Half Year 2026 Converge Information & Communications Technology Solutions Inc Earnings Call

August 13, 2026

Speaker #1: You are muted. You can mute or unmute yourself by pressing star 6. This meeting's host has enabled Zoom's AI Companion technology.

Speaker #2: Good afternoon, everyone, and welcome to Converge's first half 2026 Investors Briefing. I am Owen Ocampo, the company's Investor Relations Head, and I'm supported by our IR Supervisor, Jolene Panopio.

Owen Kieffer Ocampo: Good afternoon, everyone, and welcome to Converge's H1 2026 investors briefing. I am Owen Ocampo, the company's Investor Relations head, and I am supported by our IR Supervisor, Julene Panopio. Please allow me to give a few housekeeping reminders before we begin. Kindly mute your microphones while the presentation is ongoing. We will have a Q&A portion once the full presentation is finished. If you have any questions at any time during the presentation, please send them to the Zoom chat and we will tackle them afterwards. Lastly, please note that this session is being recorded.

Owen Ocampo: Good afternoon, everyone, and welcome to Converge's H1 2026 investors briefing. I am Owen Ocampo, the company's Investor Relations head, and I am supported by our IR Supervisor, Julene Panopio. Please allow me to give a few housekeeping reminders before we begin. Kindly mute your microphones while the presentation is ongoing. We will have a Q&A portion once the full presentation is finished. If you have any questions at any time during the presentation, please send them to the Zoom chat and we will tackle them afterwards. Lastly, please note that this session is being recorded.

Speaker #2: Please allow me to give a few housekeeping reminders before we begin. Kindly mute your microphones while the presentation is ongoing. We will have a Q&A portion once the full presentation is finished.

Speaker #2: If you have any questions at any time during the presentation, please send them to the Zoom chat, and we will tackle them afterward. Lastly, please note that this session is being recorded.

Speaker #1: This meeting is being recorded.

Operator: This meeting is being recorded.

Speaker #2: I'd also like to inform everyone that our full press release and our quarterly report are available on PSE Edge and on our website.

Owen Kieffer Ocampo: I would also like to inform everyone that our full press release and our quarterly report are available on PSE EDGE and on our website. You may download a copy as reference at your convenience. Let me now introduce the management team who will be presenting today. We have Mr. Dennis Anthony Uy, CEO and Co-Founder; Ms. Grace Uy, President and Co-Founder; Mr. Robert Yu, our Chief Finance Officer; Mr. Benjamin Azada, our Chief Operations Officer; and Attorney Laurice Esteban-Tuason, our Corporate Compliance and Data Protection Officer and Corporate Sustainability Officer. Let me now hand you over to Sir Dennis for his opening remarks.

Owen Ocampo: I would also like to inform everyone that our full press release and our quarterly report are available on PSE EDGE and on our website. You may download a copy as reference at your convenience. Let me now introduce the management team who will be presenting today. We have Mr. Dennis Anthony Uy, CEO and Co-Founder; Ms. Grace Uy, President and Co-Founder; Mr. Robert Yu, our Chief Finance Officer; Mr. Benjamin Azada, our Chief Operations Officer; and Attorney Laurice Esteban-Tuason, our Corporate Compliance and Data Protection Officer and Corporate Sustainability Officer. Let me now hand you over to Sir Dennis for his opening remarks.

Speaker #2: You may download a copy as reference at your convenience. So, let me now introduce the management team who will be presenting today. We have Mr. Dennis Anthony Uy, CEO and co-founder.

Speaker #2: Ms. Grace Uy, President and Co-Founder; Mr. Robert Yu, our Chief Finance Officer; Mr. Benjamin Azada, our Chief Operations Officer; and Attorney Larisse Esteban Tuazon, our Corporate Compliance and Data Protection Officer.

Speaker #2: And Corporate Sustainability Officer. Let me now hand you over to Sir Dennis for his opening remarks.

Speaker #3: Thank you, Owen. Good day. I hope everyone is safe and dry in their homes or at work. During our last briefing, we reported to you that we have completed our national digital infrastructure.

