PLDT Q2 2026 Earnings Report

PLDT EPS Results

• Actual EPS: $0.61
• Consensus EPS: $0.66
• Beat/Miss: Missed by -$0.05
• One Year Ago EPS: N/A

PLDT Revenue Results

• Actual Revenue: $903.22 million
• Expected Revenue: $880.28 million
• Beat/Miss: Beat by +$22.95 million
• YoY Revenue Growth: N/A

PLDT Announcement Details

• Quarter: Q2 2026
• Date: 8/13/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 3:30AM ET

Philippine Long Distance Telephone Company (PLDT (NYSE:PHI)) is the largest integrated telecommunications provider in the Philippines, offering a comprehensive suite of fixed‐line, wireless, broadband Internet, and digital solutions to residential, enterprise, and government customers. Founded in 1928, PLDT has played a pivotal role in the development of the country’s communications infrastructure, evolving from a traditional operator of long‐distance telephone lines into a diversified digital services provider.

PLDT operates two main business segments: its fixed‐line and broadband operations under the PLDT brand and its wireless services through subsidiary Smart Communications. The company’s network assets include an extensive fiber‐optic backbone, mobile network with LTE and 5G coverage, as well as data centers and cloud platforms that support enterprise ICT solutions. PLDT also offers cybersecurity services, digital payment platforms, and managed services, positioning itself as a one-stop provider for connectivity and digital transformation.

Headquartered in Makati City, PLDT provides comprehensive communications services across the archipelago. Its senior leadership team is led by Executive Chairman Manuel V. Pangilinan and President and CEO Alfredo S. Panlilio, whose strategic initiatives focus on network modernization, product innovation, and expanding digital ecosystems. Through partnerships with global technology and content providers, PLDT continues to strengthen its service offerings and support the country’s shift towards a digital economy.

PLDT Q2 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: PLDT maintained resilience but reported mixed earnings. First-half service revenue rose 1% to PHP 97.8 billion and EBITDA reached PHP 56.1 billion with a 52% margin, while telco core income fell 2% to PHP 16.6 billion and reported income declined 6% amid higher depreciation and foreign-exchange losses.
• Positive Sentiment: Wireless trends improved materially during the quarter. Monthly top-ups moved from negative 3% in March to positive 1% in June, approximately positive 3% in July and 2%–3% in August, supported by selective price increases, personalized offers and strong network performance.
• Positive Sentiment: Home operating indicators began recovering after first-quarter installation constraints. Fiber net additions more than doubled sequentially to 97,000 in the second quarter, postpaid net adds turned positive in May, and churn remained low, although revenue improvement is expected to lag the installation recovery by several months.
• Positive Sentiment: Enterprise remained the strongest growth engine. Revenue increased 5%, ICT revenue rose 22% and tech services grew 35%, while Vitro data-center revenue climbed 13% with activated capacity potentially expanding from 34 megawatts to 62.4 megawatts.
• Positive Sentiment: Lower capital spending and potential asset monetization support deleveraging. First-half CapEx fell to PHP 20.7 billion from PHP 27.4 billion, full-year guidance remains in the mid-PHP 50 billion range, and a potential Vitro REIT transaction could provide slightly over PHP 12 billion for debt repayment, reducing net debt-to-EBITDA from about 2.6 times to approximately 2.4 times.

Presentation

[Gina Gabrillas, Head of Investor Relations at PLDT]

Afternoon, everyone. Thank you for waiting. Apologies for that delay. Thank you for joining us today. My name is Gina Gabrillas. I am the Head of Investor Relations here at PLDT, and it is my pleasure to welcome you to our first half 2025 financial and operating results briefing. Joining us today to share insights into PLDT's performance and strategic direction are PLDT Chief Operating Officer, Mr. Butch Jimenez, our OIC CFO, Mr. Leo Posadas. We also have here with us SVP and Head of Consumer Home Business, Mr. John Palanca. We also have our Head, or OIC for Smart Communications, Mr. Lloyd Manaloto, and our Chief Legal Counsel, Attorney Joan De Venecia-Fabul. We will also be joined later by our other key officers for our enterprise business as well as our data center business.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Before we begin, I would like to remind everyone that we will have a Q&A session after the presentation. You may submit your questions via the MS Teams Q&A panel. Thank you also to those who have submitted the questions beforehand, and we will make sure to address those during the call. To start, I would like to invite our Chief Operating Officer, Mr. Butch Jimenez, to walk us through PLDT's financial and operating performance.

[Butch Jimenez, COO at PLDT]

Good afternoon, everyone, and thank you for joining us today. I will take you through PLDT's first half 2026 financial and operating results. For the first half, gross service revenues grew 2% to PHP 108.7 billion, while service revenues net of interconnection costs increased 1% to PHP 97.8 billion. Both were tempered by softer consumer spending and wireless and the lagged revenue impact of first quarter installation constraints in Home, partly offset by continued enterprise growth. Cash OPEX subsidies and provisions were broadly flat at PHP 41.7 billion, supporting EBITDA of PHP 56.1 billion in a stable 52% margin.

[Butch Jimenez, COO at PLDT]

Below EBITDA, depreciation and amortization increased 6%, reflecting our past investments in network and infrastructure. Telco core income declined 2% to PHP 16.6 billion, while stable financing costs, contribution from Maya, and asset sales helped stabilize core income at PHP 17.3 billion. Overall, the business remained resilient with stable margins and continued financial discipline.

