TKC

Ladies and gentlemen, thank you for standing by. I'm Paulina, your Chorus Call operator. Welcome, and thank you for joining the Turkcell conference call and live webcast to present and discuss the Turkcell first quarter 2026 financial results. All participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mrs. Özlem Yardım, Investor Relations and Corporate Finance Director. Mrs. Yardım, you may now proceed.

Thank you, Paulina. Hello, everyone, and welcome to Turkcell's 2026 first quarter earnings call. On the call today we have our CEO, Ali Taha Koç and CFO Kamil Kalyon. They will provide an overview of our operational and financial results for the quarter, followed by a Q&A session. Before we begin, I would like to kindly remind you to review our safe harbor statement, which is available at the end of our presentation. With that, I will now turn the call over to Mr. Ali Taha.

Thank you very much, Özlem. Good afternoon, everyone. We delivered a phenomenal quarter. We successfully launched 5G nationwide on March 31st. This landmark launch reinforced our clear leadership in mobile. We executed with precision at every stage of the 5G deployment, from spectrum acquisition to network rollout, from network rollout to marketing. In all aspects, Turkcell is the leader. Our spectrum acquisition was both strategic and efficient. We secured 25% more capacity than our closest competitor, creating a network of superior scale and positioning it for long-term demand. Our launch was supported by a powerful go-to-market strategy. To accelerate 5G adoption, we expanded data package allowances fivefold and introduced compelling smartphone campaigns. Our ads featuring global celebrity Shaquille O'Neal resonates strongly with customers. We proved the real-world power of our network through high-impact use cases.

We successfully tested remote driving of a Türkiye'nin Otomobili Girişim Grubu T10F over 150 km distance. At the same time, we conducted live speed tests across Turkey. Turkey has 81 different cities. At live from all the cities we have 5G, and with 5G speeds exceeding 2,000 Mb, 2,000 Mbps. It means more than 2 Gb. No one has that kind of capability. No one has that kind of speed other than Turkcell. We secured the best frequencies, delivered superior network quality, and executed the strongest launch campaign. Our market is now more solid and resilient than ever. Next page, please. We started the year with flawless execution across all our domains. We have been the leader in the mobile, we are the leader today, and we will continue to lead the future.

By securing 40% of the 5G spectrum in the tender, we further reinforce our long-term capacity dominance. On the fixed side, we are driving value-led growth by promoting multi-gigabit per second fiber offerings. Currently, 20% of our customers are on 1 Gbps, means 1,000 Mbps and above plans. Digital Business Services delivered robust growth through corporate digitization, supported by sustained momentum in data center and cloud services. We further strengthened our balance sheet by securing $1 billion in Murabaha financing. This preserves our investment capacity while supporting a healthy leverage profile. Finally, we continue to expand our strategic partnership. We introduced up to 50% discounts on Samsung smartphones to support 5G penetration. We also secured a managed service collaboration with ASFAT in the defense industry and a strategic cooperation with HBO Max to strengthen our TV platform strategy.

Next page, please. In the first quarter of 2026, our revenues grew by 9% year-on-year, exceeding TRY 68 billion. This robust top-line performance was driven by combination of operational discipline and strategic execution. Key contributors included strong momentum in Digital Business Services, the scaling of our Techfin segment, and high-quality subscriber acquisition across both mobile and fixed segments. Group EBITDA increased to TRY 28 billion with a margin of 41.4%. Our bottom line performance strengthened further with net income increasing by 15% to TRY 4.6 billion with disciplined financial management. On the subscriber side, we have 661,000 postpaid net additions. We achieved a great quarter in the mobile number portability market driven by targeted and segment-based offers. We continue to prioritize subscriber quality and rich content packages to strengthen our leadership.

Our Data Center and Cloud business maintains a strong trajectory with revenues increased by 20.8% as we continue to scale our digital infrastructure. Overall, these results once again proved our ability to monetize the broader digital ecosystem. Next page, please. Let's look at the operational drivers behind our performance this quarter. Market competition remained relatively stable. We have 661,000 postpaid net additions in this quarter, our strongest total mobile net additions in the past 14 quarters. This performance reflects the success of our targeted offers and our focus on high-value subscriber growth. The share of postpaid subscribers rose by 4.6 points year-on-year to 81%. Mobile Average Revenue Per User remained broadly flat year-on-year. This reflects the lagged impact of last year's competitive pricing, our contract-based structure, as well as the rapid increase in inflation in the first quarter.

As we transition to 5G, we are taking a balanced approach. We are carefully managing pricing to protect our subscriber base while sustaining our clear leadership in the revenue market share. Our strategy is also reflected in lower churn rates supported by an effective churn policy. Next page, please. Moving on to our, the fixed broadband operations, we achieved a strong quarter in fixed broadband supported by solid subscriber growth. We recorded 36,000 net fiber subscriber additions, including 21,000 from Turkcell Fiber domain. Residential Fiber ARPU increased by 9.7% year-on-year, supported by active upselling, pricing actions, and the growing contributions of our IPTV offering. We expanded our Turkcell Fiber home pass by 138,000 in the first quarter, reaching a total of 6.5 million home passes in 30 different cities.

