Earnings call transcript: PLDT Q3 2025 sees steady revenue growth, stock stable

PLDT Inc. (PHI) reported its third-quarter earnings for 2025, showcasing a modest increase in consolidated service revenues, while maintaining steady EBITDA margins. Despite a slight decline in core income, the company continues to invest in innovation and infrastructure, keeping its stock stable at $19.26 after the earnings announcement. According to InvestingPro data, PLDT is currently trading significantly below its Fair Value, suggesting potential upside for investors looking at the telecom giant's impressive 72.2% gross profit margins.

Key Takeaways

• Consolidated service revenues increased by 1% year-on-year.
• EBITDA grew by 3%, maintaining a 52% margin.
• Core income saw a 5% decline due to increased depreciation and financing costs.
• The company launched new products, including the Filipinas AI platform and Maya Black credit card.

Company Performance

PLDT demonstrated steady performance in Q3 2025, with a 1% year-on-year increase in consolidated service revenues, reaching ₱145.9 billion. The company's EBITDA rose by 3%, maintaining a robust 52% margin, despite a 5% decline in telco core income attributed to higher depreciation and financing costs. PLDT's strategic focus on innovation and infrastructure investments, such as the launch of Filipinas AI and expansion of its 5G network, positions it well against competitors in the telecommunications sector.

Financial Highlights

• Revenue: ₱145.9 billion, up 1% year-on-year
• EBITDA: ₱82.8 billion, up 3% with a 52% margin
• Core income: ₱25.8 billion, supported by Maya's profitability
• CapEx: ₱43 billion for the first nine months, down from ₱52.3 billion last year

Outlook & Guidance

PLDT lowered its full-year CapEx guidance to ₱60 billion, aligning with its strategic focus on optimizing operational efficiency and reducing costs. The company aims to achieve a net debt to EBITDA ratio of 2.0 within the next three to four years. Future investments will continue to target network infrastructure expansion and digital connectivity projects, including potential data center stake sales and REIT listings.

Executive Commentary

Danny Yu, CFO, highlighted the success of Maya, stating, "Maya has created a powerful two-sided network where more customers drive more transactions." Additionally, Butch Jimenez, COO, expressed confidence in regulatory developments, saying, "We think that the law as written actually achieves what it set out to do, cheaper internet for all."

Risks and Challenges

• Regulatory changes: Potential impacts from the Connecta Pinoy Law and spectrum management uncertainties.
• Market competition: Increased pressure from competitors in the telecommunications and digital payment sectors.
• Economic factors: Macroeconomic pressures that could affect consumer spending and investment capacity.

PLDT's strategic initiatives and focus on innovation continue to bolster its competitive position, despite challenges in the regulatory and economic landscapes. The company's efforts in expanding its AI and data infrastructure, alongside maintaining strong digital payment capabilities through Maya, are expected to support future growth.

Full transcript - PLDT Inc DRC (PHI) Q3 2025:

Jingay Nograles, Head of Investor Relations, PLDT: Good afternoon, everyone, and thank you for joining us today. I'm Jingay Nograles, Head of Investor Relations here at PLBC. And it's my pleasure to welcome you all for our nine month financial and operating results briefing. Joining us today to share insights into PLDT's performance and strategic direction are PLDT's Chief Financial Officer, Mr. Danny Yu PLDT's Chief Operating Officer, Mr.

Butch Jimenez PLDT Corporate Secretary, Marilyn Victorino Aquino PLDT Chief Legal Counsel, Attorney Joanne DeFanesha Cabo Head of Consumer Business, Mr. John Falanga Head of Enterprise Business, Mr. Blum Spineda ETLBT President and CEO, Diboy Hindino as well as our OICs for Smart, Mr. Lloyd Manaloto and Ms.

Marge Delacchio, OIC for Smart, PLDT: Marge Delacchio. All

Jingay Nograles, Head of Investor Relations, PLDT: right. So before we begin, I'd like to remind everyone that we will have a Q and A session after the presentation. So you may of course submit your questions via the MS Teams Q and A panel, which you can see in the webinar. Thank you also to those who have sent your questions in advance. For those who are not able to use the Q and A due to compliance reasons, you may definitely raise your hand and we will unmute your mic at that time.

All right. To start, I'd like to invite our Chief Financial Officer, Mr. Daniel Yu, to walk us through PLDT's

Danny Yu, Chief Financial Officer, PLDT: Good afternoon, and thank you for joining us today. Allow me to present PLDT's financial and operating highlights for the first nine months of the year. Our service revenues net of interconnection reached billion dollars up 1% year on year, driven by steady demand across fiber, data and ICT. Cash OpEx, subsidies and provisions were down 2%, showing our focus on spending control and even as we support growth areas. EBITDA rose 3% to billion with margins steady at 52% amidst higher revenues and lower OpEx.

