Kyivstar Group Q2 2026 Earnings Report

Kyivstar Group EPS Results

• Actual EPS: $0.33
• Consensus EPS: $0.35
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: N/A

Kyivstar Group Revenue Results

• Actual Revenue: $334.66 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Kyivstar Group Announcement Details

• Quarter: Q2 2026
• Date: 7/31/2026
• Time: Before Market Opens
• Conference Call Date: Friday, July 31, 2026
• Conference Call Time: 10:30AM ET

Kyivstar Group (NASDAQ:KYIV) (NASDAQ:KYIV) is a leading Ukrainian telecommunications operator that provides a broad range of consumer and business communications services. The company operates one of Ukraine’s largest mobile networks and offers voice, messaging and mobile broadband services over 3G and 4G/LTE technologies. In addition to mobile services, Kyivstar supplies fixed-line broadband and home internet access, serving residential customers with connectivity and related value‑added services.

For enterprise and public sector customers, Kyivstar delivers a portfolio of business solutions that includes fixed and mobile data plans, machine‑to‑machine (M2M) and Internet of Things (IoT) connectivity, and ICT services intended to support digital transformation. The company also develops digital products and content services designed to complement its core connectivity offerings, aiming to capture ancillary revenue streams from payments, media and cloud-enabled applications.

Founded as a national telecom provider in Ukraine, Kyivstar has grown into a major domestic carrier with nationwide coverage. The company is affiliated with the international telecom group VEON, which has historically been involved in its ownership and strategic development. Kyivstar’s operations are focused on serving the Ukrainian market, where it competes with other national and regional operators across consumer and enterprise segments.

Kyivstar emphasizes network investment and service availability as central pillars of its strategy, seeking to expand data capacity and digital services to meet rising customer demand. The company’s product mix and national footprint make it a key participant in Ukraine’s telecommunications sector, providing connectivity infrastructure and business communications solutions across the country.

Kyivstar Group Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Kyivstar reported strong second-quarter results, with revenue up 19% year over year to $339 million, EBITDA up 14% to $188 million, and equity free cash flow up 32% to $104 million. Management raised full-year guidance for revenue and EBITDA growth for the second time this year.
• Positive Sentiment: Digital revenue surged 83% to $74 million, reaching nearly 22% of total revenue, while digital EBITDA remained profitable at $31 million. Uklon was the largest contributor, with revenue up more than 50%, and Helsi and Tabletki added further growth in the digital health ecosystem.
• Positive Sentiment: Telecom fundamentals remained resilient despite a nearly 3% decline in mobile subscribers: churn improved to just over 14%, IRPU rose 11% to $3.90, 4G penetration exceeded 70%, and data usage increased more than 18%. Multi-play customers reached 8.1 million and generate nearly 50% more ARPU than mobile-only customers.
• Positive Sentiment: The company completed an $81 million acquisition of six solar plants totaling 105 MW, bringing renewable capacity to 118 MW and potentially covering about 30% of annual telecom electricity consumption. Kyivstar said the assets should hedge energy costs and strengthen operational resilience during the war.
• Negative Sentiment: Net profit fell nearly 6% to $77 million because of a $21 million non-cash fair-value charge on listed warrants; excluding that item, profit would have been $98 million. Management also expects mobile subscriber pressure to persist due to double-SIM unwinding, pricing effects, and unfavorable demographics, while the second-half EBITDA comparison becomes tougher as acquisition and accounting benefits normalize.

Presentation

[Cole Akeson, Group Director of Investor Relations at Kyivstar]

Thank you. As noted, I am Cole Akeson, Group Director for Kyivstar Investor Relations. Joining me today are Executive Chairman, Kaan Terzioğlu, CEO, Oleksandr Komarov. Thank you, Kaan. Oleksandr Komarov, CFO, Taner Kızıltoprak, and Anand Ramachandran, the Chief Corporate Development Officer for VEON. Before we begin, please note the date for your calendars. We will be hosting our first Capital Markets Day on November 16 in New York City. Details will follow. Returning to earnings, Oleksandr will begin with strategic and operational highlights, followed by Taner with a review of our financial performance. We will open the line for your questions. Before we begin, please note that today's presentation contains forward-looking statements which involve risks and uncertainties. Further details are available in our SEC filings, including our Form 20-F filed March 16, 2026. Our earnings release and presentation are available on our investor relations website.

[Cole Akeson, Group Director of Investor Relations at Kyivstar]

I'll hand over to Oleksandr.

[Oleksandr Komarov, CEO at Kyivstar]

Thank you, Cole. Hello, everyone. I'm very pleased to see some of you here in New York in person. We delivered another strong quarter. Our telecom core is resilient. Our digital ecosystem keeps scaling. The two businesses fit each other. We are raising our full year outlook for the second time this year. Let me start with the numbers. Revenue reached $339 million, up more than 19% year-over-year. EBITDA grew nearly 14% to $188 million with healthy margins in both businesses. Equity free cash flow grew more than 32% to $104 million. Cash generation funds our growth. Second, our digital transformation. Digital revenue grew 83% year-over-year. This is one first quarter with Uklon in both comparison periods. The comparison is clean. Digital reached 21.7% of total revenue from just over 14% a year ago.

[Oleksandr Komarov, CEO at Kyivstar]

This is a structural shift, not a side project. Third, our Multiplay strategy. 8.1 million Multiplay customers, up almost 24% year-over-year. They pay more. They churn less. I will come back to the mechanics. Finally, three strategic developments during this quarter. The first one is Starlink. More than 6 million customers have used Direct-to-cell, which now also carries light data for essential applications, even without terrestrial signal. The second one is energy. We acquired six solar power plants in the Lviv region, strengthening our energy independence and hedging our electricity costs. The third one is sovereign AI infrastructure. More about this when we discuss the digital enterprise vertical. As for the scorecard. Telecom and infrastructure revenue grew nearly 9% to $265 million on rising ARPU and data usage.

