PLDT Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Performance: Service revenues net of interconnection cost reached PHP 145.9 billion, up 1% year-on-year. EBITDA rose 3% to PHP 82.8 billion with a margin steady at 52%. Telco core income was PHP 25.3 billion, down 5% year-on-year, while core income was stable at PHP 25.8 billion supported by Maya's profitability.
• Growth Segments: Fiber revenues grew 7%, mobile data and fixed wireless up 1%, enterprise corporate data and ICT up 2% year-on-year, and ICT up 27% year-on-year. Fixed wireless is now included in growth segments, with expansion driven by 5G and network coverage.
• Cost Control: Cash OpEx, subsidies, and provisions were down 2%. Compensation and benefits decreased 7%, selling and promotions 18%, and subsidies 25%.
• Maya: A leading fintech platform, it continued to show strong performance with growth in deposits, loans, and payments. It launched products like Maya Black credit card and innovative personal loans.
• Sustainability: PLDT's ESG ratings improved, participated in UN Global Compact Leaders' Summit, and Smart secured a PHP 2 billion green loan for 5G rollout.

Segment Performance

• Home: Home revenues grew 4% year-on-year to PHP 45.7 billion. Fiber revenues were up 7% to PHP 44.5 billion, accounting for 97% of total home revenues. The company added 265,000 net fiber subs year-to-date, a 67% increase versus the previous year, with the total fiber base 8% higher year-on-year.
• Enterprise: Year-to-date revenues reached PHP 35.6 billion, broadly steady year-on-year. Corporate data and ICT revenues rose 2% year-on-year to PHP 26.7 billion, with ICT revenues growing 27% year-on-year. The business unit returned to growth in the third quarter, with corporate data and ICT now accounting for 75% of total enterprise revenues.
• Wireless: Revenues reached PHP 63.2 billion for the first 9 months, down slightly year-on-year due to legacy brands. Data revenues (including mobile data and fixed wireless) rose 1% year-on-year to PHP 57.3 billion, accounting for 91% of total wireless revenues. Fixed wireless revenues were up 18% year-on-year, and 5G adoption continued to expand with 10.5 million 5G devices and 6% growth in data traffic.
• Maya: The third quarter net income was PHP 532 million. Banking customers nearly doubled year-on-year to 9 million, deposits reached PHP 57 billion, up 59% year-on-year, and total loans disbursed since inception hit PHP 187 billion. Maya remained the #1 merchant acquirer and card payment processor.

Guidance

• Full-year 2025 CapEx lowered to PHP 60 billion from the original guidance of PHP 68-73 billion due to more favorable pricing and terms.
• Target to reduce net-debt-to-EBITDA ratio to around 2.0x with asset monetization and lower CapEx.
• Maya is expected to continue scaling with higher transaction volumes, growing deposits, and expanding lending and merchandise businesses.

Risks

• Uncertainties surrounding the Konektadong Pinoy law and IRR, including unclear wholesale access pricing mechanisms and spectrum management provisions.
• Potential impact of new market players and changes in spectrum utilization policies affecting the industry.
• Dependence on government projects and possible delays or changes in government spending affecting enterprise revenues.

Question and Answer

• Q: Given that Maya's lending was still strong in 3Q '25, what were the main drivers for the drop in net income for the period?

A: Aayush Jhunjhunwala mentioned factors like the impact of removing gaming links starting in August 2023 per BSP direction and the launch of Maya Bank Black Credit card and personal loans causing excess provision impact in the near to medium term.

• Q: With regard to the KPA and the IRRs, how do you see this impacting profitability and investment profile?

A: Marilyn Victorio-Aquino discussed uncertainties around pricing mechanisms for wholesale access and unclear spectrum management provisions, noting it's not clear if pricing from voluntary contracts will align with regulator approval and the impact of spectrum underutilization definitions.

• Q: On wireless, it's been trailing competitor performance. What's driving the difference?

A: Marjorie Garrovillo and Lloyd Manaloto noted Smart Wireless had flattish growth vs Globe YTD, improved ARPUs using hyper targeting, and fixed wireless growth driven by 5G investment and devices.

• Q: On enterprise, will the uptake in government projects sustain in Q4?

A: Blums Pineda and Butch Jimenez mentioned continued momentum into Q4 and early Q1, with sustained government investment in digital connectivity expected, including data center and GIDA site initiatives.