Turkcell Earnings Call Highlights Growth, Data Center Push

Turkcell Iletisim Hizmetleri As ((TKC)) has held its Q4 earnings call. Read on for the main highlights of the call.

Turkcell Iletisim Hizmetleri As struck an upbeat tone on its latest earnings call, underscoring broad-based growth in revenues, profits and subscribers alongside rising contributions from digital, techfin and data center activities. Management acknowledged rising competition, FX exposure and future margin pressures, but argued that strong execution, strategic partnerships and a solid balance sheet leave the group well positioned.

Strong Revenue and Profit Growth

Turkcell reported full-year revenues up 11% to more than TRY 241 billion, with fourth-quarter sales up 7% to TRY 63 billion, underscoring resilient demand in its core markets. EBITDA expanded even faster, rising 14% to TRY 104 billion with a margin around 43%, while net income from continuing operations climbed 23% to TRY 17.8 billion.

Robust Subscriber Momentum and ARPU Expansion

Subscriber metrics were a standout, with a record 905,000 postpaid net adds in Q4 and 2.4 million for the year, the strongest intake in over two decades. The postpaid mix rose to 81% and mobile ARPU delivered 5.4% real growth, while churn eased to 2.7%, indicating improving customer loyalty despite market pressures.

Fixed Broadband and Fiber Performance

In fixed broadband, Superonline added 119,000 fiber subscribers over the year, taking the fiber base to 2.6 million users. Fiber home pass reached 6.3 million with a solid 42% take-up ratio, and residential fiber ARPU advanced 10.3% year on year, showing steady monetization of the expanding network.

Data Center, Cloud Scaling and Google Partnership

The data center and cloud segment delivered 32% revenue growth and now operates 50 MW of active capacity, with a long-term plan to double that by 2032. Management expects data center and cloud revenues to increase roughly sixfold in U.S. dollar terms by 2032, supported by a new hyperscale region partnership with Google Cloud and meaningful EBITDA contributions starting in 2026.

Digital Services and Techfin Momentum

Digital business services revenues grew 30% to TRY 7 billion, backed by a system integration backlog of TRY 6 billion that underpins future activity. Techfin also gained traction, with Paycell’s Q4 revenues up 40% year on year and non-group volumes rising, taking overall techfin revenues to 6% of consolidated sales, or about TRY 2.4 billion.

Strong Balance Sheet and Shareholder Returns

Turkcell highlighted a powerful balance sheet, ending the year with TRY 92 billion in cash, net debt of just TRY 15 billion and net leverage at 0.1 times. The company distributed 72% of net income from continuing operations and launched a three-year buyback program, while keeping CapEx intensity at 22.6% as it invests for growth.

Renewable Energy Expansion and Cost Savings

The group continued scaling its solar portfolio, reaching about 62 MW of active capacity and 164 MW installed across eight cities. These renewable investments generated TRY 156 million in operating expense savings during the year and support both energy resilience and Turkcell’s long-term emissions goals.

5G Spectrum, Network Leadership and Infrastructure

Turkcell secured the largest spectrum allocation in the national 5G auction, reinforcing its ambition to lead in next-generation mobile services. An infrastructure agreement with BOTAS enhances its fiber footprint, while planned investments in 5G, data centers and renewables are reflected in an expected operational CapEx intensity around 25%.

Elevated Competition and High Number Portability

Management flagged intense market competition in 2025, alongside record-high mobile number portability that increased customer switching. Turkcell responded with active pricing and customer-centric initiatives to defend market share, and its strong postpaid additions suggest these measures are gaining traction.

FX Position and Reduced Hedging Exposure

The company now carries a short U.S. dollar position close to US$1 billion as it scaled back expensive hedging, increasing sensitivity to any renewed lira weakness. FX debt stands at about US$3.4 billion versus FX financial assets of US$1.9 billion plus derivatives, and management ultimately targets a larger, but controlled, FX position over time.

Potential Margin Pressure in 2026

While profitability is currently strong, Turkcell guided to a slightly lower EBITDA margin range of 40%–42% for 2026 compared with roughly 43% in 2025. The company cited planned average salary increases, higher 5G-related marketing and sales spending, and possible energy price volatility as key drivers of near-term margin headwinds.

Data Center Growth Normalization and Scale Questions

Investors probed whether the data center business, despite 32% growth, will see decelerating expansion as the base gets larger, with guidance set at 18%–20% growth for 2026. Some also questioned whether the current 50 MW capacity is small relative to hyperscale ambitions, pointing to the need for sustained capital investment from both Turkcell and its partners.

Decline in Certain Financial Revenues

Not all lines moved upward, as financial lending revenues fell 6%, reflecting the impact of a lower interest rate environment on this portion of the portfolio. This shows that while net interest margins improved to 6.3%, some revenue streams remain exposed to macro shifts in rates.

One-Time Accounting Impact from BOTAS Agreement

Reported lease obligations increased due to a one-off accounting effect linked to the long-term BOTAS infrastructure deal. While this inflates lease liabilities on the balance sheet, management presented it as an accounting change rather than a deterioration in underlying financial health.

Guidance and Outlook

For 2026, Turkcell is targeting real revenue growth of 5%–7%, an EBITDA margin of 40%–42% and operational CapEx intensity of about 25% as it invests in 5G, data centers and renewables. The company expects data center and cloud revenues to grow 18%–20% next year with rising EBITDA, while aiming to keep net leverage below one time and continue returning a significant share of earnings to investors.

Turkcell’s earnings call painted the picture of a telecom operator evolving into a broader digital and infrastructure platform while still delivering solid core metrics. For investors, the mix of strong growth, disciplined leverage and rising capital returns looks attractive, but it comes with the usual caveats around competition, currency moves and execution on big-ticket 5G and data center investments.