[Oleksandr Komarov, CEO at Kyivstar]

Within EBITDA, telecom and infrastructure generated $157 million at a 59% margin, and digital generated $31 million at a 42% margin. Both engines are profitable. Net profit declined nearly 6% year-over-year to $77 million or $0.33 per share. The cause of the paper decline is one of non-cash item, a $21 million fair value charge on our listed warrants. Taner will walk you through the mechanics and more later. Let's look at the mobile business, starting with subscribers. Our mobile base declined nearly 3% year-over-year to 21.8 million customers. The main mechanism is double SIM-ers. Many Ukrainians carry secondary low-ARPU SIM cards. When they stop using extra cards, these fell out of the customer base. Demographics and seasonality play a role. Internal and third-party estimates put our market share steady at approximately 47%. We focus on the quality of the base, not the volume.

[Oleksandr Komarov, CEO at Kyivstar]

The quality shows in three numbers. The first one is churn, down almost a full point year-over-year to just over 14% annualized. The second one is ARPU. It grew more than 11% to $3.90. The third one is usage. 4G penetration passed 70%, and monthly data consumption grew more than 18% to almost 15 GB per customer. These drive our double-digit telecom revenue growth in UAH. Fixed broadband grew nearly 11% to 1.3 million customers. Households. Nearly half of them also subscribe to Kyivstar TV. One product pulls the other into the household. The fragmented market leaves room for organic and inorganic growth. Multiplay is a core of our engagement model. Let me explain the mechanics. A Multiplay customer uses voice, data, and at least one of our digital applications.

[Oleksandr Komarov, CEO at Kyivstar]

These customers now represent almost 40% of our one-month active base, up more than eight points from a year ago, and a stable quarter-on-quarter at 8.1 million. The economics are simple. A Multiplay customer generates $5.80 in monthly ARPU. Compare that with the $3.90 of a mobile-only customer, a difference of nearly 50%. Multiplay customer also churn less. Engagement drives the top line and retention protects it. Now, the digital ecosystem. This chart shows UAH figures to eliminate currency effects from the comparison basis. I will focus my comments on our report in currency, the U.S. dollars. Digital revenue reached $74 million, up 83% year-over-year, and now makes up almost 22% of total revenue. Three points stand behind this performance. The first one is the broad base of our growth that spans all five verticals with Uklon the biggest contributor. The second one is profitability.

[Oleksandr Komarov, CEO at Kyivstar]

Digital EBITDA reached $31 million at 42% margin compared with almost 44% a year ago. This small decline reflects investment in new services as we scale the business. These platforms pay their own way. The third one is structure. Our telecom base gives a customer acquisition at a near zero cost, and Multiplay bundles are our distribution channels. Moving to Uklon, our mobility platform. Uklon generated almost $33 million in revenue this quarter, up more than 50% year-over-year. More than $12 million in EBITDA, up more than 35%. Real scale in Ukraine, a growing operation in Uzbekistan. Active customer grew 8% to 5.2 million. Rides grew more than 4% to 43 million. Deliveries grew almost 26% to 1.4 million. Uklon is becoming a one-stop solution for movement around and between cities. There are three moves to note. The first one is a multimodal transport.

[Oleksandr Komarov, CEO at Kyivstar]

We agreed to acquire E-wings, which adds electric scooters in 11 Ukrainian cities. With the travel service for intercity buses, Uklon covers more of the journey. Remember, Ukraine remains a no-fly zone, so buses and trains carry the country. The second one is autonomy. Uklon ran Ukraine's first live testing of autonomous vehicle technology. Uklon leader, Serhii, and I tested it personally, which you can watch on our YouTube channel. This technology is still at an early stage, but our testing places us first in this space at home. The third one is commerce. Our Uklon Store pilot starts with the same-day flower delivery in Kyiv, applying Uklon's expertise in space adjacent to mobility. On the healthcare, Helsi is Ukraine's leading health tech platform. Helsi served 5 million customers this quarter, and revenue grew almost 36% year-over-year to $2.4 million. The engine behind this growth is premium subscription.

[Oleksandr Komarov, CEO at Kyivstar]

From 57,000 subscribers at the end of last year to more than 109,000 today. Family medical care plans and health insights, automatic interpretation of test results, biomarker tracking drive the conversion, and our Helsi SuperPower bundle inside Kyivstar mobile plan is a core channel to distribute. The foundation keeps widening. More than 43,000 doctors and specialists, around 1,800 healthcare institutions, and 2.4 million patient appointments booked in the quarter. Helsi is deeply embedded in the state e-health system, convenient to join and hard to leave. It also eases access to healthcare during the war, which we are considering as a national priority. Tabletki.ua, the leading online marketplace for pharmaceuticals and other healthcare products. Its first full quarter with us after consolidation in February. The quarter was strong. Revenue reached $7.8 million, and EBITDA reached $6.2 million, an implied margin close to 80%. The margin follows from the model.