Dennis Anthony Uy: Thank you, Owen. Good day. I hope everyone is safe and dry in their homes or at work. During our last meeting, we reported to you that we have completed our national digital infrastructure, from our nationwide fiber network and our Resilient International Cable Link to our AI-ready data center and cloud infrastructure. We have built the vital foundation that will give power to the country's digital future. Just last month, President Marcos inspected our Angeles City data center. This visit comes on the heel of the issuance by the President of Executive Order 119, EO 119, which published new national rules on government data classification, data residency, and cybersecurity.

Speaker #3: From our nationwide fiber network and our resilient international cable link, to our AI-ready data center and cloud infrastructure, we have built the vital foundation that will keep powering the country's digital future.

Speaker #3: Just last month, President Marcos inspected our new data center. This visit comes on the heels of the issuance by the President of Executive Order 119, or EO 119, which established new national rules on government data classification, data residency, and cybersecurity.

Dennis Anthony Uy: With our 12-megawatt facility certified Tier 3 by Uptime Institute and host our Converge Cloud, we are ready to support EO 119 and the national data sovereignty agenda by serving our localized and secured sovereign cloud. On top of this, Angeles City Data Center has been also designated by Department of Trade and Industry, Board of Investments as strategic investment of national significance and has been granted Green Lane certification. This allow us to move forward faster to serving our growing enterprise customer and expanding further in this facility. Connecting our data center facility to the world, our international subsea cable system, adding our eight international link, our capacity to two new international cables. Bifrost landing in Davao, which is provide link between Philippines to US and SEA-H2X landing in La Union, which is connect from Southeast Asia to China. Both of system now ready for service.

Speaker #3: With our 12-megawatt facility, certified Tier 3 by Uptime Institute, and hosting our Converge Cloud, we are ready to support EO 199, 119, and the national data sovereignty agenda by serving our localized and secured sovereign cloud.

Speaker #3: On top of this, the unrealistic data center has also been designated by the Department of Trade and Industry Board of Investment as a strategic investment of national significance.

Speaker #3: And has been granted Green Lane certification. This allows us to move forward faster in serving our growing enterprise, consumer, and expanding further in this facility.

Speaker #3: Connecting our data center facility to the world are international subsea cable systems, adding our eight international links. Our capacity to two new international cables.

Speaker #3: Bifrost landing in Davao, which is providing connectivity between the Philippines and the US, and CX2X landing in La Union, which is connected from Southeast Asia to China.

Speaker #3: Both of our systems are now ready for service, and we are already seeing heavy demand from global companies and hyperscalers. Moving beyond the heart of infrastructure, we are also building our talent for the future.

Dennis Anthony Uy: We are already seeing heavy demand from the global companies and hyperscalers. Moving beyond the heart of infrastructure, we are also building our talent for future. We have recently sent our top engineers and our leaders team to intensive training so that they can be deep dive on AI and cloud architecture and learn from the global experts. From our employees, we are putting them AI tools in their hand. We educate and encourage them to use AI in their daily operations. We are also providing them a digital token and best experience and build workforce in the AI tool from various platform. Our effort to improve service and elevate consumer experience have not gone unnoticed. For the second quarter of DICT, Oplan Bantay Signal report, Converge was a top performing fixed broadband provider in the country.

Speaker #3: We recently sent our top engineers and our leadership team to internship training so that they can deep-dive into AI and cloud architecture and learn from global experts.

Speaker #3: From our employees, we are putting AI tools in their hands. We educate and encourage them to use AI in their daily operations. We are also providing them a digital token and test experience, and building workforce in the AI tool from various platforms.

Speaker #3: Our efforts to improve service and elevate the consumer experience have not gone unnoticed. For the second quarter of the DICT Off-Plan Bantai Signal Report, Converge was a top-performing fixed broadband provider in the country.

Speaker #3: One of the most critical metrics for us is the reported customer satisfaction, which shows an 84% decrease in customer complaints from January to June 2026.