Telco core income came in at $25,300,000,000 down 5% mainly due to higher depreciation and financing costs from network and IT investments. On the other hand, core income was stable at $25,800,000 supported by Maya's sustained profitability. Our share in Maya's core net income reached $6.00 $3,000,000 for the period, a $1,500,000,000 turnaround from last year's loss. Maya remained profitable for the third consecutive quarter, showing consistency as it solidifies its position as the country's leading fintech ecosystem. In summary, our nine month results show a stable top line, resilient EBITDA and improving contribution from digital businesses.

Consolidated service revenues reached $145,900,000,000 up 1% year on year. If we exclude legacy services, total revenues rose 3% showing the continued expansion of our growth areas. Within these growth segments, fiber revenues grew 7%, reflecting solid demand for reliable connectivity. Mobile data and fixed wireless revenues were up 1%, fit usage and five gs adoption continuing to rise. Please note that beginning this quarter, we will now include fixed wireless access, FWA within our growth segments for our wireless business.

The base numbers have been adjusted accordingly to provide like for like comparison and reflect organic growth. Fixed wireless growth is driven by the expanding five gs base and stronger network coverage. For Enterprise, Corporate Data and ICT revenues grew 2% returning to growth in the third quarter as government and public sector projects started to ramp up after election related delays in the first half. ICT on its own grew 27%. Overall, the shift towards these growth areas, namely fiber, data, fixed wireless and ICT continues to offset the decline in legacy revenues.

Focusing on the third quarter, I'd like to point out that all major business units delivered positive growth even with legacy drugs showing recovery especially for our mobile and enterprise groups. Consolidated service revenues rose 2% year on year to billion dollars Excluding legacy services, total revenues rose 4%. Wireless consumer revenues were up 1% with mobile data and fixed wireless delivering 3% growth year on year. Home revenues climbed 3%, while fiber revenues were up six percent. Enterprise as mentioned earlier is now back on its growth path, still a 2% increase year on year with corporate data and ICT up 5%, while ICT services on its own grew 51% year on year as government projects begin pushing through.

Overall, third quarter marked a broad based recovery with improvements in both mobile and enterprise, reflecting steady execution and disciplined growth across the group. Now let's take a closer look at each of the business units. Home revenues grew 4% year on year to $45,700,000,000 driven mainly by continued fiber demand. Fiber revenues were up 7% to $44,500,000,000 now accounting for 97% of total home revenues. We added 265,000 net fiber subs year to date, up 67% versus last year.

Total fiber base is now 8% higher year on year. On prepaid, we have selectively introduced prepaid fiber in appropriate growth markets specifically targeting quality subs who have a high probability of topping up regularly. In this way, we're not only secure revenue growth, but also sustainable profits in the long run. Refilled sub count has grown 15 times since 2024. ARPU held steady at fourteen seventy, the highest in the industry driven by our value based bundles such as video and gaming.

Churn remained low at 1.9%, reflecting strong customer loyalty and consistent network quality. To further extend our reach, we have launched air fiber and laser Internet, providing fiber like speeds in hard to reach areas at lower cost. This technology expands our coverage and improves service availability in underserved locations. Overall, Home continues to deliver solid growth underpinned by fiber leadership, high ARPU and expanding access through new technologies. Let's now move on to Enterprise.

Year to date revenues reached billion dollars for the first nine months broadly steady year on year, while Corporate Data and ICT revenues rose 2% year on year to R26.7 million dollars Within this ICT revenues grew 27% year on year, driven by strong demand for Managed IT Services up 115%, Data Center Colocation up 25%, Cybersecurity Services up 12%. Importantly, the business unit returned to growth during the third quarter reversing earlier softness as delayed government projects pushed through. Enterprise revenue rose 5% versus the second quarter with Corporate Data and ICT up 7% led by a 40% increase in ICT services. Corporate Data and ICT now account for 75% of total enterprise revenues reflecting our continued shift toward high value services. BLDT also continues to strengthen its leadership in AI and data infra, positioning the group at the forefront of the country's digital transformation.