[Oleksandr Komarov, CEO at Kyivstar]

Customer booked $376 million of gross merchandise value. We recognize as revenue only our commission and service fees. Low capital, very high conversion. The scale is national. 6.3 million customers, 15 million average monthly bookings, and more than 14,500 partner pharmacies across the whole Ukraine. Helsi and Tabletki.ua have natural synergies. We are building toward a more connected patient journey. From doctor's appointment to prescription to a medicine order. We are evaluating whether delivery could join that flow. We are taking a deliberate approach so that any changes serve customers well, create shareholders value, and comply with regulatory requirements. Moving to entertainment, Kyivstar TV remains the largest media streaming service in Ukraine. The customer base grew almost 48% year-over-year to 3.6 million, and revenue reached nearly $14 million. To be clear, the growth rate mainly reflects the move to gross revenue recognition last September.

[Oleksandr Komarov, CEO at Kyivstar]

Underlying drivers are real: a bigger customer base, a high-demand exclusive content. Last quarter, I told you we would broadcast world boxing champion Oleksandr Usyk's latest high-profile boxing match. We delivered with exclusive rights to the Usyk-Rico fight in Ukraine, alongside premieres such as "Kill House" and a deep library of international and Ukrainian content. Exclusive local content acquires customer. The ecosystems keeps them inside. From B2C to B2B, digital enterprise serves companies and institutions from small businesses to the largest. Revenue grew almost 16% year-over-year to $16.9 million. Active contracts grew more than 29% to 2,400. Two product lines drive the growth: big data and AI services and cloud. Advisor, our self-service advertising platform, passed 4,100 registered clients. Now, sovereign AI. Two milestones this quarter. The first one is Syayvo, our Ukrainian large language model in Kyivstar Tech portfolio.

[Oleksandr Komarov, CEO at Kyivstar]

The latest model 4B, a kind of pilot model, entered beta testing and has achieved high marks in local competitive testing. The second one is infrastructure. In June, at the Ukraine Recovery Conference, we signed a memorandum with Ukraine's Ministry of Economy to explore expanded cooperation in sovereign AI infrastructure. Any investment would be faced within our existing CapEx framework: disciplined capital, national capability. All these parts serve one growth strategy. We are a digital and communication service provider with a strong backbone in our telco business. In core connectivity, we intend to maintain market leadership. We focus on a high-quality customer base and technological innovation. This quarter launch of Direct-to-cell light data is a good example. We grow ARPU by expanding value to the customers, not just through price. In fixed broadband, we aim to expand market share through organic growth and targeted acquisitions.

[Oleksandr Komarov, CEO at Kyivstar]

Broadband brings entire households into our ecosystem. In digital, we scale through organic growth and strategic acquisitions, increase Multiplay adoption, and deepen daily engagement with our customers. Our loyal telecom base is a launchpad for digital products. The next slide shows how we build the ecosystem step by step since late 2024. spectrum, Uklon, Helsi, Starlink Direct-to-cell, solar, Tabletki.ua, Shtorm. Each move fits the same design. The newest one is energy. In May, we completed the acquisition of six solar power plants in the Lviv region, 105 MW total power for roughly $81 million. With our first plant, Sunvin 11, our capacity now stands at 118 MW. Expected output equals roughly 30% of the electricity our telecom operations consume in a year. The logic is clear. Energy independence that hedges a major operational cost and reduces our exposure to potential green instability during the war.

[Oleksandr Komarov, CEO at Kyivstar]

With that, I will ask Taner to walk you through the financials.

[Taner Kızıltoprak, CFO at Kyivstar]

Thank you, Oleksandr. It's a pleasure to join my first earnings call as a Kyivstar CFO. Let me walk through the mechanics of the quarter. Total revenue reached UAH 15 billion, up 27% year-over-year. $339 million, up 19%. EBITDA grew 21% to UAH 8.3 billion or $188 million. Digital's lower margin comes with lower capital intensity, so its cash conversion is comparable to telecoms. The resulting cash flow funds our expansion. Below EBITDA, one item deserves precision: the warrant charge. Our listed warrants are a fair value liability, $49 million at the end of June, against $28 million at the end of March. The $21 million increase runs through the income statement as a non-cash loss, driven only by the warrants market price at quarter end. Net profit came to $77 million. Without the warrant item, it would have been $98 million. On investment, CapEx was $59 million.

[Taner Kızıltoprak, CFO at Kyivstar]

17% of revenue for the quarter, almost 27% over the last 12 months. On cash, net cash flow from operating activities reached $170 million, and equity free cash flow after leases and licenses reached $104 million, up 32% year-over-year. $243 million over the last 12 months. Turning on balance sheet. We ended June with $364 million of cash and equivalents, up from $353 million at the end of March. Free cash flow absorbs the Solar acquisition payment and still grew the position. Gross debt, excluding leases, stands at $88 million, largely payable to our majority shareholders, VEON. Lease liabilities total $400 million, mainly from our tower agreements with Ukraine Tower Company, recognized under IFRS 16. Excluding leases, we hold a net liquidity position of $277 million. The balance sheet gives us room to keep investing from our own cash generation.

[Taner Kızıltoprak, CFO at Kyivstar]

Let me hand the call back to Oleksandr.

[Oleksandr Komarov, CEO at Kyivstar]

Thank you, Taner. Let me close with the outlook. We are raising full-year guidance for the second time this year. The first half gives us the confidence. In UAH, we now expect revenue to grow 21%-23% and EBITDA to grow 17%-19%. In U.S. Dollars, that is 14%-16% revenue growth and 9%-12% EBITDA growth. There are a couple of important background items to keep in mind here. The first one is the exchange rate. In the past, we guide in both our reporting and trading currency with a fixed currency assumption. This is a factor outside our control, along with the wider geopolitical and macroeconomic environment. The second one is the comparison base. From this quarter, Uklon sits in both periods. Growth rates describe the underlying business. Tabletki.ua and our investment in energy assets add inorganic growth through the second quarter of 2027.

