Globe Telecom, Inc. (GLO) Earnings Call Transcript & Summary

Good afternoon, and welcome to the First Quarter 2026 Analyst Briefing of Globe Telecom. We will begin with a video presentation of our performance and a few updates on the digital platform businesses to be followed by the Q&A session.

Welcome, everyone. Thank you for joining us for Globe's First Quarter 2026 Analyst Briefing. To begin the presentation, we are pleased to report that resilient demand for data connectivity, coupled with higher share in equity affiliates continued to drive Globe's growth in the first quarter of the year. Our consolidated gross service revenues for the first 3 months reached PHP 42 billion, an improvement of 5% year-on-year. Data-related services contributed to 91% of top line during the 3-month period, reflecting the resilience of the company's operations as well as its commitment to providing Filipinos with consistent and reliable services amidst an extremely volatile macroeconomic environment plagued with heightened risks and uncertainty. On a sequential basis, first quarter revenues were slightly softer compared to the seasonally stronger fourth quarter, which was also the all-time high. Consolidated GSR for the period were the second highest quarterly revenues on record. Our EBITDA increased by 7% compared to the same period last year, hitting PHP 22.2 billion as the slight uptick in costs was more than offset by our higher top line. Our EBITDA margin stayed robust at 53%, well above company guidance. This higher margin also more than offset the nonoperating charges for the first quarter, ultimately pushing core net income to PHP 4.9 billion, a 9% increase on a year-on-year basis. The healthy core NIAT growth was also supported by improving share in equity affiliates for the period. With that, we turn to some developments within Globe and its digital platform businesses, each of which we will be discussing in greater detail later in the presentation. Firstly, STT GDC Philippines has secured a landmark deal with Empower to supply the STT Fairview 1 and STT Cavite campuses. Secondly, the company continues to reap strong contributions from Mynt, which now accounts for 30% of Globe's net income before tax. And finally, as a result of the promising first quarter performance, the Board has approved a quarterly cash dividend of PHP 25 per share. Key dates for this declaration are the payment date of June 10, 2026, to shareholders on record as of May 25. Moving on to the company's operating performance. Mobile business performance continues to be buoyed by organic growth in mobile data usage. Globe generated PHP 30 billion in service revenues for the first 3 months of 2026, up 6% year-on-year with sequential performance reflecting typical post-peak seasonality. About 89% of this came from mobile data, which reached PHP 26.8 billion in service revenues during the quarter, higher by 11% on a year-on-year basis. While mobile data continued to strengthen, traditional voice and SMS services remained on a structural decline, consistent with the broader shift toward app-based communication. As of end March 2026, Globe's mobile subscriber base reached around 67 million, up 8% from a year ago. While our mobile data user base expanded to over 39 million, up by 6% year-on-year, driven by the continued digital adoption across the customer base. Meanwhile, mobile data traffic rose to 1,810 petabytes from 1,537 petabytes a year ago, while average monthly data consumption per subscriber increased by 12% to approximately 16 gigabytes, reflecting sustained usage growth and ongoing 5G migration. At a more granular level, Globe's robust average daily top-ups showed sustained data habituation as 5G continued its promising momentum. Average daily mobile top-ups and daily wireless traffic sustained elevated levels through the first 3 months of 2026. Evidently, the mobile business continues to be anchored on stable prepaid engagement, consistent usage patterns and further supported by targeted hyper personalization initiatives, which enhanced reload frequency and customer stickiness. Meanwhile, Globe's 5G customer base continues to deliver higher value per user versus non-5G subscribers, supported by rising 5G daily traffic and average traffic per user. This indicates improving monetization as 5G adoption scales. Moving on to the wired segment. Fiber broadband revenues sustained their growth momentum in the first quarter, further cementing total segment turnaround. Globe at Home Broadband generated PHP 6.2 billion in revenues in the first 3 months of 2026, up 6% year-on-year and broadly in line with fourth quarter levels as fiber adoption deepened across the base. Fiber made up 93% of total broadband revenues compared to 91% at end 2025 and 89% a year earlier. This was a result of the 10% year-on-year growth in total fiber revenues, supported by the 37% increase in fiber subscribers. Total broadband subscribers reached 2.2 million as of end March 2026, driven by migration to fiber and improving household penetration. Of this total base, GFiber prepaid contributed 1 million subscribers as it sustained its momentum into the first quarter of the year, building on the strong base at end 2025. Hitting this milestone highlights the growing trust of Filipino households in a flexible, affordable and reliable home Internet. This was further propelled by higher value reloads, driving continued revenue growth from the prepaid fiber segment. Globe's strategy ultimately favors profitable density over geographic sprawl, ensuring disciplined growth through targeted customer acquisition. The company's success is rooted in a disciplined acquisition strategy that balances rapid scale with sustainable long-term value. Meanwhile, Globe's corporate data revenues were lifted by robust demand for ICT-related services. The segment recorded PHP 5.1 billion in revenues for the first quarter, up by 6% year-on-year. Results were supported by the 17% uplift in revenues from ICT-related services led by business application solutions, cloud and cybersecurity services, reflecting sustained demand for higher-value enterprise solutions and offsetting a 4% decline in core data revenues. On a sequential basis, corporate data revenues declined by 10%, mostly coming from Box core data and cloud solutions attributed to the typical cyclical nature of corporate ICT spending in the early months of the year. Globe continues to enhance its