Globe Telecom Unsp/Adr

Good morning, everyone, and welcome to the second quarter 2026 analysts briefing of Globe Telecom. So we will begin with a video presentation of our performance and a few updates on the digital platform businesses to be followed by the Q&A session.

Welcome, everyone, and thank you for joining us for Globe's second quarter 2026 analysts briefing. To begin the presentation, we are pleased to report that notwithstanding external headwinds, Globe sustained its growth momentum and achieved a record-breaking quarter. Consolidated growth service revenues climbed to a new all-time high of 85.4 billion pesos for the first six months of 2026, growing by 6% year-on-year. Data-driven revenues accounted for 91% of consolidated service revenues, reinforcing Globe's continued transformation toward a more diversified, higher-quality, and sustainable revenue base. The robust first-half results were further supported by Globe's highest quarterly service revenues on record. Consolidated GSR amounted to 43.4 billion pesos in the second quarter, up 3% quarter-on-quarter and exceeding the previous record set during the seasonally strong fourth quarter of 2025. The quarter's performance was driven by broad-based growth across Globe's core connectivity businesses. Globe's EBITDA reached 44.9 billion pesos in the first six months, increasing 6% year-on-year, while EBITDA margin remained resilient at 52.6%, well above the company's full-year guidance. Top-line growth more than offset the increase in operating expenses and subsidy, generating operating leverage that enabled Globe to invest in its network and digital infrastructure. In the second quarter, EBITDA increased 2% from the previous quarter to 22.7 billion pesos. Lastly, core net income stood at 10.2 billion pesos for the first half, while on a sequential basis, core net income grew by 7% to 5.3 billion pesos as the higher EBITDA offset the non-operating charges for the period. This further highlights the improving trajectory of the company's underlying earnings. With that, we turn to some developments within Globe and its digital platform businesses, each of which we will be discussing in greater detail later in the presentation. Firstly, STT GDC Philippines is on track to hit projected total capacity of over 30 megawatts by year-end. Secondly, the company continues to reach strong contributions from Mint, which accounted for 28% of Globe's net income before tax in the first half. And finally, as a result of the resilient performance in the first six months, the board has approved a quarterly cash dividend of 25 pesos per share. Key dates for this declaration are the payment date of September 3rd, 2026 to shareholders on record as of August 18th. Moving on to the company's operating performance. Mobile data accounted for 89% of total segment revenues on the back of essential usage, deeper habituation, and a growing user base. Total mobile revenues for the first six months stood at 60.4 billion pesos, up 6% from the same period last year. Second quarter mobile service revenues increased 2% quarter on quarter to 30.4 billion pesos, representing the second highest quarterly mobile revenues on record. Mobile data continued to power the segment, with first half revenues amounting to 53.9 billion pesos, up 10% year on year. As of end June 2026, Globe's mobile subscriber base stood at around 67.7 million, supported by accelerating digital adoption, network quality improvements, and customer engagement initiatives, while the company's mobile data user base expanded by 5% year-on-year to 39.6 million. We'd like to highlight that this first half performance demonstrates Globe's ability to effectively monetize data while making sure it continues to equip its customers with with best-in-class services amidst a more cautious consumer sending environment. As such, mobile data traffic increased to 3,723 petabytes, while average monthly data usage per subscriber rose to approximately 17 gigabytes. At a more granular level, usage remained stable despite periods of economic drag, with 5G adoption accelerating. Average daily mobile top-ups and daily wireless traffic remained elevated throughout the first half of 2026. reinforcing connectivity as the Filipino's fifth utility, with Globe being the biggest enabler. Meanwhile, Globe's 5G customer base continues to deliver higher value per user versus non-5G subscribers, supported by rising 5G traffic and at-poo, and further fueled by Globe having the widest 5G network coverage across the country. This indicates improving habituation and monetization as 5G adoption scales. Moving on to the wired segment. Broadband revenue growth extended to a fifth straight quarter on sustained operating momentum. The broadband business generated 12.4 billion pesos in revenues during the first six months of 2026, representing 6% year-on-year growth. Second quarter revenues totaled 6.3 billion pesos, up 1% quarter on quarter, marking the fifth consecutive quarter of sequential revenue growth and cementing the segment's solid growth momentum. Fiber made up 93% of total segment revenues, primarily due to the 9% increase in fiber revenues and 33% growth in fiber subscribers. Total broadband subscribers grew to 2.4 million as of end June 2026, driven by migration to fiber and broader household adoption. Out of this total broadband base, Globe's disciplined execution propelled G-Fiber prepaid further as it reached 1.1 million subscribers as of end June 2026. This highlights the growing trust of Filipino households in flexible, affordable, and reliable home internet. Globe's strategy ultimately boils down