Our take-up rate reached 41.8%, reflecting effective monetization of our infrastructure investments and the strength of our fiber growth strategy. Next page, please. Digital Business Services had a strong start to 2026, with revenues increased by 64% year-on-year. This performance was driven by higher hardware revenues from large-scale end-to-end corporate projects. We also delivered robust 21% growth in our Data Center and Cloud business. Our system integration backlog remains strong, exceeding TRY 10 billion. Our cumulative data center investments have reached close to EUR 600 million. We are on track to finalize our fifth module in Ankara. Our Google Cloud Hyperscale partnership is on track as we planned. Next page, please. Paycell, the growth engine of this segment, in this quarter, Paycell revenues increased by 15%, fueled by strong momentum in our Point of Sale and Pay Later businesses.

Active users of Pay Later increased by 16%, exceeding 3 million. On the financial side, revenues declined primarily due to ongoing installment limitations. Looking ahead, we see 5G penetration as a natural growth catalyst. A more supportive regulatory environment for installments limits would unlock the full expansion potential of this business. Despite revenue pressure, Paycell's net interest margin expanded significantly by 3.6 percentage points to 8.3%, supported by lower funding costs. Balance sheet risk management remained disciplined with cost of risk is at 3.3%. I will now hand over to our CFO, Kamil Kalyon, to walk you through our financial highlights. Thank you.

Thank you very much, Ali Taha Koç. Let me walk you through our financial results. We are very pleased with our solid first quarter performance. With a 9% increase, our top line exceeded TRY 68 billion. This growth was primarily driven by Turkcell, which rose 8.6% year-over-year. Our non-telco revenues were instrumental in this performance, particularly Digital Business Services. Accounting for 12% of our revenue this quarter, Digital Business Services delivered strong momentum through managed services. Our expanded postpaid base and fixed broadband services also provided a robust foundation for expansion. Additionally, our other segments contributed TRY 0.5 billion to the top line, fueled by the robust performance of call centers and Belarus subsidiaries. The EBITDA margin was 41.4%.

The increasing share of hardware sales from large-scale integration projects made a significant contribution to top-line growth but weighed on the overall margin mix. This impact was partially mitigated by disciplined cost management, favorable energy prices, and reduced funding costs at Financell. Next slide, please. Net income rose 15% to TRY 4.6 billion, primarily supported by strong operational performance and robust EBITDA generation. Another key driver was the monetary gain, which benefited from the capitalization of the 5G license and contributed TRY 4.2 billion year-on-year. This year, we are scheduled to make several major payments. We have proactively positioned ourselves to manage them effectively. The payment of the first installment of the 5G license in January amounting to $653 million, together with the recognition of future installments and higher swap transactions, led to an increase in FX expenses.

In addition, the redemption of $500 million Eurobond last October and the license payment in the first quarter resulted in a slight increase in net interest expense. EBITDA delivered a significantly stronger contribution compared to last year. This improvement was supported by effective cost management and pricing policies, while relatively stable Euro/TRY parity also helped constrain FX funding costs and the cost of goods sold. The effective tax rate increased this quarter. This was driven by a higher corporate tax expense and deferred tax impact stemming from the absence of inflation accounting in statutory financials. Next slide, please. Let's move on to CapEx management. In the first quarter of 2026, our CapEx to sales ratio stood at 21.5%. 85% of our operational CapEx was allocated to connectivity businesses, naturally reflecting our intensive preparations for the 5G rollout.

On the fixed side, we continued our fiber expansion, adding 138,000 new homes passed this quarter. Our base station fiberization has now reached 47%, significantly enhancing our overall network quality at 5G readiness. Data Center investments accounted for approximately 5% of our CapEx, with construction currently underway for the fifth module in Ankara data centers. Seasonally, we experience lower CapEx intensity in the first quarter. However, we expect higher figures in the upcoming quarters, driven by our ongoing investments in renewable energy and Data Center expansions for Google Cloud. Next slide, please. Moving to our well-positioned balance sheet. The first quarter ended with a cash position of TRY 96 billion. In January, we completed the first installment payment for the 5G license and paid TRY 3.2 billion Wireless Usage Fee.

However, our cash position was significantly bolstered by the successful Murabaha syndication. Considering both cash and financial assets as part of our overall liquidity, we maintained a stable position quarter on quarter. Our current liquidity remains robust, providing full coverage for both the upcoming 5G payments and all debt maturities over the next four years. Driven by the new loan utilization and the impact of significant regulatory payments on our cash reserves, our net debt increased to TRY 49 billion. Consequently, and as expected, our net leverage ratio rose to 0.42 times. We expect leverage to remain below the 1x threshold despite this being a high investment year. Next slide, next slide, please. Lastly, foreign currency risk management. We proactively balance hedging costs supported by our strong natural hedge position.