[Butch Jimenez, COO at PLDT]

Looking more closely at the top line, consolidated service revenues were up 1% to PHP 97.8 billion for the first half. Excluding legacy services, revenues grew 2% to PHP 89.2 billion and now account for 91% of total. Wireless revenues were broadly stable at PHP 42.1 billion, with mobile data and fixed wireless access grew 2% to PHP 38.7 billion. Home revenues were PHP 30 billion, down 1%, reflecting the revenue lag from the installation constraints we experienced in the first quarter. Enterprise remains our strongest growth driver, with revenues up 5% to PHP 24.8 billion by corporate data and ICT. While overall growth remains measured, the mix continues to shift toward data and ICT services. Let me now take you through the performance of each of our major business units. Starting with wireless, where we saw an improvement in trends through the second quarter.

[Butch Jimenez, COO at PLDT]

Wireless consumer revenues were PHP 42.1 billion this half, broadly stable year-on-year. Data and fixed wireless access revenues grew 2% to PHP 38.7 billion and now account for 92% of wireless consumer revenues. More importantly, the trajectory within the first half has improved. Monthly year-on-year top-ups moved from negative 3% in March to flat in April and May and positive 1% in June. This brought wireless revenues back to roughly flat for the first half. The usage numbers back this up. Active data users reached 24.1 million. Data traffic increased 12% year-on-year to 3,273 petabytes. 5G devices increased to 12.5 million, now representing 21% of the device base. ARPU also remained resilient despite the softer consumer spending environment. Wireless started the year under pressure and is ending the half on firmer footing. A lot of that comes down to how we're approaching pricing and customer engagement.

[Butch Jimenez, COO at PLDT]

Let me show you what we're doing on that end. Two things are driving better monetization. First, we are being more deliberate on pricing, selectively moving some prepaid offers to higher price points while adding more data and benefits so customers still see good value. For example, the selected prepaid offers moved from PHP 99 to PHP 109 with additional data in the package. Second, we are getting much better at engaging individual customers. Our hyper-personalized offers use each customer's behavior and usage patterns to make promotions more relevant. The results have been encouraging. App-based hyper-personalized offers are converting at as much as 5% versus around 0.2% for generic SMS broadcast offers. That's as much as 25 times higher. These actions are helping us support higher spend while keeping ARPUs resilient in a softer consumer environment. Our network experience also remains a key strength.

[Butch Jimenez, COO at PLDT]

In Opensignal's latest July report, Smart earned eight mobile experience awards with outright wins across gaming, voice apps, 5G upload and 5G coverage, and joint wins in video. What's worth noting is that Opensignal looks at coverage in the places people live, work, and travel, rather than simply measuring land area or population covered. It is designed to reflect the coverage users can reasonably expect in their day-to-day lives. Smart's network performance was also recognized in Ookla Speedtest Awards for the first half of 2026. Smart was named the Philippines' fastest mobile network, best mobile network, and best mobile video experience. Sharper pricing, better personalization, and a strong network experience are giving us a better path to improved monetization. Turning to home revenues were PHP 30 billion for the first half, down 1%, with fiber also down 1% at PHP 29.4 billion. It's worth remembering how home works.

[Butch Jimenez, COO at PLDT]

It's a 99% postpaid business, so there's a natural three to four-month lag between an installation and when it shows up meaningfully in revenue. Each new installation adds to the recurring revenue base, so the benefit builds as new subscribers accumulate. That's why the first half numbers still carry from the installation constraints we saw in the first quarter. The OSS migration slowed how quickly customer orders were converted into completed installations. The good news is that we started seeing recovery signs in the second quarter as installation volumes picked up and postpaid net adds turned positive in May. On fundamentals, ARPU remains best in industry at PHP 1,330 for the first half, though down from a year ago. Net churn is industry leading at 1.8%, with postpaid churn improving to 1.4%. Lastly, fiber net adds improved to 97,000 in the second quarter, more than double the first quarter trend.

[Butch Jimenez, COO at PLDT]

Let me show you those operating indicators in more detail because that's really where the recovery story is clearest. You can see the improvement more clearly in the operating indicators. Postpaid installations increased steadily through the second quarter, with June reaching the highest monthly level so far this year. As installations throughput improved, postpaid net additions turned positive for May. Churn also remains well managed, with monthly postpaid churn at 1% in June. We also continue to strengthen the home proposition beyond connectivity. Fiber Unli All brings fiber together with Cignal, HBO Max, and Smart data in one package. The idea is to give customers more value from their relationship and support deep engagement and retention. We continue to improve the service experience. Star Genie, our AI-enabled frontline service tool, helps our customer-facing teams resolve inquiries directly and much faster. Inquiry resolution is now around 10 times faster.

[Butch Jimenez, COO at PLDT]

Ticket escalations have been cut by half, and more than 61,000 hours of customer waiting time have been avoided. The operating recovery is already underway as installations rebuild the recurring subscriber base. We expect revenues to follow with the usual lag. Let me now turn to enterprise, which was our strongest growth business in the first half. Enterprise revenues increased 5% to PHP 24.8 billion, while corporate data and ICT revenues also grew 5% to PHP 18.4 billion. The mix continues to shift toward higher growth services. ICT revenues increased 22% in the first half, led by 35% growth in tech services. This more than offset the continued decline in legacy services. We are also seeing good growth across underlying infrastructure base. Fiber lines increased 6%, SD-WAN lines grew 18%, and contracted third-party racks across our Vitro data centers increased 6%. A key part of the strategy is One Enterprise.

