KYIV

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

I'll hand over to Oleksandr.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Let me hand the call back to Oleksandr.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Great. Thank you.

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

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

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

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

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

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

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

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

Brilliant. Thank you.

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

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

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

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

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

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

Yes.

Okay.

In general, yes.

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

Let me address this question from a different perspective.

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

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

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

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

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

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

Thank you very much.

Thank you.

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

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

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

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

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

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

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

Thanks, Oleksandr.

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

Thank you.

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

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

Taner, please.

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

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

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

Okay, guys. Thanks for that.

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

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

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

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

Thank you.

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

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

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

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

Okay, solar portfolio.

Yeah.

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

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

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

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

Thank you

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

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

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

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

Thank you.

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

Hello. Welcome to Kyivstar's 1Q 2026 results presentation. For those of you who have joined the Zoom webinar, if you would like to ask a question, you can use the Raise Hand button, which can be found on the black bar at the bottom of your screen at any time to join the queue to ask a question, and you will be called upon during the Q&A session. For those of you watching on the webcast, if you would like to submit a written question, please use the Ask a Question tab at the top right of your screen. These questions can also be sent in at any time during the presentation. As a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Cole Akeson, you may begin.

Thank you. Good afternoon and good morning. Thank you all for joining us to discuss Kyivstar Group's or Kyivstar's first quarter results. I am Cole Akeson, Group Director for Kyivstar Investor Relations. Joining me today are Kaan Terzioğlu, Chairman of the Board, Oleksandr Komarov, the CEO, Boris Dolgushin, our CFO, and Anand Ramachandran, Chief Corporate Development Officer for VEON. Oleksandr will begin with strategic and operational highlights, followed by Boris with a review of our financial performance. We will open the line for questions. Before we begin, please note that today's presentation contains forward-looking statements which involve risks and uncertainties. Further details are available in our SEC filings, including our Form 20-F, filed March 16, 2026. Our earnings release and presentation are available on our investor relations website. With that, I'll hand over to Oleksandr.

Thank you, Cole. Hello, everyone. We started 2026 with strong execution. Our telecom core is resilient. Our digital ecosystem is scaling. The two businesses fit each other. Let me start with the numbers. Revenue reached $323 million. This is an increase of nearly 27% year-over-year. EBITDA grew more than 23% to $173 million. We focus on cash generation. Equity free cash flow grew almost 32% to $87 million for the quarter. Second, our digital transformation. Digital revenue more than tripled year-on-year, reaching almost 21% of our total revenue in first quarter 2026. This is an increase of more than 5 percentage points quarter-on-quarter and more than 13 percentage points from a year ago. Our platforms have scale.

We now serve more than 28 million non-unique digital customers, a number now larger than our mobile subscriber base. We also streamlined our report in this quarter, integrating identity services into our digital enterprise vertical to provide a clearer and more consistent view of performance. Identity services are undergoing a transition away from traditional A2P messaging to more varied API-based platforms, becoming more digital than traditional analog mobile. We also moved to reporting customers across service line on three months active basis to provide better comparability between lines and over time. Accordingly, we provide reclassified numbers for past periods to ensure comparability and maximum visibility. Third, our Multiplay strategy. Multiplay customers use voice, data, and at least one of our apps. They generate more revenue individually and are less likely to churn. Multiplay customers grew 31.6% to 8.1 million.

They now make up nearly 40% of our active mobile base. This engagement drives the top line. Mobile ARPU rose 14.1% year-on-year to UAH 3.80. Our strategic investments. In February, we consolidated Tabletki.ua. Tabletki.ua is Ukraine's leading online healthcare marketplace. It processed $258 million in gross merchandise value over the two months of consolidation for the quarter. We expanded our cooperation with SpaceX to resell Starlink internet to enterprise customers. Over 5 million customers already use our direct-to-cell messaging services, and we will launch light data later this year. Our first quarter financials, telecom revenue grew 8% to $256 million. Customers are moving to 4G and using more data. Digital revenue grew 257% to $67 million.

The consolidations of Uklon and Tabletki.ua drove this surge. Our other digital products also grew organically. Starting from this quarter, we are splitting our EBITDA disclosure to show digital separately from telco and infrastructure. This better clarifies the development of the respective verticals. Total EBITDA rose more than 23% to $173 million. Our telecom and infrastructure core generated $144 million in EBITDA, resulting in a 56% margin. Our digital platforms generated $29 million in EBITDA, producing a nearly 43% margin. Net profit reached $85 million. Earnings per share was $0.37. We invested $67 million in capital expenditure. Our CapEx intensity was 20.9% for the quarter. We generated $161 million in operating cash flow. Equity free cash flow grew 32% to $87 million. Cash generation funds our growth. Our cash position remains strong at $353 million.