Currently, 77% of our cash is held in hard currencies, while 88% of our total FX denominated debt is in hard currencies. To avoid excessive hedging costs during periods of relatively stable FX levels, we have strategically opted to maintain a higher short FX position. Supported by $2.8 billion in FX assets and a $1.3 billion derivatives portfolio against $4.4 billion in FX debt, our net short FX position has now risen to $1.2 billion. This position reflects cash outflows related to 5G license, FX denominated CapEx, and our optimized use of hedging instruments. Moving forward, we target an FX position of approximately $1.5 billion to support our ongoing investments and 5G obligations while maintaining the flexibility to adjust our strategy in line with market conditions.

That concludes our presentation. We would now be happy to take your questions. Thank you very much.

Ladies and gentlemen, at this time we will begin the question and answer session. The first question is from the line of Madhvendra Singh with HSBC. Please go ahead.

Yes, hi, thanks a lot for taking my question. My first question is on the consumer segment. I think your release rates, consumer revenue growth was about 3%. If you could talk about that, you know, what is the context there? Because your overall revenue growth is high single digit in line with your guidance, but consumer growth is much lower. If you could talk, you know, about the drivers. Secondly, if you could talk about the pricing action within the mobile segment. How many have you revised the prices year to date? How much was the price hikes? What periods? Your future plans around the price hike as well. That's the second question.

Finally, have you seen any impact on your operating costs from the higher fuel prices, energy costs, and so on? Any potential impact there, if you could talk about that. Thank you.

Let me start with the price adjustments. In 2026 segment-based dynamic pricing and offer strategy will be maintained. We're gonna closely follow up the competition and act upon it. We utilize actually AI power tools to provide dynamic and customer-specific offers. We cannot have a mass change in the pricing, but from a segment level, we are doing the change, price differentiation. On mobile side, this year, we applied a 26% price adjustment in January and 16% in April to restore pricing into the expected baseline. This year this did happen. On the fixed side as well, we applied price adjustments broadly in line with the incumbents pricing actions. Accordingly, we implemented approximately 12% price increase on the shared infrastructure and around 18% on our fiber products in February.

Regarding the first question, this quarter, we have lots of great news with the Digital Business Services. Our Digital Business Services and Paycell has a huge growth. Currently we are the biggest digital integrator in Turkey, and we are working very closely with the defense industry and another public sector. We gain lots of momentum on that perspective, so that's the reason that our growth is higher. Secondly, data center and cloud businesses grew around 21% year-over-year, so that's also helping us our growth. The Paycell also remain a strong contributor, to say the truth that it's our main growth engine. It grew 15%. We have a balance sheet right now, so we have multiple options so we can grow.

Consumer segment is still the biggest one, but we have other options that we can have a higher growth.

For the third question, we are closely monitoring the volatility in the global energy market, especially the fuel prices. While high fuel prices put upward pressure on costs, the actual impact will depend on the conflict duration and the intensity. Currently, it's a little bit early to say estimation for the future, but it depends on the duration of the conflict.

Okay. Thank you.

The next question is from the line of Cemal Demirtaş with Ata Invest. Please go ahead.

Thank you for the presentation. My first question is about the ARPU side. We see a real term contraction quarter-over-quarter and year-over-year. Could you further elaborate that, how should this trend go in the following quarters? The other question is about the cost side, the participation. We see that, it turned to positive net income around TRY 305 million contribution to your side. What do you expect for the following quarters at least? The last question is about the tax rate, effective taxes. How should we assume for the rest of the year? Thank you.

Thank you, Cemal. Thank you very much for the question. I'm gonna answer the first one and the top part and the tax part, the accountable is gonna answer that. Let me start with our primary objective is actually maintain a healthy ARPU growth that aligns with macroeconomic indicators. The mobile market currently was characterized by intense competition throughout the 2025, as you may know. Consecutively, our strategic churn management and pricing actions taken last year have had a temporary restrictive impact on our current ARPU growth because we already did this strategic churn management systems last year, so we can see the impact this year. For the full year 2026, our target is to achieve ARPU growth that closely tracks the inflation cycle.

However, we must remain mindful that any unexpected shifts in inflation dynamics, as we can see that nowadays, will create some influence on our real growth trajectory. Our dynamic pricing model will manage this and continue to migration to higher value segments remain our key strategy to ensure ARPU resilience. We implement a strategy that will enable us to maintain a healthy growth. In 2025 has also affected this year's growth as our ARPU growth is coming with a lag. We need to always know that there's a lag between the inflation and on our ARPU growth because we are doing our contracts, 12-month contracts. That's the reason that increasing trend in inflation is also putting a pressure on current year's growth.

If you look at the numbers, we have a healthy ARPU for the users. Also, we don't do any strange operations with the machine-to-machine communication. Our ARPUs are always stable. Growth is there.