[Butch Jimenez, COO at PLDT]

We bring together PLDT, Smart, ePLDT, PLDT Global, and Vitro to offer clients a broad set of solutions under one relationship. Increasingly, our wins involve more than one part of the group, combining connectivity with cloud, managed IT, cybersecurity, and data center services. That breadth is reflected in the growth we are seeing across the different enterprise businesses. You can see that momentum across the different businesses supporting our enterprise customers. PLDT Global's enterprise revenues grew 30%, supported by hyperscaler and carrier demand for international connectivity, cable capacity, and co-location. Smart's enterprise business grew 15%, driven by services such as A2P, GIGA, Enterprise Postpaid, and IoT. ePLDT Tech Services grew 37%, reflecting continued demand for managed IT, cloud, cybersecurity, and customer experience solutions. Vitro data center revenues grew 13%, supported by enterprise, cloud, and hyperscaler demand.

[Butch Jimenez, COO at PLDT]

What ties these businesses together is the ability to serve more of our customers' digital requirements from connectivity all the way through to the cloud, cybersecurity, and data centers. I'd like to spend a little more time on Vitro, where we see a particularly strong growth runway. Vitro data center revenues grew 13% in the first half, supported by demand from enterprises, the public sector, and hyperscalers. Today, Vitro has approximately 34 megawatts of activated IT-ready capacity across its portfolio, making us the largest data center operator in the Philippines by live colocation IT capacity, and we have significant room to scale from here. The next 10 megawatts at VITRO Santa Rosa are targeted for activation by the end of this year. Beyond that, identified expansion opportunities across Santa Rosa, Clark, and Cebu too could take total IT-ready capacity to 62.4 megawatts.

[Butch Jimenez, COO at PLDT]

That represents more than 80% growth from our current activated capacity. We also see a supportive backdrop for the industry. Executive Order No. 119 reinforces the importance of secure in-country hosting for sensitive government data. More broadly, it strengthens the case for building digital infrastructure locally and could support further cloud and hyperscale investment in the Philippines. Vitro is well-positioned for that opportunity, given its track record, scale, nationwide footprint, and its integration with PLDT's broader ecosystem. We are also continuing to build a platform to global standards. VITRO Santa Rosa is TIA-942 Rated III and LEED Gold certified, while S&P Global Ratings assigned Vitro a light green shade of green assessment. Turning now to operating expenses. Cost management remained disciplined in the first half. Total cash expenses, subsidies, were slightly lower at PHP47 billion, despite continued investments to support the business.

[Butch Jimenez, COO at PLDT]

The main increases came from repairs and maintenance, up 3%, and contract-specific service costs, which rose 26% in line with higher project activities. Subsidies were also higher, reflecting our continued push to drive device adoption and customer engagement. These increases were largely offset by lower compensation and benefits, selling and promotions, and taxes and licenses. Overall, we were able to keep the cash cost base stable while continuing to fund areas that support growth and customer experience. This cost discipline helped preserve margins, which I'll discuss on the next slide. Turning to EBITDA. The semestral trend shows a steadily expanding earnings base. EBITDA reached PHP56.1 billion in the first half, marking the fifth consecutive semester of growth from PHP53.9 billion in the first half of 2024. This has been supported by a combination of steady revenues and disciplined cost management.

[Butch Jimenez, COO at PLDT]

This allowed us to maintain EBITDA margin at 52%, broadly consistent with the levels we have sustained over the past several periods. Moving below EBITDA, Telco core income was PHP16.6 billion, down 2% year-on-year, mainly reflecting the higher depreciation and amortization. Maya continued to contribute positively, with PLDT share of core income reaching PHP559 million for the first half, compared with PHP406 million last year. Maya's second quarter contribution was lower, mainly due to one-time accounting adjustments rather than a weakening in the underlying business. Excluding these effects, the contribution would have been stronger. We also recognized around PHP0.3 billion from asset sales. These helped stabilize core income at PHP17.3 billion. Reported income was PHP16.4 billion, down 6% year-on-year. Losses in foreign exchange and derivatives, which moved from a net gain last year to a net loss in the first half of 2026.

[Butch Jimenez, COO at PLDT]

Overall, while higher depreciation weighed on Telco core earnings, Maya and asset sales helped cushion the impact on core income. Turning to CapEx. We continued to bring investment intensity down while maintaining focus on growth and network quality. CapEx for the first half was PHP20.7 billion, down from PHP27.4 billion last year. This brought CapEx intensity down to 19% of service revenues from 26% a year ago. We continue to prioritize investments that support growth and customer experience, including new cell sites, both fiber ports, AI, submarine cables, and IT modernization. For the full year, we continue to expect CapEx in the mid-PHP50 billion range. Our objective remains the same, continue bringing CapEx intensity down over time while sustaining positive free cash flow and investing where we see the best returns.