enterprise capabilities by embedding AI-driven solutions and strengthening its network of digital infrastructure assets, reinforcing its role in enabling business modernization across industries. Our adjacent businesses continue to unlock greater value for Globe, driving ecosystem synergies that strengthen core telco. While non-telco revenues declined by 36% year-on-year to PHP 365 million in the first 3 months, this was primarily due to the deconsolidation of the Yondu Group following the completion of Globe's partnership with NCS under which Globe retained a 49% stake, while NCS assumed majority ownership. Excluding non-telco revenues from Yandu Group last year, non-telco revenues would have decreased by 4%. Total equity share in affiliates for the period amounted to PHP 2 billion, an improvement of 7% compared to the same period last year as Mynt delivered another stellar quarter, reinforcing its standing as the Philippines' leading digital financial services provider. Globe's equity share in Mynt rose to PHP 1.9 billion in the first quarter, an 8% increase from PHP 1.8 billion in the same period last year and a 120% increase versus the last quarter. This contribution now accounts for 30% of Globe's net income before tax, up from 22% share in 2025. Mynt's growing contribution underscores its role as a key earnings driver, complementing Globe's sustained investments in digital infrastructure and connectivity. Shifting the discussion to capital expenditures now. Globe's cash CapEx for the first 3 months of 2026 reached PHP 12.7 billion, up 51% year-on-year as Globe sees opportunities for strategic infrastructure investments. These include targeted investments in network expansion and capacity enhancements, consistent with Globe's disciplined capital allocation strategy and full year guidance of below USD 1 billion. CapEx during the quarter represented 30% of service revenues, supporting the company's improving free cash flow profile. The company remains focused on sustaining positive free cash flow and maintaining a prudent balance sheet. Approximately 91% of this spending was allocated to data-related initiatives, underscoring Globe's continued investment in digital capacity expansion and network quality nationwide. As of end March 2026, Globe continued to expand and modernize its network to support increasing data usage and evolving connectivity requirements. Globe sustained its leadership in 5G connectivity, rolling out 408 new 5G sites across key strategic areas during the quarter. And in line with the ongoing shift toward fiber connectivity, the company deployed 43,084 new fiber-to-the-home lines during the first quarter, extending fast and reliable Internet access to more households nationwide. We are also happy to share that our sustainability journey continues to support Globe's operational resilience and long-term value. On the environmental front, Globe is seeing significant momentum in our decarbonization road map. In 2025, the company achieved a year-on-year reduction of 15% in Scope 1 and 2 emissions and 9% in Scope 3, outpacing our near-term linear reduction targets of 4.2% and 2.5%, respectively. We also continue to optimize our energy mix with renewable energy now comprising 34% of our total consumption, keeping us firmly on track toward our 42% target by 2030. Globe's social pillar remains focused on online safety and inclusion. We have intensified our fight against cyber threats by donating IMSI catcher detectors to key government agencies, including the NTC, CICC and CIDG to help locate unauthorized signal activity. In celebration of Safer Internet Day, Globe, together with the Center for Art New Ventures and Sustainable Development, or Canvas, hosted an interactive learning session at the National Museum that use art and storytelling to help families navigate complex topics like AI and data privacy. We are also scaling our impact on education through the CENTEX Digital Education Wallet on Globe, which provides a platform to help fund the setup of new digital learning labs. Finally, we have recently published the 2025 Globe Integrated Report, which for the first time, includes the results of our double materiality assessment. We have also begun adopting IFRS S2 climate-related disclosures, aligning our reporting with global frameworks. The 2025 Globe Integrated Report may be accessed through the Globe website. Turning to Globe's digital platform businesses, starting with STT GDC Philippines. As we close out the first quarter of 2026, the message from the company is clear. We are no longer just building for the present. We are architecting the future of the Philippine digital economy. Execution is the company's primary currency. We are pleased to report that the 4-level facility of STT Fairview 1 has reached a major milestone. The facade and all Level 1 data halls are officially complete. We are currently in the commissioning phase for Level 2 and have moved into the design stage for Level 3 to stay ahead of the demand curve. At STT Cavite 2, Phase 1 is now ready for service, and we already have active customer deployments on the ground. Both build-outs put STT GDC Philippines on a definitive track to exceed 30 megawatts of total capacity across our sites by the end of this year. Capacity is meaningless without stable sustainable power. In March, we secured a landmark 40.5-megawatt renewable energy partnership with MPower. This isn't just about ESG, it's a strategic financial hedge. This 10-year commitment, which powers our Fairview and Cavita campuses through 2035 effectively derisks our operations from volatile fuel prices. It provides our investors with predictable margins and our customers with the green footprints they require. We remain firmly on track for carbon-neutral operations by 2030, ensuring our AI growth is built on a future-proof foundation. Also, last month, our team took part in the NVIDIA GTC in San Jose. The inference inflection is here, and the world is expanding AI capabilities to every region. Because the company's infrastructure is designed for high-density liquid cooled AI workloads, we have successfully secured a strong pipeline of customers looking for multi-megawatt deployments right here in the Philippines with a deployment time line of T4 to T 12 months STT Fairview is the only site in the country ready to absorb this specific high specification demand today. And finally, let's talk about market confidence. Earlier this