Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
Introduction & Market Context
MTN Nigeria Communications Ltd (NGSE:MTNN) presented its Q1 2025 results on March 31, 2025, revealing strong financial performance despite challenging macroeconomic conditions. The company operated in an environment characterized by high inflation (24% in Q1), a steady monetary policy rate of 27.5% following multiple hikes in 2024, and a relatively stable exchange rate at N1,537/US$ with improved forex liquidity.
The telecommunications giant also highlighted a supportive regulatory environment that approved price adjustments while increasing focus on service quality. A notable regulatory change restricted SIM registration by third-party agents to one SIM card per customer, potentially impacting subscriber acquisition strategies.
Quarterly Performance Highlights
MTN Nigeria delivered exceptional financial results in Q1 2025, with service revenue surpassing the N1 trillion mark, representing a 40.5% year-over-year increase. This growth was driven by strong performance across all revenue streams, with data revenue leading at 51.5% growth to N529.4 billion, followed by voice revenue which increased by 27.7% to N407.4 billion.
As shown in the following chart of key financial metrics, the company also achieved significant improvements in profitability, with EBITDA growing by 65.9% to N492.7 billion and profit after tax more than doubling with 134% growth to N133.7 billion:
The company’s commercial momentum remained strong across most key performance indicators. Mobile subscribers increased by 8.2% to 84.1 million, while active data users grew by 13.0% to 50.3 million. Data usage per active user saw a significant jump of 29.5% to 12.8, reflecting increased digital engagement. Average Revenue Per User (ARPU) also improved substantially, rising 28.6% to N3,883.
The following chart illustrates the company’s strong commercial performance metrics:
Detailed Financial Analysis
Revenue growth combined with operational efficiency drove a substantial margin recovery for MTN Nigeria. The EBITDA margin improved by 7.2 percentage points to 46.6%, approaching the company’s medium-term target of at least 50%.
The detailed breakdown of revenue and expenses reveals the contribution of each segment to the overall growth:
Operating expenses grew by 25.0%, significantly lower than the revenue growth rate of 40.5%, contributing to margin expansion. The expense growth was primarily driven by naira depreciation, with FX impact accounting for N92.8 billion of the increase. The company noted that expense growth was mitigated by contract renegotiations.
The following chart provides a detailed breakdown of the operating expense profile:
MTN Nigeria’s capital structure showed improvements in Q1 2025, with net debt decreasing by 14.1% to N618.0 billion compared to FY 2024. The company maintained strong financial ratios with interest coverage at 9.0x (against a minimum target of 5x) and Net Debt/EBITDA at 0.5x (well below the maximum target of 2.5x).
The debt profile shifted toward more fixed-rate (56% vs 51% in FY 2024) and naira-denominated debt (77% vs 72% in FY 2024), reducing foreign exchange exposure:
Strategic Initiatives & Outlook
Despite overall strong performance, MTN Nigeria’s fintech segment presented a mixed picture. While fintech revenue grew by 57.9% to N36.1 billion and float increased by 60.3% to N6.2 billion, active MoMo wallets decreased significantly by 56.6% to 2.1 million, and transaction volume fell by 31.4% to 82.4 million.
The company described this as a "recalibrated strategy with a focus on quality," suggesting a deliberate pivot toward higher-value customers and services rather than pursuing user growth at all costs.
Looking ahead, MTN Nigeria outlined five key priorities for 2025:
1. Accelerating service revenue growth through enhanced quality of service
2. Achieving home broadband leadership through fiber-to-the-home and fixed wireless access deployments
3. Accelerating network investments in radio capacity, coverage, and core network upgrades
4. Driving fintech growth with focus on wallet quality and advanced services
5. Improving expense efficiency through cost-saving initiatives and reducing forex exposure
Forward-Looking Statements
MTN Nigeria provided guidance for both the short and medium term. For FY 2025, the company expects service revenue growth of at least mid-40%, an EBITDA margin of at least mid-40%, and capital expenditure intensity in the "upper teens" percentage.
For the medium term, MTN Nigeria targets service revenue growth of at least 20%, an EBITDA margin of at least 50%, and reducing capital expenditure intensity:
The Q1 2025 performance of 40.5% service revenue growth and 46.6% EBITDA margin indicates the company is on track to meet or exceed its full-year guidance. The capital expenditure intensity of 19.1% in Q1 is aligned with the "upper teens" guidance for the full year.
MTN Nigeria’s stock (NGSE:MTNN) closed at 275 naira on May 30, 2025, up 2.18% or 6 naira. The stock has traded between 169 and 285 naira over the past 52 weeks, with the current price near the high end of that range, reflecting investor confidence in the company’s growth strategy and financial performance.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.