We recently launched Filipinas AI, the country's first sovereign AI platform. Hosted at VITRO Santa Rosa, this platform enables the enterprise to build and deploy AI models locally, giving businesses access to GPU powered computing on demand. For our wireless business, revenues reached $63,200,000,000 for the first nine months, down slightly by $300,000,000 versus last year due to legacy grants. Data revenues, which now include mobile data and fixed wireless, rose 1% year on year to billion dollars accounting for 91% of total wireless revenues. For the third quarter alone, data revenues were up 3% year on year, reflecting steady demand and continued monetization discipline.

Fixed Wireless sustained strong momentum with revenues up 18% year on year as Smart leads the market by revenue share. If we remove fixed wireless, mobile data revenues rose 1% to billion dollars Performance was supported by stable data traffic growth, disciplined monetization, customer value management initiatives that help optimize spend and reduce marketing costs. Five gs adoption continues to expand with the number of five gs devices up 39% year on year to 10,500,000, while data traffic rose 6% year on year to 4,393 petabytes. The share of five gs devices within the total base improved to 18% driving higher data usage and improved customer experience. As we continue to innovate on the product side, we also staying focused on cost discipline across the group.

Total cash OpEx, subsidies and provision for the first nine months of the year came in at 63,100,000,000.0 down $1,100,000,000 or 2% versus last year. The biggest savings came from compensation and benefits down 7%, reflecting continued workforce optimization. Selling and promotions were also lower by 18%, driven by better campaign targeting and spend efficiency. Subsidies were also down by 25%, reflecting Smart's deliberate shift towards higher quality acquisitions and tighter credit screening for postpaid device plans. On the other hand, repairs and maintenance rose 4% to billion dollars reflecting ongoing network expansion and site rollouts.

Contract specific services were up 25 tied to the ramp up of key enterprise and ICT projects. For the first nine months of 2025, EBITDA reached $82,800,000,000 up 3% year on year with margin steady at 52%. This performance reflects the combined impact of a $1,000,000,000 rise in revenues along a R1.1 billion dollars discipline for decline in operating costs. The 52% EBITDA margin has held firm demonstrating our ability to defend profitability even in a very competitive environment. Telco core income reached $5,300,000,000 down five percent year on year, mainly due to higher depreciation and financing costs from network and infra investments.

Core income was steady at $25,800,000,000 supported by continued earnings from Maya, whose consolidated core income hit $1,600,000,000 year to date. Maya remained profitable for the third straight quarter, continuing to gain scale through higher transaction volumes, growing deposits and steady expansion in its lending and merchandise businesses. This quarter also includes $2,600,000,000 in accelerated depreciation, a non cash charge related to modernization of our core and IT systems and the retirement of legacy assets. Reported income stood at $25,100,000,000 lower year on year, mainly reflecting the absence of last year's higher ForEx and derivative gains as well as the accelerated depreciation booked this quarter. CapEx for the first nine months stood at R43 billion dollars down from R52.3 billion dollars for the same period last year.

CapEx intensity improved to 27% from 33% a year ago, driven by lower spend on network and IT as major projects near completion. For the full year, 2025 CapEx guidance is lowered further to 60,000,000,000 lower than the original guidance of R68 billion to R73 billion dollars This is mainly due to more favorable pricing and terms. We continue to invest in new cell sites, LTE and five gs upgrades, home fiber ports, data center development and submarine cables. These projects will strengthen network quality and support the growth of enterprise and digital services. As of September, net debt stood at $289,000,000,000 translating to a net debt to EBITDA ratio of 2.61 times, slightly higher than the prior quarter, but still within our target range.

Our gross debt was at $299,000,000 with 60% of maturities falling beyond 2,030, providing a long runway and minimal near term refinancing pressure. About 13% of total debt is U. S. Dollar denominated with only 5% tonnage keeping ForEx exposure very manageable. The average interest cost was 5.49%, up slightly from last year's 5.08% as lower rate maturities are refinanced.

Our interest coverage ratio remains healthy at 3.37 times, while our average debt maturity is 6.5. PLT remains investment grade with ratings from S and P and Moody's. In terms of cash flow, we recorded a $1,100,000 in proceeds from tower sales and completed a $20,500,000,000 final dividend payment for 2024 during the period. Incidentally, Pillarity hit positive free cash flow as of September 2025 ahead of its forecasted 2026 target. Looking ahead, we are working towards reducing leverage to around two point zero times net debt to EBITDA, which will be supported by our asset monetization program as well as lower CapEx.

Now let me now discuss Maya, The Philippines all in one fintech platform powered by Maya Bank and Maya Philippines. It's a fully integrated platform that unites digital payments, savings and lending for both consumer and enterprises. Maya has created a powerful two sided network where more customers drive more transactions, generating richer insights, which enables higher cross sell of products and ultimately delivering scale and profitability. Maya continues to lead with strong performance across deposits, loans and payments. Maya remains the number one merchant acquirer and card payment processor.