[Butch Jimenez, COO at PLDT]

Turning to the balance sheet, net debt stood at PHP287.3 billion at the end of June, with net debt to EBITDA at 2.57 times. We continue to manage the debt profile proactively with a well-spread maturity schedule. Only 3% of total debt matures in 2026, while more than half matures beyond 2031. Average debt maturity remains healthy at over six years. Our average pre-tax interest costs also improved to 5.05% from 5.43% at the end of 2025. Foreign currency exposure remains limited. USD denominated debt accounts for 14% of total debt, with only a small portion left unhedged. PLDT remains investment grade, rated BBB by S&P Global and Baa2 by Moody's. Our focus remains on maintaining positive free cash flow and steadily bringing net debt to EBITDA towards two times. Finally, on dividends, the board declared a cash dividend of PHP46 per share for the first half of 2026.

[Butch Jimenez, COO at PLDT]

This represents consistent with our dividend policy. PLDT continues to offer an attractive return to shareholders with a trailing 12-month dividend yield of around 8% based on the June 30 share price. At the same time, we are balancing shareholder returns with the need to strengthen the balance sheet. Our focus remains on sustaining positive free cash flow, continuing our asset monetization programs, and bringing leverage down over time. In the second quarter of 2026, Maya continued to scale its integrated ecosystem and remain profitable. Through one platform, Maya enables consumers to save, borrow, and transact, while helping businesses accept payments, manage cash flow, and access financial solutions. This integrated model creates strong network effects across consumers and businesses, reinforcing Maya's position as the Philippines' leading digital bank and merchant acquirer. Maya sustained strong growth across both digital banking and payments.

[Butch Jimenez, COO at PLDT]

As of end June 2026, Maya's deposit balance reached PHP86 billion, while loans outstanding rose to PHP39 billion. In merchant acquiring, Maya accounts for 53% of POS terminals nationwide as of December 2025, based on BSP industry data and Maya's corresponding regulatory submission under the same reporting definitions. On digital banking, Maya deposit balance grew 71% year-on-year, while loans outstanding increased 56% year-on-year, reflecting continued demand for its savings and credit products. The loan-to-deposit ratio stood at 45%, supporting the continued expansion of the lending portfolio. Asset quality remained stable, with gross NPL ratio of 4.8%, while annualized net interest margins stood at 17.3% for the first half of 2026, reflecting strong lending margins. Maya expanded payment flexibility for consumers through Maya Mini Payments, which allows Maya credit card users to convert any purchase into monthly payments without requiring a merchant tie-up.

[Butch Jimenez, COO at PLDT]

For businesses, the new Maya Business app brings together payments, banking, lending, cash flow management, and business insights and analytics in one app for the MSMEs. Maya also enabled Apple Pay acceptance through Maya Terminals and Maya Checkout, giving Apple Pay users a simple, secure, and convenient way to pay at Maya-powered businesses in-store and online. These products and services demonstrate how Maya continues to innovate across both the consumer and business sides of its integrated reach. On sustainability, we continue to strengthen the depth and transparency of our reporting. As complements to our 2025 Annual and Sustainability Report, we published five focus reports covering business continuity and network resilience, gender equality, human rights and environmental due diligence, just transition, and materiality and impact assessment. These reports help convey an even more holistic corporate narrative for PLDT.

[Butch Jimenez, COO at PLDT]

PLDT continues to participate in industry forums and thematic discussions covering areas such as finance, accounting, human capital, child protection, and nature-based sustainability. These platforms allow us to share what we have learned, exchange best practices, and contribute to the broader conversation on integrating sustainability into business. To wrap up, the first half showed a resilient performance despite a softer operating environment. Wireless trends improved through the second quarter. Home's operating indicators are moving in the right direction, and Enterprise continued to deliver solid growth. At the same time, disciplined cost and capital management helped us protect margins, strengthen cash generation, and maintain our focus on deleveraging. We believe these trends give us a firm base as we move into the second half of the year. With that, we thank you for your time, and we are happy to take your questions.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you very much, Butch, for that presentation. Before we open the floor for your questions, let me just acknowledge the presence of some of our other key officers here. We have also with us, SVP Lum Spinetta, who heads our Enterprise business. We also have

[Lloyd Manaloto, Officer-in-Charge at Smart Communications]

He went to the bathroom.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Attorney Mava, our corporate secretary. Thank you for joining us as well. Please feel free to go ahead and put in your questions in the Q&A box if you feel free to do so. Or if you wish, you can also raise your hand, and I can unmute you, and you can ask your question live on the audience. A number of you have sent in your questions before the meeting started, so let me go ahead and ask those questions. This first question is from Marky Cardonan of F. Yap Securities. Question is for our mobile business. You have highlighted the improvement in top-ups from negative 3% in March to positive 1% in June. How are you seeing July and early August trends, and do you now view the improvement as a structural recovery in consumer spending, or are customers simply responding to the price and offer changes?

[Lloyd Manaloto, Officer-in-Charge at Smart Communications]

Thank you for the question. The first part of the question is, are we seeing improvement in top-ups? For July, we are looking at roughly a +3% top-ups. In August, we are standing somewhere between 2% and 3%. That is good to. In response to the second part of the question, what part is structural and what part is driven by marketing interventions? Recall that around in March, we went down to -3%. April, probably around -2%. Sometime around May, we saw an improvement in gasoline, the diesel prices, which have very positive effects with mobility. All told, if we were looking at the numbers, it seems that from -2% to flat, that is driven by structural improvements in gasoline prices. From June, we saw a +1%, July, a +3%, and roughly around maybe a +2% around August.