From the Togg side, Togg's net loss initially is starting from the third quarter of 2025, Cemal. Mainly supported by change in special consumption tax base, which led to higher vehicle prices in the company. The new model T10F also supported the sales momentum in Q4 2025 and Q1 2026. Within the light of these facts in Q1, Togg registered a net income of TRY 306 million. There are various reasons of this profit in the Togg side. This improvement was mainly driven by the increased benefit of current incentive mechanisms, mechanism with higher vehicle sales. This is the first one. The other one, financial expenses also improved due to relative stability of Euro/TRY parity in Q1.

Additionally, Togg continues to record monetary gains under the inflation accounting due to its significant fixed asset base. When you combine these three effects, the company declared a good result in Q1. We also expect the momentum in the coming periods. For the last question, as you know, from the tax side, the termination, as you know, you might aware, the termination of inflation accounting in accordance with the Turkish Tax Procedure Law led to tax impacts of the indexation effects of accounts under capital items is no longer taken into account. With another saying, the inflation accounting in the local side is canceled or postponed for three years period. There are some negative effects of this issue in the deferred tax side.

Therefore, since the taxable nature of the monetary loss calculated on capital items has been eliminated, the effective tax rate has increased, naturally. Therefore, higher fixed asset revaluation effects are included at the end of year. Termination of inflation accounting impact had been limited from this side. In addition to this, for the account, inflation accounting, the profit of the term is also increased in this 1st quarter. Therefore, this is the second reason which we have a tax expense in our financials in Q1.

Okay. Do you expect any upward revision to your revenue growth after around 9% growth in 1st quarter? You have like five to seven.

It is really early to say something about the guidance revisions, revise because we should, first of all, we should see the economical conditions in Turkey. The other one, the most important one is the conflict, duration of the conflict. If the conflict, for example, duration will, for example, extended for many months, therefore it will, how can I say? Influence the inflation rate in Turkey. We, we will look at the position of the inflation in the coming future. It's really early to say something about this one. I think we should see the Q2 results. Maybe in the Q3 side it would be more feasible or more rational to say a revise in the guidance side, in negatively or positively. It's really too early to say, to talk about this one.

Thank you. One, one last thing about your, you know, promotion camera. It was very, I think effective, at least from a consumer perspective like me. Whenever I look at, you know, see it make me smile. I think from my side, it was very effective. From your side, do you think it reached to crowds in Turkey? Any reaction on that? It really, it's one of the best commercial I have experienced during the last several years. I just want to, you know, appreciate it from the consumer perspective. Do you have any measure that, you know, it had any positive effect on your activities in all around Turkey? Thank you.

First of all, thank you very much for your comment. It's very, you're making us happy when you say with these comments. Also our marketing team is also very happy about the impact. Overall, what happened is, you know, we missed that kind of great ads in Turkey. Turkcell has in its DNAs to publish a great ad. I think it is go back to the future or whatever you can say that, long time before we didn't have that kind of big, great ads. Still true that everybody knows the, especially the story is very nice. It's explaining the 5G technology with a very funny and Turkish style way, I can say that.

That's the reason that there's a huge interest on that, you know. Everybody's 5G speed is just very well aligned with the Turkcell terminology, so it helps a lot. We are seeing that and we continue on the campaigns, especially on the consumer side, we have a huge campaign about the five-fold. We are waiting for that to be over. This month and the next month we are gonna see the real impact. On top of it, we just bought a new market, which is called Fixed Wireless Access. It means that we are gonna give Superbox, 5G Superbox, and then we have a new ad about it as well.

Overall, we are expecting a positive impact, both the campaign and how we deploy our 5G technology in Turkey.

Thank you very much, Ali Taha.

Thank you.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Turkcell management for any closing comments. Thank you.

Thank you very much joining. Hopefully we're just gonna see each other in the second quarter results. Thank you.

Thank you for joining us. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling and have a pleasant evening.

Ladies and gentlemen, thank you for standing by. I'm Paulina, your Chorus Call operator. Welcome, and thank you for joining the Turkcell's conference call and live webcast to present and discuss the Turkcell Fourth Quarter and Full Year 2025 financial results. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mrs. Ozlem Yardim, Investor Relations and Corporate Finance Director. Mrs. Yardim, you may now proceed.

Thank you, Paulina. Hello, everyone, and welcome to Turkcell's 2025 year-end earnings call. On the call today, we have our CEO, Ali Taha Koc; and CFO, Kamil Kalyon. They will provide an overview of our operational and financial results for the quarter and the year, followed by a Q&A session. Before we begin, I would like to kindly remind you to review our safe harbor statement, which is available at the end of our presentation. With that, I will now turn the call over to Mr. Ali Taha Koc.