Now, let's look at the mobile business where we served 22 million customers. Our annualized churn rate was 16% for the quarter. We remain the country's clear market leader. Mobile ARPU grew 14% to $3.80. Customers are moving to 4G and using more data. Data consumption grew 31% to almost 15 GB per user monthly. Nearly 70% of our mobile base is now on 4G. Our fixed broadband base grew almost 12% to move to the 1.2 million customers. This includes 52,000 new users from our recent Shtorm acquisition. Broadband and digital entertainment work closely together. Today, nearly 46% of our broadband users also subscribe to Kyivstar TV. Cross sales and synergies bring us back to the core of our digital growth strategy, Multiplay. Multiplay customers grew almost 32% year-over-year to 8.1 million. They now make up nearly 40% of our active mobile customer base.

They also generate higher revenue. The average Multiplay customer generates $5.30 in a monthly ARPU. That is nearly 40% more than the average mobile customer. They spend more now with digital suite, but they also spend more on connectivity. Let's look closer to our digital revenue. Digital revenue grew by 2.6x to $67 million. It now makes up almost 21% of total revenue. Three points about this performance. First, strategic acquisitions enhance our scale. The consolidations of Uklon and Tabletki.ua Drove the bulk of this quarter's surge. That said, the growth is also broad-based. We see momentum across all verticals. Uklon, Helsi, Tabletki.ua, Kyivstar TV, and the digital enterprise business. Third, we have a structural cost advantage. Our telecom customer base provides low acquisition costs. Our Multiplay bundles act as an optimized distribution model. This synergy allows us to scale platforms, profitability, and maintain strong unit economics.

Moving to Uklon, our mobility platform. In the first quarter, Uklon generated nearly $33 million in revenue and more than $12 million in EBITDA. This reflects both a scaled business in Ukraine and a growing business in Uzbekistan. The platform processed nearly 44 million rides and 1.5 million deliveries, the latter reflecting an almost 10% rise quarter-on-quarter. Active customers rose to more than 5 million for the quarter. We are expanding the product range. Customers can now book inter-city bus tickets directly in the new Uklon Travel. We continue to explore new ways to develop Uklon further at a comprehensive one-stop mobility platform. Our digital enterprise business is gaining scale with more than $16 million in revenue and 9% increase year-over-year. We manage 2,200 active B2B contracts, up 31% year-on-year. Big data and AI drove the majority of this quarter's growth.

The segment's revenue grew 75% to $4.4 million. Cloud revenue grew 42% to $2.3 million. ADWISOR, our self-service advertising platform primarily focused on small and medium-sized businesses, expanded to over 4,000 registered clients. The division also contains Kyivstar.Tech, which binds our ecosystem together and is responsible for one of our most cutting-edge work. An example is our work in cooperation with the Ukrainian government and leading international partners to produce our sovereign LLM, which is trained exclusively on Ukrainian language data to meet the unique needs of Ukrainian clients. Moving to entertainment, Kyivstar TV remains the largest media streaming service in Ukraine. Revenue grew 390% year-over-year to $10.5 million. Last year's shift to gross revenue recognition is complemented by strong organic momentum spurred by two factors. First, customer expansion and engagement. Our customer base reached a new record at the more than 3 million As I mentioned earlier, more than 46% of our fixed broadband base now subscribes to our TV platform. Second, our original content continues to inspire engagement. New crime drama, Tykha Nava, is the most-watched title in the platform's history. Exclusive Ukrainian content attracts new customers and strengthen our ecosystem. We are looking forward to soon being exclusive Ukrainian broadcaster of an upcoming boxing match featuring world heavyweight champion and proud Ukrainian, Oleksandr Usyk. On the healthcare, Helsi is Ukraine's leading health tech platform. We served 4.9 million active digital customers in Q1. Patients booked 2.4 million appointments through the platform. We are scaling the platform paid services. Customer paying the premium offerings increased by more than half quarter-on-quarter to reach more than 87,000. Revenue grew nearly 32% year-over-year to more than $2 million.

Helsi powers appointment scheduling, prescriptions, and health records, including integration with Ukraine state health system. The platform makes care easier and faster to access, a win-win for patients and doctors alike. Customers are upgrading for a range of advanced health insights. Our Helsi Superpower telecom bundle helps drive these conversions. Helsi highlights our commitment to corporate social responsibility and ESG. We are expanding access to digital healthcare for Ukrainians during the wartime. We have Tabletki.ua, the leading online healthcare marketplace. We consolidated this business in February. In just two months, the platform contributed more than $5 million in revenue and more than $4 million in EBITDA. Customer volume is strong. The platform facilitated 15.3 million average monthly bookings in the first two months of the year. For the same period, gross merchandise value reached $258 million.