year, a KKR-led consortium announced the acquisition of 100% of STT GDC at an enterprise value of SGD 13.8 billion. This deal expected to close later in 2026 is a massive vote of confidence in the STT platform. It signals that the world's most sophisticated institutional investors view our industry as the backbone of the AI economy. For STT's venture partners at Globe and Ayala, this confirms that the JV is part of a global elite class of infrastructure assets. In summary, STT GDC Philippines has the physical capacity coming online, the renewable energy to power it and the global AI pipeline to fill it. We are not just a good bet. We are the platform in the Philippines with the scale, the parentage and the technical readiness to lead this new era. Moving on to Mynt, In the first quarter, GCash strengthened its position as the #1 finance app in the Philippines by monthly active users based on third-party analytics from Sensor Tower. We also continue to sustain leadership as the top InstaPay destination by transaction volume as per PPMI. The company's scale and everyday relevance are what uniquely positions GCash to step up meaningfully for Filipinos in the moments that matter most, especially amidst today's current environment. And it's not the first time that GCash has been there for Filipinos during difficult times. Amidst the pandemic, GCash was their lifeline in silver lining, enabling them to send money and purchase essentials safely and helping small businesses survive. Today, we continue to find ways to help Filipinos wherever they are. Firstly, for our OFWs in the Middle East, we have eased cross-border burden by waiving transaction fees, both inbound and outbound from mid-March to early May 2026. This includes the UAE, Saudi Arabia, Qatar, Kuwait, Oman, Bahrain, Israel, Lebanon and Jordan. Secondly, working closely with the government, GCash has enabled fast and efficient delivery of fuel subsidies to thousands of PUV drivers and operators. We've disbursed aid in partnership with the LTFRB, and there are ongoing discussions with DSWD. And lastly, we continue to empower users to earn, save and access credit amidst financial pressures. Part of this is providing tid tips to help build more responsible spending habits and offering discounts in their everyday commutes. With GCash's portfolio of innovative financial services, we are helping provide financial access to the masses. Through lending, we have disbursed loans worth PHP 406 billion life to date, growing 60% from last year to over 11.1 million unique borrowers. We also partnered with AC Energy and the province of Ilocos Norte to make affordable solar energy more accessible to Filipino households, helping ease the burden of rising electricity costs. Through GInsure, we have sold 192.4 million policies life to date to 21.8 million users, giving them coverage for various emergencies. In wealth management, we are giving our users more ways to secure their future through wealth building. GSave now serves 16.9 million users, benefiting from our varied portfolio of partner banks. GStocks now has 1.9 million registered users who can now easily invest in local stocks. GFunds now has 9 million users who can easily invest in a diverse lineup of funds. Meanwhile, GCrypto enables 5 million users to trade different cryptocurrencies. And with the launch of Pera coach, our GenAI-powered financial coach for saving, investing and money management, users are encouraged to ask all you can and receive personalized guidance tailored to their financial goals and risk preferences. This marks a meaningful step toward making financial literacy and financial management more accessible to everyday Filipinos. Beyond these digital financial services, GCash remains committed to enabling progress across different sectors to empower communities nationwide. We are collaborating extensively with the public sector in pursuit of our vision of finance for all. We continue to be the trusted digital partner of LGUs like Pasig City, Pasay City, Caloocan City and MSSD-BARMM in making disbursements for aid, allowances and payroll faster and more transparent. In last February's GCash Digital Excellence Awards, we recognized our public sector partners who have made an impact in their communities by promoting digital finance in their organizations. Next, we remain focused on trailblazing innovation with accessible tools to make Filipino's lives better. Through GCash for Business, aspiring entrepreneurs can easily register and access tools for improved payment processing and operational efficiency. With the newly launched GCash International transfers, users can now send money directly from their GCash wallets to overseas bank accounts, cards and e-wallets. Lastly, GCash continues to champion sustainability initiatives that help create a greener future for Filipinos. Building on the success of its inaugural year, the GCash Eco Run returned for its year 2, bringing together over 12,000 runners in support of environmental sustainability who helped plant 40,500 trees. This is on top of the 4.3 million actual trees planted by our Green Heroes as of end 2025. Mynt's growing contribution underscores its role as a key earnings driver, complementing Globe's sustained investments in digital infrastructure and connectivity. Moving on to the financial portion of the presentation. To recap, gross service revenues reached PHP 42 billion for the first 3 months of 2026, posting a 5% year-on-year increase as performance remained supported by sustained mobile data demand, continued fiber adoption and resilient enterprise ICT activity, underscoring the strength of Globe's core data-driven revenues. These are the second highest quarterly revenues on record. Total operating expenses and subsidy stood at PHP 19.8 billion, up 4% year-on-year, overall leading to a consolidated EBITDA of PHP 22.2 billion, higher by 7% compared to the same period last year. EBITDA margin strengthened to 52.8% from 52.1% a year ago, exceeding the full year guidance of approximately 50% Total depreciation expenses reached PHP 14.4 billion as of end March 2026, up 7% year-on-year, driven by Globe's continued capital investments. EBIT, as a result, reached PHP 7.8 billion, an improvement of 7% from the previous year. Globe recorded total nonoperating charges of PHP 1.3 billion, a reversal from the PHP 0.9 billion net nonoperating income in the same period last year. This shift was primarily driven