[Lloyd Manaloto, Officer-in-Charge at Smart Communications]

That roughly +2% is now driven by our interventions. It is half structural and probably half driven by our marketing activities.fLloyd

[Gina Gabrillas, Head of Investor Relations at PLDT]

Mm-hmm. Thank you, Lloyd Manaloto. Before I go to the next question, apologies, people. I forgot to acknowledge your presence here. We also have Biboy Candino, the President and CEO of PLDT and Vitro, our data center business. If you have questions for that side of the business as well, please feel free to ask the question. All right. This second question is for our home business. This is also from Marky Cardonan of F. Yap Securities. Given that installations and postpaid net adds have turned positive in May, should we expect the revenue and selection to become visible at around August or September, or is there still a longer lag from the OSS disruption?

[John Palanca, SVP and Head of Consumer Business Home at PLDT]

Yes, Marky, right?

[Gina Gabrillas, Head of Investor Relations at PLDT]

Marky.

[John Palanca, SVP and Head of Consumer Business Home at PLDT]

Hi. Hi, Marky. Thank you for your question. Actually, we're very encouraged by the leading indicators that we've seen. As we mentioned during the briefing, our installation rates went up to pre-disruption levels. We've also seen the conversion rates improve and the churn rates go down. All these factors will add to the compounding of the installed revenue moving from month-to-month to higher levels. Yes, we are encouraged to see this impact very soon. I'd like to say that it would be sooner than later, but we will see what the impact of this is. But I can say, based on the initial figures that we're seeing, that we will see year improvements for sure. Thank you.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. As a follow-up to that, John, would you be able to share if there are any installation run rates that you need to reach for Home to return to positive revenue growth, or is this something

[John Palanca, SVP and Head of Consumer Business Home at PLDT]

Well, as a matter of principle, Marky, too. As a matter of principle, our net adds is really a function of our gross adds and our churn rates. As long as we keep it on the positive side, this will compound. In fact, our challenge in catching up was really the shortfall of the Q1 disruption that carried over, also compounded negatively into the first half. But we're seeing that we are now positive net adds and at an increasing rate at that. Also, we're seeing that the customers that we are acquiring are in the postpaid segment, which provides a much higher ARPU for us. As long as we continue to do that for the balance of the year and moving on to the next year, then we should be okay. Thank you.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you, John. All right. Next question, also from Marky. This is on Maya, and I'll be taking that question. Maya remains profitable, but its contribution to PLDT's core income was slightly lower both Q&Q and year-on-year. In the second quarter, is it because of non-recurring accounting adjustments? If you exclude those adjustments, how should we think about underlying earnings per share for Maya in the second half of 2026? Also to follow through to that question, with Maya's loan book up 56%, would that cause management to slow credit growth? What early warning indicators would tell you that the current 4.8% NPL ratio is no longer sustainable? Just to address the Q&Q and year-on-year decline for Maya.

[Gina Gabrillas, Head of Investor Relations at PLDT]

The movement in that is really not reflective of the underlying performance of the business, and it's really primarily true to certain accounting treatments of expenses and non-recurring expenses for the quarter. If it were not for those accounting adjustments that are one time, definitely year-on-year and both quarter-on-quarter contributions to PLDT would have been much stronger and positive. Regarding the question about credit growth, it did grow 56%. If you do look at the LDR, loan to deposit ratios of Maya, which is published in the bsp.gov.ph website, it is still in the low 40s. There definitely is quite a bit of room to expand. Usually if you look at Maya, it really is hand-in-hand with the BSP in really pushing financial inclusion in the Philippines.

[Gina Gabrillas, Head of Investor Relations at PLDT]

If we look at the credit quality of Maya, as well as the credit quality that is published by the BSP, based on that, Maya really hasn't observed any broad-based deterioration in credit quality. In fact, Maya's loans continue to grow. Our NPLs continue to improve to 4.8. Maya really continues to monitor repayment behavior, portfolio performance, and developments across the customer segments very closely. I think for now they're at a comfortable position on that. Okay. This next question is from Jojo Gonzales, Jojo Gonzales of Philippine Equity Partners. Many thanks for sending ahead of the call. My questions are around the cost side. This would be for our finance team. As OpEx appears to have outpaced the growth of revenue. Sorry, let me read that again.

[Gina Gabrillas, Head of Investor Relations at PLDT]

As OpEx appears to have outpaced the growth of revenues, especially in 2Q, specifically depreciation, interconnection, and the cost of devices and accessories, what is behind the seemingly faster rate of growth of these items? Thank you. Okay.

[Leo Posadas, OIC CFO at PLDT]

Sure. In terms of the depreciation, there have been investments predominantly related to the network, upgrading our core services. We also plan to build out in terms of the transport, as well as the core network. Also to solidify our position. We want to make sure that our 5G coverage is better. We are increasingly focusing on that within the boundaries of our CapEx guidelines, which this year we've signaled around a PHP 55, mid-50s billion CapEx target for this year. For us, that CapEx, which started, and will continue in the second half, has elevated some of the depreciation associated, and we have to invest to grow the business. I think the challenge for us is to be prudent in terms of our cost management, but also looking with a view towards pushing on and driving the growth in the top line.

