in solution that moves beyond SMS OTPs and aligned with the BSP’s push for stronger digital authentication. Lastly, SME also contributed to growth, with revenues up 3% year-on-year, supported by fiber and mobile access and scalable ICT offers, including SME engagement series with government and partners. Overall, enterprise is back in growth mode, anchored on ICT and digital infra. I’ll zero in on VITRO and Pilipinas AI on the next slide.

VITRO is now on its 25th year. It remains the market leader with the widest data center footprint in the Philippines. That matters because enterprise, cloud, AI workloads all depend on the uptime, security, and trust. In April 2025, we launched the country’s first operational hyperscale facility through VITRO. VITRO Santa Rosa is designed for enterprise, hyperscalers, and public sector workloads. With about 4,500 racks and up to 50,000 megawatts, once fully energized, it now hosts live NVIDIA GPU servers powering PLDT’s ASTAP solutions. Demand remains steady, with colocation up 36%, supported by a 19% increase in rack deployments. On top of the infra, we’re also building the AI layer through Pilipinas AI, the country’s first sovereign AI solution stack. This tool allows enterprises and the PH government to adopt AI without heavy upfront build-out while keeping data and workload hosted locally.

To make this tangible, we already have live AI use cases running in VITRO today. These include AI-powered contact center tools that automate routine tasks, first steps, improve response quality, and give agents better prompts and insights. We also run conversational AI or Talkbots that can handle complex and multi-step conversation for customer support and lead generation. Lastly, we also have AI assistants that improve productivity in collection and other workloads by guiding next best actions and reducing handling time. VITRO and Pilipinas AI strengthen PLDT’s position in data center and AI, support our long-term plan to scale this business with discipline. As we continue to invest in the business, we are also keeping a tight grip on cost, as OPEX came in lower for the third consecutive year.

For the full year 2025, total cash OPEX, subsidies, provisions came in at PHP 84.9 billion, down PHP 1.2 billion or 1% year-on-year. The biggest savings came from compensation and benefits, down 6%, reflecting continued workforce discipline and productivity efforts. We also spent less on selling and promotions, down 9%, supported by better targeting and spend efficiency. Provisions and subsidies were both lower year-on-year, reflecting more disciplined customer acquisition and tighter credit screening in device lend plans. Offsetting some of these, contract specific services increased, tied to the wrap-up of key ICT projects. Repairs and maintenance was also higher, reflecting ongoing network rollout and upkeep. All told, we are managing OPEX, rather OPEX carefully, while still funding the priorities that support growth and service quality.

For the full year 2025, EBITDA reached PHP 188.2 billion, up 3% year-on-year, with margin steady at 52%. This was driven by a PHP 1.5 billion increase in service revenues, alongside a PHP 1.2 billion decline in operating costs. The EBITDA margin held firm at 52% for the year, reflecting our ability to defend profitability even in a competitive market. Was PHP 33.9 billion, down 3% year-on-year, mainly due to higher depreciation and financing costs as we continue to invest in network and infra. Core income improved to PHP 34.6 billion, up 1%, supported by Maya’s milestone year. Our share in Maya’s core income was PHP 0.7 billion, improving from a PHP 1 billion loss last year, or PHP 1 billion upswing. Important income was PHP 30 billion, down 7% year-on-year.

This mainly reflects the lower Forex and derivative gains versus last year. Overall, core earnings held up, supported by the steady operation and Maya’s improving contribution. Meanwhile, our modernization work position us for the next phase of growth. Let me now move to CapEx and free cash flow. First, we sustained positive free cash flow through end 2025, building on what we achieved last quarter. Full year 2025 CapEx was PHP 60.3 billion, down from PHP 78.2 billion last year. CapEx intensity improved to 38% from 38% a year ago, reflecting tighter discipline and better pricing and terms. For 2026, our CapEx guidance is in the mid PHP 50 billion range, with the same focus on growth and quality. Our goal is to steadily bring CapEx and CapEx intensity down while sustaining positive free cash flow.

Let me now move to our debt profile as of December 2025. I’ll start with a key point. PLDT sustained positive free cash flow as of end of 2025, supporting our deleveraging path. Net debt was PHP 284.7 billion, while net debt to EBITDA was at 2.56 times. Gross debt was PHP 296.9 billion. Our maturity profile remains long dated, with 49% of our maturities are post 2031. This keeps our near-term refinancing needs manageable. Interest cover remains healthy at 3.3 times. Average debt maturity is 6.5 years, with 33% fixed rate and 67% hedging, as we anticipate lower rates opening into 2026. Finally, our recent annual review, PLDT continues to be rated investment grade by S&P and Moody’s, with stable outlooks.

