PLDT Inc.

Good afternoon, everyone, and thank you for joining us today. I'm Jingay Nograles, Head of Investor Relations here at PLDT, and it's my pleasure to welcome you all to our nine-month financial and operating results briefing. Join us today to share insights into PLDT's performance and strategic direction are. EPLDT's Chief Financial Officer, Mr. Danny Yu. EPLDT's Chief Operating Officer, Mr. Butch Jimenez. EPLDT Corporate Secretary, Marilyn Victorino Aquino. EPLDT Chief Legal Counsel, Attorney Joanne de Venetia Cabo. Head of Consumer Business, Mr. John Palanca. Head of Enterprise Business, Mr. Blum Spinetta. EPLDT President and CEO, B. Boyd Hendino. As well as our OICs for SMART. and Ms. Marge Garuccio. All right, so before we begin, I'd like to remind everyone that we will have a Q&A session after the presentation. So you may, of course, submit your questions via the MS Teams Q&A panel, which you can see in the webinar. Thank you also to those who have set their questions in advance. For those who are not able to use the Q&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. Danny Yu, to walk us through TLDT's financial performance.

Good afternoon, everyone, and thank you for joining us today. Allow me to present TLDT's financial and operating highlights for the first nine months of the year. Our service revenue's net of interconnection was reached 145.9 billion, up 1% year-on-year, driven by steady demand across fiber, data, and ICT. Cash effects, subsidies, and provisions were down 2%, showing our focus on spending control and even as we support growth areas. EBITDA rose 3% to 82.8 billion, with margin steady at 52% amidst higher revenues and lower outbreaks. Telco core income came in at 25.3 billion, around 5%, mainly due to higher depreciation in financing costs from network and IT investments. On the other hand, core income was stable at 25.8 billion, supported by Maya's sustained profitability. Our share in Maya's core net income reached $603 million for the period, a $1.5 billion 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 tech-in-tech ecosystem. In summary, our nine-month results show a stable top line. We see yet even an improving contribution from digital businesses. Consolidated service revenues reached 145.9 million, up 1% year-on-year. If we exclude legacy services, total revenues rose 3%, showing the continued expansion of our people 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%, with usage and 5G 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 expanding 5G 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 $48.8 billion. Excluding legacy services, total revenues rose 4%. Wireless consumer revenues were up 1%, with mobile data and fixed risk delivering 3% growth year-on-year. Home revenues climbed 3%, while fiber revenues were up 6%. Enterprise, as mentioned earlier, is now back on its growth path, seeing 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 45.7 billion, driven mainly by continued fiber demand. Fiber revenues were up 7% to 44.5 billion, 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. WePageSumTown has grown 15 times since end of 2024. Our pool held steady at 1,470, 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. IRP, and expanding access through new technologies. Let's now move on to enterprise. Year-to-date revenues reached 35.6 billion for the first nine months, broadly steady year-on-year, while corporate data and ICT revenues rose 2% year-on-year to 26.7 billion. Within this, ICT revenues grew 27% year-on-year Driven by strong demand for managed IT services up 115%, data center co-location 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. PLDT also continues to strengthen its leadership in AI and data infrastructure. positioning the group at the forefront of the country's digital transformation. We recently launched Pilipinas AI, the country's first sovereign AI platform. Also 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 63.2 billion for the first nine months, down slightly by 0.3 billion versus last year due to legacy funds. Data revenues, which now include mobile data and fixed wireless, rose 1% year-on-year to 57.3 billion, 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. VIX Wireless sustains strong momentum with revenues up 18% year-on-year as smart leads the market by revenue share. If we remove VIX Wireless, mobile data revenues rose 1% to 56 billion. Performance was supported by stable data traffic growth, disciplined monetization, customer value management initiatives that help optimize spend and reduce marketing costs. 5G adoption continues to expand with the number of 5G devices up 39% year-on-year to 10.5 million, while data traffic rose 6% year-on-year to 4,393 petabytes. The share of 5G devices in the total base improved to 18%, driving higher data usage, and improve customer experience. As we continue to innovate on the product side, we also stay focused on cost discipline across the group. Total cash effects, subsidies, and provision for the first nine months of the year came in at 63.1 billion, down 1.1 billion of 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 smarts' deliberate shift towards higher-quality acquisitions and tighter credit screening for post-paid device plans. On the other hand, repairs and maintenance rose 4% to $23.6 billion, 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 82.8 billion, up 3% year-on-year, with margins steady at 52%. This performance reflects the combined impact of a 1 billion rise