It delivered five thirty two million dollars in net income in the third quarter, sustaining profitability while growing. Bounty customers nearly doubled year on year to $9,000,000 while its cumulative borrower base grew 81% to 2,400,000.0 Deposit reached $57,000,000 up 59% year on year and total loans disbursed since its inception hit 187,000,000 Maya continues to onboard millions into the formal financial system, especially younger users and underserved segments. It continues to be the digital bank of choice for young customers across the country. Of the 9,000,000 customers in just over three years, 84% comprised Gen C and Millennials and 76% are based outside of Central Manila. Of the 2,400,000 borrowers that Maya has given credit to, over half are first time borrowers with no previous lending history.

Maya's deposit base has grown to $56,700,000,000 as of September more than doubling from 2023. It disbursed PHP36 billion in quarter three alone bringing its total loan disbursement since launch to PHP187 billion. The loan book now stands at R27 billion dollars with loan to deposit ratio at 48%. Our net interest margin rose to 18.9% for the first nine months, while maintaining a healthy portfolio with an NPL ratio of 6.3%. Maya continues to expand its fintech ecosystem through product innovation and strategic partnerships.

Maya launched Maya Black, its premium credit card in quarter three receiving a very strong response from the customers. Around 40% of Maya Black cardholders are first time credit users underscoring Maya's role in democratizing credit access to Filipinos. Maya's also launched an innovative personal loans product in the previous quarter that incentivize users to make periodical savings a habit by offering higher rates. Maya is also leveraging its relationship with established businesses like Cebuana Louillier to expand credit to unbanked customers through over 3,500 branches and 25,000 agents nationwide. In summary, Maya's strong growth across payments, deposit and lending reflect the power of a fully digital integrated ecosystem.

PLET continues to mark progress in its sustainability journey as manifested in its latest ESG ratings, which continue to register improvements as you will see on the slide. We continue to align with global best practices and we have started to take part in global conversations. At the Climate Week in New York, TLBP and SMART represented The Philippines at the United Nations Global Compact Leaders Summit, which we showcased a homegrown innovation that integrates localized marketing of natural hazards and remote monitoring of network facilities into a single visual dashboard. We were also featured in The Philippines Twenty Twenty Five Voluntary National Review presented by the Department of Development, highlighting the country's progress on sustainable development goals. Other highlights during the quarter includes a workshop with our supply chains where we cascaded our biodiversity policies, particularly in the context of network rollouts.

Smart also secured a billion green loan with proceeds to be used to accelerate the rollout of our five gs network nationwide, which is more energy efficient. Now that concludes our prepared remarks for PLDT's nine months results. We're now open for questions.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you so much, Danny, for your insights. Before we open the floor to your questions, allow me to reintroduce our business leaders in the room. I'd like also to recognize our COO, Mr. Bocimenes Ayush Junjunwala of Maya, CIO of Maya has also joined us as well. And just to remind everyone, those who are in the room with us are our Head of Consumer Business, Home, Mr.

John Palanga our Head of our Enterprise Business Mr. Lump Spinera PPLDT and Petro President, Ivoicentino ROICs for Smart, Lloyd Manalotto and Marge Garfilio. Of course, we have our CFO, Mr. Danny Yu our Chief Legal Officer, Ms. Joanne DeVeneca Cabul and our Corporate Secretary, Ms.

Marilyn Victorino Acquito. All right. So for those who would like to ask questions, please feel free to put them in the Q and A box. We are also welcome to answer your questions live. Just feel free to raise your hand and we would be more than happy to assist.

All right. So the first question here is from Nikki Frankel of Apoqua Securities. This is for Maya. Given that Maya's lending was still strong in 3Q twenty twenty five, what were the main drivers for the drop in net income for the period? Were there any one offs that were attributed to this?

Ayesh, would you like to take that?

Ayush Junjunwala, CIO of Maya, Maya: Sure, Jingai. Hi, thanks for the question. So there are a couple of factors that resulted in a slight drop. One was the slight impact of the removal of gaming links, the effect of which started to come in the August 2023 as per BSP's direction. And secondly, as Danny mentioned, we launched my Black Credit Card.

And as I mentioned in the previous call as well that we had launched our personal loans. So as we scale these longer duration loans, they will continue to have some provision some excess provision impact in the near to medium term before the until the portfolio matures. So these are the two sort of main factors for that.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you, Ayush. All right. It looks like we also have some questions here from Arthur Caneda of Citi. Let me just unmute you. All right.

