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01/11 16:22
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary presents a mixed but generally positive outlook. Despite a Q3 EPS loss due to noncash charges, the company shows strong revenue growth, improved leverage, and significant digital revenue expansion. The Q&A section highlights strategic asset management and growth plans, particularly in fintech and digital services. Positive market reaction is likely due to increased guidance, strong cash flow, and strategic expansions, offsetting the EPS loss. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8%.
Revenue Revenue grew 7.5% year-on-year in U.S. dollar terms. On a like-for-like basis, adjusting for deconsolidation of TNS+, Uklon acquisition, and the sale of Deodar and Kyrgyzstan business, revenues grew 10%. This growth reflects continued momentum across operating markets.
EBITDA EBITDA increased by 19.7% year-on-year in U.S. dollar terms. The EBITDA margin stood at 47% for the quarter, up 410 basis points year-on-year, supported by operating leverage and disciplined cost management across all markets.
Direct Digital Revenues Direct digital revenues grew 63% year-on-year to reach $198 million, now contributing 17.8% of total group revenues. Growth was driven by financial services, entertainment, ride-hailing, enterprise, and premium digital brand segments.
EPS (Earnings Per Share) Last 12-month EPS stands at $8.89, up 60.2% year-on-year. However, Q3 reported EPS was a loss of $1.84 per share due to two noncash charges totaling $259 million related to SPAC sponsor shares and the sale of Kyrgyzstan business.
Net Debt Net debt, excluding leases, stood at $1.72 billion as of September, with leverage improving to 1.13x EBITDA. This reflects operational and financial discipline and the success of the asset-light strategy.
Equity Free Cash Flow Last 12 months equity free cash flow reached $584 million, showcasing strong cash generation.
CapEx Intensity Last 12 months CapEx intensity, excluding Ukraine, was 17.7%, in line with guidance.
JazzCash (Financial Services in Pakistan) Gross transaction value rose 40% year-on-year, representing 13% of Pakistan's GDP on a last 12-month basis. This was driven by a 48% increase in total transactions and a 38% increase in transactions per user.
Multiplay Customers Multiplay customers generated 55.4% of total customer revenues, growing revenue-wise by 23% year-on-year. These customers generate 3.8x the ARPU of a voice-only subscriber.
Digital Services Growth: Monthly digital service users surpassed telecom SIM card users for the first time. Direct digital revenues grew 63% year-on-year in USD terms, contributing 17.8% of total group revenues. AI-powered solutions and super app platforms are central to this growth.
AI Integration: AI 1440 strategy is central to operations, with large language models and agentic AI-powered solutions being integrated into customer-facing platforms. AI is driving engagement in entertainment, customer care, and enterprise solutions.
Market Expansion: Completed the sale of Kyrgyzstan operations to focus on core growth markets. Partnered with Starlink for satellite connectivity in all operating markets. Kyivstar and Beeline Kazakhstan are expanding services with nationwide coverage and testing activities.
Digital Ecosystem Expansion: Digital-only user base doubled to 50 million, representing 35% of total digital users. Financial services platforms like JazzCash in Pakistan are scaling rapidly, contributing significantly to the digital ecosystem.
Revenue and Profitability: Revenue grew 7.5% year-on-year in USD terms, with EBITDA increasing by 19.7%. EBITDA margin expanded by 410 basis points year-on-year to 47%.
Cost Efficiency: Operational and financial discipline improved leverage to 1.13x EBITDA. Asset-light strategy and cost management supported margin expansion.
Asset-Light Strategy: Streamlined portfolio by selling Kyrgyzstan operations and focusing on core markets. Partnered with Starlink for resilient connectivity.
Shareholder Value: Listed Kyivstar on NASDAQ, unlocking significant value. Approved a $100 million share and/or bond repurchase program.
Regulatory Approvals: Kyivstar's nationwide coverage launch is contingent on receiving necessary regulatory approvals, which could delay or hinder the rollout.
Geopolitical Challenges: Ongoing macro and geopolitical challenges, particularly in Ukraine, could impact operations and financial performance.
Currency Fluctuations: Revenue and EBITDA growth projections are sensitive to significant fluctuations in exchange rates, which could adversely affect financial outcomes.