Looking ahead, our focus is to maintain positive free cash flow in 2026 and works toward around 2.0x net debt to EBITDA, supported by our asset monetization plans. For 2025, total dividends amount to PHP 94 per share, reflecting a 16% regular dividend payout aligned with our policy. A final dividend of PHP 46 per share for 2025 was declared today. PLDT continues to focus on deleveraging to generate positive free cash flows. As of end of 2025, PLDT’s 12-month trading dividend yield stood at 8%, positioning us as one of the most attractive dividend plays in the market. on to Maya. Maya operates as an integrated digital financing platform covering payments, savings, and lending. The platform serves both consumers and businesses, with scale driving higher transactions, broader product usage, and stronger network effects.

These dynamics support Maya’s leadership in digital financial services in the Philippines. Maya closed 2025 with robust growth and achieved full-year profitability. As of December 2025, Maya remained as the leading digital bank and merchant acquirer in the Philippines. Deposit balances reached approximately PHP 68 billion, up 72% year-on-year. Total loans disbursed since 2022 reached PHP 256 billion. The Maya Group delivered PHP 1.7 billion in net income for 2025, marking its first full year of profitability. Performance was supported by Maya’s proprietary technology platform and AI capabilities. On the funding side, deposit products continued to attract customers with competitive interest rates. In 2025, Maya accelerated credit expansion through the launch of the Maya Black Credit Card and continued scaling of Easy Credit and personal loans.

Credit quality remains stable, with a gross NPL ratio of 6.1% as portfolio continue to mature. Maya continues to expand access to formal banking across the country. Its customer base is predominantly young, with the majority located outside Metro Manila. Through digital banking and credit products, Maya enables consumer to save securely, spend flexibly, and access credit responsibly. In 2025, Maya expanded partnership across the private and public sectors. Private sector collaboration included Cebuana Lhuillier for new-to-credit consumers, and Pepsi-Cola Products Philippines and Ultra Mega to enable purchase financing for micro businesses. Maya also partnered with Philippine Airlines to integrate airline miles into Maya app, and supported digital engagement and voting platforms such as Pinoy Big Brother and Miss Universe Philippines.

In the public sector, partnership with agencies including the Department of Education, the Philippine Sports Commission, and the National Power Corporation helped improve access to digital financial services. Based on the performance of these products and partnership, Maya continues to redefine digital finance in the Philippines. From PLDT’s perspective as a shareholder, Maya’s first full year of profitability reflects the strength of its platform-led model and the long-term growth potential. PLDT continues to make notable gains in sustainability. For the second straight year, PLDT was included in the S&P Global Sustainability Yearbook after posting the highest CSA score among the Philippine companies at 77. Only 848 out of 9,200 companies assessed were included.

Further evidencing it has made in ESG, PLDT also earned a B rating from CDP for both climate and water, performing in line with global and industry averages on climate, while exceeding averages on water. PLDT remain at the forefront of adopting global reporting framework on ESG to further improve transparency and communication of progress to its various stakeholders. During the quarter, the board approved policies on water and energy management. To support energy efficiency and greenhouse gas reduction objectives, energy audits and energy management trainings were conducted nationwide. In support of our advocacy of creating a safe online environment, we continue to block access to malicious domains and URLs. We also deployed in-house innovation using AI to enhance risk assessment for both the enterprise and our employees.

A summary of our latest ESG ratings that manifest the progress that we have made can be found in the sustainability selection, rather, section of the presentation. That concludes our prepared remarks for PLDT’s full year 2025 results. We are now open for questions.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Danny, for those valuable insights on our growth initiatives and key developments. As you’ve seen today, we remain confident in our market position, supported by our improving operational fundamentals, strategic investments in digital infrastructure, and the promising growth trajectory of Maya. Before we open the floor to your questions, allow me to reintroduce our business leaders who are here with us, who can also help answer your queries. We have our Chairman and CEO, Mr. Manuel V. Pangilinan. Of course, our CFO, Mr. Danny Yu. Our COO, Mr. Butch Jimenez, our Corporate Secretary, Attorney Marilyn Victorio-Aquino, our Chief Legal Counsel, Attorney Joan De Venecia-Fabul. We have our business unit heads, our Head of Consumer Business soul, Mr. John Palanca, our Head of Enterprise Business, Mr. Blums Pineda, the OICs for Smart Communications, Ms. Marjorie Garrovillo and Mr. Lloyd Manaloto.