to scaling sustainably. The company aims to deliver rapid growth while ensuring high long-term customer value and without sacrificing profitability. Meanwhile, Globe Business advanced its growth trajectory as demand for core connectivity and ICT-related services continued to push revenues higher. Corporate data revenues posted all-time high, first-half revenues of 11 billion pesos, up 15% year-on-year. On a sequential basis, corporate data revenues grew 15%, driven by higher core data revenues, led by domestic Internet services, alongside continued strength in ICT, primarily from business application solutions. Globe's core adjacent businesses also sustained significant contribution, effectively unlocking greater value within the Globe ecosystem. While non-telco revenues declined to 0.8 billion pesos in the first six months, this was primarily due to the deconsolidation of the Yondu Group, following the completion of Globe's partnership with NCS, partly offset by strong showing from Asticom. Excluding Yondu's contribution in the prior year period, non-Telco revenues would have increased by 17% year-on-year. Complementing the strength of our core business, Globe also benefited from the steady performance of Mint, which accounted for 28% of the company's net income before tax in the first six months, underscoring its growing importance in diversifying Globe's earnings base and supporting long-term value creation. Moving on to our capital expenditures, total spending stood at 26.3 billion pesos, higher on a year-on-year basis as Globe continued to pursue strategic investment opportunities during the first six months. These include targeted investments in network expansion and capacity enhancements, consistent with Globe's disciplined capital allocation strategy and full-year guidance of below $1 billion. Capital expenditures during the quarter represented 31% of service revenues, as the company continues to maintain financial flexibility to support its long-term priorities. Approximately 91% of this spending was allocated to data-related initiatives, demonstrating the company's commitment to enhancing network capacity, improving service quality and helping shape the future of connectivity in the Philippines. During the first six months of the year, Globe also accelerated the rollout of its 5G network, adding 878 new sites during the period to further strengthen coverage and capacity. The company also expanded its fiber footprint by deploying 80,052 new fiber-to-the-home lines, extending high-speed broadband access to more households nationwide. Globe's investments in network infrastructure are translating into tangible improvements in customer experience. Based on UCLA speed test intelligence data for Q1 to Q2 2026, Globe has been recognized as the most consistent mobile and fixed network in the Philippines and the widest 5G coverage in the Philippines. This recognition reinforces Globe's network leadership and its commitment to delivering a reliable and consistent connectivity experience for customers nationwide. Globe also continues to drive nationwide digital inclusion by achieving 100% completion of all 180 applications. geographically isolated and disadvantaged area sites awarded under DICT's Bayanihan SIM project. By bringing connectivity to these areas nationwide, we contribute to bridging the digital divide for underserved Filipinos. This expansion provides remote communities with reliable access to essential digital resources, including online education, government services, and vital livelihood opportunities. Meanwhile, our sustainability journey continues to support Globe's operational resilience and long-term value creation. On the environmental front, Globe is maintaining momentum toward its S-B-T-I approved net zero ambition. During the second quarter of 2026, the company established a partnership agreement with the First Gen Group to supply renewable energy to power key facilities across Mindanao and Caloocan City. In parallel, Globe transitioned approximately 700 cell sites to renewable energy through the retail aggregation program, strengthening both our green energy mix and network resilience. Moving to our social pillar, we continue to focus on online safety and community empowerment. In online safety and digital literacy, our digital thumbprint program reached over 1,800 participants across various executions nationwide, engaging students, youth groups, and local leaders. Furthermore, we intensified our proactive fight against cyber threats by hosting a technical deep dive session for NTC, CICC, PNP, CIDG, and NBI, equipping them with the operational skills needed to utilize IMSI catcher detectors to locate and disrupt unauthorized mobile signal activities. On disaster response and community assistance, GLOBE distributed over 4,000 relief packs to families affected by the volcanic unrest of Mount Mayan and recent earthquakes in Mindanao. Globe also marked the first use of Starlink's satellite-to-mobile technology for disaster and emergency response across South Cotabato, Sultan Kudarat, and Sarangani following the magnitude 7.8 earthquake. To drive enterprise transformation, we are actively developing an AI-native workforce by equipping our employees with AI capabilities. We have launched persona-based learning pathways to build skills from foundational AI literacy to advanced solution development. We also delivered targeted enablement programs, including design thinking workshops, tool consultations, and hands-on technical sessions to accelerate practical AI adoption across the organization. Globe has also achieved the ISO 27001-2022 certification