Core Insights - Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) is a dividend stock that is benefiting from advancements in AI technology [1] - The company has focused over 80% of its capital expenditures on mobile and fixed networks to enhance its communication service capabilities [2] - Turkcell has a long-standing market presence, maintaining innovative offerings and disciplined expense management for the past 30 years [3] Company Overview - Turkcell Iletisim Hizmetleri A.S. is a Turkish provider of converged telecommunication and technology services, established in 1993 [4] - The company's core offerings include tower and satellite services, fixed data services, international roaming services, and voice services [4] Investment Activity - Rhumbline Advisers reduced its stake in Turkcell by 12.9%, selling 21,761 shares, and now holds 146,534 shares valued at approximately $911,000 [1]

ISTANBUL--(BUSINESS WIRE)--Turkcell (NYSE: TKC) (BIST: TCELL), Turkey's leading communications and technology company, has been ranked as the global leader in ESG (Environmental, Social, Governance) sustainability ratings by the London Stock Exchange Group (LSEG), thanks to its pioneering efforts in sustainability and environmental initiatives. Among 286 telecom companies worldwide, Turkcell achieved the highest ESG score in its sector. The LSEG ESG score, a primary criterion for investors, is. ...

Group 1 - Turkcell has been named to TIME's list of World's Best Companies 2025, highlighting its recognition in the global market [1] - The evaluation covered over 200,000 participants across 50 countries, indicating a comprehensive assessment process [1] - Companies were assessed based on employee satisfaction, revenue growth, and ESG (environmental, social, and governance) performance [1]

[HIGHLIGHTS](index=4&type=section&id=HIGHLIGHTS) [Financial Highlights](index=5&type=section&id=FINANCIAL%20HIGHLIGHTS) Turkcell Group reported solid Q2 and H1 2025 financial performance, with strong revenue, EBITDA, and EBIT growth | TRY million | Q224 | Q225 | y/y% | H124 | H125 | y/y% | | :---------- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 47,150 | 53,022 | 12.5% | 92,274 | 103,866 | 12.6% | | EBITDA | 20,105 | 23,086 | 14.8% | 38,777 | 45,304 | 16.8% | | EBITDA Margin (%) | 42.6% | 43.5% | 0.9pp | 42.0% | 43.6% | 1.6pp | | EBIT | 6,322 | 8,818 | 39.5% | 11,479 | 17,525 | 52.7% | | EBIT Margin (%) | 13.4% | 16.6% | 3.2pp | 12.4% | 16.9% | 4.5pp | | Net Income | 3,922 | 4,201 | 7.1% | 7,779 | 7,468 | (4.0%) | [Second Quarter Highlights](index=5&type=section&id=SECOND%20QUARTER%20HIGHLIGHTS) Turkcell achieved strong Q2 2025 financial and operational results, driven by significant revenue and profit growth - First installment of dividend, amounting **TRY4.0 billion**, was distributed to shareholders on June 20, 2025[15](index=15&type=chunk) - Group revenues increased by **12.5% year-on-year**, primarily due to Turkcell Türkiye's strong ARPU growth, increased hardware revenues, and **23.1% growth** in the Techfin segment[15](index=15&type=chunk) - Data Center & Cloud business grew by **53.2% year-over-year**[15](index=15&type=chunk) - EBITDA increased by **14.8% to TRY23.1 billion**, with the EBITDA margin improving by **0.9 percentage points** year-on-year to **43.5%**[17](index=17&type=chunk) - Net leverage level stood at **0.29x**, and the net short FX position was **US$102 million**, within the neutral FX definition[15](index=15&type=chunk) - Recorded the highest mobile postpaid net additions in 5.5 years (**816 thousand**), increasing postpaid subscriber base share to **78%**[15](index=15&type=chunk) - Mobile ARPU (excluding M2M) grew by **9.8%**, and residential fiber ARPU grew by **17.5%**[15](index=15&type=chunk) - Added **67 thousand new fiber homepasses** this quarter, bringing total homepasses to **6.1 million**[15](index=15&type=chunk) [COMMENTS BY CEO, ALİ TAHA KOÇ, PhD](index=6&type=section&id=COMMENTS%20BY%20CEO%2C%20AL%C4%B0%20TAHA%20KO%C3%87%2C%20PhD) [Delivering Strong Results in the Second Quarter of 2025](index=6&type=section&id=Delivering%20Strong%20Results%20in%20the%20Second%20Quarter%20of%202025) CEO Ali Taha Koç highlighted Turkcell's robust Q2 2025 performance, driven by infrastructure and investments - Consolidated revenues in Q2 2025 rose **12.5% year-on-year to TRY53.0 billion**[17](index=17&type=chunk) - EBITDA increased **14.8% to TRY23.1 billion**, with the EBITDA margin improving by **0.9 percentage points** year-on-year to **43.5%**[17](index=17&type=chunk) - Net income grew **7.1%** compared with the previous year, reaching **TRY4.2 billion**[17](index=17&type=chunk) [Healthy Growth Driven by Outstanding Subscriber Net Additions and Strong ARPU Performance](index=6&type=section&id=Healthy%20Growth%20Driven%20by%20Outstanding%20Subscriber%20Net%20Additions%20and%20Strong%20ARPU%20Performance) Turkcell achieved significant mobile postpaid subscriber growth and ARPU increases in Q2 2025, driven by offers - Achieved **816 thousand net postpaid mobile subscriber additions** in Q2, the highest in five and a half years[18](index=18&type=chunk) - Postpaid subscribers now represent **78% of the total mobile base**, a **5 percentage point increase** year-on-year[18](index=18&type=chunk) - Mobile ARPU (excluding M2M) rose by **9.8% year-on-year**[18](index=18&type=chunk) - Connected **67 thousand new households** to end-to-end fiber infrastructure, with residential fiber ARPU increasing by **17.5% year-on-year**[19](index=19&type=chunk) [Paycell: Driving Growth in the Techfin Segment](index=6&type=section&id=Paycell%3A%20Driving%20Growth%20in%20the%20Techfin%20Segment) Paycell led the Techfin segment's strong Q2 2025 growth, significantly contributing to consolidated revenues - Techfin business grew by **23.1% in Q2**, accounting for **6% of consolidated revenues**[20](index=20&type=chunk) - Paycell achieved revenue growth of **35.8%**, primarily driven by increased volume in its POS business and new customer additions[20](index=20&type=chunk) - Financell's revenues rose **4.7% year-on-year**, with net interest margin (NIM) improving by **2.9 percentage points to 4.9%**[21](index=21&type=chunk) [Leading Türkiye's Tech and Communications Landscape with a Clear Sense of Responsibility](index=7&type=section&id=Leading%20T%C3%BCrkiye's%20Tech%20and%20Communications%20Landscape%20with%20a%20Clear%20Sense%20of%20Responsibility) Turkcell leads Türkiye's tech and communications by investing in data centers and cloud, achieving revenue growth and diversifying debt - Data center and cloud revenues rose by a solid **53.2% year-on-year**[22](index=22&type=chunk) - Signed murabaha financing agreements with leading financial institutions in the Gulf region, diversifying the debt portfolio[23](index=23&type=chunk) [FINANCIAL AND OPERATIONAL REVIEW](index=7&type=section&id=FINANCIAL%20AND%20OPERATIONAL%20REVIEW) [Financial Review of Turkcell Group](index=7&type=section&id=FINANCIAL%20REVIEW%20OF%20TURKCELL%20GROUP) Turkcell Group's Q2 2025 financial performance was strong, with revenue growth driven by Turkcell Türkiye and Techfin | Profit & Loss Statement (million TRY) | Q224 | Q225 | y/y% | H124 | H125 | y/y% | | :------------------------------------ | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 47,150.2 | 53,021.9 | 12.5% | 92,273.9 | 103,865.5 | 12.6% | | Cost of revenue | (22,041.1) | (24,311.2) | 10.3% | (43,925.1) | (47,202.5) | 7.5% | | Gross Margin | 53.3% | 54.1% | 0.8pp | 52.4% | 54.6% | 2.2pp | | Administrative expenses | (1,617.2) | (1,975.4) | 22.1% | (3,317.0) | (4,095.9) | 23.5% | | Selling and marketing expenses | (3,047.8) | (3,341.5) | 9.6% | (5,621.4) | (6,749.5) | 20.1% | | EBITDA | 20,104.6 | 23,085.8 | 14.8% | 38,776.7 | 45,303.9 | 16.8% | | EBITDA Margin | 42.6% | 43.5% | 0.9pp | 42.0% | 43.6% | 1.6pp | | EBIT | 6,321.9 | 8,817.9 | 39.5% | 11,478.7 | 17,524.8 | 52.7% | | EBIT Margin | 13.4% | 16.6% | 3.2pp | 12.4% | 16.9% | 4.5pp | | Net finance income / (costs) | (2,011.5) | (1,341.2) | (33.3)% | (1,776.1) | (1,720.8) | (3.1)% | | Profit from continuing operations | 3,207.3 | 4,387.9 | 36.8% | 6,264.8 | 7,655.2 | 22.2% | | Net Income | 3,922.3 | 4,200.

Core Viewpoint - Turkcell Iletisim Hizmetleri A.S. reported strong financial results for Q2 2025, with a notable year-on-year growth in revenue driven by increased average revenue per user (ARPU) and a growing mobile subscriber base, particularly in the postpaid segment [3]. Financial Performance - The company's revenue reached TRY 53 billion, reflecting a year-on-year growth of 12% [3]. - The growth was primarily attributed to strong ARPU performance and significant expansion in the mobile subscriber base, especially in the postpaid domain [3]. Conference Call Overview - The conference call included key participants such as the CEO, CFO, and the Investor Relations Director, who provided insights into the operational and financial results for the quarter [2]. - The call was structured to include an overview of results followed by a Q&A session, indicating a focus on transparency and engagement with investors [2].