Go ahead, Arthur. Yes, go ahead.

Arthur Caneda, Analyst, Citi: Hi. Yes, thanks for the opportunity. Several questions, please. Firstly, with regard to the KPA and the IRRs, which have been released by and signed by the President, how do you see this is impacting your profitability as well as investment profile going forward? I'm just wondering, do you see the new revenue opportunities as outweighing the revenue risks with regard to upcoming competition?

Second question I had is with regard to mobile. I mean, we've seen this has been it has been trailing that of your competitor for the third straight quarter. What's driving this difference in performance? Is there any issue that the company needs to work out? And the third question is on enterprise.

You mentioned an uptick in government projects earlier. I'm just wondering, are you seeing sustained uptick into the fourth quarter given that you've seen a slowdown in the broader macro momentum and government spending? Thank you.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you, Arthur. Okay. We have three questions here. Perhaps we can take your first question your second question first, which is on wireless. It's been trading for a while.

Is there any difference in performance that you'd like to highlight? So Harge or Lloyd, would you like to take this question?

Marge Delacchio, OIC for Smart, PLDT: All right. So for the wireless business, whilst we have been trailing behind Globe and actual revenue, when you actually review the growth rates, we can actually see that the Smart Wireless Group has actually achieved a flattish growth rate for year to date 2025 versus Globe, it's actually a more of a negative. Number two, the actual Q3 achievement versus last year, Smart is also ahead versus Globe. Now what's interesting is that what we've actually managed to do is using tools like hyper targeting, we actually have been able to secure a higher quality, subspace, so much so that our ARPUs for Smart have actually, improved. So we're actually at a positive 2.5% on our ARPU for Smart versus Bloom, for example, which is up negative 5.5%.

We do believe that with tools like this and actually focusing on how we could generate more positive growth, we should be able to at least stabilize and actually sustain our global resilience.

Lloyd Manaloto, OIC for Smart, PLDT: Also we'd like to add to the fact that if you look at fixed wireless, for example, wireless network, We're actually growing and this is driven by our investment in five gs and investment in five gs devices. So that's one area we're also focusing on as a total portfolio because we see that bigger growth.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you, Marge. Thank you, Lloyd. Let's take your question on enterprise next in terms of the sustained update in

Lloyd Manaloto, OIC for Smart, PLDT: the fourth

Jingay Nograles, Head of Investor Relations, PLDT: quarter. Bams, would you like to take it?

Danny Yu, Chief Financial Officer, PLDT: Yes,

Bams, Enterprise Representative, PLDT: sure. Thanks for the question, Arthur. So with PODP Enterprise, yes, we are seeing the continued momentum, as we mentioned before, into the fourth quarter and also into early Q1. As you can imagine, some of the major projects will probably result in some slippage of our wire dates, etcetera, which is quite normal. But we're seeing still that level of investment and activity.

There's a lot of across both national government agencies and LGUs continued demand here that we're serving on both the connectivity and the ICP side. Thank you.

Butch Jimenez, COO, PLDT: Can I add?

Jingay Nograles, Head of Investor Relations, PLDT: Yes, of course.

Butch Jimenez, COO, PLDT: Just I guess a couple of insights on where the government is going to lap in terms of sustaining their investments in the digital connectivity. Of course, I can't speak for the government at this point in time. But generally, what we see is that they are going to continue their trust and their investments in being able to connect The Philippines digitally. I don't see that slowing down. And I think that after realizing that they've spent too much on flood controls, they've started to sense that maybe they should start shifting some of that expense or that spend to other areas and digitizing or providing digital connectivity to various aspects of Philippine society is something that they are talking about prioritizing.

So first, let's talk about data centers. The government or PBBM has already given the DICD an order for public sector data sovereignty. That becomes a big driver for the enterprise group in terms of possible revenues in the future, principally because we do have the biggest data center in The Philippines and we are the only ones at this point in time that can provide GPU as a service leading towards AI. Aside from that, the site investment or initiative of the government has just finished its bidding. PLDT Globe has gotten its fair share of rolling out in Kiva sites.

So that is going to add revenue for our company, at the same time continue the investments of the government in connectivity. Now tomorrow, I will be presenting to the PISAC, the Private Sector Advisory Council, a couple of more initiatives to digitize state universities in The Philippines and the other one is healthcare centers in The Philippines. So it looks like they are realizing that we are far behind our Asian or ASEAN neighbors when it comes to digital connectivity. And it's one of the priorities that I think the President and the government is going to push forward in 2026 and beyond. So looking forward to a sustained investment of the government in connectivity.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you, sir Butch. Right. The last question, which is on Connectad and Pinoy. Mr. Nimaga, would you like to take this one?