[Oleksandr Komarov, CEO at Kyivstar]

CapEx intensity stays at 21%-24% of revenue. We are past the peak of our elevated investment cycle. We allocate within a disciplined framework. One more item for your calendars. On November 16, we will hold our first-ever Capital Markets Day in New York City. We will present a medium-term update, strategy, the unit economics of the ecosystem, and the capital allocation framework. Details will follow from our investor relations team. We hope to see you there. To wrap up, the quarter shows our model working. The telecom core generates cash, and the digital ecosystem compounds growth. We are delivering double-digit growth in most verticals. Despite external volatility, our business remains strong and profitable. Thank you for your support. We can now open the line for the Q&A.

[Cole Akeson, Group Director of Investor Relations at Kyivstar]

Thank you, Oleksandr. We will, with the assistance of our colleagues, take questions from those in the room first, and once those are exhausted, we will move along to those who have joined us online.

[Jesse Sobelson, Analyst at BTIG]

Hi, everyone. Good morning. Jesse Sobelson with BTIG. I had a two-parter on the AI initiatives. First, on Syayvo, can you walk me through why Kyivstar would build out a national LLM? Is the value of the model itself, or is it really about your proprietary Ukrainian data and distribution? Secondly, on the data center MOU, what's actually in scope? Does it commit capital, or is it just a feasibility study? Thank you.

[Oleksandr Komarov, CEO at Kyivstar]

Let me start with the second question, then I will ask Taner to take the second one. The first one is quite simple. We are a big believer in the sovereign AI infrastructure. From our perspective, it's just a matter of time. Of course, we are a bit affected by the current war situation and certain mitigation actions, I'm absolutely sure that after the war, Ukraine, as any other country, will return to the sovereignty issue. This is one aspect. The second aspect, we see a growing demand, in-market demand, where government is the main customer, potentially the main customer. The third one, we are considering telco business ourselves as much better prepared than anyone else to develop, to invest, and to run AI infrastructure across Ukraine.

[Oleksandr Komarov, CEO at Kyivstar]

At the end, as it was stated by Kaan TerzioÄŸlu at the previous call, at the end, every customer will use AI. Taking into account a relatively low-income and low-ARPU country, we need to find a way how to combine and to create synergies between global AI providers and local capabilities. At the end, I'm absolutely sure that 90% of all questions and requests will be, to some extent, compute inside Ukraine with the local infrastructure and local LLM, with the most difficult questions and requests lifted to the global brain. Based on this assumption, we are taking an initiative. We see a request from the Ministry of Economy and Ministry of Digital Transformation, we are considering the way how we can develop the national AI infrastructure.

[Taner Kızıltoprak, CFO at Kyivstar]

For the data center side, we are continuously evaluating all the options on the table. For [VEON], in terms of the CapEx intensity side, we directly plan all our investment plans within the guidance of the CapEx intensity levels, 21%-24%.

[Kaan TerzioÄŸlu, Group CEO at VEON]

Maybe one thing to add, because you mentioned the distribution, and it is a very important point. We consider connectivity as the foundation and our competitive advantage. If you look to the numbers, 22 million telecom customers, 6 million Tabletki.ua customers, 5 million Uklon customers. Practically every single person in Ukraine and outside of Ukraine is our customer. That gives us a natural advantage to distribute any additional service at a fraction of the cost.

[Vincent Fernando, Analyst at Zero One Investment Research]

Okay, I guess I will do the next question. I am Vincent Fernando with Zero One Investment Research. First question is, I just want to understand a bit how the Starlink service works with your subscribers. You mentioned you had 6 million users who had used the Direct-to-cell service. Does every user basically onboard onto Starlink? If they go off the tower network, then they roll onto it, or do they have to sign up for a special subscription? My second question is just to understand, you have Helsi, which is a huge footprint across the country, right, in terms of the users. Now you have Tabletki.ua, which you have acquired. Obviously, a lot of synergies between those two businesses. How should we see that rolling out in terms of how the synergies roll out in a timeline?

[Vincent Fernando, Analyst at Zero One Investment Research]

Because I know it takes some time for it to integrate and figure things out, and at some point maybe then you have a revenue lift as you basically use Helsi to expand Tabletki.ua. I just want to understand the timeline of that rollout. That is those two questions. Thank you.

[Oleksandr Komarov, CEO at Kyivstar]

Let me start with the satellites. We are a big believer in cooperation between terrestrial and non-terrestrial networks. Right now, our cooperation is with two SpaceX verticals. The first one is Starlink Mobile. With the Starlink Mobile, we have two types of services. The first service is SMS. SMS is available to every Kyivstar customers without any extra charge. It's embedded in our telecom value proposition. We are considering that this is part of our humanitarian mission. In this very difficult environment, with the energy supply issues, we should give our customers opportunities to stay connected. The second layer of Starlink Mobile is light data. With the light data, we did a first step to monetize the service. Light data is embedded into the high-value premium subscriptions as a part of the value proposition.

[Oleksandr Komarov, CEO at Kyivstar]

You can connect this service as a part of the Superpower ecosystem available to our customers. For some of them, if they have free slot, it might be free of charge, but it is a certain competition for the Superpower like Kyivstar TV or Helsi subscription. It's up to the customer to decide, you can connect this on the paid base for the extra monthly fee. These are the first steps to start monetization of the satellite services. The second pillar that we are developing with SpaceX right now is resell of the fixed satellite broadband services in Ukraine. We are the first. Kyivstar is the first official reseller of the Starlink services and hardware in Ukraine for the business and public institutions. This is just a pure resell business. The second question is about Helsi and Tabletki.ua.