by the absence of nonrecurring gains booked last year from the Mynt stake dilution following the MUFG investment in tower sales alongside higher net interest expense and foreign exchange losses. These were partially offset by stronger equity earnings from affiliates. Provision for income taxes during the quarter amounted to PHP 973 million. Globe posted a net income after tax of PHP 5.6 billion, down by 20% the same period last year, primarily due to the nonoperating charges previously mentioned. Core net income, which strips out these nonrecurring items, including gains from asset disposals, ForEx movements and mark-to-market adjustments amounted to PHP 4.9 billion, up by 9% year-on-year. On a sequential basis, Globe's consolidated gross service revenues were slightly softer, owing to seasonality effects and also coming down from all-time high revenues in the fourth quarter of 2025. Managed costs led to operating expenses and subsidy declining by 1% compared to the prior quarter. Consolidated EBITDA declined 5% quarter-on-quarter from PHP 23.4 billion last quarter, while depreciation expenses ticked 3% higher. This led to EBIT declining by 18% on a quarter-on-quarter basis. Compared to the fourth quarter, total nonoperating charges narrowed from PHP 2.5 billion, driven by higher equity earnings from affiliates, which offset elevated financing costs during the period. With provisions for income tax declining on a Q-on-Q basis, net income remained stable, while core earnings declined by 9% from PHP 5.4 billion in the fourth quarter. Looking at our costs on a year-on-year basis, interconnect charges increased by PHP 67 million from data roaming and A2P domestic SMS payout. Staff costs were up PHP 87 million, mainly on increase in headcount. Marketing and subsidy grew by PHP 142 million from higher ad spending net of lower commissions. Network costs ticked higher by PHP 642 million on higher electricity and fuel charges, BAS payout, subscriber line maintenance, repair costs for support facilities and communication equipment and leases from joint pole and cell sites. Services and other OpEx also increased by PHP 170 million coming from managed services and cloud costs as well as expenses related to taxes and licenses. These higher operating expenses were partially offset by the PHP 408 million decline in provision from lower trade and inventory provisions. This, coupled with total revenues growing by PHP 2.1 billion led to a 7% year-on-year improvement in Globe's EBITDA to PHP 22.2 billion. On a sequential basis, the PHP 140 million increase in network costs, PHP 102 million growth in provisions and PHP 168 million increase in services and other OpEx were more than offset by the decrease in interconnect charges, staff costs and marketing and subsidy expenses. These managed costs, however, were not able to fully offset the PHP 1.4 billion decrease in revenues, leading to 5% quarter-on-quarter contraction in EBITDA. Globe maintains ample liquidity and comfortable gearing levels that are well within its bank covenants. As of March 31, 2026, Globe's consolidated cash and cash equivalents reached PHP 42.4 billion. Total debt stood at PHP 251.2 billion, aligning with capital investments. Key leverage metrics demonstrate financial flexibility with gross debt-to-EBITDA at 2.6x, net debt to EBITDA at 2.1x and debt service coverage ratio at 3.21x. As part of Globe's efforts to further strengthen its balance sheet, the company successfully raised PHP 25 billion from its issuance of 12.5 million cumulative nonvoting, nonparticipating, nonconvertible redeemable and reissuable, PHP denominated nonvoting preferred shares. The offer was 2.4x oversubscribed over the PHP 15 billion size, reflecting overwhelming support from the investing community and strong confidence in Globe's disciplined capital management and long-term strategy. The net proceeds were used to redeem a portion of Globe's USD perpetual capital securities with the tender offer exercise completed last April 23, 2026, and fund the company's capital expenditures, overall supporting the continued expansion and enhancement of Globe's network and digital infrastructure. As a result, the Board of Directors has approved the payout of PHP 25 per share, reflecting Globe's commitment to sustainable and competitive returns, continuing to deliver value to our shareholders while navigating increasingly complex macroeconomic conditions. Key dates for this declaration are the payment date of June 10, 2026, to shareholders on record as of May 25. Finally, as we close the presentation, we would like to emphasize that Globe is entering 2026 from a position of financial strength with all segments firing on all cylinders. The company has taken a war-like footing to weather this year's headwinds and preserve business momentum. Globe remains mindful of the risks and uncertainties arising from the ongoing Middle East crisis. The resulting global oil and energy shock has contributed to a sharp increase in inflation, which accelerated to 7.2% in April 2026. Its impact has extended beyond oil, gas and kerosene prices with second order effects also driving higher prices for key staples such as rice, which directly affects Filipino households. The country's GDP growth also slowed to a post-pandemic low of 2.8% in the first quarter, which underscores the potential impact of these macroeconomic pressures on consumer spending and overall business activity. Against this backdrop, our 2026 guidance reflects both prudence and confidence. Globe continues to target low to mid-single-digit revenue growth while recognizing that performance may trend to the lower end of this range due to the downside risk from the Middle East crisis. Nevertheless, we continue to maintain our EBITDA margin target at around 50%. We intend to spend below USD 1 billion this year, investing only where it matters most, keeping in mind our goal of strengthening the company's free cash flow position. Our strategy is anchored on disciplined execution and minimal disruption to Globe's best-in-class customer experience. We will continue to expand our 5G network, deepen our fiber footprint and scale our digital platforms to better serve the evolving needs of our customers. Through focused execution and more efficient capital allocation, we are strengthening our foundation to deliver sustainable long-term value. And with that, we conclude the presentation. Thank you all for listening.