Thank you, Ozlem. Good afternoon, everyone, and thank you for joining us today. We closed 2025 with a strong finish, exceeding all of our expectations. Revenues increased by 11%, and we achieved an EBITDA margin of 43.1%. Net income from continuing operation reached TRY 17.8 billion, up 23% year-on-year. These outcomes reflect disciplined execution and strong momentum across the business. 2025 was pivotal for our long-term strategic positioning. We were awarded the largest spectrum in the 5G auction and secured our fiber footprint through the agreement with BOTAS. This will strengthen our network leadership and expand our capacity to capture 5G demand. We maintain a robust balance sheet through prudent financial management. This preserves flexibility and liquidity. We delivered shareholder returns through a solid dividend payment and launched a 3-year share buyback program. Turkcell is a technology company. We are reinforcing that identity through focused investments. In 2025, we allocated 15% of CapEx to strategic areas, primarily in data center, cloud infrastructure and renewables. These investments deepen our digital infrastructure, enhance energy resilience and support long-term value creation. A major milestone for Turkiye is our strategic partnership with Google Cloud. We are building a hyperscale cloud region in Turkiye. This cloud region will help enterprises accelerate cloud adoption to secure their data sovereignty as well as excess advanced capabilities in AI, cybersecurity and digital platforms. Turkcell is at the center of Turkey's digital transformation. With this partnership, Turkcell will have sustainable technology-led growth. Next page, please. Over the past 3 years, we have executed with discipline to show that Turkcell's leadership in connectivity and digital infrastructure. This transformation shapes how we operate today and how we allocate capital to deliver long-term value creation. Our capital allocation framework is built on 3 pillars. First one, investing in our business to sustain leadership and capture future growth. We continue to advance mobile rollout and expand our fiber footprint with 5G. Our fixed wireless access solution Superbox will extend our coverage beyond fiber. In parallel, we are investing in data centers and cloud, which will bring future growth. As we scale this business, we may also evaluate selective inorganic opportunities. Our expected CapEx intensity of around 25% reflects this investment cycle. The second one, delivering attractive shareholder returns. Last year, we distributed 72% of net income from continuing operations. This is our ninth consecutive year of dividend distribution, 9 consecutive years. We also launched a new share buyback program and repurchased $58 million of shares to date, reflecting our confidence in long-term value of our business. Thirdly, maintaining a strong balance sheet. We continue to diversify our funding sources from sustainable bond issuance to Islamic financing structures. We remain committed to maintaining net leverage below 1x, preserving flexibility to invest in growth while continuing to support shareholder returns. Overall, we have a crystal clear capital allocation plan to invest in strategic infrastructure, capture structural global opportunities and deliver sustainable shareholder value. Next page, please. We can now move to the quarterly performance. The fourth quarter marked another period of solid execution for Turkcell's leadership. Performance was driven by operational excellence and supported by our key growth engines. With outstanding performance across all core segments. In this quarter, revenues grew by 7% year-on-year to TRY 63 billion. Results were underpinned by ARPA expansion, continued subscriber momentum and scaling of our data center business. All of these reinforce the strength and resilience of our growth model. Group EBITDA increased 12% to TRY 26 billion, reaching a solid 41.2% margin. Margin expansion reflects continued cost discipline and as well as the operational efficiency. Focused financial management also supported our bottom line with net income from continuing operations increasing 11% to TRY 3.6 billion. We achieved 905,000 net postpaid additions in the fourth quarter. This is the strongest quarterly result in the last 6 years. This was driven by targeted value propositions as well as customer-focused strategy. Another good news, this growth also came with real ARPU expansion, reflecting balanced growth. On the other hand, our data center and cloud business continued to scale with revenues growing by 32%, renewable energy installed solar capacity reached 62.2 megawatts. Next, please. Let us turn to the key operational highlights that shape our great quarter. Competition remained elevated for much of the year, but it is moderately in the middle of the fourth quarter. 