VEON Ltd. (VEON) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary presents a mixed but generally positive outlook. Despite a Q3 EPS loss due to noncash charges, the company shows strong revenue growth, improved leverage, and significant digital revenue expansion. The Q&A section highlights strategic asset management and growth plans, particularly in fintech and digital services. Positive market reaction is likely due to increased guidance, strong cash flow, and strategic expansions, offsetting the EPS loss. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8%.
Key Financial Performance
Revenue Revenue grew 7.5% year-on-year in U.S. dollar terms. On a like-for-like basis, adjusting for deconsolidation of TNS+, Uklon acquisition, and the sale of Deodar and Kyrgyzstan business, revenues grew 10%. This growth reflects continued momentum across operating markets.
EBITDA EBITDA increased by 19.7% year-on-year in U.S. dollar terms. The EBITDA margin stood at 47% for the quarter, up 410 basis points year-on-year, supported by operating leverage and disciplined cost management across all markets.
Direct Digital Revenues Direct digital revenues grew 63% year-on-year to reach $198 million, now contributing 17.8% of total group revenues. Growth was driven by financial services, entertainment, ride-hailing, enterprise, and premium digital brand segments.
EPS (Earnings Per Share) Last 12-month EPS stands at $8.89, up 60.2% year-on-year. However, Q3 reported EPS was a loss of $1.84 per share due to two noncash charges totaling $259 million related to SPAC sponsor shares and the sale of Kyrgyzstan business.
Net Debt Net debt, excluding leases, stood at $1.72 billion as of September, with leverage improving to 1.13x EBITDA. This reflects operational and financial discipline and the success of the asset-light strategy.
Equity Free Cash Flow Last 12 months equity free cash flow reached $584 million, showcasing strong cash generation.
CapEx Intensity Last 12 months CapEx intensity, excluding Ukraine, was 17.7%, in line with guidance.
JazzCash (Financial Services in Pakistan) Gross transaction value rose 40% year-on-year, representing 13% of Pakistan's GDP on a last 12-month basis. This was driven by a 48% increase in total transactions and a 38% increase in transactions per user.
Multiplay Customers Multiplay customers generated 55.4% of total customer revenues, growing revenue-wise by 23% year-on-year. These customers generate 3.8x the ARPU of a voice-only subscriber.
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Operating Highlights
Digital Services Growth: Monthly digital service users surpassed telecom SIM card users for the first time. Direct digital revenues grew 63% year-on-year in USD terms, contributing 17.8% of total group revenues. AI-powered solutions and super app platforms are central to this growth.
AI Integration: AI 1440 strategy is central to operations, with large language models and agentic AI-powered solutions being integrated into customer-facing platforms. AI is driving engagement in entertainment, customer care, and enterprise solutions.
Market Expansion: Completed the sale of Kyrgyzstan operations to focus on core growth markets. Partnered with Starlink for satellite connectivity in all operating markets. Kyivstar and Beeline Kazakhstan are expanding services with nationwide coverage and testing activities.
Digital Ecosystem Expansion: Digital-only user base doubled to 50 million, representing 35% of total digital users. Financial services platforms like JazzCash in Pakistan are scaling rapidly, contributing significantly to the digital ecosystem.
Revenue and Profitability: Revenue grew 7.5% year-on-year in USD terms, with EBITDA increasing by 19.7%. EBITDA margin expanded by 410 basis points year-on-year to 47%.
Cost Efficiency: Operational and financial discipline improved leverage to 1.13x EBITDA. Asset-light strategy and cost management supported margin expansion.
Asset-Light Strategy: Streamlined portfolio by selling Kyrgyzstan operations and focusing on core markets. Partnered with Starlink for resilient connectivity.
Shareholder Value: Listed Kyivstar on NASDAQ, unlocking significant value. Approved a $100 million share and/or bond repurchase program.
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Risk or Challenges
Regulatory Approvals: Kyivstar's nationwide coverage launch is contingent on receiving necessary regulatory approvals, which could delay or hinder the rollout.
Geopolitical Challenges: Ongoing macro and geopolitical challenges, particularly in Ukraine, could impact operations and financial performance.