Thank you, Ira, for that presentation, and good afternoon once again. We would like to introduce management panel for today's briefing. Starting off with our President and Chief Executive Officer, who is joining us virtually, Mr. Carl Cruz. We are also joined by Mr. Carlo Puno, our Chief Finance Officer; Mr. Darius Delgado, our Chief Commercial Officer; Tony Froilan Castelo, General Counsel; Eric Tan Balco, the Head of Consumer Mobile, who is joining us virtually; also with Mr. Raymond Policarpio, our Vice President for Globe B2B Business Development, also joining us virtually; Mr. Danny Theseira, Senior Adviser, Broadband Business; Atoriilin Seraspi, Vice President for Corporate Finance; and Mr. Carl Malana, President and Chief Executive Officer, SEB GDC Philippines. We also like to acknowledge the presence of Ms. Minette Navarrete, President of Kickstart Ventures, who's our most gracious and generous host this afternoon. Thank you. We'll now begin the Q&A session. Similar to last quarter, we'll now -- we will first tackle questions regarding core business before the platform businesses.

Our first set of questions come from Kirin of Maybank. First question, which is composed of 2 parts, covers mobile and to a certain extent, KPA. Maybe Darius can start off with this. Congrats on the results. We've seen sustained improvement in the mobile segment. Can you comment if we continue to see a more rational competitive environment?