We continue work on integrating Tabletki.ua with Helsi, and ultimately with Uklon's delivery network. We expect these synergies to drive deeper engagement across our digital customer base. All these parts come together in our growth strategy. We intend our core connectivity business to maintain market leadership. We focus on retaining a high quality customer base and driving technological innovation. For example, over 5 million customers use our direct-to-cell satellite messaging, and we expect to launch light data later this year. In fixed broadband, we aim to expand market share. We plan to drive this expansion through both organic growth and targeted acquisitions. This market brings entire household into our ecosystem, mutually reinforcing the mobile and digital businesses. Third, our digital ecosystem. We anticipate scaling our digital platforms through organic momentum and strategic acquisitions. Our core strategy is to increase multiplay adoption and deepen daily engagement across our customer base.

We continue to progress our strategy through both organic and inorganic growth. Most recently, we announced the expansion of our cooperation with SpaceX to include selling high-speed internet services to Ukrainian businesses and public institutions, allowing us to provide B2C and B2G customers a full-featured connectivity stack within Kyivstar packages. Now, Boris will tell us more about the financials.

Thank you, Oleksandr. Total revenue reached $323 million in the first quarter, an increase of nearly 27% year-over-year. This reflects UAH 14 billion in revenue, a 31% increase. EBITDA grew more than 23% to $173 million, based on a 29% gain to UAH 7.5 billion. As discussed, our telecom margin expanded to more than 56%, while our digital platforms operated nearly 43% margin. This split reflects our strategy. We generate strong cash flow from our core network that partially goes to fund the rapid scaling of our digital ecosystem. Capital allocation remained disciplined. CapEx total $67 million, reaching nearly 21% of revenue. A significant portion of this capital goes toward network resilience during the war. Despite these critical investments, our cash conversion remains strong.

Equity free cash flow after leases and licenses grew 32% to $87 million. Turning now to the balance sheet. We ended the first quarter with $353 million in cash and deposits. The sequential decrease reflects our capital allocation to fund the Tabletki.ua and Shtorm acquisitions. Gross debt, excluding leases, is $94 million. We carry immaterial external debt, mostly owed to parent company VEON. Lease liabilities totaled $393 million. These arise from our tower agreements with Ukrainian tower company and are fully recognized under IFRS 16. Excluding these lease liabilities, our net cash position is $259 million. Let me now hand the call back to Oleksandr.

Thank you, Boris. Looking further ahead, we raise our full year outlook for 2026 on a mix of the ongoing strong execution and external influences that have been less turbulent than assumed in our base case. In UAH, we expect revenue to grow 18%-21% and EBITDA to grow 14%-17%. On our average exchange rate assumption of 45.5 UAH to the U.S. dollar, we expect revenue to grow 11%-14% in U.S. dollars and EBITDA 7%-10%. While this is an upgrade to our previous guidance, it represents moderation from our first quarter growth rates due largely to base effects. This anticipates a comparison base that will no longer include the immediate aftermath of the 2023 cyberattack. A weaker spot exchange rate and the lapping of the Uklon consolidation.

We plan to allocate capital efficiently with CapEx intensity at the range of 21%-24% of revenue for the year. We intend to continue targeted investments in network quality and energy resilience while normalizing from our elevated 2025 investment cycle. The wrap up, we are delivering double-digit growth across segments driven by our digital momentum and strong execution. Despite external volatility, our business remains resilient, and our strong cash generation continues to fund our expansion. We think these trends would look impressive for any company, let alone one operating in a war zone, and hope you agree with us. Thank you for your support. We can now open for the line for Q&A.

Thank you. At this time, if you would like to ask a question, please click on the Raise Hand button, which can be found on the black bar at the bottom of your screen. When it is your turn to ask a question, you will receive a prompt to be promoted as a panelist. Please accept, wait a moment, and once you have been introduced, you may unmute yourself, turn your video on, and ask your question. Written questions can be submitted on the webcast by using the Ask a Question tab at the top right of your screen. As a reminder, we are allowing analysts one question and one related follow-up today. If you wish to ask more questions, please raise your hand again to rejoin the queue. We will pause a moment to allow the questioners to enter the queue.

Our first question comes from Max Findlay with Rothschild & Co. You may now unmute your line, turn your video on, and ask your question.