2025 was marked by record high mobile number portability. In this environment, our customer-centric approach and pricing strategy helped us strengthen our market leadership and expand our customer base. We had 2.4 million postpaid net additions for the year 2025, the highest level in the past 26 years. Rising share of the postpaid subscribers was a key driver of revenue growth. It increased by 4.7 percentage points year-on-year to reach 81%, strengthening the resilience and the visibility of our revenue base. Revenue quality also improved. Through our micro segmented pricing actions and AI-supported offers we migrated a significant portion of our subscribers to higher-tier packages. As a result, mobile ARPU real growth is 5.4%. Innovative offerings, including family plans and a new loyalty platform like Tumbara, increased engagement and supported retention. As a result, our churn improved year-on-year to 2.7%. Next, please. Turning now to our fixed broadband operations. Another strong year for Superonline, our fixed business as well. We expanded our base with net addition of 119,000 Turkcell fiber subscribers. Total fiber subscriber base reached 2.6 million. High-speed campaigns were instrumental in driving this growth. We expanded our offer to speeds of up to 1,000 megabits per second. Today, out of all of our customers, 1 in 5 customers subscribes to speeds above 500 megabit per second. This signals a clear shift toward premium connectivity with Turkcell Superonline only. Residential fiber ARPU increased by 10.3% year-on-year. We expanded our fiber home pass to 6.3 million home passes. While increasing the number of home passes, we achieved a phenomenal performance on take-up ratio of 42%. Next please. Our digital infrastructure strategy is central to Turkcell's long-term growth. We believe that cloud and AI infrastructure is structural, a must for every business in Turkiye. The Turkish cloud market is growing at 19% annually in dollar terms, supported by increasing digitization and rapid adoption of AI-driven workloads. Our partnership with Google Cloud marks a defining milestone. Establishing a Google Cloud region in Turkiye strengthens our country's digital ecosystem and enhances our position in the infrastructure value chain. This partnership diversifies Turkcell's revenue streams and reinforces our long-term growth profile. Today, we operate 50 megawatts of active data center capacity, and it will be doubled by 2032. Over the same period, we expect our data center and cloud revenues to grow at least sixfold in U.S. dollar terms. Beginning in 2026. We expect this segment to generate approximately $100 million in EBITDA. We are uniquely positioned to capture this technological breakthrough with our scale, network assets, market leadership and strategic partnership, we are ready to benefit from this structural growth. Next please. Digital Business Services delivered solid growth, with revenues increasing by 30% to TRY 7 billion, supported by stronger hardware sales. Our system integration backlog reached TRY 6 billion. Our data center and cloud revenues increased by 32% year-on-year. This outstanding growth was driven by capacity expansion. As this new capacity established a higher base, we expect growth rates to gradually normalize. Even so underlying demand remains robust and continues to support for further expansion. We expect to complete the final module of Ankara data center in this year, reaching the full capacity -- full technical capacity of our existing facilities. In the first half 2026 construction of our new data centers under Google Cloud partnership will start. This will be our next phase of capacity expansion strategy. Techfin is one of our core strategic growth engine. Our techfin business delivered solid performance in 2025 with revenues growing by 21% and once again outpacing group growth. Paycell was the main driver of this growth. In the fourth quarter, its revenues increased by 40% year-on-year, supported by POS solutions and Pay Later services. Paycell increased its non-group revenue share by 18 percentage points to 77%, reflecting its ability to scale beyond the Turkcell ecosystem. On the financial side, revenues declined by 6%, mainly reflecting the lower interest rate environment. The loan portfolio continued to expand despite tight regulatory conditions. Net interest margin improved to 6.3%, primarily driven by lower funding costs as well as disciplined risk management and better collection practices. Overall, techfin continues to enhance the diversification and quality of our revenue growth. Next page, please. Now a few words on our renewable energy footprint. We are so proud of it. In the fourth quarter, we commissioned our largest active facility to date. Active solar capacity increased from 8 megawatts at the end of the last year to 62 megawatts in 2025. In total, we reached 164 megawatts of installed capacity across 8 different cities. These investments are already delivering financial benefits. During the year, our solar energy portfolio generated TRY 156 million in OpEx savings. Stronger contribution is expected in 2026. We will continue to expand our portfolio to enhance cost efficiency, strengthening operational resilience and support our 2050 net 0 commitment. Next page, please. We exceeded our expectations in 2025. This underscores the resilience of our operating model and the consistency of our execution. Looking ahead to 2026, our focus remains on real profitable growth. We expect real revenue growth in the range of 5% to 7% with the strength of our core business and increasing contributions from strategic areas. We aim to deliver an EBITDA margin between 40% to 42%, reflecting ongoing operational efficiency while continuing to invest in growth. Our operational CapEx intensity is expected to be around 25%, consistent with our investment cycle in 5G rollout, digital infrastructure expansion and renewable energy projects. In our data center and cloud business, we anticipate revenue growth in the range of 18% to 20%. This reflects a normalization following the significant capacity expansions completed in 2025, while underlying demand remains healthy. Overall, we believe our guidance balances growth, continued investments and sustainable value creation. With that, I will now hand over to our CFO, Mr. Kamil Kalyon, to walk you through our financial highlights.