[Oleksandr Komarov, CEO at Kyivstar]

You are absolutely right. You should consider, let's say, Tabletki.ua Acquisition from the perspective of strengthening our digital health vertical. Yes, there are two different entities, two different businesses, but in our midterm perspective is the digital vertical that is helpful to the client since first symptoms until full recovery. As I mentioned here, there are plenty of synergies. Yes, we are carefully developing this plan with the first initiatives, the idea that Helsi application is a kind of universal helper, is an universal advisor for you, is a universal window to the health world, with Tabletki.ua being embedded as a part of the value proposition. Yes, the third element of this synergy is potential delivery provided by Uklon. We are doing first steps here. You are absolutely right.

[Oleksandr Komarov, CEO at Kyivstar]

We are right now much more focused on the proper integration of the Tabletki.ua Business into the group, because it's just a four-month-old acquisition. Our plans are very much about potential synergies.

[Vincent Fernando, Analyst at Zero One Investment Research]

Can you give any rough color on when that really rolls out, when the synergies can have a couple of quarters?

[Oleksandr Komarov, CEO at Kyivstar]

It will not roll like a one-off. Okay. What you will see is a gradual improvement of the business metrics, so joint products, okay. I hope as a result for the investor, we will be able to stay with this quite significant, let's say 35%-40% growth rate in the hard currency in our digital health vertical.

[Vincent Fernando, Analyst at Zero One Investment Research]

Great. Thank you.

[Cole Akeson, Group Director of Investor Relations at Kyivstar]

Do we have any other questions from the room? If not, if you're all thinking, we can move to some of the questions from our online participants.

[Operator]

Thank you. For those of you in the Zoom webinar, if you'd like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. When it is your turn to ask a question, you'll receive a prompt to be promoted as a panelist. Please accept, wait a moment, and once you have been introduced, you may unmute yourself, turn your video on, and ask your question. Written questions can be submitted on the webcast by using the Ask a Question tab at the top right of your screen. Our first question comes from Max Findlay with Rothschild & Co. Please go ahead.

[Max Findlay, Analyst at Rothschild & Co]

Hi. Thank you all for your time today. First of all, welcome, Taner, to your first earnings call as CFO. I'm sure you hope they continue as they did today with guidance upgrades. My first question's on mobile revenues. Reported mobile growth in U.S. dollars was from the energy acquisition made in $5 million for the quarter. So looks like underlying growth has slowed from near 10% in Q1 to about 5% in Q2, and this slowdown seems to be driven by pricing. I've noticed the sequential ARPU increases have slowed down a bit. The question, in short, is: Is it getting harder to grow pricing?

[Max Findlay, Analyst at Rothschild & Co]

My second question is, there's been another fantastic quarter for digital services growth, as you've talked about on the call, and in particular, I noticed Uklon's growth was very strong again, and at 50%, is growing faster than when you acquired the business, which from memory was growing at a 30% CAGR. How much are the different business lines, such as Uklon Travel, that you've introduced, helping contribute to this accelerated growth? Could you give us some color on what the opportunities are here and also Uzbekistan as well? Thank you very much.

[Oleksandr Komarov, CEO at Kyivstar]

Okay. Let me start with the second one, and then I will ask Taner to address the first question. Uklon growth of 50% year-on-year consists of two major elements. The first one is the business growth, organic business growth driven by ride hailing and delivery. Okay? This is around 35%+ of the overall growth. Okay? The rest, 15%, is driven by the new accounting approach as a gross-up of the B2B Uklon revenue, so according to the IFRS that we applied. It's actually reflected in the past period also. That's why this 50% constitutes of actually two elements. Okay? The growth is mainly provided by ride hailing business, plus delivery. These are two main growing elements.

[Oleksandr Komarov, CEO at Kyivstar]

We are doing certain pilots with the bus transportation and ticketing and marketplace embedded into the application, but their impact is marginal at this stage. Taner, please.

[Taner Kızıltoprak, CFO at Kyivstar]

Thank you very much. First of all, we have a strong revenue growth into second quarter, with, I mean, 27% UAH base and also 19% U.S. dollar base. You know that we have acquisition in February, Tabletki.ua, and also we have a solar power acquisition in the May. All these, I mean, acquisition is going to have a positive impact for the following months and quarters as well. On top of it also, except from these impacts, these acquisitions, we have directly also strong organic growth, which is 23% in UAH base, when we directly extract these acquisitions' effects on the table. Please also keep in mind that we have also negative effect coming from the beginning of the year due to this new regulation to negatively impact our revenue.

[Taner Kızıltoprak, CFO at Kyivstar]

All in all, the positive impact coming from this acquisition, mainly Tabletki.ua and also energy assets, we are going to keep our revenue stronger, revenue growth for the following quarters.

[Max Findlay, Analyst at Rothschild & Co]

Brilliant. Thank you.

[Operator]

Thank you. Our next question comes from Adrian Cundy with Emerging and Frontier Capital. Please unmute, turn on your video, and ask your question.

[Adrian Cundy, Analyst at Emerging and Frontier Capital]

Hi, Kaan, Oleksandr, Taner. Nice to meet you. Cole, hope you're doing well. I wanted to touch on extent really on sort of Uklon and marketplace and sort of where you sort of see the opportunities in Ukraine and digital financial services. Last call, you mentioned that some of the major wallet providers in Ukraine were very robustly valued. At the same time, I've been reading that Ukraine is moving steadily towards open banking, I'm just wondering, should we be expecting to sort of see Uklon evolve into sort of adding a digital wallet service? Where do you sort of see the digital financial services opportunity in Ukraine, going forward? That's just given Chairman Kaan's comments on VEON that DFS is a priority in every single market that the group operates in.