Hello all. Congratulations on an impressive set of results and the upgrades. In mobile, there were 400,000 subscription losses in Q1, which was higher than Q1 last year. It's sometimes hard to discern what contributes to net losses, and it'd be useful to understand how much of this is secondary SIMs dropping off versus primary SIM loss, and what sight do you have of how net adds will develop throughout the year. Secondly, sticking to mobile ARPU growth was very impressive in Q1. I guess there are few things going on here. With the loss of roaming revenues and the drop-off, low ARPU secondary SIM subs. If you're able to quantify what is driving mobile ARPU growth, that'd be very useful. Thank you.

Let me start with the first question. This Kyivstar customer base decline is actually the reflection of the overall market trend. This trend is very much driven by a few factors. The first factor is decline in the number of double SIM-ers across the market. The second factor is the decline in the new gross adds because of a certain cell price increase. The third factor is overall demographic situation in Ukraine. It's a bit difficult to quantify, but the biggest factor is actually double SIM-ers that is very much situational and driven by very heavy blackouts we faced during the December, January this year. Let me also draw your attention to one simple fact, that according to the national regulation statistic, Kyivstar is maintaining subscriber market share year-on-year.

We grew 0.1% in 2025 versus 2024. Okay. We are relatively stable for the last years with around 47%+ subscriber market share. Okay. Your second question is, could you please remind me.

The drivers for mobile ARPU.

Okay. The drivers for mobile ARPU, there are two main drivers for mobile ARPU. The first one is growing data consumption. Despite the war, despite the overall decline in an active number of the SIM cards, our customers are consuming more and more data. We observed a 30% increase year-on-year. The second one is actually disciplined pricing that is actually focused to address inflation in Ukraine, and potential GDP growth. We already declared that our kind of objective to maintain the mobile telco business growth and a low double digit that is very much driven by inflation and growing consumption of data services.

Brilliant. Brilliant. Thank you very much.

Our next question comes from Ganesh Nagesha with Barclays. You may now unmute your line, turn your video on, and ask your question.

Hi. Congratulations on the results. A question from me on the digital segment. You had a very strong growth in the quarter. Just trying to understand on the Kyivstar TV and Uklon. The numbers were quite strong, similar to the 4Q. What are the factors that are driving this? Just trying to understand, are there any seasonality in them, or like how should we think of the growth for these two segments in the coming quarters? Thank you.

Let me take it one by one. Okay. The Uklon growth is actually driven by three major factors. Okay. The first one is a growing number of riders. The second one is a growing number of rides per one rider. The third one is actually pricing, which was very much driven by energy crisis, global energy crisis, and the growing prices for the fuel and gas. These are three major factor that are affecting Uklon's performance, okay? We also observe a certain market share increase in the ride-hailing business, but it was also supported by the growing, you know, much faster growing delivery business. In Kyivstar TV, we observe a certain, let's say, non-organic growth very much driven by the 3P penetration, okay?

Our 3P offer is growing quite significantly, which is driving our Kyivstar TV business growth, which was extremely successfully supported by originals at the beginning of the year. You're right, it is a certain seasonality incorporated into Q1 result, okay? Normally this wintertime and New Year's Eve time is actually a high season for the entertainment business, okay? The main growth was very much driven by the overall growing number of active customers and originals, okay? Tykha Nava is our own, let's say, originals, demonstrated the record high numbers of unique watchers, okay, since the launch of the platform. We do hope and expect that the boxing match, Usyk fight, will be another stimulus for the further growth.

Yeah, very clear. Thank you.

Our next question comes from Jesse Sobelson with BTIG. Please unmute your line and ask your question.

Good morning. Thanks for taking my question here. Can you help us think about the Starlink and direct-to-cell service? Is it a defensive coverage and resilience feature that protects users in ARPU or a standalone revenue line that could enable further monetization? I see, you know, the 5 million users here, but I'm very curious on exactly how to think about that part of your business. Thank you.

Let me start with a kind of segmentation. Right now we provide only one service. Is it based on direct-to-cell technology service is SMS. We decided for ourself that taking into account the war situation and the overall humanitarian risk and loss of connectivity risk, we will provide this for every Ukrainian with a Kyivstar SIM card for free. This, what you see as a reflection in our statistics. More than 5 million Kyivstar customers use this service since the launch in November 2025 and they send and receive more than 8 million messages through the satellite technology. Actually, second half of the year, we are going to introduce a light data services based on the direct-to-cell technology.

This light data will let us to use certain applications that will be adapted to the satellite technology across the whole territory of Ukraine, okay? Our main focus to provide this feature to the messengers, to the financial applications, and to the state-owned applications like Diia. Okay, since this we are planning a direct monetization of the direct-to-cell services. We just recently signed a resell agreement for the Starlink services. Kyivstar will be the first reseller of the Starlink services in Ukraine, taking in mind that Ukraine is one of the biggest market, okay, for the Starlink services across the globe.