John Thie, Analyst, UBS: Hello?

Marge Delacchio, OIC for Smart, PLDT: What opportunities? It's difficult to assess the opportunities right now because this is the first country where they are going to roll out the open access on assets model. So we don't know in what shape or form transform it basically be formed in The Philippines. But aside from that, if there are new players that are with their vision and philosophy that allows them and are committed to invest in facilities, invest in new infrastructure that will complement and supplement our network. That is an opportunity that we can consider because it will strengthen our network together.

And we may be able to improve the connectivity for the entire country and maybe that will help innovation of the Connectat in Pinoy to have more connectivity even in the Gidas area and also improve the Internet connectivity within the entire country. But that requires but that is something that we can find an opportunity that we can explore and exploit and create new partnerships around that. But if it is pure access, it's hard to assess the opportunity right now because we don't know how it will be rolled out in The Philippines, the open access for all assets.

Arthur Caneda, Analyst, Citi: So no indications on the IRRs based on what's been signed by the President so far?

Lloyd Manaloto, OIC for Smart, PLDT: I'm sorry.

Jingay Nograles, Head of Investor Relations, PLDT: Indications on how we feel about

Marge Delacchio, OIC for Smart, PLDT: the IRR? Well, how we feel about the IRR. Mr. Familinan answered that earlier in the meetup briefing. Maybe try and give his answer.

Jingay Nograles, Head of Investor Relations, PLDT: Sure, sure. So he had a very UNIDENTIFIED he had a statement earlier that he shared with the media. So I'll just quote what he mentioned and I'll share it with you Arthur. So when he was asked about PLDT's overall view on the final RRR, he answered by turning the question around, right. We think that the law as written actually achieves what it set out to do, cheaper internet for all, wider coverage, more infrastructure.

Because the law and its IRR right now do not impose any obligation on new entrants to build infrastructure. There's no requirement to start in geographically isolated or disadvantaged areas. And there is no service obligations to ensure coverage or quality. And if you recall in the Ramos administration, there was a sound model under the service area scheme, where telcos were assigned specific regions and targets like reaching the number of households to be connected, right? And that created real infrastructure build out at that time.

And the Connectadem Pinoy Law, on the other hand, does not have such provisions. So really the question remains on whether it will truly deliver on its promises. So that was the statement shared by Deputy earlier on the IRR.

Arthur Caneda, Analyst, Citi: Got it. Thank you very much.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you, Arthur. All right, we have another hand raised from Ranjan Sharma. Let me go ahead and unmute you.

Ranjan Sharma, Analyst, Unknown: Hi. Good evening, and thank you for the presentation. Can you hear me?

Marge Delacchio, OIC for Smart, PLDT: Yes. We can.

Ranjan Sharma, Analyst, Unknown: Yeah. Thanks for thanks for the opportunity. My questions are are related to the KPI as well. Can you help us understand what how the wholesale access pricing mechanism is going to be set? When you're being asked to open up a network, on what basis are postal access prices that you would be charging any access seekers?

Is this completely on commercial terms? Is there a cost model associated with it? And and the second question is on the spectrum. I think there's also spectrum management provisions as well, which includes drawback of underutilized spectrum. Can you help us understand how that might impact the industry as well?

Jingay Nograles, Head of Investor Relations, PLDT: In terms of the pricing, I don't think there has been any

Marge Delacchio, OIC for Smart, PLDT: specific model that was shared in the IRR, right? The way it was drafted was that the incumbents are to submit our price list in the reference access offer and that will be reviewed by the regulators to determine if it is fair, reasonable and non discriminatory. So I think there's really no specifics at this time on using any specific model. Yes. Maybe I may add to that.

It is not clear to us because we already have open access bilateral contractual maintenance. Do open access on a contractual basis. But it's not clear to us, for example, whether or not the pricing that we have assumed based on voluntary contracts with counterparties will be the same price that will be approved by the regulators. And there is also a provision in the IRR, which says it seems to be a market player that the regulator scrutinize repricing. And what that means is not clear to us, whether or not significant market players will be required to price down their offering compared to contractual commitments that they've entered into before Connectadom Penari, it's not very clear to us.

So on the spectrum underutilization, is that a question?