Currency Fluctuations: Revenue and EBITDA growth projections are sensitive to significant fluctuations in exchange rates, which could adversely affect financial outcomes.
Tax Effects: Profitability trends in Kazakhstan and Uzbekistan were impacted by tax effects, which could pose challenges to organic profitability.
Noncash Charges: The company recorded noncash charges totaling $259 million, including $162 million related to SPAC sponsor shares and $97 million for the Kyrgyzstan business sale, impacting reported EPS.
Bangladesh Market Performance: Revenue growth in Bangladesh has been weak, with only a recent return to year-on-year growth after 14 months of decline, indicating potential market challenges.
Debt Levels: Gross debt stood at $4.86 billion, with leverage at 1.13x EBITDA, which, while improved, still represents a significant financial obligation.
Digital Margins: Digital services, while growing, have structurally lower margins compared to telecom services, which could impact overall profitability.
Macroeconomic Risks: The company operates in markets with high inflation rates, averaging 8.2%, which could pressure costs and pricing strategies.
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Guidance & Outlook
Fiscal Year 2025 EBITDA Outlook: VEON has raised its fiscal year 2025 EBITDA outlook to 16% to 18% growth in local currency terms, up from the previous guidance of 14% to 16%.
Revenue Guidance for 2025: The company maintains its revenue guidance of 13% to 15% growth in local currency terms for the full year. In U.S. dollar terms, this translates to 7% to 8% revenue growth, assuming no significant fluctuations in exchange rates.
Capital Intensity: Capital intensity, excluding Ukraine, is expected to remain within the 17% to 19% range for the year.
Digital Revenue Growth: Direct digital revenues grew 63% year-on-year and now contribute 17.8% of total group revenues. Financial services, the largest component, grew 33% year-on-year.
Market-Specific Growth: Strong double-digit revenue growth is expected across all markets except Bangladesh. Revenue in Bangladesh returned to year-on-year growth for the first time in 14 months as of September 2025.
JazzCash Financial Services: JazzCash in Pakistan continues to grow, with gross transaction value rising 40% year-on-year. The platform processes over 80% of all Raast payments under the Prime Minister's Cashless Society initiative.
Digital Ecosystem Expansion: The total monthly active users of VEON's digital platforms grew to 143.3 million, up 39% year-on-year. Digital-only users now represent nearly 35% of total digital users.
AI Integration: VEON is embedding augmented intelligence across its ecosystem, with AI-driven features being integrated into customer engagement, entertainment, and enterprise solutions. AI-powered customer care and recommendation engines are driving significant user engagement.
Share and Bond Repurchase Program: The Board has approved a $100 million share and/or bond repurchase program, reflecting confidence in VEON's growth prospects and long-term value creation.
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Shareholder Return Plan
Share and/or Bond Repurchase Program: The Board has approved another $100 million share and/or bond repurchase program. This decision reflects VEON's confidence in its growth prospects and its commitment to delivering value to investors.
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Key Q&A
Q:What was the motivation for choosing a SPAC structure for Kyivstar's public listing, and how is the company thinking about its future ownership stake?
A:The SPAC structure was chosen for its deal certainty and fast-track listing process. Kyivstar is now listed on NASDAQ with a valuation of $2.8 billion, 2.3x its net equity value. The company is open to diluting its current position to allow more investors, including Ukrainians and international investors, to participate in Kyivstar's growth.
Q:What is the plan for the $653 million cash at VEON headquarters and the $470 million cash at Kyivstar?
A:The $653 million cash at VEON headquarters is being kept safe in assets generating cash or protecting against devaluation. For Kyivstar's $470 million, due to martial law in Ukraine, there are limitations on upstreaming cash, such as a $1 million dividend limit per company. The company plans to invest in Ukraine, focusing on energy resilience, storage, and growth opportunities.
Q:Will VEON pursue divestment of tower assets in Ukraine similar to the Pakistan model?
A:VEON plans to separate tower operations in Ukraine and transfer them to independent tower companies to allow infrastructure sharing among operators. This aligns with their asset-light strategy and aims to increase cash generation capacity.
Q:What are the details of JazzCash and MMBL's financial services in Pakistan?