in revenues along a 1.1 billion discipline for decline in operating costs. The 52% EBITDA margin has helped firm demonstrating our ability to defend profitability even in a very competitive environment. Telco core income reached $25.3 billion, down 5% year-on-year, mainly due to higher depreciation in financing costs from network and infra investments. Core income was steady at $25.8 billion, supported by continued earnings from Maya, whose consolidated core income hit $1.6 billion 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 $2.6 billion 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 25.1 billion lower year-on-year, mainly reflecting the absence of last year's higher forex and derivative gains, as well as the accelerated depreciation book this quarter. CapEx for the first nine months stood at 43 billion, down from 52.3 billion 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 billion, lower than the original guidance of 68 to 73 billion. This is mainly due to more favorable pricing and terms. We continue to invest in new cell sites, LTE and 5G upgrades, home fiber ports, data center development, and submarine cables. These projects will strengthen network quality to support the growth of enterprise and digital services. As at the end of September, debt stood at $289 billion, translating to a net debt to event ratio of 2.61 times slightly higher than the prior quarter, but still within our target range. Our gross debt was at $299 billion, with 60% of maturities falling beyond 2030, providing a long runway and minimal near-term refinancing pressure. About 13% of total debt is U.S. dollar denominated, with only 5% unhedged. 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 years. PLET remains in better investment grade with ratings from S&P and Moody's. In terms of cash flow, we recorded a $1.1 billion in proceeds from tower sales and completed a $20.5 billion final dividend payment for 2024 during the period. Incidentally, Fidelity hit positive pre-cash flow as of September 2025, ahead of its forecasted 2026 target. Looking ahead, we are working towards reducing leverage to around 2.0 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 enterprise and enterprises maya has created a powerful two-sided network where more customers drive more transactions generating richer insights which enables higher cross-seller 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 532 million in net income in the third quarter, sustaining profitability while growing. Boundary customers nearly doubled year-on-year to 9 million, while its cumulative borrower base grew 81% to 2.4 million. Deposit reached 57 billion, up 59% year-on-year, and total loans dispersed since its inception hit 187 million. 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 million customers in just over 3 years, 84% comprise Gen C and Millennials and 76% are based outside of Metro Manila. Of the 2.4 million 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 $56.7 billion as of September, more than doubling from end of 2023. It dispersed $36 billion in Q3 alone, bringing its total loan disbursement since launch to $187 billion. The loan book now stands at $27 billion, with loan-to-deposit ratio at 48%. 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 card holders are first-time credit users, underscoring Maya's role in democratizing credit access to Filipinos. Maya has also launched an innovative personal vaults product the previous quarter that incentivizes users to make periodical savings a habit by offering higher rates. Maya is also leveraging its relationship with established businesses like Cebuana Luwiler 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. PLDP 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, PLDP and SMART represented the Philippines that the United Nations Global Compact Leaders summit. which will showcase a homegrown innovation that integrates localized mounting of natural hazards and remote monitoring of network facilities into a single visual dashboard. We were also featured in the Philippines 2025 Voluntary National Review presented by the Department of Development, highlighting the country's progress on sustainable development goals. Other highlights during the quarter include a workshop with our supply chains where we cascaded our biodiversity policies, particularly in the context of network rollouts. Smart also secured a 2 million peso green loan with proceeds to be used to accelerate the rollout of our 5G network nationwide, which is more energy efficient. Now that concludes our prepared remarks for PLDD's nine months results. We're now open for questions.

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. Bochimenez, Ayush Junjunwala of Maya. The 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, Mr. John Palanca, our Head of our Enterprise Business, Mr. Lump Spinetta, EPLDD, and Petro President, V. Boyd Henvino, our OICs for SMART, Lloyd Manaloto, and Marge Garcilio. Of course, we have our CFO, Mr. Danny Yu, our Chief Legal Officer, Ms. Joanne de Venetia-Cabul, and our Corporate Secretary, Ms. Marilyn Victorino-Aquito. All right, so for those who would like to ask questions, please feel free to put them in the Q&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 Apaca Securities. This is for Maya. Given that Maya's lending was still strong in 3Q25, what were the main drivers for the drop in net income for the period? Were there any one-offs that were attributed to this? Ayush, would you like to take that?