Dennis Anthony Uy: One of the most critical metrics of us is this report customer satisfaction, which show 84% decrease in the customer complaints from January to June 2026. On top of this, Ookla recognize us the best internet, fast internet, and best fixed latency for the first half of the year. These milestones are direct result of our continuous investment in the network, hardening and resiliency, and this award only inspire us to do better. Our national digital infrastructure is built. We are upskilling our workforce. We are making our customer happy. There are so many exciting things happening in the tech space. I assure you, Converge, we will right at that center of it. To echo what President Marcos said during the visit of our data center, we are preparing for the future now. Thank you very much. I will hand over to Grace.

Speaker #3: On top of this, Ookla recognized us as having the best fast internet and best fixed latency for the first half of the year. This milestone is a direct result of our continuous investment in the network, hardening, and resiliency, and this award also inspires us to do better.

Speaker #3: Our national digital infrastructure is built, we are upskilling our workforce, we are making our customers happy. There are so many exciting things happening in the tech space.

Speaker #3: And I assure you, Converge, we will be right at the center of it. To echo what President Marcos said during the visit to our data center, we are preparing for the future now.

Speaker #3: Thank you very much. I will hand over to Grace.

Speaker #4: Thank you, Dennis, and good afternoon to all our investors and analysts. I'm Grace, the President and Co-Founder of Converge. In the first half of 2026, we successfully defended our profit margins despite macro headwinds, including high inflation and elevated fuel costs.

Maria Grace Uy: Thank you, Dennis, and good afternoon to all our investors and analysts. I am Grace Uy, the President and Co-Founder of Converge. In H1 2026, we successfully defended our profit margins despite macro headwinds, including the high inflation and elevated fuel cost. Balanced growth across both operating segments, paired with a strict operational discipline, kept our core margin profile intact and demonstrated the underlying resilience of our business. First, our consolidated revenue reached more than PHP 22.4 billion, representing a 3.1% increase year-on-year. Growth was anchored by strong Enterprise segment performance and backed by steady, reliable baseline revenues from our Residential business. Second, the Residential revenues grew to more than PHP 18.5 billion, proving the overall resilience of our customer base and challenging macro conditions. Third, our Enterprise business remains a significant growth engine, posting a 15.1% increase with almost PHP 4 billion in revenues this half.

Speaker #4: Balanced growth across both operating segments, paired with strict operational discipline, kept our core margin profile intact and demonstrated the underlying resilience of our business.

Speaker #4: First, our consolidated revenue reached more than $22.4 billion, representing a 3.1% increase year on year. Growth was anchored by strong enterprise segment performance and backed by steady, reliable baseline revenues from our residential business.

Speaker #4: Second, the residential revenues grew to more than $18.5 billion, proving the overall resilience of our customer base amid challenging macro conditions. Third, our enterprise business remains a significant growth engine, posting a 15.1% increase with almost $4 billion in revenues this half.

Speaker #4: This momentum was primarily fueled by double-digit expansion across our SME and corporate subsegments from an expanded subscriber base. Fourth, our financial health is evidenced by a strong EBITDA of $13.3 billion—most notably, our EBITDA margin of 59.1% continued to track well within our full-year guidance.

Maria Grace Uy: This momentum was primarily fueled by double-digit expansion across our SME and Corporate subsegments from expanded subscriber base. Fourth, our financial health is evidenced by a strong EBITDA of PHP 13.3 billion. Most notably, our EBITDA margin of 59.1% continued to track well within our full year guidance. This reflects our disciplined focus and prudent cost management and operational excellence. Lastly, our net income for the period stood at PHP 5.5 billion with a 24% margin. Our ROIC remains a standout at 14.9%, which results in best-in-class capital efficiency as we continue to scale. Let me now hand you over to Robert to give more details on our financial performance.

Speaker #4: This reflects our disciplined focus and prudent cost management on operational excellence. Lastly, our net income for the period stood at $5.5 billion, with a 24% margin.

Speaker #4: Our ROIC remains a standout at 14.9%, which results in best-in-class capital efficiency as we continue to scale. Let me now hand you over to Robert to give more details on our financial performance.

Speaker #2: Thank you, Grace, and good afternoon—or as we say here at Converge, good morning to all our friends and members of the investment community. Thank you for your continued interest in and support of the company.