Financial Data and Key Metrics Changes - The company's top line reached TRY 53 billion, reflecting a year-on-year growth of 12% [4] - Group EBITDA rose by 15% year-on-year to TRY 23 billion, with a solid margin of 43.5% [5] - Net income from continuing operations increased by 37% year-on-year to TRY 4.4 billion [5][21] Business Line Data and Key Metrics Changes - The mobile segment saw 816,000 postpaid net additions, the highest in over five years, with mobile ARPU increasing by 9.8% year-on-year [6][7] - Fixed broadband subscriber base remained stable at 3.3 million, with residential fiber ARPU increasing by 17.5% year-on-year [12] - Digital Business Services grew by 39%, exceeding TRY 4.9 billion in revenue, while data center and cloud services surged by 53% [13][14] Market Data and Key Metrics Changes - The mobile churn rate was 2.2%, influenced by high volumes in the mobile number portability market due to competition [8] - The postpaid share in total mobile subscribers reached 78%, indicating a focus on value-added subscribers [7] Company Strategy and Development Direction - The company is committed to maintaining its leadership position in the mobile market through superior network quality and customer experience [9] - Investments are being made in both mobile and fixed infrastructure to support the upcoming 5G deployment, with a focus on digital transformation [9][33] - Approximately 65% of the CapEx budget will be allocated to fixed and mobile businesses, with additional investments in data centers and renewable energy [34] Management's Comments on Operating Environment and Future Outlook - Management expects a moderation in performance in the second half of the year, forecasting year-on-year inflation at 30.5% [17] - The company remains cautious about its guidance, considering the high base effect from the previous year and the impact of price adjustments [42][44] Other Important Information - The company’s cash position reached TRY 117 billion, with gross debt at TRY 173 billion, resulting in a net debt position of TRY 25 billion [25][26] - The company has a strong foreign currency risk management strategy, with 87% of cash holdings in hard currency [27] Q&A Session Summary Question: Update on fixed concession and 5G - Management indicated that the Minister of Transport and Infrastructure mentioned a potential renewal of Turk Telekom's concession for 25 years, and they are awaiting details on the 5G tender expected to be available by 2026 [31][32] Question: Guidance evaluation for the second quarter - Management explained that strong first-half performance provides headroom for guidance, but they remain cautious due to expected inflation and high base effects from the previous year [42][44] Question: Future of the TOG project and its impact on profits - Management acknowledged the cyclical nature of the automotive industry and indicated that TOG will take time to reach sustainable profitability, but they remain confident in the long-term value of the investment [45][47] Question: Increase in financing costs and income - Management highlighted effective balance sheet management, noting a net positive income from FX management, and indicated that they are managing their financing costs well despite high interest rates [50][51] Question: Impact of entering the mobile market - Management stated that there is currently no clear information regarding entering the mobile market and emphasized their strong competitive position in the existing mobile services [55][56]

Financial Data and Key Metrics Changes - The company's top line reached TRY 53 billion, reflecting a year-on-year growth of 12% [4] - Group EBITDA rose by 15% year-on-year to TRY 23 billion, with a solid margin of 43.5% [5] - Net income from continuing operations increased by 37% year-on-year to TRY 4.4 billion [5][21] Business Line Data and Key Metrics Changes - The mobile segment saw 816,000 postpaid net additions, the highest in over five years, with mobile ARPU increasing by 9.8% year-on-year [6][7] - Fixed broadband segment remained stable with 3.3 million subscribers, while residential fiber ARPU increased by 17.5% year-on-year [13] - Digital Business Services grew by 39%, exceeding TRY 4.9 billion in revenues, driven by recurring service revenues [14] Market Data and Key Metrics Changes - The mobile churn rate was 2.2%, influenced by high competition in the mobile number portability market [8] - The share of high-speed packages in the fixed broadband segment increased by 16 percentage points year-on-year [13] Company Strategy and Development Direction - The company is committed to maintaining its leadership position in the mobile market through investments in 5G and digital transformation initiatives [9][10] - A focus on customer experience and dynamic pricing practices is emphasized to enhance retention and competitive positioning [11][12] Management Comments on Operating Environment and Future Outlook - Management expects a moderation in performance in the second half of the year, forecasting year-on-year inflation at 30.5% [18] - The company remains cautious about its guidance, considering the high base effect from the previous year and inflation dynamics [42][43] Other Important Information - CapEx intensity for the quarter was 16.9%, with over 80% allocated to mobile and fixed