[Leo Posadas, OIC CFO at PLDT]

This is what we are focusing on, and we'll look to improve in the second half.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. All right, this next question is from Michael Fernandez of Metrobank. I think this is in regards to CapEx as well. How much is CapEx spend in the first half of 2026? That should be in your slide. Is guidance for 2026 still in the mid PHP 50 billion levels? What is CapEx guidance for 2027? How much of CapEx will be funded by debt?

[Leo Posadas, OIC CFO at PLDT]

Sure. In terms of the CapEx, as you saw last year, the CapEx for the first half was PHP 27.4 billion. This year, what we have done in the first half is lower than that, PHP 20.7 billion. From an intensity perspective, the CapEx intensity last year of 26% has reduced down to 19%. Why we are focused on that is the ability to then ensure the free cash flow generation. When we look at those measures, including, for instance, EBITDA less CapEx, that's where we're showing the improvement that we have been able to do through the reduction. Now, having said that, as I mentioned earlier, our target for the full year, though, still remains in the mid-PHP 50s.

[Leo Posadas, OIC CFO at PLDT]

Therefore, you would see an increase in the second half as we look to continue, as I mentioned, to support our network. We want better coverage. We want better quality in terms of our services that we provide across the board. We are going to be continuing our investments. In terms of guidance for next year, 2027, it's a little premature, but I think the message here is we want to continue to maintain our discipline on CapEx. We are looking very closely at the return on invested capital for the new CapEx that we're making. We want to make sure that it's spent in the right areas that will generate growth for our businesses as well in terms of the top line and provide an adequate return on that invested capital.

[Leo Posadas, OIC CFO at PLDT]

For next year, I think we would look to continue to seek to reduce, if possible, from the 55 below that. But in terms of the amount and the quantity at this point, it is too early to say.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Okay. Thank you very much for that. This next question also from Michael Fernandez is for Vitro. So Biboy Candino, this will be for you. Can management provide an update on the proposed Vitro REIT transaction?

[Biboy Genuino, President and CEO at Vitro]

Yeah. Excellent question. We are still targeting Q4 listing, but obviously this will be subject to market conditions. We have done our cornerstone roadshow already internationally and locally. Interest has been very positive. I think it is close to the view that it will be one of the only digital infrastructure REIT platforms in the country. But we will see by Q4 as to whether we will proceed.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. All right. This message, let me keep it within the Vitro space. So this is from Matteo Lorenzo. On Vitro REIT, could you help us understand why it is the right time from both PLDT's and Vitro's perspective to list? PLDT is already in a lower CapEx and positive free cash flow and deleveraging phase, while Vitro still has significant growth upside. How much of the timing is about accelerating PLDT's own financial trajectory versus the current rates and yield environment, versus what the REIT can unlock for Vitro? So I guess, Biboy Candino can take the timing from Vitro's perspective, and then we can take the timing from PLDT's perspective.

[Biboy Genuino, President and CEO at Vitro]

Yeah. I think it is a good time. From our nine data centers currently, we have eight that we are injecting into the REIT. That is 24 megawatts in total. Our ninth data center, the newest one, is VITRO Santa Rosa. It is 36 megawatts in capacity. I think it is a good opportunity to come in and capitalize the 25 years of experience of us running data centers in the country. We are the largest data center platform in terms of number of sites. We are the largest data center in terms of capacity. We are the most carrier-dense data center in the Philippines today. We are the home of the Philippine internet. We host over half of the internet exchanges in the Philippines today, and it bodes well to the platform that we have built over 25 years.

[Biboy Genuino, President and CEO at Vitro]

We are very proud of the platform, and we think it is a good opportunity to list now. But as you said, the upside is still huge. A lot of development plans on Executive Order No. 119, a lot of development plans of hyperscalers looking at expanding here in the Philippines. And of course, we have our crown jewel, VITRO Santa Rosa, to be injected in the future in the Vitro REIT.

[Leo Posadas, OIC CFO at PLDT]

Yeah. From the PLDT perspective, what I can say is that the timing is, of course, there is a lot of interest in this space. As you are aware, the recent Executive Order No. 119 has created an opportunity to scale up in this industry. The REIT itself is a portfolio of eight data centers which are mature, which have been around, some even over 20 years. As a result of it, and as the capacity of those are higher, this allows us to offer investors an attractive vehicle where they can invest into an attractive dividend yield business that is listed. Then, in the future, we would look to grow by continuing to build on the data centers.

[Leo Posadas, OIC CFO at PLDT]

As Biboy Candino just alluded to, the developments in this market with Executive Order No. 119, even without it, we are seeing a lot of growth on the corporate side and the traditional colocation businesses. Now with the interest coming from hyperscalers and AI-based providers, this is creating a lot of supply on the demand side for data centers. I think the opportunity to list would be one to then raise some capital, and perhaps some of that would go into the future investment. But also, as mentioned earlier, it is also part of the overall group plan to delever the debt where we are now today at 2.6 times net debt to EBITDA. We would like to see that come down. Any proceeds that could be generated from a listing, that would help us in terms of reducing and improving and strengthening our balance sheet.

[Leo Posadas, OIC CFO at PLDT]

This is an opportunity. It could be this year, but it does not necessarily have to. To build the business as we fill up the capacity of VITRO Santa Rosa and we look to further develop others in the future, I think that that is really where the strategy of the business is recognizing the growth in this industry and wanting to be a continued participant and increase our leadership in this category.