Tax Effects: Profitability trends in Kazakhstan and Uzbekistan were impacted by tax effects, which could pose challenges to organic profitability.
Noncash Charges: The company recorded noncash charges totaling $259 million, including $162 million related to SPAC sponsor shares and $97 million for the Kyrgyzstan business sale, impacting reported EPS.
Bangladesh Market Performance: Revenue growth in Bangladesh has been weak, with only a recent return to year-on-year growth after 14 months of decline, indicating potential market challenges.
Debt Levels: Gross debt stood at $4.86 billion, with leverage at 1.13x EBITDA, which, while improved, still represents a significant financial obligation.
Digital Margins: Digital services, while growing, have structurally lower margins compared to telecom services, which could impact overall profitability.
Macroeconomic Risks: The company operates in markets with high inflation rates, averaging 8.2%, which could pressure costs and pricing strategies.
Fiscal Year 2025 EBITDA Outlook: VEON has raised its fiscal year 2025 EBITDA outlook to 16% to 18% growth in local currency terms, up from the previous guidance of 14% to 16%.
Revenue Guidance for 2025: The company maintains its revenue guidance of 13% to 15% growth in local currency terms for the full year. In U.S. dollar terms, this translates to 7% to 8% revenue growth, assuming no significant fluctuations in exchange rates.
Capital Intensity: Capital intensity, excluding Ukraine, is expected to remain within the 17% to 19% range for the year.
Digital Revenue Growth: Direct digital revenues grew 63% year-on-year and now contribute 17.8% of total group revenues. Financial services, the largest component, grew 33% year-on-year.
Market-Specific Growth: Strong double-digit revenue growth is expected across all markets except Bangladesh. Revenue in Bangladesh returned to year-on-year growth for the first time in 14 months as of September 2025.
JazzCash Financial Services: JazzCash in Pakistan continues to grow, with gross transaction value rising 40% year-on-year. The platform processes over 80% of all Raast payments under the Prime Minister's Cashless Society initiative.
Digital Ecosystem Expansion: The total monthly active users of VEON's digital platforms grew to 143.3 million, up 39% year-on-year. Digital-only users now represent nearly 35% of total digital users.
AI Integration: VEON is embedding augmented intelligence across its ecosystem, with AI-driven features being integrated into customer engagement, entertainment, and enterprise solutions. AI-powered customer care and recommendation engines are driving significant user engagement.
Share and Bond Repurchase Program: The Board has approved a $100 million share and/or bond repurchase program, reflecting confidence in VEON's growth prospects and long-term value creation.
Share and/or Bond Repurchase Program: The Board has approved another $100 million share and/or bond repurchase program. This decision reflects VEON's confidence in its growth prospects and its commitment to delivering value to investors.
The earnings call summary presents a mixed but generally positive outlook. Despite a Q3 EPS loss due to noncash charges, the company shows strong revenue growth, improved leverage, and significant digital revenue expansion. The Q&A section highlights strategic asset management and growth plans, particularly in fintech and digital services. Positive market reaction is likely due to increased guidance, strong cash flow, and strategic expansions, offsetting the EPS loss. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8%.
The earnings call highlights strong revenue growth, strategic partnerships, and a robust digital expansion plan. The Q&A session revealed positive analyst sentiment towards 4G and AI strategies, despite some uncertainties in valuation strategies. The company's solid financial metrics, optimistic guidance, and shareholder return plans, along with strategic partnerships, are likely to positively influence the stock price. Given the market cap, a positive reaction is expected within the 2% to 8% range over the next two weeks.
The earnings call indicates strong financial performance with substantial revenue and EBITDA growth, an ongoing share buyback program, and strategic initiatives like the Kyivstar listing. Despite some concerns in Kazakhstan and cybersecurity impacts, optimistic guidance and a strong cash position are positive indicators. The market cap suggests moderate volatility, so the stock is likely to see a positive movement of 2% to 8%.
The earnings call summary shows strong financial performance with revenue and EBITDA growth, an increased EBITDA margin, and a strong cash position. The strategic partnership in Pakistan and the ongoing share buyback program add positive momentum. Despite regulatory and supply chain risks, optimistic guidance and digital revenue growth are favorable. The market cap suggests moderate sensitivity to these factors, leading to a predicted positive stock price movement in the next two weeks.
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