networks [23] - The company’s cash position reached TRY 117 billion, with a net debt position of TRY 25 billion at the end of the quarter [25] Q&A Session Summary Question: Update on fixed concession and 5G - Management indicated that the Minister of Transport and Infrastructure mentioned a potential renewal of Turk Telekom's concession for 25 years, with a goal for 5G services to be available by 2026 [31][32] Question: Guidance for the second half of the year - Management stated that strong first-half performance provides headroom for guidance, but expects growth to taper off due to contract structures and inflation [42][43] Question: Future of the TOG project and its impact on profits - Management acknowledged the cyclical nature of the automotive industry and indicated that TOG will take time to reach sustainable profitability, but remains confident in the long-term value of the investment [44][46] Question: Increase in financing costs and income - Management explained that effective balance sheet management has mitigated the impact of high interest rates, resulting in a net positive income from FX management [50] Question: Turkcell entering the mobile market - Management noted that there is no clear information regarding becoming the fourth mobile operator and emphasized the challenges of building a mobile network [55][56]

Financial Performance - Turkcell Group's revenue increased by 12.5% year-over-year to TRY 53.022 billion[58] - EBITDA grew by 14.8% year-over-year to TRY 23.086 billion, with an EBITDA margin of 43.5%, a 0.9 percentage point increase[58] - Net income from continuing operations increased by 36.8% year-over-year to TRY 4.388 billion[5] Subscriber Growth & ARPU - Postpaid net additions reached 816,000, a record high in 5.5 years[5] - Mobile ARPU increased by 9.8% year-over-year to TRY 352.5[5] - Residential Fiber ARPU increased by 17.5% year-over-year to TRY 418.2[5] Business Segments - Techfin revenue grew by 23.1%[6] - Data Center & Cloud revenue grew by 53.2%[6] - Digital Business Services revenue increased by 39% year-over-year, reaching TRY 4.930 billion[30] Fixed Broadband - Turkcell Fiber saw a net addition of 4,000 subscribers quarter-over-quarter[5] - 12-month contract share in residential fixed broadband reached 87%[23] Techfin - Loan portfolio reached TRY 7.3 billion[33] - Total transaction volume increased by 75% year-over-year to TRY 38.8 billion[33]

[Highlights](index=3&type=section&id=HIGHLIGHTS) [Segment Information](index=5&type=section&id=SEGMENT%20INFORMATION) As of Q1 2025, Turkcell revised its reporting segments to Turkcell Türkiye and Techfin, reclassifying former international and other operations - The company re-evaluated its operating segments, consolidating them into two main groups: **Turkcell Türkiye and Techfin**, effective from Q1 2025[11](index=11&type=chunk) - Following the sale of its Ukrainian assets, the companies previously in the Turkcell International segment have been reclassified under the **"Other" segment**[11](index=11&type=chunk) - Turkcell Satış, which handles consumer electronics and retail channel operations, has been moved from the "Other" segment to the **"Turkcell Türkiye" segment** for integrated management review[12](index=12&type=chunk) - The reclassification of segments has **no impact** on the Group's operating profit, net profit, or cash flow statement[14](index=14&type=chunk) [Quarter Highlights](index=6&type=section&id=QUARTER%20HIGHLIGHTS) Turkcell Group's Q1 2025 revenue grew 12.7% to TRY 48.0 billion and EBITDA increased 19.0%, though net income declined 15.3% Q1 2025 Financial Highlights (vs. Q1 2024) | TRY million | Q124 | Q125 | y/y% | | :--- | :--- | :--- | :--- | | Revenue | 42,567 | 47,963 | 12.7% | | EBITDA | 17,614 | 20,959 | 19.0% | | EBITDA Margin (%) | 41.4% | 43.7% | 2.3pp | | EBIT | 4,865 | 8,214 | 68.8% | | Net Income | 3,638 | 3,082 | (15.3)% | - The Board of Directors has proposed a **gross dividend of TRY 8.0 billion**, which corresponds to a gross dividend of TRY 3.636 per share, to be paid in two equal installments in June and December 2025[22](index=22&type=chunk) - The company renewed its fiber infrastructure agreement with BOTAŞ for an additional 15 years through a tender valued at **$25.5 million annually**[22](index=22&type=chunk) - Key operational achievements include **153,000 quarterly mobile postpaid net additions**, **30,000 fiber net additions**, and surpassing **6.0 million total fiber homepasses**[22](index=22&type=chunk) [Comments by CEO, Ali Taha Koç, PhD](index=7&type=section&id=COMMENTS%20BY%20CEO%2C%20Ali%20Taha%20Ko%C3%A7%2C%20PhD) The CEO highlighted a strong start to 2025, driven by robust ARPU growth, postpaid additions, and expansion in Techfin and Data Center businesses - Consolidated revenues for Q1 2025 reached **TRY 48.0 billion (+12.7% YoY)**, EBITDA increased to **TRY 21.0 billion (+19.0% YoY)**, and net profit was TRY 3.1 billion[24](index=24&type=chunk) - The mobile segment saw **153,000 net postpaid additions**, increasing the postpaid subscriber share to 76%, while mobile ARPU grew by **15.9% YoY**[25](index=25&type=chunk) - The fixed segment added **30,000 new fiber customers**, with total homepasses exceeding 6.0 million and fiber ARPU growing by **17.7% YoY**[26](index=26&type=chunk) - Strategic focus areas showed