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Introduction & Market Context
XLSMART (IDX:EXCL) presented its Q2 2025 results on August 27, 2025, revealing the first comprehensive look at the company’s performance following its merger. The stock reacted negatively to the results, dropping 7.77% to close at 2,730 IDR, reflecting investor concerns about the short-term costs of integration despite strong revenue growth.
The presentation highlighted 2.5 months of consolidated performance post-merger, with management emphasizing the strategic benefits of increased scale and network integration. This comes at a critical time for Indonesia’s telecommunications sector, which has been facing challenges from weak consumer purchasing power and intense competition.
Quarterly Performance Highlights
XLSMART reported significant growth across key operational metrics, largely driven by the merger. Mobile subscribers increased by 41% year-over-year to 82.6 million in Q2 2025, compared to 58.5 million in Q2 2024. The company also saw a modest improvement in Mobile ARPU, which rose from 84 IDR in 1H 2024 to 89 IDR in 1H 2025.
As shown in the following chart of subscriber and traffic growth:
Data traffic surged by 43% to 6,665 PB in Q2 2025, up from 2,660 PB in the same period last year. Fixed broadband subscribers showed the most dramatic growth, increasing by 268% to reach 980,000, compared to 270,000 in Q2 2024.
The company’s digital strategy also showed positive momentum, with app users growing 29% year-over-year to 41.4 million in Q2 2025. Digital channels now contribute significantly to revenue, with an 18% two-year CAGR.
As illustrated in this digital engagement chart:
Post-Merger Integration Progress
A key focus of the presentation was the progress of post-merger integration, which XLSMART expects to complete within eight quarters. The company highlighted the rapid activation of national roaming, which was 100% completed in 60 days, allowing subscribers to access a significantly expanded network.
The integration has already delivered tangible benefits in terms of network coverage, with the BTS (Base Transceiver Station) count increasing by 28% to 209,820. The company now covers 475 cities across Indonesia, with 156 new cities accessible for Smartfren subscribers through 11,000 newly enabled sites.
The following chart illustrates the expanded network coverage post-merger:
Management outlined three strategic pillars driving long-term value creation: Scale Advantage, Synergy Potential, and Platform for Growth. These strategies aim to maximize the benefits of the enlarged scale, drive cost efficiencies, and create a foundation for future expansion.
The company’s strategic vision is illustrated in this slide:
Financial Analysis
XLSMART’s financial results painted a mixed picture. Revenue increased by 22% to 17,466 IDR billion in 1H 2025, compared to 8,615 IDR billion in Q2 2024. However, this growth rate represents a significant acceleration from the 2% year-on-year revenue increase reported in Q1 2025, suggesting that the merger has substantially boosted top-line performance.
As shown in the revenue and profit growth chart:
While EBITDA increased by 10% to 9,294 IDR billion (normalized), Profit After Tax (PAT) declined by 32% to 701 IDR billion in 1H 2025 on a normalized basis. The reported PAT showed a loss of 1,218 IDR billion, primarily due to integration costs and one-off items.
The company provided a detailed breakdown of normalized EBITDA and PAT:
Operating expenses increased by 46% to 10,287 IDR billion, outpacing revenue growth as the company absorbed the costs of the expanded operations and integration efforts. This expansion in the cost base contributed to the pressure on profitability.
The cost breakdown is illustrated in this chart:
On a more positive note, Free Cash Flow increased by 35% to 6,477 IDR billion in 1H 2025, while capitalized capital expenditure decreased by 44% to 2,331 IDR billion. The company’s debt profile shows a gearing ratio (Gross debt to EBITDA) of 3.53x in 1H 2025, slightly improved from 3.60x in 1H 2024.
Forward Guidance & Strategic Initiatives
Looking ahead, XLSMART provided guidance for FY 2025, projecting revenue growth of 20-30%, in line with the market. The company expects EBITDA margins to be in the low to mid-40% range, down from the above 50% level reported in Q1 2025. Capital expenditure is projected at IDR 20-25 trillion, with merger synergies expected to reach US$100-200 million.
The guidance summary is presented here:
Management emphasized their investment strategy for the future, focusing on modernizing infrastructure to build a high-capacity, future-ready network. The unified vendor ecosystem is expected to enable faster rollout and better cost control, while network consolidation aims to eliminate duplication and maximize asset utilization.
The company is maintaining its three-brand strategy (XL, Axis, and Smartfren) to address different market segments, with a focus on enhancing customer experience and digital engagement. The integration of commercial operations and harmonization of field forces and digital tools are progressing as planned.
While XLSMART faces short-term challenges in managing integration costs and maintaining profitability, management remains confident that the merger will deliver significant long-term value through increased scale, synergies, and an enhanced platform for growth in Indonesia’s competitive telecommunications market.
Full presentation:
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