Turkcell Iletisim Hizmetleri AS Q3 Earnings Call Highlights

Key Points

• Q3 revenue rose 6.2% year over year in real terms to TRY 82 billion, while net income reached TRY 6.7 billion and the EBITDA margin improved to 44.2%. Management said results reinforced confidence in its full-year revenue growth and margin guidance.
• Mobile subscriber gains and pricing supported consumer growth: Turkcell added 579,000 net mobile customers, churn fell to 1.6%, and mobile ARPU increased 28% to TRY 512. Digital Business Services revenue also surged 65% to TRY 10.5 billion.
• Memory shortages and geopolitical uncertainty are delaying some data center and cloud demand, slowing expected growth in those businesses. Turkcell ended the quarter with TRY 99 billion in cash and net debt to EBITDA of 0.31 times; management expects year-end leverage to remain below one times.

Turkcell Iletisim Hizmetleri AS NYSE: TKC reported third-quarter revenue of TRY 82 billion, up 6.2% from a year earlier in real terms, as gains in its mobile business and a surge in Digital Business Services revenue supported growth.

Net income totaled TRY 6.7 billion, and the EBITDA margin rose to 44.2% from 43.9% a year earlier. CEO Ali Taha Koç said the results strengthened the company’s confidence in its full-year real revenue growth and EBITDA margin guidance.

CFO Kamil Kalyon said consumer revenue returned to growth, helped by pricing actions and a more rational competitive environment. The EBITDA margin improved despite a higher contribution from corporate hardware sales and point-of-sale services, which he said carry structurally lower margins.

Mobile and fiber subscriber gains

Turkcell added 579,000 net mobile subscribers in the quarter, including 701,000 postpaid customers. Mobile churn fell to 1.6% from 2.6% a year earlier, while average revenue per user, or ARPU, excluding machine-to-machine connections, increased 28% year over year to TRY 512.

Koç said mobile number portability volumes fell below 2.3 million during the quarter, compared with roughly 5 million per quarter in 2025. Assuming inflation develops in line with the company’s expectations, he said real mobile ARPU growth should accelerate over coming quarters as postpaid contracts are renewed.

The company added 39,000 fiber subscribers, bringing its base to 2.7 million. Residential fiber ARPU rose 34% year over year to TRY 623. Turkcell also added 101,000 subscribers to Superbox, its fixed wireless access service, and said the product’s market share reached 75%.

Turkcell expanded its fiber footprint by 242,000 home passes during the quarter, reaching 6.9 million across 33 Turkish cities. Its TV+ service added 148,000 net subscribers across its streaming and IPTV platforms.

Digital services growth and data center delays

Digital Business Services revenue rose 65% year over year to TRY 10.5 billion, accounting for nearly 13% of group revenue. Koç said large project renewals contributed significantly to the increase, while demand remained strong across the digital solutions portfolio.

However, he said global memory supply constraints and geopolitical uncertainty had delayed some customer demand for data center and cloud services, leading Turkcell to expect a more gradual revenue growth trajectory in those businesses this year. During the question-and-answer session, Koç said some business customers were postponing server purchases and, consequently, their use of colocation facilities.

Turkcell has 54 megawatts of active data center IT capacity across four locations and has invested EUR 628 million to date in data centers and hyperscale infrastructure, Koç said. Construction of facilities for Google Cloud’s Türkiye region is progressing, with the first module scheduled for delivery in 2028, according to Kalyon.

Kalyon said Turkcell could consider strategic partnerships or an initial public offering for its data center operations after the Google project is finalized, describing data centers as the company’s leading IPO candidate.

In financial technology, Paycell revenue increased 23% to TRY 2.9 billion, with customers outside the Turkcell group accounting for 81% of that total. Paycell’s active user base reached 7.1 million, Koç said.

Investment spending and balance sheet

Operational capital expenditure was 22.2% of sales in the third quarter and 22.8% for the first nine months, below Turkcell’s 25% full-year guidance. Kalyon said some planned data center and renewable energy spending had shifted to later periods as project schedules changed.

The company ended the quarter with TRY 99 billion in cash and net debt to EBITDA of 0.31 times. Kalyon said Turkcell most likely would not need additional funding in 2026 and was exploring external financing opportunities for data centers.

Turkcell paid $400 million including value-added tax for its new headquarters in Istanbul, Kalyon said. Koç said the acquisition would be reflected in fourth-quarter financial results and was intended to bring teams together at a technology and innovation hub.

Turkcell has also agreed to acquire an additional 11% stake in electric vehicle maker TOGG from Anadolu Group, raising its ownership to 34% upon completion. Koç said the agreement did not commit Turkcell to provide additional funding to TOGG.

Asked about the combined effect of the headquarters purchase, dividend and TOGG investment, Kalyon estimated that net debt to EBITDA could end the year around 0.7 to 0.75 times, remaining below one times.

About Turkcell Iletisim Hizmetleri AS (NYSE:TKC)

Turkcell İletişim Hizmetleri A.Ş. is a telecommunications and technology company headquartered in Istanbul, Türkiye. Founded in 1994, it provides mobile voice and data services, along with fixed broadband and television offerings.

The company also develops digital services and technology solutions for consumers and businesses, including communications, payments, cloud, and data-center services. Its core market is Türkiye, and it serves customers in the Turkish Republic of Northern Cyprus through a local operation.

Turkcell's chief executive officer is Ali Taha Koç, who took the role in 2023.

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