strong growth, with **Techfin revenues up 31.5%** and **Data Center & Cloud business revenue up 47.5%**[24](index=24&type=chunk)[30](index=30&type=chunk) [Financial and Operational Review](index=9&type=section&id=FINANCIAL%20AND%20OPERATIONAL%20REVIEW) [Financial Review of Turkcell Group](index=9&type=section&id=FINANCIAL%20REVIEW%20OF%20TURKCELL%20GROUP) Group revenue rose 12.7% to TRY 48.0 billion and EBITDA grew 19.0%, but net income fell 15.3% due to a high base effect from an asset sale in 2024 Q1 2025 Profit & Loss Statement Summary | Profit & Loss Statement (million TRY) | Q124 | Q125 | y/y% | | :--- | :--- | :--- | :--- | | Revenue | 42,566.8 | 47,962.6 | 12.7% | | EBITDA | 17,614.2 | 20,959.1 | 19.0% | | EBITDA Margin | 41.4% | 43.7% | 2.3pp | | EBIT | 4,864.6 | 8,213.5 | 68.8% | | Net Income | 3,638.4 | 3,082.1 | (15.3)% | - Net income decreased by 15.3% YoY; however, excluding the TRY 747 million positive impact from the sale of Ukrainian assets in Q1 2024, **net income increased by 6.6%**[46](index=46&type=chunk) Cash and Debt Position (as of March 31, 2025) | Metric | Value (million TRY) | | :--- | :--- | | Total Cash | 108,421 | | Total Debt | 150,712 | | Net Debt | 16,637 | | Net Debt to EBITDA Ratio | 0.21x | - Operational capital expenditures (excluding license fees) were **20.2% of total revenues** in Q1 2025[53](index=53&type=chunk) [Operational Review of Turkcell Türkiye](index=12&type=section&id=OPERATIONAL%20REVIEW%20OF%20TURKCELL%20T%C3%9CRK%C4%B0YE) Turkcell Türkiye expanded its mobile postpaid and fiber subscriber bases while achieving double-digit ARPU growth in both segments Turkcell Türkiye Operational Data (Q1 2025) | Metric | Q125 | y/y % | | :--- | :--- | :--- | | Mobile Postpaid Subscribers (million) | 29.3 | 6.2% | | Turkcell Fiber Subscribers (thousand) | 2,484.4 | 6.4% | | Mobile Churn (%) | 1.7% | 0.2pp | | Fixed Churn (%) | 1.4% | 0.1pp | Turkcell Türkiye ARPU (Q1 2025) | ARPU (TRY) | Q125 | y/y % | | :--- | :--- | :--- | | Mobile ARPU, blended (excl. M2M) | 325.1 | 15.9% | | Residential Fiber ARPU | 377.0 | 17.7% | - The company added **153,000 postpaid subscribers** in the quarter, bringing the postpaid share of the total mobile base to **76%**[57](index=57&type=chunk) - The fiber network was expanded to an additional **43,000 homepasses**, bringing the total to over **6.0 million**[60](index=60&type=chunk) [Techfin](index=13&type=section&id=TECHFIN) The Techfin segment, comprising Paycell and Financell, demonstrated strong growth, significantly contributing to consolidated results [Paycell](index=14&type=section&id=Paycell) Paycell's revenue grew 47.8% YoY to TRY 1.4 billion, driven by mobile payment and POS services, though its EBITDA margin contracted Paycell Financial Data (Q1 2025 vs Q1 2024) | Paycell Financial Data (million TRY) | Q124 | Q125 | y/y% | | :--- | :--- | :--- | :--- | | Revenue | 940.4 | 1,390.0 | 47.8% | | EBITDA | 439.4 | 545.6 | 24.2% | | EBITDA Margin (%) | 46.7% | 39.2% | (7.5)pp | | Net Income | 102.3 | 186.0 | 81.8% | - Total transaction volume reached **TRY 38 billion** in Q1 2025, an **88% year-on-year increase**, supported by POS solutions, QR Code, and direct carrier billing[63](index=63&type=chunk) - Over **70% of Paycell's revenues** originated from non-group business, highlighting its market expansion[62](index=62&type=chunk) [Financell](index=14&type=section&id=Financell) Financell's revenue grew 8.2% and its EBITDA margin improved significantly due to lower funding costs, despite weak consumer demand Financell Financial Data (Q1 2025 vs Q1 2024) | Financell Financial Data (million TRY) | Q124 | Q125 | y/y% | | :--- | :--- | :--- | :--- | | Revenue | 1,162.4 | 1,257.3 | 8.2% | | EBITDA | 129.5 | 199.4 | 54.0% | | EBITDA Margin (%) | 11.1% | 15.9% | 4.8pp | | Net loss | (130.2) | (10.1) | (92.2)% | - The loan portfolio reached **TRY 6.8 billion** in Q1 2025, with **0.8 million active customers**[65](index=65&type=chunk) - EBITDA margin improved by **4.8 percentage points to 15.9%**, driven by lower funding costs on a yearly basis[64](index=64&type=chunk) [Turkcell Group Subscribers](index=15&type=section&id=TURKCELL%20GROUP%20SUBSCRIBERS) As of March 31, 2025, the Turkcell Group's total subscriber base grew 0.7% year-over-year to 45.2 million across all regions Turkcell Group Subscribers (as of March 31, 2025) | Region | Subscribers (million) | y/y% | | :--- | :--- | :--- | | Turkcell Türkiye | 43.1 | 0.7% | | BeST (Belarus) | 1.5 | - | | Kuzey Kıbrıs Turkcell | 0.6 | - | | **Total Group** | **45.2** | **0.7%** | - The total subscriber figure is calculated by summing the mobile, fiber, ADSL, cable, and IPTV subscribers of Turkcell Türkiye, and the mobile subscribers of BeST and Kuzey Kıbrıs Turkcell[66](index=66&type=chunk) [Overview of the Macroeconomic Environment](index=15&type=section&id=OVERVIEW%20OF%20THE%20MACROECONOMIC%20ENVIRONMENT) Key macroeconomic indicators for Q1 2025 show a YoY CPI of 38.1% in Türkiye and a 17.0% increase in both USD/TRY and EUR/TRY exchange rates Key Macroeconomic Indicators (Q1 2025) | Indicator | Q125 | y/y% Change | | :--- | :--- | :--- | | Consumer Price Index (Türkiye, YoY) | 38.1% | (30.4)pp | | US$ / TRY Closing Rate | 37.7656 | 17.0% | | EUR / TRY Closing Rate | 40.7019 | 17.0% | [Reconciliation of Non-GAAP Financial