Thank you very much, Ali Taha bey. Let me briefly walk you through our financial results. We delivered a strong performance for both the year and the quarter. Top line grew by 11% year-on-year, surpassing TRY 241 billion, quarterly growth was 7%. This performance reflects resilient execution in our core telecom business and continued scaling of our techfin platform. Turkcell Turkiye revenue increased by TRY 21 billion year-on-year. Growth was driven primarily by real ARPU expansion and sustained postpaid subscriber additions. Continued upselling and premium positioning further enhanced the quality of our revenue base. Techfin accounted for 6% of consolidated revenues contributed TRY 2.4 billion for the year. Performance was underpinned despite strong momentum in Paycell, particularly in POS solutions and Pay Later. Both verticals continue to expand transaction volumes and monetization. Next slide, please. Now EBITDA performance. Exceeding the top line growth, EBITDA increased by 14% year-on-year to TRY 104 billion, reflecting efficient cost management, EBITDA margin surpassed 43%. The main positive contributors were employee and energy expenses. While payment expenses scaled alongside strong POS expansion, Paycell's primary growth driver this year. Radio-related expenses reflect the acceleration of our 5G readiness and ongoing network modernization efforts. As a result, EBITDA margin expanded by 1.2 percentage points demonstrating disciplined execution while continuing to invest for future growth. We remain focused on balancing strategic growth investments with long-term profitability. Next slide, please. Profit from continuing operations increased by 23% year-on-year to TRY 17.8 billion, primarily driven by strong EBITDA growth. We maintained market leadership through solid execution and a diversified revenue mix supporting sustainable EBITDA generation. We had a larger debt position during the year. However, our proactive balance sheet management further supported bottom line performance by TRY 3.5 billion. Net finance income benefited from lower interest expenses, loan redemptions and reduced hedging costs amid stable FX conditions. In addition, maintaining a solid TL position allowed us to benefit from attractive local currency yields. Monetary adjustments continue to reflect moderating inflation dynamics and the residual impact of the Ukraine divestment in 2024. Looking ahead, the capitalization of 5G license is expected to support normalization in this line. TOGG contributed positively this year, supported by improved pricing dynamics and the launch of the new model. We see additional long-term value creation potential as 5G-driven technological transformation accelerates. Income tax expense increased mainly reflecting the deferral of inflation accounting application in statutory financials. Next slide, please. Let's take a closer look at our CapEx management. With a prudent CapEx approach, we closed the year at 22.6%, in line with guidance. We continue to advance both mobile and fixed infrastructure. Fixed investments accelerated adding 405,000 new while base station fiberization reached 47%. Excluding strategic areas, CapEx intensity remains stable at around 18% to 19% over the past 3 years reflecting consistency in our investment framework. Our investment profile reflects a focus on our strategic growth areas beyond traditional telecom. Operational CapEx intensity of 25% is aligned with our strategic priorities across 5G, data centers and renewable energy. We allocate capital with a clear focus on long-term value creation, favoring projects with strong return visibility and scalable cash generation. Next slide, please. Moving now to our balance sheet. Our balance sheet provides flexibility to execute our strategic objectives while preserving financial resilience. We closed 2025 with a cash position of TRY 92 billion after dividend payments, loan repayments and the Eurobond redemption in the fourth quarter. Our solid liquidity position fully covers upcoming 5G payments and debt service obligations over the next 2.5 years. Net debt was TRY 15 billion. Net leverage improved to 0.1x supported by strong EBITDA generation. We remain committed to maintaining leverage below 1x while comfortably funding 5G payments and broader strategic investments. The increase in lease obligations reflects the onetime accounting impact of a 15-year BOTAS infrastructure renewable agreement in the fixed side. We continue proactive debt management and actively evaluate diversified financing opportunities to support our long-term growth strategy. Next slide, please. Lastly on foreign currency risk management. We proactively monitored market conditions and swapped a portion of our U.S. dollar holdings into Turkish lira. As a result, 56% of our cash was held in TL at year-end. This allows us to benefit from higher local currency yields and supported net financial income. At the year-end, we had USD 3.4 billion in FX debt, USD 1.9 billion in FX-denominated financial assets and a derivative portfolio of USD 600 million. Derivative portfolio reflects our short-term FX swap transactions with volumes increasing towards year-end and fewer NDF transactions. The increase in our short-term FX position mainly reflects higher FX-denominated CapEx in the fourth quarter and a deliberate reduction of hedging instruments to avoid higher costs. We target managing our FX position around USD 1.5 billion to support investments and 5G license obligations. We may adjust this level proactively in line with market volatility. This concludes our presentation. We are now ready to take your questions. Thank you very much.