[Oleksandr Komarov, CEO at Kyivstar]

First of all, we are doing just first steps to develop a marketplace embedded into the Uklon application. Okay? This is very much linked to our delivery competitive advantage. You should see the essence why it is flowers. Okay? Because people are interested in a relatively quick delivery right now. Okay, this is what we are piloting right now. Maybe it's too early to say how it will evolve. Right now we are servicing hundreds of customers per day, okay, we want to understand what are the other categories that might be interested in such type of fast delivery from one side, and relatively, let's say, high margin from another side, because it's a certain combination of the type of the product with delivery need. Okay? Let me once again stress that we see a very great potential in delivery business.

[Oleksandr Komarov, CEO at Kyivstar]

Our own perception that this business is underdeveloped in our Uklon portfolio for the time being, okay? All these steps is how to strengthen the delivery First of all. Okay. The second question seems to be broader than just Uklon question. I have already declared many times that we have two major priorities at the KGL in developing our ecosystem. The first one is the marketplace, and the second one is finance services. Ukrainian finance market is well-developed. We have a lot of different institutions. It's a highly competitive market, okay? Taking into account our relationship with the millions of customers, engagement, a huge gross merchandise value, that we can effectively manage. We see ourselves in the future as a finance service provider in order to achieve two objectives.

[Oleksandr Komarov, CEO at Kyivstar]

The first one is to actually decrease our transaction cost and to manage this gross merchandise value in the most effective way. The second one is to find a value for the potential credit. We are just at the kind of feasibility stage right now in Ukraine. It's a new regulation, it's a very difficult regulator to deal with. There is a really extremely high competition with a well-developed almost, let's say, global scale institutions like Monobank or PrivatBank that are in front of the privatization. We are actively considering potential scenarios, how we can strengthen KGL ecosystem and Uklon in particular. By the way, this question is even more, let's say, important from 2027 when the new legislation on the ride-hailing will be imposed, and we will be able to manage the whole gross merchandise value that is created by Uklon business.

[Adrian Cundy, Analyst at Emerging and Frontier Capital]

It's not out of the realm of possibilities that you could start storing capital in Uklon users' accounts in the next couple of years, and then engaging in financial intermediation.

[Oleksandr Komarov, CEO at Kyivstar]

Yes.

[Adrian Cundy, Analyst at Emerging and Frontier Capital]

Okay.

[Oleksandr Komarov, CEO at Kyivstar]

In general, yes.

[Adrian Cundy, Analyst at Emerging and Frontier Capital]

Okay. I have a second question, which is unrelated to digital financial services, it sort of comes back off the data center comments. You've expressed in previous calls a dream of having a next-gen fiber backbone infrastructure for all players in the Ukraine. As you look at investing across data centers, obviously that creates significant backhaul needs. You move a lot of data between your towers and through your network. Are you investing a lot in fiber? Not just to the home, but backhaul and that basic level infrastructure, and is there a potential for a [NetCo] or an industry-wide fiber broad backbone company evolving?

[Oleksandr Komarov, CEO at Kyivstar]

Let me address this question from a different perspective.

[Oleksandr Komarov, CEO at Kyivstar]

From the operational perspective, we are not investing a lot into the fiber because we already have one of the biggest fiber infrastructure across Ukraine. Our current fiber is more than 50,000 km of backbone, backhaul, and last mile. Okay? At the same time, Ukraine has a relatively developed fiber business. We have few players, more or less the same scale in Ukraine. Yes, we are considering how we can, first, optimize our investments. I can't give it's going to be a forward-looking statement. Sorry. Okay? We are looking how we can optimize investments into the new infrastructure through a certain competition between the major players, number one.

[Oleksandr Komarov, CEO at Kyivstar]

We are ready to consider non-organic development into the fiber core if we will see an opportunity to create a point of the valuation based on our fiber core infrastructure that can be monetized. As a standalone business through certain fiber core, net core, and service core separation. We have quite strategic plans, we will act situationally. For the time being, we are very much focused to ensure readiness for 5G, and one of the key element of this readiness is fiber penetration to the site. We already reached around 50% across the whole country and up to 70% across some of the cities.

[Adrian Cundy, Analyst at Emerging and Frontier Capital]

Okay. You sound like you're making good progress, congratulations on another good quarter.

[Taner Kızıltoprak, CFO at Kyivstar]

As just an addition to Oleksandr, we directly, as an inorganic way, we directly, in February, we directly acquired Shtorm to expand our fixed broadband market share with the $10 million. As an information.

[Oleksandr Komarov, CEO at Kyivstar]

This is including a certain infrastructure in this specific region, of course. Every acquisition of the fixed broadband business, and this is the second for us during the last two years, is actually coming with the certain elements of the infrastructure.

[Adrian Cundy, Analyst at Emerging and Frontier Capital]

All right. Thank you, and congratulations again on a solid quarter.

[Oleksandr Komarov, CEO at Kyivstar]

Thank you very much.

[Taner Kızıltoprak, CFO at Kyivstar]

Thank you.

[Operator]

Our next question comes from Matthew Harrigan with StoneX. Please unmute, turn on your video and ask your question.

[Matthew Harrigan, Analyst at StoneX]

Thank you. It was actually fairly amusing a few days ago when the AT&T stock rallied because Starlink hadn't really hurt their business. A little premature to be worrying about that on a backwards-looking basis. Clearly the mobile business is pretty protected given the penetration issues and latency and all that. When you get version 3 deployed, Starlink 28, 29, obviously there are a lot of concerns on broadband. It's affected the cable stocks in the U.S. a lot, and clearly you've got some advantages in that your price point doesn't remotely resemble what it is in the U.S. or even some European markets. How do you feel about the Starlink issue and your broadband business? Again, it's much smaller than digital or mobile, but is that a real developing concern in terms of the competitiveness of broadband?