[Biboy Genuino, President and CEO at Vitro]

I think, just to add to that, I think you even had admitted in your question, right? The market conditions is what we talk about, like how would it price in that period when we explore the listing. I think we are obviously paying attention to that. We want to make sure that it is pricing in the upside and the growth that we are factoring into the Vitro REIT and how the data centers are performing. I just wanted to highlight that as well.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. All right. I will take some live questions now. I see John Toh, UBS, with a raised hand. Let me go ahead and allow you to unmute. Please go ahead and ask your question, John. Are you able to Apologies, John. Perhaps you can send me your message offline if you are not able to ask it live. Let me go ahead and move back to the Q&A side while I figure out the live question. Apologies about that, John. All right. This question, also in the Q&A box is This is from Lisa Lang of Papa Securities. This is for our mobile segment. Mobile subscribers saw churn across all segments this quarter. Are you seeing more aggressive pricing from competitors, or just a case of subscribers self-selecting into lower-priced providers amid inflation?

[Lloyd Manaloto, Officer-in-Charge at Smart Communications]

All right. Our end, obviously, just did a cleanup on our subscriber base. It is not a churn driven by the subscribers, but rather we saw some subscribers who do not make sense already with the network because they are just using data source. That is basically a cleanup. For us, for ours. Good morning.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. All right. This is from Michael Xavier Alonso. This is in regards to Pax Silica. Maybe you, Glen, or Biboy Candino can comment on this. Do you anticipate any potential disruption or increased competition in the data center business arising from the Pax Silica development?

[Biboy Genuino, President and CEO at Vitro]

I can take that. As we understand, I think we are still really waiting for details on what exactly Pax Silica is. While I think, obviously, both the U.S. government and the Philippine government have been in talks. This is yet to trickle down in terms of significant implications to which private sector locators are going to drive the investors, specifically which U.S. companies are going to lead the charge. The last time when we talked to different parties, it is not that clear yet. That said, I think a lot of the Pax Silica focus is really on advanced manufacturing and rare minerals and that type of processing. I think data center and other digital infrastructure, particularly connectivity, is much more of servicing those different industries.

[Biboy Genuino, President and CEO at Vitro]

We are prepared, as always, to respond to that, as we do in any other site type location, industrial zones, et cetera. I think we are waiting for more details. In fact, we have had maybe some independent inquiries. It could be considered within the same industries as what Pax Silica is targeting, already asking. That is just part of business as usual to engage them and talk to them for both connectivity as well as their data center needs.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. All right. Going back to the Q&A box. This is from Michael Fernandez as well, from Metrobank. How much of PLDT's debt can we expect to go down as a result of the Vitro REIT transaction? Understand that it was previously mentioned that a portion of the proceeds will be used to pay down debt.

[Leo Posadas, OIC CFO at PLDT]

In terms of the debt reduction from a net debt to EBITDA ratio, we would see an improvement from the 2.6 to approximately 2.4.

[Gina Gabrillas, Head of Investor Relations at PLDT]

On the B plan, I think it's a little under PHP 13 billion, a little over PHP 12 billion, that will be used to pay down debt. All right. This is from Francis Giles Puno. This is in regards to costs as well, depreciation and CapEx. Would you say that the growth in depreciation, despite tempered CapEx in the past few quarters, is related to old 4G investments becoming more outdated as you migrate further to 5G? How long do you expect depreciation growth to remain elevated?

[Leo Posadas, OIC CFO at PLDT]

Sure. Yeah. That's 2026 figures assuming moderate increase in depreciation, which reflects some of the prioritized network and digital investments, for instance, fiber and wireless expansion, capacity, resilience, upgrades. We want to sustain the CapEx intensity improvement through tighter prioritization and the discipline in terms of the execution. There's also an impact from IFRS 16, some of the step-ups as we use more of these back network investments. So depreciation on the right of use is also contributing to the increase in the CapEx in the depreciation.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. All right. John, I'm going to try to unmute you again. John, can you ask your question now?

[John Talbott, Analyst at UBS]

Sure. Thank you. First question on mobile. I understand it is macro-linked, although your competitor showed stronger growth. Anything you think they are doing differently?

[Biboy Genuino, President and CEO at Vitro]

I think fundamentally on our network, first, there are two maybe interesting things that we're looking at as comparison to them. One is on our network, we're focusing our rollouts in 5G primarily because of the revenue. We see for them it's the other way around. More CapEx to roll on the rest of the country. That's one. The other item that we're seeing they are a little ahead is that they have, I think on the IT side, they have better reach on their hyper-personalization, particularly because of reach of GCash. What we intend to do now is figure a way to actually extend our hyper-personalization capabilities to go beyond their current applications, SMS, and I can get into more partnerships with the wallets and with the social media providers.

[Biboy Genuino, President and CEO at Vitro]

That should allow us now to double the game with regard to our marketing efforts, in particular new add subscribers.

[John Talbott, Analyst at UBS]

Very clear. Thank you. Second question on broadband. I think one of your competitors also accelerated revenue growth whereas two of the three slowed this quarter. I guess the question is: how would you characterize the competitive landscape given these factors?

[Lloyd Manaloto, Officer-in-Charge at Smart Communications]

Yes. Thank you for that. PLDT remains to be the clear leader in the high-value fiber or premium market. We have the highest ARPU today. We have the lowest churn, and we are 52% of the postpaid fiber market. A lot of the industry growth have nine separate growth around the growth in the prepaid segment very disproportionately. This is driven by, of course, the ARPU prepaid fiber and acquisition by our competitors more in that segment. PLDT owns underlying fundamentals have been growing and they turned positively in Q2.