for our information security management system. This milestone expands our coverage to include corporate governance, information security implementation, and core data center management, building upon our existing ISO 27,001 certification for internet data centers. Furthermore, Globe was once again recognized in the Fortune Southeast Asia 500 List and Time World's Most Sustainable Companies, 2026. Globe maintained its status as a supplier engagement leader in the CDP supplier engagement assessment. We were also honored in the 2026 Standard Insights Consumer Choice Awards as the most sustainable mobile network, most active mobile network for the environment, and for excellence in digital literacy and safety. Turning to globe's digital platform businesses, starting with STTGDC Philippines. Three months ago, the company shared that it is no longer just building for the present. It is actively architecting the future of the Philippine digital economy. Today, as we review our progress, we are proud to show you that we are delivering on that exact promise to meet global demand. However, while we are incredibly proud of our execution, we remain grounded. We understand that in the context of the global AI revolution, we are just at the starting line. The foundation is set, but our real journey begins now. Execution remains our primary currency. At STT Fairview 1, Level 1 is officially 100% sold out. With Level 2 commissioning underway, strong customer pool has already pushed us into the design phases for Levels 3 and 4. Over at STT Cavite 2, Phase 1 is fully ready for service with active customer deployment, prompting us to initiate design for Phase 2. Across all sites, this keeps us squarely on track to surpass 30 megawatts of total capacity by the end of this year. Crucially, we are scaling this physical footprint sustainably and securely. With major regulatory catalysts like Executive Order 119, the National Data Sovereignty Directive, enforcing strict local data residency rules, we anticipate accelerated demand from government and enterprise partners who must keep critical workloads on Philippine soil. To power these high-density AI workloads cleanly, Our Fairview and Cavite campuses are backed by long-term renewable energy partnerships, paired with incorporating close-loop water recycling systems, effectively moving the company towards a carbon-neutral operation by 2030. Having capacity ready is only half the equation. We must also help our local market prepare to adopt and leverage it. This commitment to responsible, state-of-the-art infrastructure directly shapes how we engage and lead our local market. And being an industry leader means doing more than just pouring concrete and deploying servers. In April, we hosted our Mind the Gap media briefing right in our Makati site. We recognized that to truly enable Philippine organizations to become AI ready, we have a responsibility to accelerate local market understanding and adoption. Through deep conversations with business leaders, a clear theme emerged. The biggest barriers to realizing AI ambitions are talent availability and infrastructure readiness. More importantly, we learned that though cost will always be a factor, The true priority of businesses revolves around strict compliance in line with sovereignty regulations, which fundamentally shapes where and how their AI models must be deployed. We are positioning ourselves not just as a vendor, but as their partner. This localized consultative approach is perfectly matched by our growing global credibility. Building on our momentum from NVIDIA GTC, our team traveled to Taiwan in June for Computex 2026. There, we engaged in rich discussions with industry leaders and global innovators who are actively looking to expand their AI workloads into the Southeast Asian region. We successfully spotlighted the Philippines as a strong, highly viable market for their deployment roadmap. Perhaps most validating of all, STTGDC Global Data Centers was proudly highlighted as a key infrastructure partner within the NVIDIA ecosystem, effectively acknowledged today as an AI-ready infrastructure provider. To close, we are delivering the capacity we promised We are powering that capacity sustainably. We are actively educating and enabling our local market. And through our global shareholders in STTGDC, we are also recognized on the global stage by the biggest technology players in the world. STTGDC Philippines has successfully established its base. But we approach the coming quarters with grounded ambition, fully aware that building the digital backbone of a nation is a marathon, not a sprint. The digital economy is moving fast. And while we are proud of our milestones, We know this is just the beginning of the impact we will make. Moving on to Mint. Before we proceed with the usual highlights, let us turn our attention to this short video detailing how GCash grew from an SMS money transfer service of Globe Telecom to the super app it is today.

Big things don't always start big. Sometimes they start with a text carrying support, opportunity, a way forward. One simple patala and possibility moves. One text became a transaction. A transaction became a network. And the network became part of everyday life. One place to pay, save, borrow, invest. Different needs moving as one. When the world stood still, GCash kept moving. Across homes, across islands. From one Filipino to another. What began here now reaches the world. Connecting millions of people. And possibilities still grow. And it still begins with one small signal. Ready to become something bigger. The next possibility starts now.