So I thought you're going to say the second question didn't answer.

Well, I can do that now. Also, if you can give any updates, if you see any new entrants in the mobile side in light of the Konnectado Act reducing barriers to entry.

Okay. So on the second question, I'll answer first, and then I'll hand over to you. So on the first question on a more rational competitive environment in mobile. competition, to be fair, has been quite stable of late, and we've seen certain price ups or monetization moves on their end in the last 2 quarters on hero offers or flagship offers. And we have no reason to believe that this won't continue, especially with the fuel crisis potentially impacting the top line of operators starting March. On the Globe side, we continue to protect and capture value from our traffic with a strict pricing discipline. So we actually maximize our ROI, complemented by innovations across all of the major brands that we have launched in Q1 to sustain our brand equity advantage together with more intelligent hyperpersonalization that keeps on getting better with AI in terms of serving up the best offers relative to the micro segments we touch. And we do all these on the back of maintaining our position as the most consistent mobile network in the Philippines. On the new entrants in mobile in light of Konektadong, none yet in our radar because in a mature market such as the mobile industry in the Philippines, we have a very high penetration rate and also a high multi-SIM incidence rate. Our belief is that it will be very challenging for any major player to get even an inch in the mobile industry today as what we've seen with the entry of DITO do in the last couple of years. You have an answer or additional insight.

Just to add to that, based on the registry of the NC, only the existing VAS providers have so far registered under the DIP model. There are no foreign telcos or any new entrants coming from local conglomerates here in the Philippines. So no new entrants so far.

Thank you, D. Thank you,. Next question is from John of UBS. And I think this is for Eric. Mobile ARPU fell 3% year-on-year and 5% quarter-on-quarter, which was steep. Was this because of lower yields from competition or demand disruption?

Thank you, John. So as mentioned by Darius, it's not so much driven by price. We've actually seen in Q1 that there were some price increases or pricing moves to monetize on the side of Smart. The Q-on-Q drop actually is mainly driven by 2 things. So the first is really seasonality from our Q4 peak from the Christmas holidays, but it's also a function of our growing base and the mix of the base. So we've actually looked at our new acquisitions, and you would see that the new APU profile actually is over-indexed on multi-MW. So they spend relatively lower. But that cohort or that part of the base, we continue to habituate through hyperpersonalization. What's good though is our healthy spending customers continue to increase in consumption and they continue to actually increase our spend with us, driven by our most consistent network and of course, as we migrate them to 5G. And I guess, Darius did talk about this earlier. I think the most important part of the equation is our strong pricing discipline. We don't do price drops or heavy discounting at this point as to not dilute value, and we can reinvest it back to improving our overall network experience.

Thank you, Eric. The next question is from -- also from John, and this is on broadband. So this is for Danny. Broadband revenues were flat for 3 straight quarters despite strong net adds. When will net adds translate to revenue? And the second part of the question is prepaid cannibalizing postpaid business too much?

Thanks, John, for the question. First thing first, we see a natural timing between the growth of the acquisition as well as the monetization curve because unlike postpaid, where immediately, you have the first month bill straight away of PHP 1,000 or PHP 2,000, prepaid fiber requires a bit of an onboarding and normalization before it kicks in. And what we've seen over the last few quarters is that the net add growth is heavily driven by GFP and typically, the monetization ramp ups thereafter. And what we're confident also from the prepaid fiber base is once you overcome this period, we see the reload frequency from the existing base and as well as the higher value of SKUs is really promising. And that's what we're confident about when we look at the existing mature cohorts of prepaid fiber. Second is around the whole cannibalization effect. We don't see much cannibalization happening from postpaid to prepaid because the prepaid base is largely covering the addressable market of your D segment in the Philippines, where they're a little bit more conscious about the flexibility, the affordability. And previously, they are actually unserved household segments that probably rely on just mobile only. And we're also looking into when we expand with prepaid fiber, you're getting a wider acquisition funnel, not only from the ABC segment, but also the D segment of the prepaid fiber segment. And when we look at the postpaid as well, we're very confident because the postpaid is generating pretty high ARPU today. They're relatively sticky, healthy and it's still continuing to grow rapidly. So the whole strategy here is really hinge around how do we deliver the best network, the best value, the best experience? And how do we really look at the long-term value of our customers and monetization of the assets accordingly, driving really the long-term value. So that's how we're seeing the strategy for broadband. Thank you.

Thank you, Danny. The next question from UBS is, again, on KPA. So this is for Tony. Are there any updates on KPA as a topic has gone quiet for the past few months?

About a month ago or more than a month ago, the industry through the PCT or the Philippine Chamber of telecommunications operators wrote the DICT asking for a moratorium on the implementation of KPA because of the Middle East energy crisis. And this was favorably accepted to by the DICT. So that's the main reason why there are no activities yet on the KPA.

Thank you, Tony. So next set of questions come from Zhiwei Macquarie. This is -- first question is on mobile. So again, this is for Eric. On mobile, how would you characterize the growth in subs but decline in ARPU? Was it due to promotions driving the sub growth or seasonality with sub growth driven by other factors?