A:JazzCash and MMBL serve 50 million bank accounts and 22 million monthly active users. They issue 153,000 nano loans daily, averaging $30-$40, supporting small businesses and families. The business is growing at 33% year-on-year, with a merchant network of 700,000 and handling 13% of Pakistan's GDP transactions.
Q:Is VEON looking to extract value from its digital assets in Pakistan?
A:Yes, VEON plans to crystallize the value of its digital services portfolio when it reaches the right scale. Digital services contribute to both telecom business growth and direct digital revenue.
Q:How does VEON manage the trade-off between scale and profitability, and what are the drivers behind the improved EBITDA growth guidance?
A:VEON manages this trade-off through disciplined operational cost management and price increases aligned with market conditions. Improved EBITDA growth is driven by cost efficiencies and disciplined pricing strategies.
Q:Does VEON plan to expand its fintech business to other markets and increase JazzCash penetration?
A:Yes, VEON plans to leverage its fintech expertise in other markets like Bangladesh and Ukraine. It also aims to increase JazzCash penetration by promoting smartphone ownership and embedding digital services.
Q:What are VEON's plans for ride-hailing services, and will they expand to other markets?
A:VEON's ride-hailing business operates in 28 cities and plans to expand to other markets like Kazakhstan and Pakistan. Expansion will be decided city-by-city based on market characteristics.
Q:How does VEON view its market position and growth opportunities?
A:VEON sees significant growth opportunities from connecting unconnected customers and expanding digital services. It aims to provide affordable smartphones with embedded digital services to drive organic growth.
Q:What is the growth trajectory of VEON's financial services business in Pakistan?
A:VEON's financial services business in Pakistan has shown steady growth of 30%-40% per quarter over the last six quarters, with no signs of slowing down.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the specific run rate for JazzCash's EBITDA growth trajectory, providing only general growth trends without precise figures.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI customer
AI enterprise
Bangladesh
Deodar Kyrgyzstan
Financial Services
Kyivstar
TV customer
advertising
basis TNS
basis point
component
connectivity
consolidation
date
debt USD
discipline
effect
footprint
group revenue
intelligence
journey
landmark
layer ecosystem
milestone
momentum market
multiplay segment
news channel
noncash charge
page
profitability trend
revenue dollar
sale Deodar
sale Kyrgyzstan
scale
service user
step
tool
value service
VEON Transcript
VEON Ltd. (VEON) Q1 2026 Earnings Call Transcript
Positive5-13
The earnings call indicates strong financial performance with a 17% revenue and 17.7% EBITDA growth, alongside a 73.4% increase in equity free cash flow. The company's digital operator strategy is contributing significantly to these results. Although forward-looking statements carry risks, the absence of negative trends in Q&A and the ongoing share buyback program support a positive outlook. Given the company's market cap and these strong metrics, a strong positive stock price reaction is anticipated over the next two weeks.
VEON Ltd. (VEON) Q4 2025 Earnings Call Transcript
Positive3-13
The earnings call highlights strong financial performance with raised EBITDA guidance, robust digital revenue growth, and a new share repurchase program. Despite some uncertainties, such as regulatory approvals and margin compression, the company's strategic initiatives in digital services, financial ecosystems, and market expansion are promising. The market cap suggests moderate sensitivity to these factors, leading to a positive outlook.
VEON Ltd. (VEON) Q3 2025 Earnings Call Transcript
Positive11-10
The earnings call summary presents a mixed but generally positive outlook. Despite a Q3 EPS loss due to noncash charges, the company shows strong revenue growth, improved leverage, and significant digital revenue expansion. The Q&A section highlights strategic asset management and growth plans, particularly in fintech and digital services. Positive market reaction is likely due to increased guidance, strong cash flow, and strategic expansions, offsetting the EPS loss. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8%.
VEON Ltd. (VEON) Q2 2025 Earnings Call Transcript
Positive8-7
The earnings call highlights strong revenue growth, strategic partnerships, and a robust digital expansion plan. The Q&A session revealed positive analyst sentiment towards 4G and AI strategies, despite some uncertainties in valuation strategies. The company's solid financial metrics, optimistic guidance, and shareholder return plans, along with strategic partnerships, are likely to positively influence the stock price. Given the market cap, a positive reaction is expected within the 2% to 8% range over the next two weeks.
VEON Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
