Kyivstar Group Q2 Earnings Call Highlights

Kyivstar Group NASDAQ: KYIV reported quarterly revenue of $339 million, up more than 19% year over year, as growth in its telecom operations and expanding digital ecosystem led the company to raise its full-year outlook for a second time. CEO Oleksandr Komarov said EBITDA increased nearly 14% to $188 million, while equity free cash flow rose more than 32% to $104 million. The company’s digital revenue increased 83% year over year to $74 million and represented 21.7% of total revenue, compared with just over 14% a year earlier. “Our telecom core is resilient. Our digital ecosystem keeps scaling,” Komarov said. “The two businesses fit each other.” Telecom and infrastructure revenue rose nearly 9% to $265 million, generating EBITDA of $157 million at a 59% margin. Digital operations produced $31 million in EBITDA, representing a 42% margin. Kyivstar’s mobile subscriber base declined nearly 3% from a year earlier to 21.8 million customers. Komarov attributed the decline primarily to customers discontinuing secondary, lower-revenue SIM cards, as well as demographic trends and seasonality. He said the company’s market share remained steady at approximately 47% based on internal and third-party estimates. Management emphasized customer quality over subscriber volume. Annualized churn declined by almost one percentage point to just over 14%, while mobile average revenue per user, or IRPU, increased more than 11% to $3.90. Monthly data usage per customer rose more than 18% to nearly 15 GB, and 4G penetration exceeded 70%. Fixed broadband customers increased nearly 11% to 1.3 million households. Nearly half of those households also subscribe to Kyivstar TV, according to Komarov. The company reported 8.1 million multi-play customers, up almost 24% year over year. These customers use voice, data and at least one digital application. Multi-play customers generated monthly ARPU of $5.80, compared with $3.90 for mobile-only customers, and also had lower churn, Komarov said. Uklon, Kyivstar’s mobility platform, generated nearly $33 million in quarterly revenue, up more than 50% year over year, and more than $12 million in EBITDA. Active Uklon customers grew 8% to 5.2 million, while rides increased more than 4% to 43 million and deliveries rose almost 26% to 1.4 million. Komarov said Uklon’s reported growth included both underlying expansion in ride-hailing and delivery and a change in accounting treatment that grossed up certain business-to-business revenue. The company has agreed to acquire E-wings, an electric scooter operator serving 11 Ukrainian cities, and is piloting same-day flower delivery through Uklon Store in Kyiv. In healthcare, Helsi served 5 million customers during the quarter and increased revenue nearly 36% to $2.4 million. Premium subscriptions more than doubled from 57,000 at the end of the prior year to more than 109,000, supported by family medical plans, health insights and distri...