Great. Thank you for the detail there. Also I'd love to just follow up real quick on the M&A front and the environment there.

Of course.

With the cash that you have. Can you just elaborate on maybe where valuations are in the space, and if there's any particular verticals within Ukraine that you're currently focused on researching for further expansion? Thank you for taking my questions.

We are quite open with our non-organic development strategy. We have three main priorities, okay, to invest non-organically in our core business, and this is mainly infrastructure and fixed broadband providers. You already saw a couple of example of acquisition of Shtorm, 50,000 customers. Our second priority is to facilitate and accelerate our transformation from the telco service provider to the digital service provider with a telco license through organic development like Kyivstar TV and non-organic acquisitions like Uklon. The third priority is alternative energy. It is very much driven by the current energy situation in Ukraine and the growing electricity pricing.

We see this as a well-thought investment that will let us not only diversify the supply of the energy to our infrastructure, but also to ensure a certain hedge of the growing energy prices, okay, so in our core business. These are three main priorities for our non-organic M&A strategy.

Great. Thank you.

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

Oh, thank you. You can hear me, of course, right?

Yes.

Great. I have one down in the weeds question and then one broad conceptual question. On the cybersecurity side, you know, clearly, you know, Russian military intelligence, Fancy Bear, Cozy Bear, haven't gotten any less active. You know, the attack last year was massively disruptive. I mean, do you feel like you've made incredible progress on the vulnerabilities or are the Russians laying off? Are you doing very much with AI and cybersecurity in your enterprise offerings as well? 'Cause clearly you have some necessary competencies in-house.

Let me start with a very brief description. What we faced at the end of 2023 was not a kind of hackers attack. It was one of the biggest act of the cybersecurity war and terrorism in the world. Yes, you are right, we are one of the probably primary targets. From the Russian perspective. At the same time, I feel ourselves really confident in our ability to protect Kyivstar infrastructure and Kyivstar customers from the cybersecurity threats. We invested a lot since the incident. We have hired the biggest global consultants, and right now I think that we are much better protected than we used to be in 2023. With the support of the global companies like Microsoft, Cisco, and others.

We are using probably one of the most advanced SIEM system in the world, very heavily supported by AI monitoring and threat recognition system. These are two major factors of our investments. Instead of one perimeter, create a multiple perimeters inside our infrastructure and automate this perimeter with the SIEM and AI platforms as much as possible in order to ensure early recognition of any potential threats.

I guess the second question, you know, I think it's instructive to look at your mobile and digital pricing, you know, relative to some of the Eastern European markets and even Africa. Certainly you've got more growth potential than just about any market, maybe outside of Africa. You're at some pretty substantial discounts. You know, I can remember years ago, people, you know, the holy grail for Mexico was getting Mexican advertising CPMs at the level of Brazil, and it finally happened, but it took about 50 years. I think consumers just kind of get acclimated to a certain pricing level, and it's hard to, you know, get things level on a, on a global market scale.

What are your strategies for, you know, pushing the pricing, you know, forward when you get a more normal environment, maybe getting close to some comparable markets in Europe and other areas?

I think we are doing very good job in disciplined pricing right now. I joined Kyivstar in 2018, and it was a market with the average ARPU below $1. Despite the war, despite quite difficult economic situation, we, from my perspective, we're able to demonstrate our ability to grow ARPU year-over-year, not only in a local currency, but also in the reported currency. This is our vision. Right now, Ukraine has one of the lowest, actually lowest Eastern European ARPU, which is not in line with the size of the Ukrainian economy. My own perspective that in the reasonable future, Ukraine should reach at least the lowest Eastern European ARPU. That is, for the time being, for example, in Romania, is a bit above $7 per month.

Great. Thank you so much.

Our next question comes from Ali Zaidi with Inam. Please unmute your line, turn your video on, and ask your question.

Hi, everybody. Thank you so much for taking our questions. I just had one question. We saw this quarter that Tabletki.ua had an exceptionally high EBITDA margin of approximately 85%. Do you think this margin is sustainable in the longer run?

Yeah. Ali, thank you for the question. Let me take this. We have, as an operator, demonstrated, I think, one of the best marginalities worldwide based on the GSMA analytics. Definitely, as you know, we are moving more and more towards digital business. This quarter, the first time I think we disclosed the margin of the digital business, which we see quite decent. We try to protect our marginality of the core business despite all the externalities that impact our performance. At the same time, you need to assume that the more we penetrate into the digital business, so while the percentage marginality may be lower, so it adds to the absolute margin and the absolute net income. This business is incomparable in terms of CapEx intensity.

