TURKCELL Iletisim Hizmetleri AS Q1 FY2025 earnings call

• 2025 marks the 25th anniversary of Turkcell's IPO.
• Top-line TRY48 billion, +12.7% YOY; EBITDA TRY21 billion, +19% YOY; net profit TRY3.1 billion.
• Gained 153,000 postpaid and 30,000 fiber customers.
• Techfin segment revenues up 31%, data center/cloud revenues up 48%.
• Mobile postpaid share at 76%, ARPU up 15.9% due to rational pricing, upselling, and expanded postpaid base.
• Fixed broadband added 30,000 net fiber customers; residential fiber ARPU up 17.7%.
• Digital Business Services revenue TRY4 billion, recurring service revenues up 23%, system integration backlog TRY4.9 billion.
• Data center/cloud plans to add 2 new modules by year-end, with total investments at EUR528 million.
• Techfin: Paycell revenue up 47.8%, Financell revenue up 8.2%, Net interest margin 4.7%.

Turkcell's first quarter 2025 saw top-line reach TRY48 billion, up 12.7% YOY. EBITDA was TRY21 billion, up 19% YOY, with a margin of 43.7%. Net profit was TRY3.1 billion. Mobile side: Postpaid share reached an all-time high of 76% with 153,000 net postpaid additions quarter-on-quarter and 1.6 million YOY; ARPU grew 15.9%. Fixed broadband: Added 30,000 net fiber customers; residential fiber ARPU grew 17.7%; share of 100 MB plus packages exceeded 46%. Techfin segment revenues surged 31%. Data center and cloud revenues grew 48%. Digital Business Services achieved revenue of TRY4 billion, with recurring service revenues up 23% and system integration project backlog at TRY4.9 billion.

• Firmly standing by 2025 guidance.
• CPI expectation revised to 35% year-end.
• 5G spectrum auction expected in 2025, service live in 2026.
• Anticipate leverage staying below 1 times in 2025.

• Macro-economic tensions impacting financials.
• Competitive landscape affecting subscriber additions.
• Currency volatility and its impact on balance sheet.
• Uncertainties around 5G spectrum pricing and regulatory conditions.

Q: On revenue performance, how does price increase spread and compare to competitors?

A: Turkcell's revenue growth comes from diverse services, upselling, and growing subscriber base; competition intensified but Turkcell focuses on ARPU and revenue growth.

Q: Update on 5G process?

A: No official timeline from regulator yet; spectrum auction expected in 2025, service live in 2026; Turkcell is ready with 4.5G infrastructure and 5G coverage in certain areas.

Q: Beat guidance in Q1, any update to guidance?

A: Currently sticking to 2025 guidance, but CPI expectation revised to 35% year-end.

Q: Subscriber numbers, strategy going forward?

A: Postpaid net additions affected by competition; fixed subscriber base at 3.3 million, 30k net fiber additions; focus on fiber investment and reselling competitors' fiber in areas without own infrastructure.

Q: Data center CapEx plan?

A: 24% of CapEx in Q1 for data centers, plan to reduce to 13% by year-end; investing in fiber and mobile infrastructure too.

Q: Effective tax side, deferred tax expense?

A: Deferred tax expense due to differences in inflationary accounting principles; next quarters not expected to have significant tax effect.

Q: TOGG investment, capital increase?

A: TOGG financing planned; Turkcell made capital contributions, will evaluate capital increase if needed; investment seen as part of e-mobility ecosystem.

Q: FX risk management, resilience?

A: Strong balance sheet, 87% cash in hard currency, hedging $388 million; net FX position $76 million, managed to limit impact of currency movements.