Measurements](index=16&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20FINANCIAL%20MEASUREMENTS) This section reconciles the Q1 2025 consolidated profit of TRY 3.1 billion to an Adjusted EBITDA of TRY 21.0 billion - The company uses Adjusted EBITDA as a key metric to facilitate performance comparisons by excluding the effects of capital structure, tax positions, and depreciation/amortization[70](index=70&type=chunk) Reconciliation of Adjusted EBITDA to Profit (Q1 2025, million TRY) | Item | Q125 | | :--- | :--- | | Consolidated profit before minority interest | 3,082.1 | | Income tax expense | (3,459.7) | | Consolidated profit before income tax & minority interest | 6,541.8 | | Adjustments (Finance, Monetary, Other) | 1,671.7 | | **EBIT** | **8,213.5** | | Depreciation and amortization | (12,745.6) | | **Adjusted EBITDA** | **20,959.1** | [Appendix](index=19&type=section&id=Appendix) [Appendix A – Tables](index=19&type=section&id=Appendix%20A%20%E2%80%93%20Tables) Appendix A details a net FX loss of TRY 1.4 billion and a total income tax expense of TRY 3.5 billion for Q1 2025 Net Foreign Exchange Gain and Loss Details (million TRY) | Item | Q124 | Q125 | | :--- | :--- | :--- | | Net FX loss before hedging | (3,708.3) | (1,783.3) | | Swap interest income/(expense) | 254.9 | 115.1 | | Fair value gain on derivative financial instruments | 267.8 | 286.8 | | **Net FX gain / (loss) after hedging** | **(3,185.6)** | **(1,381.3)** | Income Tax Expense Details (million TRY) | Item | Q124 | Q125 | | :--- | :--- | :--- | | Current tax expense | (61.7) | (622.8) | | Deferred tax income / (expense) | (1,761.8) | (2,836.9) | | **Income Tax expense** | **(1,823.6)** | **(3,459.7)** | [Appendix B – New Segment Breakdown](index=20&type=section&id=Appendix%20B%20%E2%80%93%20New%20Segment%20Breakdown) Appendix B presents historical financial data under the new reporting segments, showing Turkcell Türkiye and Techfin as the primary revenue drivers Revenue Breakdown by New Segment (Q1 2025, million TRY) | Segment | Revenue | | :--- | :--- | | Turkcell Türkiye | 43,523.4 | | Techfin Business | 2,746.6 | | Other Segment | 1,692.7 | | **Consolidated Revenues** | **47,962.6** | EBITDA Breakdown by New Segment (Q1 2025, million TRY) | Segment | EBITDA | | :--- | :--- | | Turkcell Türkiye | 19,835.0 | | Techfin | 716.9 | | Other | 407.2 | | **Consolidated EBITDA** | **20,959.1** | [Condensed Consolidated Financial Statements](index=21&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [Condensed Consolidated Interim Statement of Financial Position](index=23&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of March 31, 2025, total assets grew to TRY 418.1 billion, driven by increased cash, while total liabilities rose to TRY 208.3 billion Statement of Financial Position Summary (million TRY) | Item | 31 March 2025 | 31 December 2024 | | :--- | :--- | :--- | | **Total Assets** | **418,120** | **378,919** | | Total Non-Current Assets | 259,270 | 253,786 | | Total Current Assets | 158,850 | 125,133 | | **Total Equity and Liabilities** | **418,120** | **378,919** | | Total Equity | 209,835 | 205,781 | | Total Liabilities | 208,285 | 173,139 | [Condensed Consolidated Statement of Profit or Loss](index=25&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For Q1 2025, revenue increased to TRY 48.0 billion, but profit for the period decreased to TRY 3.1 billion due to higher taxes and no discontinued operations gain Statement of Profit or Loss Summary (million TRY) | Item | 31 March 2025 | 31 March 2024 | | :--- | :--- | :--- | | Total revenue | 47,962.6 | 42,566.8 | | Total gross profit | 13,622.8 | 9,173.3 | | Operating profit | 7,763.9 | 4,563.0 | | Profit before income tax | 6,541.8 | 4,707.8 | | Profit from continuing operations | 3,082.1 | 2,884.3 | | Profit from discontinued operations | - | 746.6 | | **Profit for the year** | **3,082.1** | **3,630.9** | [Condensed Consolidated Financial Statement of Cash Flows](index=28&type=section&id=Condensed%20Consolidated%20Financial%20Statement%20of%20Cash%20Flows) In Q1 2025, a significant net cash inflow from financing activities of TRY 33.7 billion led to a net increase in cash of TRY 39.1 billion Statement of Cash Flows Summary (million TRY) | Item | 31 March 2025 | 31 March 2024 | | :--- | :--- | :--- | | Net cash inflow from operating activities | 12,729.9 | 7,716.3 | | Net cash outflow from investing activities | (7,341.0) | (16,235.3) | | Net cash inflow from financing activities | 33,711.0 | 6,904.6 | | **Net increase in cash and cash equivalents** | **39,099.9** | **(1,614.4)** | [Note 13. Loans and borrowings](index=46&type=section&id=Note%2013.%20Loans%20and%20borrowings) Total borrowings stood at TRY 150.7 billion as of March 31, 2025, following a USD 1 billion Eurobond issuance and new domestic financing in Q1 - In January 2025, the company completed a dual-tranche bond issuance to qualified investors abroad: a **USD 500 million conventional bond** due 2030 and a **USD 500 million sustainable bond** due 2032[159](index=159&type=chunk)[160](index=160&type=chunk) - The company issued domestic bonds totaling **TRY 2.23 billion** in Q1 2025 and utilized new loan facilities from the Development Investment Bank of Türkiye (EUR 18.5 million) and China Development Bank (CNY 103 million)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) Breakdown of Borrowings (as of March 31, 2025, million TRY) | Type | Long-term | Short-term | | :--- | :--- | :--- | | Unsecured bank loans | 28,666 | 26,367 | | Secured bank loans | 8,574 | 1,307 | | Lease liabilities | 4,155 | 2,257 | | Debt securities issued | 53,370 | 26,016 | | **Total** | **94,765** | **55,947** | [Note 17. Commitments and Contingencies](index=56&type=section&id=Note%2017.