Basically the CapEx there is just capitalization of the labor of the development staff. In terms of cash conversion, it may result in even better cash conversion. I would propose you look both at the marginality, but also at our cash conversion dynamics.

Let me add a bit. I'm considering our digital margin not as a decent, but as an impressive. I think that we are running a big digital business, fast-growing, with the marginality higher than 40%, and I think this is to some extent unprecedented. Thank you for your question.

Thank you so much. Thank you.

Our next question comes from Vincent Fernando with Zero One. Please unmute your line, turn your video on and ask your question.

Thank you. I want to touch on the cloud and big data side of your digital enterprise business. Obviously with the conflict, I imagine it structurally changes what a data center means in Ukraine. You probably want to be distributed. We have resilient architecture. That's probably more valuable than being like a centralized large hyperscaler. How is Kyivstar thinking about the data center opportunity? You know, given you have that nationwide network footprint, you have some energy independence assets like SUNVIN 11 and the sovereign cloud positioning. You know, what comes with being a, you know, Ukraine domicile provider? What does addressable market look like, and how might it be different than other markets because like, again, that there's kind of risk of being too centralized? Thank you.

We see the cloud business as quite promising. So far our main business is resale of Microsoft primarily and a bit of Amazon. Our own consideration that we, in order to be competitive cloud service provider, we need to be a multi-service provider, multi-cloud service provider. We just recently launched our own cloud business in Ukraine, our own data center. We start to commercialize it at the end of 2025. We are looking for a way how to accelerate it in organic and non-organic way. To some extent, I am absolutely sure that especially after the war and with a certain recovery, and with a certain return to a sovereignty, it will be a very, very fast-growing business stream, and we want to be prepared.

We want to be prepared from the list of service perspective, from the market share perspective and available competencies in place. This is quite essential part of our business development.

Got it. Thank you.

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

Good afternoon, gentlemen. Thank you for making the time available. My first question revolves around digital top line. If I back out to Tabletki.ua and Uklon, and I look at the sort of organic growth basis year-over-year, it looks to be very, very high, the growth rate. I'm just wondering if you might sort of compare and contrast the organic growth opportunity in your digital portfolio versus the new acquisitions. Do you think that it'd be great if there's some sort of pro forma view on how Uklon is growing and Tabletki.ua is growing year-over-year. That's my first question. My follow-on question comes back to the capital expenditure of UAH 66.

I would assume that's overwhelmingly in the telecom business and relative telecom revenues, that's obviously sustainably remains quite high, well above sort of 21%. How much of that is really network resilience? How much of that is things like the 5G test bed? Given that really sort of 4G subs are now about 70% of your total sub base penetration.

What is sort of the, you know, given that, you know, older people tend not to be on data as much, what is sort of the roadmap for boosting data through, and how much do you think you're eventually in one year or two out will your network be in 5G given that the government has a test policy there?

Okay. I will ask Boris to answer first question, and then I will take a second one. Boris, please, could you please address this organic growth versus non-organic.

Yeah.

Of the digital revenue stream? Yeah.

Adrian, thank you for the question. As we discussed in the previous calls, even if you exclude Uklon and Tabletki.ua impacts, we are growing about 60% year-over-year.

This growth is supported kind of primarily by the existing streams, kind of our digital enterprise solution and the TV, which as Oleksandr explained, is growing due to the unique content quite aggressively. It's in line with our promise kind of to grow the digital business at the high double digits to triple digit levels. We are executing this trend.

How long do you think that's sustainable for, that sort of super normal growth rate?

It will be a kind of forward-looking statement, to be honest.

You know, declare the forward growth rate, you know, we are a bit careful and limited by the current rules imposed on us, so. You can make this trend by yourself. We were declaring our, let's say, organic growth rate, you know, 2025 organic growth rate in our presentation. You know, Boris just said where we are at the beginning of 2026, I think that you can make your simulation quite easily.

Uh-

Adrian, if I may make our legal team slightly more comfortable, the raw numbers are of course on slide 7.

Yeah. Yeah. Thank you.

Coming back to CapEx. Of course, we do not consider CapEx higher than 20% as a normal one, so it is definitely elevated by necessity to invest in resilience, okay. Around 15% of our CapEx is actually streamlined into the different resilience projects, okay. Still, let me emphasize that quite big share of our CapEx is focused on the modernization and strengthening our healthy network. We have accelerated 3G sunset. This year is the last year of 3G technology for Kyivstar in Ukraine. Okay.

We want to strengthen our technological leadership versus the competition. Okay? We are very close to finalize our license, 4G-driven license obligation with a population coverage almost 97%.