We also have with us, President and CEO of PLDT, Mr. Alfredo S. Panlilio. Now, I’d like to open the floor to your questions. You may submit your questions by the Q&A panel. You may raise your hand as well. I’ve also received a number of questions here before the meeting started. I see we have a hand raised by John Te of UBS.

Joan De Venecia-Fabul, Chief Legal Counsel, PLDT: Let me unmute you, John, and, you can ask your question.

John Te, Analyst, UBS: Hi, good afternoon. Let me go over my questions one by one, if you don’t mind. First is on mobile. I just want to understand the 5% growth quarter and quarter, which was relatively consistent with what Globe reported. The drivers differed. We saw ARPU growth for PLDT and subscriber growth for Globe. Do you mind explaining what you think drove that difference in this quarter?

Joan De Venecia-Fabul, Chief Legal Counsel, PLDT: Sorry, we didn’t hear the beginning part of your question, but I suppose this is in regards to our wireless business and the growth of 5% had different drivers for Smart and, you know. I’ll throw the question over to you, Dovido, thank you.

Lloyd Manaloto, OIC, Smart Communications, PLDT: Good afternoon. Can you hear us? Hi. Our drivers for growth for the Quarter Four were actually our launch of hyper-personalization offers, which allowed us to upsell and therefore drive our ARPUs. Moreover, if you look at our subscriber base, if you break it down to the numbers, our gross activations actually increased by roughly about 10%-15%, while our churn held firm. That basically shows us also an increase in our subscriber base plus the fact that our ARPU also increased. Thank you.

John Te, Analyst, UBS: Thank you. My second question is on broadband. It was flat quarter and quarter, and we saw some softness in ARPU, although offset by subscriber ads. Was this, I guess, driven mostly by prepaid acquisitions or anything that could have influenced ARPU? Thank you.

John Palanca, Head of Consumer Business - Home, PLDT: Hi, this is John from PLDT Home. The second half of 2025, as you know, was really one that was ridden with calamities. We had a few major calamities, including earthquakes and typhoons, including Super Typhoon Sinlaku and Uwan. These activities or these events actually caused us to balance our growth with the customer trust. We had to redeploy our resources to ensure that our existing customers were restored. We were impacted by this by these events and the redeployment of our resources, our repair resources, to in our growth path. Our installation slightly went down.

It was a good balance of maintaining a growth little gently, as well as restoring those affected areas. The big difference, I believe, between the previous years was that while the previous calamities were driven by strong winds, today they’re driven by floods. Flooding means extra frustration work for us, as we would have to go into the homes to replace the wires and the modems. Last year, 22 million were actually affected by the typhoons that began in July and ended in December, plus the 3 earthquakes, and 293,000 homes were actually affected from PLDT.

Glad to say that we feel that the trust remained, because we were able to keep 73% of those customers. We continued to work with the remaining 68,000 to handhold them and make sure that we will do everything we can to keep them on the network. On the second part of your question on the ARPU softening. As you know, we’re operating in a more price-sensitive environment today. The entry-level tiers are really our growth drivers. There is still a very stable demand in the pipeline for our mid to high-tier postpaid plans. Our upsell activities from the entry-level tiers remain to be healthy.

The movement is not really any structural price erosion, rather it more reflects our portfolio and the mix optimization to balance growth with lifetime value. Prepaid does expand our overall market. It opens up another. You asked about prepaid, I’ll let you reply. It is a growth driver. It opens up our market to an additional 12 million homes. We choose to participate selectively. We still have headroom in our existing facilities, which brings us more margins, but less capital intensity. We will only participate where the returns are within our thresholds. Thank you.

John Te, Analyst, UBS: Okay, thank you for the very comprehensive response. I’ll just combine my third and fourth question. Maybe a quick update on Konektadong Pinoy, your overall thoughts on what might happen. The second question is just an update on the data center and the potential IPO for Maya, which we’ve seen in the press the past few days. Thank you.