%20Commitments%20and%20Contingencies) The company faces ongoing legal disputes, regulatory investigations, and has outstanding purchase commitments of TL 4.7 billion - The Competition Authority imposed an administrative fine of **TL 57,301** on the Company, which was recognized as a liability in the Q1 2025 financial statements[193](index=193&type=chunk) - A lawsuit related to a prior Competition Board decision was settled via mediation, with the company paying **TL 130,000** in May 2024[190](index=190&type=chunk) - The company is subject to multiple ongoing investigations by the Information and Communication Technologies Authority (ICTA) regarding R&D obligations, subscriber refunds, subscription agreements, and service quality[194](index=194&type=chunk)[195](index=195&type=chunk)[197](index=197&type=chunk)[203](index=203&type=chunk) - As of March 31, 2025, the Group has outstanding purchase commitments of **TL 4,743 million** and is contingently liable for guarantees amounting to **TL 21,492 million**[181](index=181&type=chunk)[182](index=182&type=chunk) [Note 21. Discontinued operations](index=65&type=section&id=Note%2021.%20Discontinued%20operations) The sale of Ukrainian subsidiaries in Q1 2024 generated a one-time profit of TRY 746.6 million, which is absent from Q1 2025 results - The sale of Ukrainian subsidiaries was agreed upon in December 2023 and completed in 2024[222](index=222&type=chunk)[223](index=223&type=chunk) Profit from Discontinued Operations (for Q1 2024, million TRY) | Item | 31 March 2024 | | :--- | :--- | | Revenue | 3,514.1 | | Gross profit | 1,245.1 | | Operating profit | 937.8 | | **Profit for the year from discontinued operations** | **746.6** |

[FORM 20-F Filing Information](index=1&type=section&id=FORM%2020-F) [Filing Details](index=1&type=section&id=Filing%20Details) Turkcell's FY2024 Annual Report on Form 20-F, prepared under IFRS, classifies the company as a well-known seasoned issuer - The registrant is **Turkcell İletişim Hizmetleri A.Ş.**, incorporated in the Republic of Türkiye[3](index=3&type=chunk) - The report is an Annual Report for the fiscal year ended **December 31, 2024**[2](index=2&type=chunk) - Turkcell is a **well-known seasoned issuer** and a **large accelerated filer**[6](index=6&type=chunk)[7](index=7&type=chunk) - Financial statements are prepared in accordance with **International Financial Reporting Standards (IFRS)** as issued by the IASB[7](index=7&type=chunk) Securities Listing Details | Class of Security | Trading Symbol | Exchange Registered On | | :---------------- | :------------- | :--------------------- | | American Depositary Shares, each representing 2.5 ordinary shares | TKC | New York Stock Exchange | - As of period-end, **2.2 billion Ordinary Shares** are outstanding, including **330 million Group A shares** and **1.87 billion Group B shares**[6](index=6&type=chunk) [Introduction](index=5&type=section&id=INTRODUCTION) [Company and Financial Reporting Context](index=5&type=section&id=Company%20and%20Financial%20Reporting%20Context) Turkcell's consolidated financial statements for the three-year period ended December 31, 2024, are prepared under IFRS, applying IAS 29 due to Türkiye's hyperinflationary economy - Turkcell's consolidated financial statements are prepared in accordance with **IFRS** as issued by the IASB for the three-year period ended **December 31, 2024**[15](index=15&type=chunk) - Türkiye has been classified as a **high-inflation economy under IAS 29** since June 30, 2022, necessitating inflationary adjustments to financial statements for all reported periods, expressed in terms of the Turkish Lira's purchasing power as of **December 31, 2024**[16](index=16&type=chunk) - Certain historical figures (e.g., investigations, lawsuits, dividends) are disclosed without IAS 29 restatements and are explicitly labeled as '**not restated for IAS 29**'[16](index=16&type=chunk) - Performance measures like subscriber numbers, ARPU, and churn rates are not standardized across the telecommunications industry, making direct comparisons difficult[20](index=20&type=chunk) [Forward-Looking Statements and Risk Factors](index=6&type=section&id=FORWARD-LOOKING%20STATEMENTS%20AND%20RISK%20FACTORS) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) Forward-looking statements in this report are subject to risks and uncertainties, and actual results may differ materially - The report contains forward-looking statements identifiable by terms like 'may,' 'will,' 'expect,' 'intend,' 'estimate,' 'anticipate,' 'believe,' 'continue,' or similar expressions[23](index=23&type=chunk) - Actual results could differ materially from expectations due to uncertainties and risk factors detailed in the report[24](index=24&type=chunk) [Non-IFRS Measures](index=7&type=section&id=NON-IFRS%20MEASURES) This section defines non-IFRS measures, Adjusted EBITDA and Adjusted EBITDA Margin, used by management to monitor performance and clarifies