So I guess I'll focus more on the growth in subs as I did talk about ARPU earlier and mentioned that it's not so much about pricing. So actually, our growth in subs really indicates customers preferring Globe because of our strong brand equity in the market and of course, our improving network experience. So recall that we have been the most reliable and most consistent network for 4 straight years. And in Q1, we actually refreshed our postpaid and prepaid proposition. So we did offer customers a lot of innovations. If I can just name a few, we did offer them flagship forever so that they can get access to a new device faster. We gave them Gogive, which allows our customers to actually donate to their favorite courses as they use mobile data. And we have also strengthened our portfolio with our AI offerings. And in Q1, we have partnered with Pana and expect that actually in the next few quarters to -- for us to actually introduce more partners. By end of this month, we will announce actually more partners and more innovations that will continue to enrich the lives of our customers.

Thank you, Eric. There is another question again on mobile this time from Uni Capital Securities. Can you provide color on the behavior of your user base during periods of elevated and sticky inflation? What trends do you see on consumer spending for connectivity services?

So actually, on the mobile side, maybe there are 2 things that's affecting customer behaviors today. So the first is the Middle East crisis, where we see, of course, more learn and more work-from-home scenarios with less mobility. And of course, second this is what was mentioned in terms of the increasing inflation rate and prices of basic commodities. So historically, the sustained high inflation of more than 2 quarters significantly affects our user base, most especially our macroeconomic base for those who are part of the VE segment. And of course, that leads to declining spend and higher churn. And that is why hyperpersonalization actually plays an important role in these changing times, where we actually continuously shift and review the way that we touch our customers to make sure that the products and the services that we offer our customers are relevant and accessible to them. And of course, that also includes us offering them broadband for their work and for their learn from home needs. We have also enriched our loans and rewards offerings to be able to help our macroeconomic customers during these times, most especially when they are short in their budget. And I also wanted to mention that I did talk about our network improvements earlier. And those network improvements actually cover both indoor and outdoor. So no matter where you are, we provide you a consistent and reliable experience. And then with all of this, we're also very optimistic because if you look at our traffic, which is an indication of demand, it continues to be healthy and stimulated so far.

Thank you, Eric. So that completes the first part of Q&A covering the core business and KPA. We'll now proceed to the platform businesses, starting off with questions on Mynt and GCash. The first is from Kervin Sisayan of Maybank. For GCash or Mynt, we saw a year-on-year earnings growth. Can we say that the pressure on weaker revenue stemming from the online gaming segment is gone? Or has it recovered already?

Okay. I guess I'll answer that. No, Mint's year-on-year performance is really driven by the robust performance of the ongoing business too.

Yes. Thank you, Carlo. Then the follow-up question is, of course, any indications for the IPO schedule?

So Mynt and its shareholders are still very open to all of the available capital solutions, including an IPO. To date, there is still no official decision regarding timing. The focus is really still trying to make sure that we deliver and continue the performance of the ongoing business, and we will provide the necessary and appropriate disclosures if and when a definitive decision has been made.

Thank you, Carlo. We also have a question on Mynt from of UBS. Mynt's equitized income already exceeded the precrackdown level in 1Q '25. How much of the rebound was driven by gaming? Or put another way, how much of Mint's first quarter 2026 profits are driven by use cases outside gaming?

As mentioned, the performance is really driven by the robust growth of the ongoing business. It is also predominantly primarily driven by the growth of the lending business supported, of course, by core payments and transfers, growing so much that it actually outperformed 1Q '25 despite the delinking. So it's all underpinned by user base expansion as well as use case -- deepening use case and user engagement.

Thank you, Carlo. We also have a question on Mint from Zwei from Macquarie. Could you run us through the drivers that drove the better profitability of GCash, especially if there was an element of the change to amortization loan fees from last year that could have helped the earnings.

Well, if you look at on a quarter-on-quarter basis, historically -- well, first is your first quarter is generally -- there are less OpEx pressures on the first quarter. I think in the first quarter of 2026, net income margin for GCash for Mint is 27% compared to 13% in the fourth quarter, simply because a lot of the spend is really pushed in the second half of the year. And again, it's also driven by the very strong performance of the ongoing business. On a quarter-on-quarter basis, revenues grew close to 10% against the last quarter, again, because of the expanded base and deepening user engagement. And as mentioned as well, in the fourth quarter of last year, we did see some softening because of the change in the accounting policy, which is really just a timing issue. And so we are recognizing the revenues now, which also benefited or contributed to the strong performance in the first quarter.

Thank you, Carlo. Also a follow-up question from Zhiwei on GCash. For GCash, what are you seeing in terms of trends in borrowing and repayment by your customers?