[Operator Instructions] The first question is from the line of Bystrova Evgeniya with Barclays.

Congrats on your results. I have just one question. I was kind of curious to know more about the data centers business. If you could please provide more color maybe on what are the EBITDA margins of this business? That would be very helpful.

So thank you very much for the question. It's our growth area, and we are expanding our data centers. AI and our cloud are expected to drive 14% CAGR in data centers from 2025 to 2030, lifting global capacity from 108 gigawatts to 200 gigawatts. So overall, what we can see is our results are getting better and better. AI is reshaping workloads all around the world. So there's a huge demand on the data center business. So currently, our expectation is that more than 2x increase in active data center capacity and 6x increase in the data center cloud revenues in dollar terms as of 2032. Share of the DC cloud revenue and total revenue is expected to increase around 8% to 10%. It is -- currently, it is around 2% and we are expecting that no dilutive impact is expected on our EBITDA margin.

The next question is from the line of Demirtas Cemal with Ata Invest.

Thank you for the presentation and congratulations for good results. My question is about your FX position. Maybe if could you further elaborate that. If I didn't understand wrong, you mentioned that you have short position now around $900 million. I couldn't understand the justification behind that any -- short position in U.S. dollar, maybe that will be more helpful because there's jump and you justify with some other things, I guess, investments that further evaluation could be helpful. And the other question is, again, the data center sites. We visited one of your -- the data center, and it was really helpful for us. Thank you once again, and you spent time with us, and it was very helpful to know where Turkcell is going ahead. But Ali Taha bey, I'm receiving questions about the size of the investments. Currently, is a simple calculation, maybe you can just give us a better color with the size, you have already have 50 megawatts. And you will add additional 50 megawatts. And -- but during that period, $1 billion will be invested you and $2 billion will be invested by Google. For some -- just we see that question from also investors, isn't the small number, small megawatts as a hyperscale scalers shouldn't be expected a bigger megawatt numbers also in the investment side, please just help us to understand better? Or should we assume that this is the starting point. Going forward, this megawatt number could be much higher. That would be very helpful again.

Yes. Cemal, I will start from your first question. Our FX position is around USD 957 million sizes. As you know, fourth quarter is seasonality from the CapEx investments are very high in our site. Therefore, the one reason is coming from the high CapEx investments. The other side, as we mentioned in the presentation slide, we are monitoring the market conditions very closely and we swapped some portion of U.S. dollar holdings into Turkish lira. Therefore, we would -- currently our cash is -- 56% of the cash is Turkish lira position. This transaction in order to benefit from the higher local currency yields coming from the money funds, for example, in Turkiye, the money market funds. Therefore, we would like to benefit from this advantage, therefore, we swapped some portion of our U.S. dollar into Turkish lira. For the first question, I can say this at for the second and third question, I will hand over to Mr. Ali Taha.

Kamil bey, related to this question. Doesn't it mean you are taking a position, if I understand correctly, it looks like if there is the pressure on Turkish Lira, do you have any hedge for that already as a structure -- is it hedged? I just try to understand that. Maybe it's a good strategy part of this, but doesn't need just for the benefit because Turkish lira -- things might change. There's a risk and it's not the main business of the company. So maybe further justification could be helpful.

You're absolutely right. But as you know, in 2025, the FX policy of the Central Bank worked very well. Therefore, the hedging costs were very, very expensive in 2025. Therefore, we prefer to move a short position in the U.S. FX side in 2025. Yes, this policy worked very well in 2025. For example, if you do not have any war in the Iran or something like that, we believe that in 2026 this policy also will work. But currently, we are monitoring the conditions. Current conditions are a little bit different when you compare it with 2025. We are closely monitoring the markets and the environment right now. Therefore, we will decide how will we use this FX position. But as we mentioned in our presentation, our aim is, our policy is we would like to keep the short position in USD 1.5 billion levels. We still trust the policy of the Turkish Central Bank for 2026.

Okay. Let's come to the data center business. Yes, that's my favorite topic and favorite question. Let me tell you that. Let me give you a brief information about the Turkiye. Turkiye's total cloud consumption is around 150 to 200 megawatts. So if you look at the corporates, it's there out of 70 to 80 megawatts. So overall, what we need to do is most of the corporate domain in Turkey is still building their own data centers and they do internal consumption. So that's the reason that 50-megawatt number is not a huge number. The good thing about the 50-megawatt is. So previously, what we were doing is we were preparing the infrastructure for the colocation services. So our first 50 megawatts, most of the banks, most of the airline companies are bringing their own servers and they have their own hardware, and we colocate them in our data centers. But for the Google Cloud, it's going to be full-blown system. So we are going to build a data center. We are going to prepare for Google Cloud that infrastructure with electricity with cooling. But on top of it, Google will bring thousands, 10 thousands servers to Turkiye. So that's the reason that the investment is high. So they're going to have a full-blown system such a way that -- and so another thing is the space, 50 megawatts is good enough because these servers are going to be used by not only one company, hundreds of companies that are going to -- together, they are going to use it. That's the meaning of cloud actually. So they can utilize their service more and more. So that's the reason that 50 megawatts is a huge investment, and I'm pretty sure that our biggest target is to bring all of these companies or the industry players to move their old systems to this cloud -- state-of-the-art cloud regions.

[Operator Instructions] The next question is from the line of Karagoz Yusuf with Ak Yatirim.

You ended the year with a 43% EBITDA margin for the next year, your guidance is around 40% to 42%. Do you expect any contraction in margins?

Yusuf, normally, as you said, that the 2025 performance was very, very good regarding the EBITDA side, especially for the energy cost and the salary expense, salary wage expenses are -- does not increase over the inflation rate. It was very useful for 2025. In 2026, there are some -- we make a salary increase, average in 30 percentage levels is a little bit above the inflation side. And as you know, this is the 5G year. We will be starting from the April 1, the 5G issue. Therefore, we will be spending some money through the marketing expense, marketing activities and the sales activities for the 5G side. And we will closely monitor the energy prices because the war, current war might affect -- might have some effects, inflationary effects in the energy side and the other cost. Therefore, we would like to be a little bit conservative starting for the year for the EBITDA margin. We will look forward within the year. But this year is a little bit less when you compare it with the 2025.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Turkcell management for any closing comments. Thank you.

Thank you very much for listening. Hope to see you next time. Thank you.

Thank you very much.

Thank you, bye.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.