[Matthew Harrigan, Analyst at StoneX]

Obviously it's the highest capacity network, you're still going to have some cheap and cheerful potential price competition. Thanks.

[Oleksandr Komarov, CEO at Kyivstar]

I don't see any issues with Starlink broadband business development in Ukraine because of few reasons. The reason number one, Ukraine has a very, very high penetration of fiber. Either it's FTTB or FTTH technology. Ukraine is a relatively low ARPU country. From my perspective, I don't see any reason to pay premium and to substitute your home connection, existing fixed connection that can be easily upgraded right now from 100 Mbps to 1 Gbps, from 1 Gbps to a few gigabits. I don't see any reason to do this because in any case, fixed terrestrial broadband is a more stable and high-quality service than, let's say, Starlink fixed broadband business. I see a number of very important use cases taken into account the current war situation in Ukraine, number one.

[Oleksandr Komarov, CEO at Kyivstar]

Second one, for a relative semi-fixed/mobility, because there are people who are using this on their cars. There is a certain market niche that we would like to satisfy with our resale agreement signed between Kyivstar and SpaceX a few months ago.

[Matthew Harrigan, Analyst at StoneX]

Sort of a fuzzy second question. I think even with some economic growth in Ukraine in the last couple of years, you're still off 20% or so on GDP from pre-invasion, and you've got a big diaspora. I know you've got some customers there as well. If we do hopefully pray for a settlement in Ukraine, do you think you're going to get a substantial step function improvement in your business? Obviously you'll get some benefits filtered in over a number of years on massive reconstruction funds and all that. I know it's premature, but it seems like it's certainly something that boosts your long-term potential, to say the least.

[Oleksandr Komarov, CEO at Kyivstar]

For sure. No doubt. I think that we are ready from many perspectives. The first perspective, we are probably the most compliant international platform for the future investments into the reconstruction. We are simultaneously in infrastructure business, critical infrastructure business, and in a consumer digital business. I'm absolutely sure that there will be actually two very big positive outcomes. Extra investments into the critical infrastructure, strengthening infrastructure, developing infrastructure across Ukraine where we can play a significant role. The second one is a certain return of the population. I don't know how many, 20%, 30%, 40% of the population will be back, and these are our digital customers. As it was underlined by Kaan, we are literally servicing every Ukrainian with the different types of services. The non-organic growing population, because of the return, will have a positive impact on our business.

[Matthew Harrigan, Analyst at StoneX]

Thanks, Oleksandr.

[Taner Kızıltoprak, CFO at Kyivstar]

Just in addition, we are also leading most of the pillars in Ukraine. I mean mobile, fixed TV, healthcare, ride hailing. There's also this leading advantage also.

[Matthew Harrigan, Analyst at StoneX]

Thank you.

[Operator]

Thank you. Our next question will come from Nicholas Paton with the Edison Group. Please unmute to ask your question.

[Nicholas Paton, Analyst at Edison Group]

Hello, team. Could you just talk a little bit about the conversion from the earnings growth guidance you've given and the cash flow? How do you see the free cash flow moving over the next half and into 2027?

[Oleksandr Komarov, CEO at Kyivstar]

Taner, please.

[Taner Kızıltoprak, CFO at Kyivstar]

Okay, let me take it. In this quarter, we directly generated $104 million cash generation, which is not a norm. Normally, we generate $30 million monthly basis, which is normal for us. For the following quarter, we also expect this at least $30 million cash generation for the quarters. Also, just for adding this quarter is our CapEx intensity is lower. This is totally seasonal things. We are going to keep our guidance for this CapEx intensity for the following quarter as well to keep our guidance and also continue for this cash generation.

[Nicholas Paton, Analyst at Edison Group]

A follow-up for Kaan. It's notable that the revenue guidance for VEON is slightly above that for Kyivstar, but the EBITDA guidance is the same. How do you reconcile those two things?

[Kaan TerzioÄŸlu, Group CEO at VEON]

Well, since the beginning of the year, of course, at VEON level, we have raised our both revenue and EBITDA guidance. The same thing is true for Kyivstar. This is their second time on both revenue and EBITDA guidance. I think reconciliation is not necessarily the way I look at it. I look at it as a portfolio of five different countries. We mentioned in the previous call, Kazakhstan, Bangladesh, in terms of our expectations. I would be looking at it from a portfolio perspective, and I'm actually quite comfortable with where we are as it stands now. Thank you.

[Nicholas Paton, Analyst at Edison Group]

Okay, guys. Thanks for that.

[Operator]

Our next question will come from James Ong with New Street Research. Please unmute, turn on your camera, and ask your question.

[James Ong, Analyst at New Street Research]

Hi. Thank you. I just have two questions. I think first is considering guidance. Even considering your Uklon acquisition not fully accounted for in the first half, is this new guidance, especially with regards to EBITDA, conservative, considering especially first half EBITDA performance? Secondly, may I know if you can share more on the decline in mobile customers, specifically in the double or multi-SIM unwind trend. Is it largely completed now, or can we expect more to come? Thank you.

[Oleksandr Komarov, CEO at Kyivstar]

Let me start with the second question, James Ong. We are not declining in the subscriber market share. We are stable in the subscriber market share. You see a certain decline in the number of active SIM cards across the market. We are declining in line with the market. There are a number of very clear reasons. The first one is decline of the second SIM penetration into the customer base. The second reason is a price increase and related to this, decrease in the number of new gross adds. The third one is the demographic dynamics across Ukraine. These are the three main reasons of the overall active SIMs decline in Ukraine that we are facing as much as our competitors. I will ask Taner to take the first one.