Joan De Venecia-Fabul, Chief Legal Counsel, PLDT: Hi, this is Joanne. I will respond to the question on Konektadong Pinoy. As you may know, the IRR or the implementing rules of the KP Act were implemented last December and took effect. The next steps would be the issuance of the eligibility criteria for data transmission industry participants or DTIPs. That has already been released. The performance standards are also forthcoming, and the guidelines on the big ones policy are also about to be issued. The crucial next step would be the issuance by the DICT, PCC, and NTC of the initial access list. As we know, that should come out in March. However, we note that the TWG has not yet been formally constituted for that, and the industry has also not yet been invited to participate in the formulation of the draft access list. That’s where we are.

The trigger for the issuance of the Reference Access Offer of the DPIPs, including the incumbent telcos, is of course, the issuance of the Initial Access List. Prior to that issuance, there is no basis for us to move with the Reference Access Offer, because we don’t know what products, infrastructure, or services would be included in the Initial Access List. We will continue to provide updates on this as the days and months pass. Thank you.

Jinggay Nograles, Head of Investor Relations, PLDT: Allow me to answer your question on Maya’s IPO. Apologies, John, but we’re not able to comment on the news surrounding Maya’s IPO at this time. I hope you understand.

John Te, Analyst, UBS: Thank you. Just 2 quick follow-ups. The data center stake sale, what the update on that? Just separately, on Konektadong Pinoy, we didn’t touch on the laws pertaining to spectrum. That was an equally important part of the bill. Thank you.

Blums Pineda, Head of Enterprise Business, PLDT: We’re seriously considering a late IPO for our data center, John. Unfortunately, we cannot discuss about the timing, but yes, an international bank is helping us on this one.

Joan De Venecia-Fabul, Chief Legal Counsel, PLDT: On the spectrum management policy framework, which is required as well in the Konektadong Pinoy Act, this is supposed to be released by the NTC by end of year 2026, or one more year after that. We have no information as of now as to whether this has already been considered by the NTC, because there are several deadlines that have to be met by them before this particular deadline on spectrum. We can expect that the movement on spectrum discussions will happen in Q3, Q4, thereabouts. Thanks.

John Te, Analyst, UBS: Thank you very much.

Blums Pineda, Head of Enterprise Business, PLDT: Using our spectrum?

Joan De Venecia-Fabul, Chief Legal Counsel, PLDT: Yes.

Blums Pineda, Head of Enterprise Business, PLDT: It’s, unless, unused spectrum is, new though.

Joan De Venecia-Fabul, Chief Legal Counsel, PLDT: That’s right. Yes. Yes.

Blums Pineda, Head of Enterprise Business, PLDT: I think you’ve got to say that.

Joan De Venecia-Fabul, Chief Legal Counsel, PLDT: Oh, yeah.

Blums Pineda, Head of Enterprise Business, PLDT: Far as PLDT Smart is concerned.

Joan De Venecia-Fabul, Chief Legal Counsel, PLDT: Yes. In so far as PLDT Smart is concerned, we are utilizing our spectrum. I think the spectrum management policy framework of the NTC will really tackle more the underutilized or unutilized spectrum, and for possible recall. We have no issues with this, actually.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Bernie, John, and John. Allow me to move to some of the questions here in the Q&A box. This one is for our home business, from Paolo Manansala of COL. Just wanted to ask how broadband revenues are up 3%, but fiber is up 6%. What is the drag in growth for the home broadband line?

John Palanca, Head of Consumer Business - Home, PLDT: Hi, Paolo. Yes, we actually grew our fiber business from PHP 56 billion to PHP 59.4 billion, up PHP 3.4 billion. However, we do have some drag from our legacy services. That includes our copper facilities that remain to be in the numerous buildings across the country. There are a few voice-only lines that remain to be migrated into voice plus data over fiber. Our legacy services in 2024 used to amount to PHP 3.2 billion. We’ve reduced that in 2025 to PHP 1.5 billion. Therefore, the total home business grew by 3%, accounting for the reduced revenues that we enjoy from the legacy services by PHP 1.7 billion.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, John.

John Palanca, Head of Consumer Business - Home, PLDT: Thank you.

Jinggay Nograles, Head of Investor Relations, PLDT: All right, this next question is from Ziwei Fu of Macquarie, and this is on Maya. There was a step up in loans disbursed during the fourth quarter of 2025, yet there was a Q on Q decline in share of earnings. Could you help me understand what happened here? Regarding Maya, on the decline on pre-profits, I do want to say that the revenues remain highly diversified across payments, transactions, and digital banking services, and that’s for both the consumer side as well as the business side, right? I do want to emphasize as well that, you know, for 2025, Maya posted positive net income, which was a turnaround from the losses last year.