Jingay Nograles, Head of Investor Relations, PLDT: Sector management provisions, how we see this impacting our business?

Marge Delacchio, OIC for Smart, PLDT: UNIDENTIFIED Well, it will have an impact on the business. But please appreciate that right now there is no standard for underutilization. It really depends on how you use the spectrum. If you use the spectrum as a macro side, the utilization might be different. If you use the spectrum to cover that basically blind spots.

But if you use it to have a continuous travel, the utilization would be different. And so the spectrum management policy is intended to, I think, come up with that. And hopefully, there will be consultation with the stakeholders like us who are using the spectrum. And hopefully, there will be a transition period if they set if they define, for example, underutilization as such. Then the next day they will start recording the spectrum that might not be there because it's basically a totally new definition of under utilization, which we are unable to imply.

The next day they will start to call it. So that is what's not clear. But I think they will have a period from the activity of the IRR to come up with a spectrum management policy framework. But that's not very clear right now.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you, Malcolm.

Ranjan Sharma, Analyst, Unknown: Thank you.

Marge Delacchio, OIC for Smart, PLDT: Okay.

Jingay Nograles, Head of Investor Relations, PLDT: Looks like we have some questions here as well from Kenyon Sun of Prutik. So two questions on net debt. You mentioned that net debt to EBITDA will be reduced to two times. Which year is this expected to be achieved? So that's the first question.

Second question, net debt to EBITDA is increasing a lot faster than net profits. Where is the where in the business is that going into?

Danny Yu, Chief Financial Officer, PLDT: We continue to spend on IT network rollout and data center development. That's where the go to. Now with respect to projection, I think it will be about three to four years from now going to the two point zero. But certainly, think the positive news that we finally achieved positive free cash flow as of September, ahead of our forecast in 2026. That's one good news.

And we hope to sustain this with lower CapEx moving forward as well as with our monetization program.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you. And we also have a question related to that regarding our positive free cash flow. So confident are we that we can sustain this into 2026?

Danny Yu, Chief Financial Officer, PLDT: We're confident because we will have lower CapEx moving forward. Again, as mentioned earlier, because of our asset monetization program.

Jingay Nograles, Head of Investor Relations, PLDT: UNIDENTIFIED And also, this is a common question that was sent to us earlier. Any updates on the current REPRESENTATIVE:] asset monetization programs, namely the data center stake sale as well as the copper sales?

Danny Yu, Chief Financial Officer, PLDT: On the data center, we're currently in talks with prospective investor who intends to take around 49% of the business. At the same time, we're also exploring the possibility of doing a REIT listing for our data center, just in case the other falls through.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you, Danny. All right. We have another question here from John Thie of UBS. Let me just go ahead and unmute you. Hey, John.

Go ahead.

John Thie, Analyst, UBS: Hi. Good afternoon. Two questions. First is on the fixed broadband net adds, strong, 95,000 compared to your run rate of 70,000 in the first half. So how much of this was prepaid?

How much of this was postpaid? And what drove the acceleration there?

Jingay Nograles, Head of Investor Relations, PLDT: John, would you mind taking this?

Lloyd Manaloto, OIC for Smart, PLDT: John. How are you? So thank you for the question. Yes, we've actually been able to build up the install rates over the last quarter. These top are not just our channels, but our install teams.

So we're able to gather more. I can't all I can say is that in the third quarter, we've seen more than a threefold increase in the prepaid subscriptions. And we're doing this in a very different way. I think I mentioned in the previous quarter that while we are growing the buying to ensure that the ARPUs remain at the high level and not capitalized post pay, our acquisition of prepaid has been very targeted to areas where prepaid applies. So going to buy from Tier A and Tier B municipalities to what is now probably Tier C and property opportunities is very selective.

So we will not be seeing the same volumes, but what we will be seeing are the quality subscribers who have a high propensity to top up. We as mentioned from the beginning of the year, we have grown more than 3x already, 3.3x to be exact. And once we're ready to release the figures, we have a sizable market rather subscriber base on prepaid, then we will do so. So at the moment, the majority of it is coming from our postpaid acquisitions.

John Thie, Analyst, UBS: Thank you. A quick follow-up on for maybe for Danny. On depreciation, there was billion plus charge in nine months, but safe to assume that most of it came from the third quarter. And the related question on interest expense, given that debt really hasn't changed, but there was a spike on year on year interest expense, would this mainly come from, I guess, leases for towers, etcetera?

Danny Yu, Chief Financial Officer, PLDT: I'll take the second question first. The reason for the increase in interest is mainly due to increase in the weighted average rate by around 49 basis points. That's one. Second reason for that is that also increase in the weighted loan average by around billion dollars compared to the previous year. So that's for the second.

