Turkcell(TKC) - 2025 Q2 - Quarterly Report

HIGHLIGHTS Financial Highlights 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 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] - 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] - Data Center & Cloud business grew by 53.2% year-over-year[15] - 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] - Net leverage level stood at 0.29x, and the net short FX position was US$102 million, within the neutral FX definition[15] - Recorded the highest mobile postpaid net additions in 5.5 years (816 thousand), increasing postpaid subscriber base share to 78%[15] - Mobile ARPU (excluding M2M) grew by 9.8%, and residential fiber ARPU grew by 17.5%[15] - Added 67 thousand new fiber homepasses this quarter, bringing total homepasses to 6.1 million[15] COMMENTS BY CEO, ALİ TAHA KOÇ, PhD Delivering Strong Results in the Second Quarter of 2025 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] - 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] - Net income grew 7.1% compared with the previous year, reaching TRY4.2 billion[17] Healthy Growth Driven by Outstanding Subscriber Net Additions and Strong ARPU Performance 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] - Postpaid subscribers now represent 78% of the total mobile base, a 5 percentage point increase year-on-year[18] - Mobile ARPU (excluding M2M) rose by 9.8% year-on-year[18] - Connected 67 thousand new households to end-to-end fiber infrastructure, with residential fiber ARPU increasing by 17.5% year-on-year[19] Paycell: Driving Growth in the Techfin Segment 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] - Paycell achieved revenue growth of 35.8%, primarily driven by increased volume in its POS business and new customer additions[20] - Financell's revenues rose 4.7% year-on-year, with net interest margin (NIM) improving by 2.9 percentage points to 4.9%[21] Leading Türkiye's Tech and Communications Landscape with a Clear Sense of Responsibility 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] - Signed murabaha financing agreements with leading financial institutions in the Gulf region, diversifying the debt portfolio[23] FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group 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.