We're still seeing healthy borrowing and repayment behaviors from the borrowing base. Of course, I guess, the team is very much closely monitoring the developing environment so that they can pivot at the moment that there is a change in or a shift in consumer behavior given the macroeconomic conditions.

Okay. Thank you, Carlo. There's also a question on Mint and GCash from Uni Capital Securities. On GCash, what specific segments drove year-on-year growth? To what extent has the delinking of licensed online gaming impacted 1Q '26 performance of GCash?

As mentioned in the previous answers, it is predominantly driven by the performance of the lending business, supported by the ongoing businesses of payments and transfers.

Thank you, Carlo. Maybe at this time, we can take questions from the live audience. If you have any questions, please raise your hand. We hand you the mic. Please introduce yourself and ask your question.

This is Derrick from CLSA. Just a follow-up on the KPA bit earlier. Given the moratorium, when can we expect the publishing of the initial access list? If I remember correctly, it was supposed to be last month and the public consultations also happened last month. So any thoughts on that one?

Although we are in constant communication with our regulators, there are no period -- exact period where -- when it's going to -- the moratorium will end. So I guess because of the Middle East crisis still raging, so it will be expected to continue.

Got it. And another follow-up on the earlier question by John. On broadband, how much of the 1 million prepaid users are new to fiber users? Is this a metric that you follow? And what's the typical number of months before you ROI from prepaid?

Well, typically, we don't disclose such details. But essentially, the whole customer journey is you can sign up within a couple of minutes, pay through GCash. And then after that, it gets installed within the same day or the next day. And then you go through G1, which controls everything. And majority of customers will typically start to get used to reloading either in GCash or we can also provide off-line reloading either through convenience stores or Sari stores through AMAX as well. And that's the habituation typically that they go through within a couple of months. And what we're running right now as well in order to habituate the customers, at least the first 7 days, we habituate the customers to the maximum speed of 300 Mbps first for them to get used to the new broadband connection because we must be reminded that this is a segment that is sensitive around affordability and flexibility in the this segment, and they are typically unserved, which is mobile-only households. So you'll need that habituation of a couple of weeks depending on different households, maybe some month or 2 before you see them getting into a maturity curve where they continuously reload either on a 7-day or a 30-day format.

Lastly, I guess, -- can you comment if there is a chance for the wallet in gaming apps to be -- the linking rules be reversed? Is there a chance for that one ash?

We don't want to speculate. So we defer to the regulators on the way forward and that one.

Are there any additional questions from the live audience?

Yes. Considering that our management has a hard stop in preparation for the financial briefing, which will immediately follow this briefing. This concludes the Q&A. And before we adjourn, we would also like now to turn over the floor to Carl for his closing remarks.

Thank you, Jean-Marie, and thank you for the participants to the analyst briefing session we just had today. As you would have seen, despite the macroeconomic condition where the country GDP has gone down, inflation is again on the rise. Our performance in the first 3 quarters of 2026 has been quite good, and we are quite pleased with the performance of the business. It's been mentioned a couple of times in the call where quarter 1 '26 results, especially revenue would be the second highest quarter on record, immediately preceding quarter 4 of 2025, which is the highest on record that we have today. The quarter also represents the fourth straight quarter of growth for us across the main segments of the business, mobile, broadband and B2B. And it's coming out of being awarded as the most reliable, consistent network for mobile and fixed, which we are truly proud of because our commitment is to always provide a best-in-class experience on the globe network. Having said that, quarter 1 is now behind us, and we look to the second quarter where obviously, the impact of the Middle East crisis will be felt. But we are confident with the way we are handling ourselves. We have immediately after the crisis broke, we have put on a wireline footing to ensure that the service continues to be best-in-class. to ensure that execution remains very strong, to ensure that cost levers are managed and well under control and all factors that can really increase our revenue and improve our customer service are being looked at in a lot of detail. Good to note that traffic continues to hold, data traffic in particular, and that bodes well for us because the way we habituate our subscribers to use more data is probably, again, best-in-class in the market. So quarter 2 will be, obviously, as everyone would expect, a bit more challenging, but we continue to hold guidance of low to mid-single-digit growth, albeit with the effect of the crisis in the Middle East. So with that, again, thank you for the participation, and we'll see you again next quarter. Thank you.

Thank you, Carl. And on that note, we conclude the first quarter 2026 analyst briefing of Globe Telecom. We should thank again all of you who joined us here and in the call. We hope you'll join us again for our second quarter 2026 analyst briefing in early August. Again, we wish everyone a pleasant good afternoon. Stay safe, everyone.