Hmm.

With all the major roads covered by the LTE technologies. Okay? My own perspective that this will be the main technological vehicle of mobile telecom for the next probably five, seven years. We do not expect 5G to be really introduced in Ukraine until end of the war. The most probable scenario is something like 12 months after the war, that's why we are considering our investments in LTE technology as a strategic one. By the way, this is very much confirmed by the Ookla, you know, this external monitoring company, that actually awarded Kyivstar with all three available awards. The biggest network by coverage, the fastest network by speed, the best one from the customer experience perspective.

Just one final question on I wasn't aware of the sunset on 3G, but is that going? You have 30% of your base that's not on 4G right now. I mean, is there a device limitation there? Are, you know, are these old folks with a, without a smartphone, and You know, when you migrate them off, is that gonna have an impact?

It's a good question. To be fair, 4G smartphones penetration is not an issue in Ukraine.

Okay.

Okay. As I mentioned at the beginning, Ukraine market still has a relatively high penetration of double SIM-ers. Okay. People using different SIM cards for the different purposes. Okay. And somehow, you know, I think that the 70% LTE penetration according to the global benchmarks is a very healthy level, despite the fact that 4G was introduced in Ukraine with a certain delay.

Okay. Thank you. Congratulations again on what was a pretty exceptional quarter on execution and results.

Thank you.

You're welcome.

Thank you very much.

Our next question comes from Tim Savageaux with Northland Capital Markets. Please unmute your line, turn your video on, and ask your question.

Tim, we don't hear you. Maybe you're on mute.

I seem Okay. Maybe there I am. Okay. Can you hear me?

It's okay.

Great.

It's okay right now.

Great. Thanks. Sorry about that. Yeah, congrats on the Tabletki.ua deal as well. Looks like based on those financials, we should be looking for more of those. My question is on organic growth as well, except sort of with an EBITDA focus. I don't know to what extent Tabletki.ua was contemplated in your previous guidance increase last quarter for 2026 or this one. It seems like there's some offsets on the cost side where we might expect, like, a greater increase. I mean, you talked about energy costs before. It does look like the organic EBITDA growth rate for the company is, you know, kind of low single digit implied in 2026.

Am I getting that right, and is there some offset on the cost factor or on the cost front, that's kind of a headwind to your strategic growth, your inorganic growth?

Tim, I will ask Boris to answer this question. Okay? Boris, please.

Yeah. Tim, thank you for the question. I think when we look at the Q1, it should be organic growth without, as you said, kind of Tabletki.ua and Uklon acquisition because we didn't have Uklon consolidated in 2025. If you look at this, we are at 16%. I'm talking organic terms. I'm not putting dollars here because you also have definitely a translation impact on our numbers. We are about 16% in terms of both revenue and EBITDA growth year-on-year. We are continuing this trend for the rest of 2026. We gave the guidance of 18%-21% in revenue, 14%-17% in EBITDA, which is in line with this guidance.

Despite the fact that we do have some factors pressing negatively our performance such as definitely utilities prices you mentioned or the EU regulation introduction, which is quite a significant impact for 2026. We are trying to offset them both in terms of the telco growth and in terms of the digital growth that we just discussed.

Okay. Great. Then to follow up, you know, I think we've seen a pretty notable uptick in Multiplay subscribers really the last two quarters in particular. I mean, would you attribute that to bringing in some of the new digital services in terms of acquisition and in terms of maybe those subscribers already having that service? I know, and this might be a tough one, but whether you expect that Multiplay trend to continue or, you know, what exactly you would attribute this uptick we've seen really in the last couple of quarters in Multiplay?

I will not answer on trend, but this is one of our ultimate objective, to grow number of Multiplay and Multiplay penetration into our customer base. What you see as a result of three major factors. The first one is organic growth of the Multiplay penetration. Every new gross add with a certain probability being converted into the Multiplay. On the shelf right now, we do not propose mobile standalone. Our basic value proposition consists of mobile, fixed, and Kyivstar TV, plus extra services provided in a form of Superpowers. You know, how customers can customize their own value proposition, you know, with the certain services provided by the ecosystem. As one of the example, Helsi subscription. Okay. The second major factor is non-organic, okay. Driven by the acquisitions of the business like Tabletki.ua. The third one is actually seasonality.

It's a certain seasonality in Multiplay mainly driven by the entertainment business. The certain periods of activity. For example, Uklon has certain seasonality. Kyivstar TV has certain seasonality. These are three major factors that are actually affecting our quarterly results with the overall trend to grow number of Multiplay customers.

Okay, thanks very much. Appreciate it.