their limitations - Adjusted EBITDA is defined as profit before finance income, finance costs, monetary gain/loss, income tax, other operating income/expenses, discontinued operations, equity-accounted investees, and depreciation/amortization[28](index=28&type=chunk) - Adjusted EBITDA is used by management as a key indicator for financial performance and facilitates period-to-period and company-to-company comparisons, but it is not an IFRS measure and has limitations[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - Limitations of Adjusted EBITDA include not reflecting cash expenditures for capital, working capital needs, interest/debt payments, or non-cash income/expense items, and potential calculation differences across companies[31](index=31&type=chunk)[32](index=32&type=chunk)[40](index=40&type=chunk) - Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by total revenues[33](index=33&type=chunk) - ARPU (Average Revenue Per User) is an operational metric calculated by dividing subscriber or network-driven revenues in Turkcell Türkiye by twelve and then by the average number of subscribers, excluding certain revenue streams[35](index=35&type=chunk) [ITEM 1. Identity of Directors, Senior Management and Advisers](index=8&type=section&id=ITEM%201.%20Identity%20of%20Directors%2C%20Senior%20Management%20and%20Advisers) [Not applicable.](index=8&type=section&id=Not%20applicable.) This item is marked as 'Not applicable' in the report [ITEM 2. Offer Statistics and Expected Timetable](index=8&type=section&id=ITEM%202.%20Offer%20Statistics%20and%20Expected%20Timetable) [Not applicable.](index=8&type=section&id=Not%20applicable.) This item is marked as 'Not applicable' in the report [ITEM 3. Key Information](index=8&type=section&id=ITEM%203.%20Key%20Information) [3.A Reserved](index=8&type=section&id=3.A%20RESERVED) This sub-item is reserved and contains no information [3.B Capitalization and Indebtedness](index=8&type=section&id=3.B%20CAPITALIZATION%20AND%20INDEBTEDNESS) This sub-item is marked as 'Not applicable' in the report [3.C Reasons for the Offer and Use of Proceeds](index=8&type=section&id=3.C%20REASONS%20FOR%20THE%20OFFER%20AND%20USE%20OF%20PROCEEDS) This sub-item is marked as 'Not applicable' in the report [3.D Risk Factors](index=9&type=section&id=3.D%20Risk%20Factors) This section outlines the principal material risks faced by Turkcell and its subsidiaries, categorized into risks relating to Türkiye, the telecom industry, the company's business, and its American Depositary Shares - The majority of Turkcell's business and assets are in Türkiye, making it highly susceptible to deterioration in the Turkish economy, Turkish Lira devaluation, or political instability[46](index=46&type=chunk)[47](index=47&type=chunk) - Continuing high inflation in Türkiye (peaked at **85.51% in Oct 2022**, ended 2024 at **44.38%**) and the application of IAS 29 for hyperinflationary economies significantly affect financial statements and could adversely impact profitability and business operations[45](index=45&type=chunk)[56](index=56&type=chunk)[60](index=60&type=chunk) - Foreign exchange rate risks, particularly the devaluation of the Turkish Lira (**19.7% against USD in 2024**), significantly affect operations, financial position, and increase borrowing and hedging costs, especially as capital expenditures and borrowings are largely denominated in foreign currencies[45](index=45&type=chunk)[63](index=63&type=chunk)[65](index=65&type=chunk) - Competition in the Turkish telecommunications market is intense, with regulatory actions often favoring competitors, potentially affecting business growth and financial condition[45](index=45&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - Rapid technological changes, including the emergence of 5G, eSIM, and AI, require significant capital expenditures and pose risks of commercial failure or obsolescence if the company fails to adapt effectively[45](index=45&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - Regulatory decisions and changes in the regulatory environment, including pricing, data protection, taxation, and license obligations, can adversely affect Turkcell's business and financial condition, potentially leading to fines or increased costs[45](index=45&type=chunk)[77](index=77&type=chunk)[97](index=97&type=chunk)[111](index=111&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - The company's growth strategy relies partly on investments in new opportunities outside core telecom activities (e.g., techfin, data centers, renewable energy), which may not be successful or provide expected returns[45](index=45&type=chunk)[102](index=102&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - Turkcell's business is heavily dependent on the continuity and security of its IT and network technology services, making it susceptible to physical and cybersecurity threats, which could lead to service disruptions, reputational harm, or financial losses[45](index=45&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - The presence of two major shareholders (TWF and IMTIS Holdings) whose interests may not align with other shareholders, and the potential exposure to international sanctions due to IMTIS Holdings' indirect beneficiaries, pose significant risks[50](index=50&type=chunk)[189](index=189&type=chunk)[191](