Turkcell(TKC) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues increased by 11% year-on-year, surpassing TRY 241 billion, with quarterly growth of 7% [20] - EBITDA rose by 14% year-on-year to TRY 104 billion, with an EBITDA margin of 43% [21] - Net income from continuing operations reached TRY 17.8 billion, up 23% year-on-year [22] Business Line Data and Key Metrics Changes - Turkcell Turkey revenue increased by TRY 21 billion year-on-year, driven by real ARPU expansion and sustained postpaid subscriber additions [20] - Data center and cloud business revenues grew by 32% year-on-year, supported by capacity expansions [16] - TechFin revenues grew by 21%, with Paycell's revenues increasing by 40% year-on-year [17] Market Data and Key Metrics Changes - The share of postpaid subscribers increased by 4.7 percentage points year-on-year to reach 81%, enhancing revenue visibility [10] - Mobile ARPU real growth was 5.4%, reflecting balanced growth strategies [11] - The Turkish cloud market is growing at 19% annually in dollar terms, driven by increasing digitalization [12] Company Strategy and Development Direction - The company is focusing on strategic investments in data centers, cloud infrastructure, and renewables, allocating 15% of CapEx to these areas [4] - A strategic partnership with Google Cloud aims to build a hyperscale cloud region in Turkey, enhancing the digital ecosystem [13] - The capital allocation framework emphasizes investing in business growth, delivering shareholder returns, and maintaining a strong balance sheet [7] Management's Comments on Operating Environment and Future Outlook - The company expects real revenue growth in the range of 5%-7% for 2026, with an EBITDA margin between 40%-42% [19] - Management highlighted the importance of operational efficiency and strategic investments in 5G rollout and digital infrastructure [19] - The company anticipates a normalization in growth rates for the data center and cloud business following significant capacity expansions [19] Other Important Information - The company maintained a net leverage below 1x, with a cash position of TRY 92 billion at year-end [25] - Active solar capacity increased from 8 megawatts to 62 megawatts, generating TRY 156 million in OpEx savings [18] - The company launched a three-year share buyback program, repurchasing $58 million of shares to date [6] Q&A Session Summary Question: Inquiry about data centers business EBITDA margins - Management indicated that the data center business is expected to see significant growth, with no dilutive impact on EBITDA margins anticipated [31] Question: Clarification on FX position and short position in U.S. dollars - Management explained that the FX position is around $957 million, with a strategy to benefit from higher local currency yields by swapping some U.S. dollar holdings into Turkish lira [38][42] Question: Size of investments in data centers and expectations for future capacity - Management clarified that the initial 50 megawatts is a starting point, with plans for significant infrastructure to support Google Cloud, indicating a substantial investment in the future [46][48]