Our next question comes from Nicholas Paton with Edison Group. Please unmute your line, turn your video on, and ask your question.

Hello, everybody. Thank you very much for all of the additional information on the digital business. I think it's actually very, very useful to see the granularity. We had a very interesting and instructive conversation on the full year VEON conference call regarding capital returns for the various businesses. I'm interested in the difference between your various digital businesses because clearly some of them are pure digital, whereas Uklon, which is 50% of your revenues in digital, is actually a relatively physical business with a sophisticated digital front end. When you look at the capital returns going forwards, how do you place Uklon versus the other digital businesses and versus the traditional telecoms business?

I'm not sure that, you know, so that you have a right approach to our Uklon business. What we are running in Ukraine is a ride-hailing platform. Platform that let riders to find driver, okay, for the transportation. For the time being, Uklon is a pure, you know, light asset business, and it's a pure digital service. From this perspective, I think that all the businesses are actually demonstrating a quite healthy marginality, okay, with the top one demonstrated by Tabletki.ua.

Yeah.

With a excellent marginality demonstrated by Uklon, which is actually at the lower end, but close to, we can't expose? Okay.

Um-

Which is close to 40%. Sorry. Ihor, I'm sorry.

Nicholas, if you're asking about, like, return on capital employed, definitely with the digital businesses such as Uklon without adding any kind of heavy assets. Yeah, this will be way higher versus what you see in our traditional telecom business.

Maybe, Nicholas, for the future, if you think about the ride-hailing business, if you think about driverless cars or Kyivstar businesses, you know, which are not having a driver, I think the future of this business will become more, I think, asset heavy as we see. It's not the issue of today, of course. Three years out, I think driverless car will be actually a CapEx heavy business, more CapEx heavy business.

Interesting. Okay, thanks for that.

If you take a look at what Uklon is directly announcing, some of the tech fairs they're doing, some very interesting work on the expertise they're building.

Okay, thank you for that.

Our next question comes from Vincent Fernando with Zero One. Please unmute your line, turn your video on, and ask your question.

I just wanna touch back on the Starlink reseller agreement. That's for Ukrainian businesses and public institutions, is that correct? Is it exclusive to Kyivstar in Ukraine? How should we think about the revenue model? Pure margin on resales or bundled into B2B connectivity? Just curious, yeah, what's the structure of that?

You're absolutely right. We will be focused on the B2B and B2G market with the resale. Okay? The income model is structured around certain markups on equipment and traffic, with the potential to convert this model into the data pool model that will open new opportunities, okay, based on the wholesale relationship with Starlink.

Got it. Is there any exclusivity in the agreement?

No, there is no exclusivity, okay? So far, we are the only one reseller, official reseller of Starlink services in Ukraine.

Got it. I know it's maybe only been about a week. Are you already seeing, you know, are you seeing what kind of customer, you know, ramp you're seeing already maybe in the early phase? I know.

It doesn't get the question.

Is it already started being marketing or marketed?

It's definitely at very early stage.

B2B.

B2B market is relatively developed. Being a B2B organization right now, you should order, you know, the Starlink device through your employee and to compensate, okay, through the salary. Okay, you are not able, like a B2B organization, okay, to order this service directly from the Starlink. We will be the first only one official representative of Starlink in Ukraine.

Great. Thank you.

Yes.

Yeah. Trust.

Our last-

Please go ahead.

Our last question comes from Ahmed Mustafa with Inam. Please unmute your line, turn your video on, and ask your question.

Hello, everyone. Thanks for the opportunity. One question from me. You have made several acquisitions within roughly 18 months. What synergies are you seeing, and how do you think about integration complexity across the portfolio? Thank you.

We have two types of synergies. The first one is operational synergies that are to some extent already extracted and reflected in the high marginality of our digital business stream. The second layer of synergies is a kind of customer synergies. They are very much reflected into the growing penetration of Multiplay services, combination of telecom services with the different digital services in a unique competitive value proposition in a form of bundles. On the top of this, we are right now focused on developing our vision of the holistic ecosystem. Over all KGL Group assets in Ukraine. These are three major synergies that we are trying to extract and to convert into the customers' and shareholders' value. You know, what we are doing right now, we are focused on some kind of, let's say, no regrets moves.

One of them is a single ID across the whole KGL ecosystem, okay? In order to have proper identification mechanism, in order to streamline customer journey, and to have better visibility of the customer base.

Mm-hmm. Great. Thank you.

We have no further questions at this time. I will now hand back to Cole Akeson for closing remarks.

Well, we'll keep this very brief. Thank you as always for your interest in Kyivstar. We are proud to have presented another strong quarter, and we look forward to speaking to you in the following quarter. Thank you again.