What was the first question again?

Jingay Nograles, Head of Investor Relations, PLDT: Accelerated depreciation of PHP 2,600,000,000.0.

Danny Yu, Chief Financial Officer, PLDT: It's mainly retirement of legacy assets as well as modernization of our IP and network call system.

John Thie, Analyst, UBS: Thank you.

Danny Yu, Chief Financial Officer, PLDT: And most of you The have market said certification is a fast paced capital intensive industry and it's rapidly changing. So we have to continually review the economic life of these assets.

John Thie, Analyst, UBS: And most of it occurred in the third quarter. Right?

Danny Yu, Chief Financial Officer, PLDT: Yes. In the third quarter. I think we recorded that in July.

John Thie, Analyst, UBS: Okay. Thank you, Danny. Thank you, management team.

Lloyd Manaloto, OIC for Smart, PLDT: Thank you.

Jingay Nograles, Head of Investor Relations, PLDT: Alright. Let me just check the mini box. Okay. So some questions that were sent in as well. This one is for enterprise.

You recently launched SmartSafe as well as Filipinas AI. How do you see these contributing to your revenues moving forward? We'll tackle SmartSafe and I guess have presented from EPO in vitro, even if

Bams, Enterprise Representative, PLDT: you will tackle the Filipinos AI announcement. So on SmartSafe, yes, we have actually been bringing this to customers already even in Q3, but we did a commercial launch just last week. Basically, with SmartSafe, this takes advantage of specific technology on the smart network that makes it as secure for someone to have a transaction on a mobile app that's available for this, so that they don't need an OTP. So it's a very seamless log on, but also just as secure as an OTP type motion. You bypass the risk of your OTP being intercepted, etcetera, which is very common nowadays.

From a revenue standpoint, of course, is a capability we need to work with other B2B companies that have apps. So the banking system, government apps, etcetera for them to build this into very simple to do it, for them to build this into the next release of their app. So that's a motion that's happening now. We're quite excited that we have several institutions with apps that are interested in this and looking to launch it as soon as possible. So we'll keep the team posted in terms of what that is.

Turning over to Vibay. Yes. Thank you, Jingay for the question on Filipinas AI. So yes, we launched this in the third quarter of this year. And the basic concept is to be able to offer a platform for enterprises to be able to run AI use cases.

The main issue of enterprises now is that they want to run AI use cases or proof of concepts, but they don't know how to utilize and how to build the infrastructure around it. They have to source for the GPUs. They need to talk to a stock provider. They need to talk to a data center, they need to provide the connectivity of the cybersecurity requirement. We're basically taking this pain point away from the customer and letting them run these different applications on a ASUs model wherein they can run the POCs on an hourly, daily, weekly or a monthly view.

And we've seen a lot of interest coming from enterprise customers who really want to experiment and run the use cases. So we're very happy to be able to offer this service to our customers. We're the first company in The Philippines to actually bring in NVIDIA H200 GPUs, the most advanced GPUs of NVIDIA currently and we're seeing a lot

John Thie, Analyst, UBS: of interest currently. Thank you.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you, B Boy. This question is from Rod Bettendidad. This question is for Danny. Noting that your debt levels have increased this year despite continuous lower CapEx guidance. Is this mainly for refinancing, increased net debt despite lower CapEx guidance?

So is the increase that because of mostly refinancing or is there

Danny Yu, Chief Financial Officer, PLDT: Mostly refinancing. Yeah, mostly refinancing.

Jingay Nograles, Head of Investor Relations, PLDT: Thank you. All right. And from Tony Watson, any thoughts? This is for Ayush. Any thoughts that you can share on a potential Maya IPO or spin off?

Ayush Junjunwala, CIO of Maya, Maya: I I think we'll stay clear of that. I think we are focused on driving the business and, you know, any IPO decisions, etcetera, will be led by the shareholders. But we as management are sort of fully focused on just executing and scaling on products.

Jingay Nograles, Head of Investor Relations, PLDT: Just doing a last stand for questions here, if there's any from the floor. Okay. It looks like there are no further questions. With that said, I'd like to thank everybody for your time today and joining us for our nine month briefing. Have any further questions that you'd like to send to us, please feel free to reach out to us via e mail.

And with that said, we look forward to presenting our full year results by February. All right. Thank you, everyone. Have a good afternoon.

Bams, Enterprise Representative, PLDT: Thank you. Thank you. Thank you. Thank you.

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