[John Palanca, SVP and Head of Consumer Business Home at PLDT]

Because PLDT is 99% postpaid, there is a certain lag for us to convert those new installations to recurring revenue. We need to wait for that impact to compound. In our business, the second half is really very straightforward. We just need to accelerate and ride on this wave of Q2 improvements while building prepaid as a potential growth engine. As long as we do not sacrifice the economics, which we are looking at very carefully today, then this is a segment that we would like to be active in as well. Thank you.

[John Talbott, Analyst at UBS]

Okay, very clear. Third question, just on the topic of CapEx. I think it was mentioned that there are new ROIC targets for new CapEx. Could we share some of those? I guess the question is also coming from depreciation has been growing faster than revenue for the past few quarters. I guess the second part of that question is whether we could actually expect CapEx to sales to drop to low 20s or even high teens as other ASEAN markets have shown this trend.

[Leo Posadas, OIC CFO at PLDT]

Yeah. On the return on invested capital point, when we look at key initiatives, for instance, if we have an initiative around the network, we want to improve the 5G cycle, for instance, then we would evaluate, depending on which locations, and opportunities that would generate increases in revenues, weighed against the cost, and therefore is it accretive to our returns and what kind of investments and returns and payback and so forth are we going to get? This is one specific example, but as part of our review in terms of our investments in the capital, then that also goes into the allocation in terms of which of the businesses, recognizing that we have the home, we have the mobile as well as enterprise and key initiatives in ensuring that we have a stronger network, then it is the allocation among that.

[Leo Posadas, OIC CFO at PLDT]

It is a measure that we review internally. It can be also specific to projects themselves, but the net effect is what impacts not just our top-line growth, we are invited to grow, but also what would be the income and the net margins that would stem from that capital investment. It is a discipline that for us is very high in terms of our priority. Given our focus to reduce our capital spend overall in terms of CapEx reduction from the past, then we have to be more efficient and effective with it. So that is really the color around how we approach the returns.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. All right, so this next question is from Raymond Trangia. Is there scope to increase the dividend payout ratio, despite the focus on, I guess, with the focus on deleveraging?

[Leo Posadas, OIC CFO at PLDT]

At this point, the focus, it has been at the 60% core income payout. I think that for now, that is still the intent and the plan of the group.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. Also from Raymond, this is a question on Maya. Can you give a PHP value for Maya's recurring net income contribution for the second quarter? I am not able to comment on the actual recurring net income contribution, but I can tell you how much they contributed to PLDT's core income, and that is PHP 559 million for the first half. But again, that does include some of those one-off accounting adjustments that resulted in the lower contribution for the second quarter. But again, that should be non-recurring, so there is that little blip that you have in the second quarter. All right. I think this next question from Raymond was already asked earlier in regards to the trends that we are seeing in mobile top-ups as it moved positive to June. How does July show month-to-date?

[Gina Gabrillas, Head of Investor Relations at PLDT]

I will just get back to you on that since it was already addressed by Lloyd earlier in the call. Let me just go ahead and go back to the Q&A box. This is from Paolo Misael Co of COL. With regards to the copper assets, is there an update to the timeline? Are you seeing a more favorable environment to sell these assets?

[Leo Posadas, OIC CFO at PLDT]

We are in discussions and exploring the opportunities to sell copper, which will stem from some of the legacy assets of the business. In terms of the environment and timing of the pricing, as you have seen in the spot prices, the price of copper has increased even within this year and the past 18 months. Today, the spot is around $6.50 US per pound. It is a commodity that is increasing in value. Of course, that helps when you are looking at a sale in terms of the pricing. As I mentioned, discussions are ongoing, and as and when a transaction would be completed, then the appropriate disclosures will be made.

[Gina Gabrillas, Head of Investor Relations at PLDT]

Thank you. This next question is from Michael Fernandez of Metrobank. This is in regards to also asset monetization, but tower sales now. Can we expect any tower sales this year? How much can we expect?

[Leo Posadas, OIC CFO at PLDT]

The approximate proceeds that we would seek to generate from the sales would be PHP 2 million. That would be the target. Of course, subject to discussions and finalization of this process.

[Gina Gabrillas, Head of Investor Relations at PLDT]

All right. I think that brings us up to the hour. Again, thank you so much for joining us today. I know there are quite a number of questions in the Q&A box still, so apologies for not being able to get through to all of that. But if we do have time, I will take these questions in and then we can answer them offline. In terms of our next earnings announcement, we will see you all in November. But thank you again very much for your time today. We hope to continue to see you in future events. Thank you. Have a good day. Bye-bye.

[John Palanca, SVP and Head of Consumer Business Home at PLDT]

Thank you.

[Leo Posadas, OIC CFO at PLDT]

Thank you.

Participants

Executives

• Gina Gabrillas, Head of Investor Relations
• Butch Jimenez, COO
• John Palanca, SVP and Head of Consumer Business Home
• Leo Posadas, OIC CFO

Analysts

• Lloyd Manaloto, Officer-in-Charge at Smart Communications
• Biboy Genuino, President and CEO at Vitro
• John Talbott, Analyst at UBS