The quarter-on-quarter decline was primarily driven by non-operating and one-time items, so that’s includes fair value adjustments and foreign exchange movements, as well as some investments in new products such as credit cards, new capabilities, including AI. There was some impact from the delinking of the gaming applications during the quarter. That is the impact of that is not as large as those one-time items, and that has fully washed through the fourth quarter results. All right. I have a raised hand here From Rema Frankel. You unmute your mic now, and you may ask your question.

Marjorie Garrovillo, OIC, Smart Communications, PLDT0: Thank you. Can you hear me? Okay, thank you again for the call. My first two questions were answered just now. If you can, this is still on Maya. Can you share the numbers on total provisioning levels on the lending side of Maya? How does that compare to 2024? The second question is: Can you break out the loans extended in Q4 between credit cards and others?

Jinggay Nograles, Head of Investor Relations, PLDT: I don’t think we disclosed the breakdown in loans, but in regards to provisioning, the credit cards were launched, Maya Black and Landers were launched within the last year, and there were some provisioning in relation to the launch of the credit cards. I think this was mentioned during our nine-month results. Just because of this new business line, there’s that difference in provisions. You can think about it in that way, but I can’t give exact figures on that.

Marjorie Garrovillo, OIC, Smart Communications, PLDT0: Okay, thank you for that. That’s all the questions I have. Thank you.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you. All right, we also have some questions here that came in before the meeting started. This question is on our data centers, and it’s from Matthew Carinuan of FPX Securities. I’ll direct this to Biboy or to Blums. Can you provide IRR or payback expectations for your AI-ready data center investments? How do returns compare versus traditional data centers, and regular connectivity, such as mobile and fiber infrastructure? There’s a follow-up here on the data center REIT, but I’ll ask that afterwards. Blums or Biboy, would you like to take this question?

Marjorie Garrovillo, OIC, Smart Communications, PLDT1: It’s a new product that we launched for our data center business. Traditionally, we just have co-location and connectivity. Now we have a new service called Pilipinas AI. We’re very happy to launch the first sovereign AI stack in the Philippines, which is getting a lot of interest from both the private sector and the public sector. Customers have an option. If you want to run POCs or use cases on AI, you now have a couple of choices: either you go to the public cloud, or you build your own sovereign on-premise stack, or you can co-locate to VITRO Santa Rosa, wherein the AI stack is now available.

Now customers have an option, but if your data is very sensitive, then the choice for customers would be keeping your data on-prem, and this is what VITRO Santa Rosa offers. Thank you.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Viboy. A follow-up question on the data center REIT, if it is pursued. I think this question is for Danny Yu. Is the objective to deleverage or unlock value multiples? Would a partial divestment dilute long-term earnings versus retaining full ownership?

Danny Yu, Chief Financial Officer, PLDT: Excuse me.

Jinggay Nograles, Head of Investor Relations, PLDT: Are we going to be using the proceeds? Is the REIT IPO there?

Danny Yu, Chief Financial Officer, PLDT: Yes.

Jinggay Nograles, Head of Investor Relations, PLDT: deleverage?

Danny Yu, Chief Financial Officer, PLDT: The REIT IPO, the proceeds will be primarily used to pay off debts. That’s the primary objective.

Jinggay Nograles, Head of Investor Relations, PLDT: Do you believe?

Danny Yu, Chief Financial Officer, PLDT: That’s the second question.

Jinggay Nograles, Head of Investor Relations, PLDT: Will this unlock the valuation multiples for the data center?

Danny Yu, Chief Financial Officer, PLDT: Partly, yes. The REIT will only cover the 8 data centers, and it does not include the VITRO Santa Rosa. It’s a partial unlocking of value.

Jinggay Nograles, Head of Investor Relations, PLDT: All right. Next question here is from Miguel Sevidal of BPI Securities. This is on interest expense. On interest expense, the growth seems to be faster than the rise in total debt. Would you provide some color on what’s driving that? The growth in interest expense is faster than the growth in total debts. What is driving that?

Danny Yu, Chief Financial Officer, PLDT: Right.

Jinggay Nograles, Head of Investor Relations, PLDT: interest rates or higher debt portfolio?

