Turkcell Iletisim Hizmetleri AS

Ladies and gentlemen, thank you for standing by. I'm Polina, your Chorus Call Operator. Welcome and thank you for joining the Turkcell conference call and live webcast to present and discuss the Turkcell fourth quarter and full year 2025 financial results. All participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mrs. Özlem Yardem, Investor Relations and Corporate Finance Director. Mrs. Yardem, you may now proceed. Thank you, Polina.

Hello, everyone, and welcome to Truxell's 2025 Year-End Earnings Call. On the call today, we have our CEO, Ali Taha Koç, and CFO, Kamil Kalyon. They will provide an overview of our operational and financial results for the quarter and the year, followed by a Q&A session. Before we begin, I would like to kindly remind you to review our Safe Harbor Statement, which is available at the end of our presentation. With that, I will now turn the call over to Mr. Ali Talcoş.

Thank you, Özlem. Good afternoon, everyone, and thank you for joining us today. We close 2025 with a strong finish, exceeding all of our expectations. Revenues increased by 11%, and we achieved an EBITDA margin of 43.1%. Net income from continuing operations reached 17.8 billion Turkish Liras, up 23% year-on-year. These outcomes reflect disciplined execution and strong momentum across the business. 2025 was pivotal for our long-term strategy positioning. we were awarded the largest spectrum in the 5G auction and secured our fiber footprint through the agreement with BOTASH. These moves strengthen our network leadership and expand our capacity to capture 5G demand. We maintain a robust balance sheet through prudent financial management. This preserves flexibility and liquidity. We deliver shareholder returns through a solid dividend payment and launch a three-year share buyback program. Turkcell is a technology company. We are reinforcing that identity through focused investments. In 2025, we allocated 15% of CapEx to strategic areas, primarily in data center, cloud infrastructure, and renewables. These investments deepen our digital infrastructure. enhance energy resilience, and support long-term value creation. A major milestone for Turkey is our strategic partnership with Google Cloud. We are building a hyperscale cloud region in Turkey. This cloud region will help enterprises accelerate cloud adaption, to secure their data sovereignty as well as access advanced capabilities in AI, cybersecurity, and digital platforms. Turkcell is at the center of Turkey's digital transformation. With this partnership, Turkcell will have sustainable, technology-led growth. Next page, please. Over the past three years, we have executed with discipline to show that Turkcell's leadership in connectivity and digital infrastructure. This transformation shapes how we operate today and how we allocate capital to deliver long-term value creation. Our capital allocation framework is built on three pillars. First one, investing in our business to sustain leadership and capture future growth. We continue to advance mobile rollout and expand our fiber footprint. With 5G, our fixed wireless access solution, SuperVox, will extend our coverage beyond fiber. In parallel, we are investing in data centers and cloud, which will bring future growth. As we scale this business, We may also evaluate selective inorganic opportunities. Our expected capex intensity of around 25% reflects this investment cycle. The second one, delivering attractive shareholder returns. Last year, we distributed 72% of net income from continuing operations. This is our ninth consecutive year of dividend distribution. nine consecutive years. We also launched a new share buyback program and repurchased $58 million of shares to date, reflecting our confidence in long-term value of our business. Thirdly, maintaining a strong balance sheet. We continue to diversify our funding sources, from sustainable bond issuance to Islamic financing structures. We remain committed to maintaining net leverage below one times, preserving flexibility to invest in growth while continuing to support shareholder returns. Overall, we have a crystal clear capital allocation plan to invest in strategic infrastructure, capture structural growth opportunities, and deliver sustainable shareholder value. Next page, please. We can now move to the quarterly performance. The fourth quarter marked another period of solid execution for Turkcell's leadership. Performance was driven by operational excellence and supported by our key growth engines, with outstanding performance across all core segments. In this quarter, revenues grew by 7% year-on-year to 63 billion TL. Results were underpinned by ARPA expansion, continuous subscriber momentum, and scaling of our data center business. All of these reinforce the strength and resilience of our growth model. Group EBITDA increased 12% to 26 billion Turkish Liras, reaching a solid 41.2% margin. Margin expansion reflects continued cost discipline and as well as the operational efficiency. Focused financial management also supported our bottom line, with net income from continuing operations increasing 11% to 3.6 billion Turkish Liras. We achieved 905,000 net postpaid additions in the fourth quarter. This is the strongest quarterly result in the last six years. This was driven by targeted value propositions as well as customer-focused strategy. Another good news, this growth also came with real ARPA expansion, reflecting balanced growth. On the other hand, our data center and cloud business continue to scale, with revenues growing by 32%. Renewable energy installed solar capacity reached 62.2 megawatts. Next, please. Let us turn to the key operational highlights that shaped our great quarter. Competition remained elevated for much of the year, but it eased moderately in the middle of the fourth quarter. 