VEON — VEON Ltd.

VEON Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $1.115 billion, up 7.5% year-on-year in USD; adjusted for divestments, growth was 10%.
• EBITDA: $524 million, a 19.7% increase year-on-year; EBITDA margin improved to 47%, up 410 basis points.
• Direct Digital Revenues: Grew 63% year-on-year, now accounting for 17.8% of total revenues.
• EPS: Reported loss of $1.84 per share due to non-cash charges totaling $259 million; however, last 12-month EPS stands at $8.89, up 60.2% year-on-year.
• Net Debt: $1.72 billion, with a leverage ratio of 1.13x EBITDA.
• Cash Balance: Ended the quarter with $1.67 billion in cash, including $653 million at headquarters.

2. Strategic Updates and Business Highlights:

• Digital Transformation: Monthly digital service users surpassed telecom SIM card users for the first time, highlighting VEON's transition to a digital operator.
• Asset-Light Strategy: Completed the sale of Kyrgyzstan operations, focusing on core growth markets.
• Kyivstar Listing: Successfully listed on NASDAQ, with a market valuation of $2.8 billion, significantly above its book value.
• Financial Services Growth: JazzCash in Pakistan achieved a gross transaction value increase of 40% year-on-year, with significant growth in digital loans.
• Digital Ecosystem Expansion: Total monthly active users reached 143.3 million, with a doubling of the digital-only user base to 50 million.

3. Forward Guidance and Outlook:

• EBITDA Growth Guidance: Revised to 16% to 18% in local currency terms for FY 2025, up from 14% to 16%.
• Revenue Growth Guidance: Maintained at 13% to 15% in local currency terms, translating to 7% to 8% in USD.
• Capital Expenditure: Expected to remain in the 17% to 19% range, excluding Ukraine.

4. Bad News, Challenges, or Points of Concern:

• Non-Cash Charges: The reported EPS loss was attributed to significant non-cash charges related to the SPAC transaction and the sale of Kyrgyzstan operations.
• Market Risks: Ongoing macroeconomic and geopolitical challenges, particularly in Ukraine, could impact future performance.
• Regulatory Constraints: Limitations on upstreaming dividends from Kyivstar due to martial law in Ukraine, affecting liquidity management.

5. Notable Q&A Insights:

• Kyivstar SPAC Transaction: Management expressed confidence in the decision to pursue a SPAC structure for Kyivstar's listing, emphasizing the importance of fast-tracking investment opportunities in Ukraine.
• Cash Management: The cash at headquarters is strategically held to ensure safety and potential investment in growth opportunities in Ukraine.
• Digital Banking Expansion: Plans to upgrade MMBL to a full digital bank license to enhance capabilities in Pakistan's financial services market.
• Ride-Hailing Business Growth: Potential for expansion into new markets, particularly in Pakistan, following the exit of major competitors.
• Sustainable Growth in Financial Services: Consistent growth in the financial services sector, with expectations for continued performance driven by microloans and digital payment solutions.

Overall, VEON demonstrated strong financial performance and strategic advancements in digital services, while also navigating challenges related to geopolitical risks and regulatory constraints.