Danny Yu, Chief Financial Officer, PLDT: The increase in financing costs is a function of interest rate, loan balance, as well as the accretion on these liabilities. If you try to dissect the increase in financing charges in 2025, 35% of that was mainly due to interest rate, 40% to loan balances, about 25% to accretion on these liabilities. On interest rate, we have started the negotiation with the local banks on a smaller spread, as well as on reduced repricing period. So far, we have been quite successful, and this will give us considerable savings. With respect to loan balances, we think that we can start paying off debts by the late latter part of 2026.

We should be able to bring down our total debts in 2026 versus 2025.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Danny. Okay, this other question is also from Greg, and it’s for our mobile business. On mobile, quarter and quarter growth was around 5%, despite a very weak GDP print. Can you provide some color on what drives that demand? To Mar or Lloyd.

Blums Pineda, Head of Enterprise Business, PLDT: Can you.

Jinggay Nograles, Head of Investor Relations, PLDT: Sorry.

Blums Pineda, Head of Enterprise Business, PLDT: The last.

Jinggay Nograles, Head of Investor Relations, PLDT: Mobile grew faster than GDP.

Blums Pineda, Head of Enterprise Business, PLDT: Mm-hmm.

Jinggay Nograles, Head of Investor Relations, PLDT: What’s driving that, you know, step up in demand versus a slow economy overall?

Danny Yu, Chief Financial Officer, PLDT: As mentioned earlier, with regards to mobile, we were able to execute a few hyper-personalization offers, which allowed us to upsell. The other item as well is we’ve actually improved our network in terms of resiliency, which actually helped us during the last quarter, where we had to deal with some natural disasters, and we were able to recover quickly, includes our network teams for being able to do that. That helped, and it actually set us up for the annual seasonality in mobile. That helped our numbers for mobile in the past quarter.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Lloyd. All right. It looks like, Raymond, you have your hand raised for another question. Go ahead.

Marjorie Garrovillo, OIC, Smart Communications, PLDT0: Yes, thank you. Just a quick follow-up on Maya. Can you share the recurring net income for 2025, if you take out all of the one-offs?

Jinggay Nograles, Head of Investor Relations, PLDT: We’re not able to provide that, at this time.

Marjorie Garrovillo, OIC, Smart Communications, PLDT0: Okay, thank you. Understand.

Jinggay Nograles, Head of Investor Relations, PLDT: Let me go to some other questions here, that were sent before the meeting started. Okay, this is also for Mobile. Mobile is showing some improvement in the second half versus.

Manuel V. Pangilinan, Chairman and CEO, PLDT: The profits of Maya for 2025 was about PHP 1.7 billion. In 2024, it was a loss.

Danny Yu, Chief Financial Officer, PLDT: 2.5.

Manuel V. Pangilinan, Chairman and CEO, PLDT: Twenty-four.

Danny Yu, Chief Financial Officer, PLDT: 2.5, 24.

Manuel V. Pangilinan, Chairman and CEO, PLDT: PHP 2.5 billion loss. In 2024, a profit of PHP 1.7 billion for 2025. What’s the other question?

Danny Yu, Chief Financial Officer, PLDT: The question is, what’s the recurring income?

Manuel V. Pangilinan, Chairman and CEO, PLDT: It, it’s hard to distinguish in the case of Maya. There were some subsidies on the credit card, and it was flowed into the P&L for 2025, which can flow again into the P&L in 2026, maybe even beyond. I think if you take the PHP 1.7, that’s more or less recurring income for Maya. Is there another part to your question?

Jinggay Nograles, Head of Investor Relations, PLDT: Raymond?

Marjorie Garrovillo, OIC, Smart Communications, PLDT0: No. No worries. That’s all I have. Thank you.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, MVP. All right, let me move to, question on mobile. I think this is partly connected to the first, but, mobile is showing some improvement and momentum in the second half versus the first half. Was there something done differently in the second half, and do you anticipate this momentum to carry on to 2026?

Marjorie Garrovillo, OIC, Smart Communications, PLDT: The Smart performances for the second half has actually been quite consistent. We’ll see a quarter on quarter growth as a trend. This is largely driven by a consistent growth on our subscriber base, along with new activations. That is also, in the back of that, is also our churn numbers have also not dramatically decreased and has been quite constant. When you pair this together with the hyper-targeting offers that we’ve been mentioning earlier, we’ve actually been able to add not just the subscribers but to actually increase the ARPU levels per subscriber. That put together, has actually given us the increase in our revenues quarter on quarter.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Marge. This other question also came in. Could you comment on the earnings trends that you’re seeing across the industry, and how do you compare against Globe’s recent disclosure?

