PLDT Earnings Call Highlights Growth Amid Debt Focus

PLDT, Inc. ((PHI)) has held its Q4 earnings call. Read on for the main highlights of the call.

PLDT, Inc.’s latest earnings call struck a cautiously upbeat tone, as management emphasized resilient operations, record performance in key segments, and a long-awaited turnaround at digital bank Maya. While higher interest and depreciation costs weighed on headline profits, the company projected confidence in its deleveraging roadmap, disciplined CapEx, and ability to keep free cash flow positive.

Steady Revenue Expansion and Firm EBITDA Margins

PLDT posted gross service revenues of PHP 212.2 billion in 2025, up 2% year on year, with consolidated service revenues rising 1% to PHP 196.2 billion. EBITDA excluding MRP increased 3% to PHP 111.2 billion, and the margin held at a solid 52%, underscoring pricing discipline and cost control despite macro and competitive pressures.

Home Fiber Reaches Record Revenues and Subscriber Scale

The Home segment remained a cornerstone, delivering a record PHP 61.0 billion in revenues, up 3% year on year, with fiber revenues climbing 6% to PHP 59.4 billion. Net fiber additions nearly doubled to 392,000, lifting the base to 3.76 million subscribers, while ARPU stayed stable at PHP 1,447 and churn remained manageable at 1.82%.

Enterprise and ICT Drive Next Leg of Growth

Enterprise revenues reached an all-time high of PHP 48.4 billion, reflecting healthy demand from corporate and government clients. ICT revenues surged 25% year on year, fueled by a 211% jump in managed IT services and 15% growth in data center colocation, with Q4 enterprise revenues up 5% quarter on quarter on the back of new contract wins.

Maya’s Turnaround Marks a Strategic Milestone

Digital bank and fintech platform Maya swung to full-year profitability, delivering PHP 1.7 billion in net income after a PHP 2.5 billion loss the prior year. Deposits grew about 72% to roughly PHP 68 billion, while total loans disbursed since 2022 reached PHP 256 billion, with a reported gross NPL ratio of 6.1% as the loan book seasons and new products scale.

VITRO Data Centers and Pilipinas AI Position PLDT for AI Wave

Data center arm VITRO reported a 36% rise in colocation demand, with rack deployments up 19% as enterprises shifted more workloads to hosted infrastructure. The new VITRO Santa Rosa site, launched in April 2025, already runs NVIDIA GPU servers and live AI workloads, positioning PLDT as an infrastructure partner for hyperscalers and public sector AI and cloud projects.

CapEx Discipline Supports Positive Free Cash Flow

PLDT stepped down capital spending to PHP 60.3 billion from PHP 78.2 billion, cutting CapEx intensity to 28% from 38% while still funding network and data center investments. This tighter spending profile helped the company maintain positive free cash flow through 2025 and underpins its ability to fund dividends while working down leverage.

Cost Controls and Operating Efficiency Underpin Margins

Cash operating expenses, subsidies, and provisions edged down 1% to PHP 84.9 billion, reflecting a sharper focus on efficiency. The largest savings came from compensation and benefits, down 6%, and selling and promotions, down 9%, supporting a PHP 1.2 billion reduction in operating costs and contributing to EBITDA growth.

Dividends and Balance Sheet Remain Shareholder-Friendly

The board declared total dividends of PHP 94 per share for 2025, including a final PHP 46 per share payout, translating into a trailing yield near 8%. Management also pointed to PLDT’s investment-grade ratings with stable outlooks, suggesting room to balance shareholder returns with ongoing funding for growth and debt reduction plans.

Profitability Pressured by Depreciation and Financial Costs

Despite solid operating trends, telco core income declined 3% to PHP 33.9 billion, as higher depreciation and financing costs weighed on bottom-line results. Reported income fell 7% to PHP 30.0 billion, as lower foreign exchange and derivative gains versus the prior year further dragged on headline profit metrics.

Rising Interest Costs and Leverage Under Scrutiny

Net debt stood at PHP 284.7 billion, translating to a net debt-to-EBITDA ratio of 2.56 times and interest cover of 3.3 times, levels investors will watch closely. Interest expense rose sharply, driven by roughly 35% from higher rates, around 40% from a larger loan balance and about 25% from lease accretion, with management targeting a gradual move toward about 2.0 times net debt-to-EBITDA.

Calamity-Driven Disruptions Hit Home’s Quarterly Momentum

Home segment revenues were flat quarter on quarter in Q4 as two earthquakes and four super typhoons disrupted installations and forced the redeployment of field resources. Management cited around 293,000 PLDT-affected homes and about 22 million people impacted by these events, highlighting the operational vulnerability of network-heavy businesses to natural calamities.

Maya’s Q4 Volatility and Higher Provisioning Costs

Maya’s contribution to PLDT’s Q4 earnings dipped due to non-operating and one-off items, including fair value adjustments and foreign exchange movements. The launch of new credit card products also prompted higher provisioning levels versus prior periods, signaling a more conservative stance as the platform expands its credit footprint.

Slow Initial Take-Up at New Hyperscale Data Center

The flagship VITRO Santa Rosa hyperscale data center, with a cited total capacity of 36 MW, had committed sales of about 6 MW so far, implying relatively modest early utilization. Management suggested that a more meaningful ramp will depend on the conversion of the existing pipeline and potential government data localization initiatives that could draw in more hyperscale and enterprise customers.

Potential REIT Offers Partial Data Center Value Unlock

PLDT is studying a potential REIT offering for eight existing data centers, excluding VITRO Santa Rosa, as a way to crystallize value and recycle capital. Proceeds from any such transaction would be earmarked primarily for debt repayment, meaning investors could see balance sheet benefits even if only part of the data center portfolio is monetized initially.

Non-Operating Items and FX Sensitivity Affect Reported Results

Management noted that reported income was hurt by lower foreign exchange and derivative gains relative to 2024, underscoring PLDT’s sensitivity to market movements outside core operations. These non-operating swings masked underlying operational improvements and contributed to the year-on-year decline in reported earnings.

Monitoring Credit Quality as Maya Scales Lending

While Maya’s profitability and loan growth are key positives, its gross NPL ratio of 6.1% underscores the need for vigilant credit risk management as the book expands. With new credit card and lending products ramping, investors will be watching how PLDT balances growth, provisioning, and asset quality to avoid eroding the gains from Maya’s turnaround.

Guidance and Outlook: CapEx, Deleveraging, and Free Cash Flow

For 2026, PLDT guided to CapEx in the mid-PHP 50 billion range, roughly PHP 53–57 billion, aiming to sustain positive free cash flow and start meaningful deleveraging in the second half of the year. Management outlined an illustrative scenario with EBITDA of about PHP 111 billion, CapEx of around PHP 55 billion, interest and taxes of roughly PHP 24 billion, dividends of about PHP 21–22 billion, and at least PHP 10 billion in potential debt reduction, supported by asset monetization including a possible data center REIT.

PLDT’s earnings call painted a picture of a telecom and digital platform in transition, balancing incremental growth with heavier financing costs and weather-related disruptions. For investors, the story hinges on whether management can execute on deleveraging, ramp up data center utilization, and manage Maya’s credit risks while preserving generous dividends and steady free cash flow.