2025 was marked by record high mobile number portability. In this environment, our customer-centric approach and pricing strategy helped us strengthen our market leadership and expand our customer base. we had 2.4 million postpaid net additions for the year 2025, the highest level in the past 26 years. Rising share of the postpaid subscribers was a key driver of revenue growth. It increased by 4.7 percentage points year on year to reach 81% strengthening the resilience and the visibility of our revenue base. Revenue quality also improved. Through our micro-segmented pricing actions and AI-supported offers, we migrated a significant portion of our subscribers to higher-tier packages. As a result, mobile ARPU real growth is 5.4%. Innovative offerings, including family plans and a new loyalty platform like Tumbara, increased engagement and supported retention. As a result, our churn improved year-on-year to 2.7%. Next, please. Turning now to our fixed broadband operations. Another strong year for SuperOnline, our fixed business as well. We expanded our base with net addition of 119,000 Turkcell fiber subscribers. Total fiber subscriber base reached 2.6 million. High-speed campaigns were instrumental in driving this growth. We expanded our offers to speeds of up to 1,000 megabits per second. Today, out of all of our customers, one in five customers subscribes to speeds above 500 megabits per second. This signals a clear shift toward premium connectivity with TruXas for online only. Residential fiber output increased by 10.3% year-on-year. We expanded our fiber homepass to 6.3 million homepasses. While increasing the number of homepasses, we achieved a phenomenal performance on take-up ratio of 42%. Next, please. Our digital infrastructure strategy is central to Turkcell's long-term growth. We believe that cloud and AI infrastructure is structural, a must for every business in Turkey. The Turkish cloud market is growing at 19% annually in dollar terms, supported by increasing digitalization and rapid adoption of AI-driven workloads. Our partnership with Google Cloud marked a defining milestone. Establishing a Google Cloud region in Turkey strengthens our country's digital ecosystem and enhances our position in the infrastructure value chain. This partnership diversifies TruXell's revenue streams and reinforces our long-term growth profile. Today, we operate 15 megawatts of active data center capacity, and it will be doubled by 2032. Over the same period, we expect our data center and cloud revenues to grow at least six-fold in U.S. dollar terms. Beginning in 2026, we expect the segment to generate approximately $100 million in EBITDA. We are uniquely positioned to capture this technological breakthrough. With our scale, network assets, market leadership, and strategic partnership, we are ready to benefit from this structural growth. Next, please. Digital business services delivered solid growth, with revenues increasing by 30% to 7 billion Turkish Liras, supported by stronger hardware sales. Our system integration backlog reached 6 billion Turkish Liras. Our data center and cloud revenues increased by 32% year-on-year. This outstanding growth was driven by capacity expansion. As this new capacity establish a higher base, we expect growth rates to gradually normalize. Even so, underlying demand remains vast and continues to support for further expansion. We expect to complete the final module of Ankara Data Center in this year, reaching the full capacity, full technical capacity of our existing facilities. In the first half of 2026, Construction of our new data centers under Google Cloud Partnership will start. This will be our next phase of capacity expansion strategy. TechWin is one of our core strategic growth engines. Our TechWin business delivered solid performance in 2025, with revenues growing by 21% and once again outpacing group growth. PayCell was the main driver of this growth. In the fourth quarter, its revenues increased by 40% year-on-year, supported by post-solutions and pay-later services. PayCell increased its non-group revenue share by 18 percentage points to 77%, reflecting its ability to scale beyond the Turkcell ecosystem. On the financial side, revenues declined by 6%, mainly reflecting the lower interest rate environment. The loan portfolio continues to expand despite tight regulatory conditions. Net interest margin improved to 6.3%, primarily driven by lower funding costs, as well as disciplined risk management and better collection practices. Overall, TechFin continues to enhance the diversification and quality of our revenue growth. Next page, please. Now a few words on our renewable energy footprint. We are so proud of it. In the fourth quarter, we commissioned our largest active facility to date. Active solar capacity increased from 8 megawatts at the end of the last year to 62 megawatts in 2025. In total, we reached 164 megawatts of installed capacity across eight different cities. These investments are already delivering financial benefits. During the year, our solar energy portfolio generated 156 million Turkish Liras in OPEC savings. Stronger contribution is expected in 2026. We will continue to expand our portfolio to enhance cost efficiency, strengthening operational resilience, and support our 2050 net zero commitment. Next page, please. We exceeded our expectations in 2025. This underscores the resilience of our operating model and the consistency of our execution. Looking at the 2026, our focus remains on real profitable growth. We expect real revenue growth in the range of 5% to 7% with the strength of our core business and increasing contributions from strategic areas. We aim to deliver an EBITDA margin between 40% to 42%, reflecting ongoing operational efficiency while continuing to invest in growth. Our operational capacity intensity is expected to be around 25%, consistent with our investment cycle in 5G rollout, digital infrastructure expansion, and renewable energy projects. In our data center and cloud business, we anticipate revenue growth in the range of 18% to 20%. This reflects a normalization following the significant capacity expansions completed in 2025, while underlying demand remains healthy. Overall, we believe our guidance balances growth, continued investment, and sustainable value creation. With that, I will now hand over to our CFO, Mr. Kamil Kalyan, to walk you through our financial highlights.