Danny Yu, Chief Financial Officer, PLDT: The Philippine telco industry was kind of anemic in 2025. Comparing the two entities in terms of net service revenues, our revenues grew by 1% this year compared to flat for Globe, or in fact, it was slightly lower at PHP 200 million. In terms of core income, PLDT was up by 1%, while their core income was 3% lower compared to the previous year. If you strip off the Fintech contribution and talk purely on telco core income, PLDT was slightly down only by 3%, while our nearest competitor was down by more than 10%. Based on our estimate, it’s kind of about 15%-17%.

Manuel V. Pangilinan, Chairman and CEO, PLDT: We are seeing also market repair in the second half of the year. In fact, it’s quite more paramount in the fourth quarter of the year. We could see improvement in the fourth quarter, and hopefully, Globe, PLDT, along with our industry players, will do better in 2026.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Danny. Looks like we have a question here from Arthur Pineda of Citi. Let me allow you to unmute your mic. Please go ahead, Arthur.

Arthur Pineda, Analyst, Citi: Hi, can you hear me?

Jinggay Nograles, Head of Investor Relations, PLDT: Yes.

Arthur Pineda, Analyst, Citi: Hi, thanks for the opportunity. Several questions. First, any growth guidance on revenue and EBITDA for 2026? In addition, are you able to give us any flavor on VITRO’s capacity takeup? Just trying to figure out how it’ll contribute further into 2026 based on the pipeline that you have. Thank you.

Jinggay Nograles, Head of Investor Relations, PLDT: Hey, Lloyd, would you like to take the question on capacity take-up for VITRO?

Marjorie Garrovillo, OIC, Smart Communications, PLDT1: Thank you, Arthur, for that question. We have 9 data centers in total. 8 of those data centers are our data centers spanning Clark, in Metro Manila, in Pasig, in Cebu, and in Davao. These are older sites, if you may, and they have a total capacity utilization of close to 80% currently. The 9th data center that we have is called VITRO Santa Rosa, which we inaugurated April of last year. Out of the 36 megawatts of total capacity there, we have already sold 6 megawatts. That is our total capacity take-up to date.

We are anticipating additional workloads to hopefully come in once government passes a department order or an executive order on data sovereignty and data localization in the Philippines, because, as you know, government is the single largest owner of data in the country. Thank you, Arthur.

Danny Yu, Chief Financial Officer, PLDT: Arthur, we can’t really give guidance at the moment. I think it’s just too early at this point. What can we, one thing for sure is that our CapEx is gonna be mid PHP 50 billion. Yeah. That’s it.

Marjorie Garrovillo, OIC, Smart Communications, PLDT1: sorry, it went silent for a while after you said PHP 50 billion. Was there any-

Danny Yu, Chief Financial Officer, PLDT: What I’m saying is that, we could not give guidance at the moment. I think it’s too early to tell. We’re just in February. What is certain, though, is our CapEx guidance is gonna be in mid PHP 50 billion. It’s between PHP 53 billion and PHP 57 billion.

Marjorie Garrovillo, OIC, Smart Communications, PLDT1: Understood. Okay, thank you.

Jinggay Nograles, Head of Investor Relations, PLDT: Danny, this question is for you as well, and this is with regards to our positive free cash flows after the 2 quarters where we were positive. Can we expect this to be sustainable into 2026? In terms of deleveraging, what can we expect?

Danny Yu, Chief Financial Officer, PLDT: I think the positive free cash flow is sustainable for as long as we rationalize and moderate our CapEx and pursue all the asset monetization programs.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Danny. Okay, let me check the Q&A box. There are some questions here as well. Okay, this is from Ziwei Fu of Macquarie on mobile: "You mentioned being able to drive higher ARPU from hyper-personalization, which shows that consumers have room to spend more. How much more do you think the consumer can spend and lift ARPUs further? What percentage of subs is using this hyper-personalization and raising ARPU?" Thank you.

Lloyd Manaloto, OIC, Smart Communications, PLDT: Can I answer the last question first? Roughly based on our CDM capabilities, we’ve got consent for roughly 40 million of our subscriber base to actually be targeted for these offers. That’s the first question. With regards to our guidance on the ARPU, we’re looking at driving a further 2% of the ARPU to help improve our revenues.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Lloyd. This question is for Lums on the Enterprise Business. Looks like there’s some momentum in the second half. Are these mostly from recurring businesses or one-time large deals? How sustainable is the run rate moving forward? Lums, are you there?