[Taner Kızıltoprak, CFO at Kyivstar]

Yes. For the EBITDA half two expectation, in the half one, you know that the Uklon impact is directly year-over-year, three months in 2025 and six months in 2026. In the first half, we directed relatively higher inorganic growth coming from Uklon. At the second half of the year, in terms of EBITDA, the apple-to-apple comparison and growth for the Uklon side. This is one of the major thing that we should underline. We have to sum up Kyivstar TV and also gross-up. We directly change our methodology starting from September 2025. It directly affects our growth rate in the second half of the year.

[James Ong, Analyst at New Street Research]

Thank you.

[Operator]

Our next question comes from Ahmed Mostafa with inam. Please unmute, turn on your video, and ask your question.

[Ahmed Mostafa, Analyst at inam]

Hello. I have a question. How should we think about the earnings contribution and economic hedge from the expanded solar portfolio?

[Taner Kızıltoprak, CFO at Kyivstar]

Ahmed, I couldn't quite hear you. Could you repeat that, please?

[Ahmed Mostafa, Analyst at inam]

Yes, sure. I was asking how should we think about the earnings contribution and economic hedge from the expanded solar portfolio?

[Oleksandr Komarov, CEO at Kyivstar]

Okay, solar portfolio.

[Ahmed Mostafa, Analyst at inam]

Yeah.

[Oleksandr Komarov, CEO at Kyivstar]

Let me start with the hedge. Okay. Our average annual price is around, let me calculate in my mind, but it is around EUR 0.20/kWh.

[Oleksandr Komarov, CEO at Kyivstar]

With the current existing production, we sell to the state at around EUR 0.11, EUR 0.12. You can imagine that at least 30% of our demand is being hedged at this level. Okay. This is a way for us how we can at least manage the inflation. For us, energy cost is the biggest single item in our OpEx and the fastest-growing one. Okay. For us, it's a clear way how we can hedge. This is not a limited. We want to develop. Okay. We see that we can actually go into the further elements of the energy business with the certain investments into the best. Okay. This is mainly focused on our own infrastructure, but this will let us to further hedge our energy pricing. Okay.

[Oleksandr Komarov, CEO at Kyivstar]

The third one, with the current demand and current supply, we can consider ourselves with the certain investments into the metering and to play a quite significant role as a potential trader on this market. This will be an extra step how we can manage the future tariff in the most efficient way. These are three elements that we are very much focused from the perspective of the overall operational efficiency improvement.

[Taner Kızıltoprak, CFO at Kyivstar]

I will further that with these acquisition green energy investments, we directly hedge our consumption. Also we have a quite high EBITDA margin as well in terms of the contribution to our financials.

[Ahmed Mostafa, Analyst at inam]

Thank you

[Cole Akeson, Group Director of Investor Relations at Kyivstar]

We have completed our queue of online questions. I know there may be some questions still in the room with the live audience. Would anyone like to ask one last question before we wrap up? We do have one. If there are any more afterward, please come speak with us.

[Matt Chesler, Analyst at FNK IR]

Matt Chesler from FNK IR. Thank you. If we can double-click on Kyivstar TV for a moment. With exclusive rights for relevant content, or even the bundling of mobile and broadband, how do you see the business developing over the medium and longer term? Maybe a sub-question on that would be with regards to content. What would the prospects for a profitability trend become?

[Oleksandr Komarov, CEO at Kyivstar]

Let me try to explain. We see the benefits of the live sport events. It was our first experience, and it definitely paid back. The result is better than our expectations. I see the full formula of success. We need to be competitive with the share of key sport events, so just to attract new audience to the application. We should be competitive in the overall content with a certain focus on the Ukrainian content. This is part of our strategy. We are, during the last years, have exclusive rights for the major, let's say, produced in Ukraine content, especially series and films. The third one, we should provide the best-in-class experience for the customer journey with advice mechanism, with AI embedded in our service, with the certain gaming elements in our service. This is the overall winning formula.

[Oleksandr Komarov, CEO at Kyivstar]

We are very much dependent on the synergies between our telco business and entertainment business. I think that the next frontier for us is to go outside from the Kyivstar perimeter, okay, with the proposal to the other mobile operators, let's say subscribers. Yeah.

[Matt Chesler, Analyst at FNK IR]

Thank you.

[Cole Akeson, Group Director of Investor Relations at Kyivstar]

Thank you. I believe we are out of time. We'd like to again say thank you to everyone who's joined us today, both those of you online and those of us who were able to join us here in New York. We'll be looking forward to speaking with you a number of times coming soon, but especially at our next quarterly results and at our November 16 Capital Markets Day. Thank you very much

Participants

Analysts

• Cole Akeson, Group Director of Investor Relations at Kyivstar
• Oleksandr Komarov, CEO at Kyivstar
• Taner Kızıltoprak, CFO at Kyivstar
• Jesse Sobelson, Analyst at BTIG
• Kaan TerzioÄŸlu, Group CEO at VEON
• Vincent Fernando, Analyst at Zero One Investment Research
• Max Findlay, Analyst at Rothschild & Co
• Adrian Cundy, Analyst at Emerging and Frontier Capital
• Matthew Harrigan, Analyst at StoneX
• Nicholas Paton, Analyst at Edison Group
• James Ong, Analyst at New Street Research
• Ahmed Mostafa, Analyst at inam
• Matt Chesler, Analyst at FNK IR