Marjorie Garrovillo, OIC, Smart Communications, PLDT: Yeah, sorry. Can you repeat the back end of the question?

Jinggay Nograles, Head of Investor Relations, PLDT: Basically, is the uptick in revenues due to recurring revenues we can expect to carry forward or large one-time deals?

Marjorie Garrovillo, OIC, Smart Communications, PLDT: Yeah, it’s a, it’s a mix of both, actually. Obviously, we had some very big wins in particular Q3 and Q4 last year. The emergency 911 national contract was a big one. We were beginning to see part of that in Q4. But those will deliver recurring revenues in 2026. There’s a mix of one time, one-off, as well as things that really drive monthly recurring charges on both the connectivity side as well as some of the managed IT services side. It’s a combination.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, Blums. Arthur, I still see your hand raised. Is there another question from you?

Marjorie Garrovillo, OIC, Smart Communications, PLDT1: No, sorry.

Jinggay Nograles, Head of Investor Relations, PLDT: Okay.

Marjorie Garrovillo, OIC, Smart Communications, PLDT1: put it down.

Jinggay Nograles, Head of Investor Relations, PLDT: Okay. I don’t see any other questions in the queue. Let me just wait a couple of moments here if there are any other questions from the live audience. If not, perhaps I may invite our CEO, MVP, for some closing remarks.

Danny Yu, Chief Financial Officer, PLDT: Thank you. First of all, thank you for joining us this afternoon. Maybe I’ll get a bit more current about my colleagues, let’s take my neck out.

Manuel V. Pangilinan, Chairman and CEO, PLDT: ... our ability to, just addressing the cash flow issue, especially the free cash flows. If you assume that we’re able to maintain our EBITDA in 2025 over to 2026, which I think we can, let’s say it was PHP 111 billion, right, for 2025. And if you assume what Danny Yu indicated to you, that our CapEx will land somewhere around PHP 55 billion. Our interest expense, this year or 2025, was around PHP 17 billion. I think we were positive cash flow last quarter of this year, 2025. You could probably maintain that interest expense at around PHP 17 billion and taxes at PHP 7 billion. When you do your sums, the free cash flows available for dividends is about PHP 32 billion.

Our dividends will probably be around PHP 21 billion or thereabouts, PHP 22 billion next year, rather than PHP 26 billion. We could probably be able to start reducing our debts to the tune of at least PHP 10 billion in the second half of 2026. Those are the broad numbers from a cash standpoint. We do anticipate some slight growth in profitability for 2026. For one, we think that Maya will likely improve its profit performance in 2026 compared to 2025. Now, where are we on, in my respect of IPO, because I hope... Unfortunately, in Marato interview with you, he did with the, well, the media briefing in Virtual.

Anyway, yes, at the request or at the initiative of KKR has engaged 2 banks late last year to do a market scan especially in the States, of what whether an IPO would be possible in 2026 or 2027. In regards to that market scan, they have engaged us also in a discussion about the potential IPO for Maya. Currently, the potential terms of an IPO are being discussed with them, including the size of the offering, the timing, and the like. If anything moves, it will be probably in the second half, not in this first half. It could spill over to 2027. We don’t know the stage yet, exact timing. We know who the banks are.

PLDT probably will have to engage its own financial advisor at some point in the year. That’s where we are. I think beyond that, we can’t comment as to terms. Thank you.

Jinggay Nograles, Head of Investor Relations, PLDT: Yeah.

Manuel V. Pangilinan, Chairman and CEO, PLDT: Thank you. Hope to see you guys, after we announce our first quarter results.

Jinggay Nograles, Head of Investor Relations, PLDT: Thank you, and thank you, everybody. For those... Kervin, I see your hand raised. I can take your question offline, and I can on that one. Thank you, everybody, for joining. That’s about all the time we have today, and we will see you in May for our first quarter results for 2026. Have a good afternoon.

Manuel V. Pangilinan, Chairman and CEO, PLDT: Thank you.

Marjorie Garrovillo, OIC, Smart Communications, PLDT2: Thank you.

Manuel V. Pangilinan, Chairman and CEO, PLDT: Thank you.