Robert Leo A. Yu: Thank you, Grace. Good afternoon. As we say here at Converge, good morning to all our friends and the investment community. Thank you for your continued interest and support in the company. As Grace mentioned, consolidated revenues reached PHP 22.4 billion, up 3.1% year-on-year. Growth was anchored by resilient Residential segment, where revenues rose slightly thanks to a favorable shift in product mix on new additions compared to the previous quarters and strong momentum in our Enterprise, which expanded its top-line contribution from 16% to 18% of total revenue. On the profitability front, we generated a robust 59.1% EBITDA margin, held net income firm at a 24.4% margin, and also maintained an industry-leading ROIC of almost 15%. While net income saw a slight dip due to the higher depreciation from our newly operational subsea cable systems, this strategic asset strengthens our core infrastructure.

Robert Yu: Thank you, Grace. Good afternoon. As we say here at Converge, good morning to all our friends and the investment community. Thank you for your continued interest and support in the company. As Grace mentioned, consolidated revenues reached PHP 22.4 billion, up 3.1% year-on-year. Growth was anchored by resilient Residential segment, where revenues rose slightly thanks to a favorable shift in product mix on new additions compared to the previous quarters and strong momentum in our Enterprise, which expanded its top-line contribution from 16% to 18% of total revenue. On the profitability front, we generated a robust 59.1% EBITDA margin, held net income firm at a 24.4% margin, and also maintained an industry-leading ROIC of almost 15%. While net income saw a slight dip due to the higher depreciation from our newly operational subsea cable systems, this strategic asset strengthens our core infrastructure.

Speaker #2: As Grace mentioned, consolidated revenues reached $22.4 billion, up 3.1% year on year. Growth was anchored by the resilient residential segment, where revenues rose slightly thanks to a favorable shift in product mix on new additions compared to the previous quarters, and strong momentum in our enterprise.

Speaker #2: which expanded its top-line contribution from 16% to 18% of total revenue. On the profitability front, we generated a robust 59.1% EBITDA margin and held net income firm at a 24.4% margin.

Speaker #2: And also maintained an industry-leading ROIC of almost 15%. While net income saw a slight dip due to the higher depreciation from our newly operational subsea cable systems, this strategic asset strengthens our core infrastructure.

Speaker #2: Moving forward, we remain firmly focused on maintaining these high standards of operational and capital efficiency. Moving on to capex, our first half cash capex stood at $5.7 billion.

Robert Leo A. Yu: Moving forward, we remain firmly focused on maintaining these high standards of operational and capital efficiency. Moving on to CapEx, our H1 cash CapEx stood at PHP 5.7 billion. With the bulk of our network investments planned for the second half of the year, our overall full-year CapEx guidance is now expected to reach PHP 17 to 20 billion. To ensure optimal return on capital, we are actively recalibrating our port deployment strategy. This involves reevaluating target locations and fine-tuning our rollout volume, shifting focus to high-potential regions like Visayas and Mindanao. Paired with our subsea cable backbone and data center roadmap, this disciplined approach ensures every port deployed drives maximum value while supporting our customers' growing digital needs. Next slide. The company maintains a resilient balance sheet and ample liquidity, supporting our commitment to financial discipline.

Robert Yu: Moving forward, we remain firmly focused on maintaining these high standards of operational and capital efficiency. Moving on to CapEx, our H1 cash CapEx stood at PHP 5.7 billion. With the bulk of our network investments planned for the second half of the year, our overall full-year CapEx guidance is now expected to reach PHP 17 to 20 billion. To ensure optimal return on capital, we are actively recalibrating our port deployment strategy. This involves reevaluating target locations and fine-tuning our rollout volume, shifting focus to high-potential regions like Visayas and Mindanao. Paired with our subsea cable backbone and data center roadmap, this disciplined approach ensures every port deployed drives maximum value while supporting our customers' growing digital needs. Next slide. The company maintains a resilient balance sheet and ample liquidity, supporting our commitment to financial discipline.

Speaker #2: With the bulk of our network investments planned for the second half of the year, our overall full-year capex guidance is now expected to reach $17 to $20 billion.

Speaker #2: To ensure optimal return on capital, we're actively recalibrating our port deployment strategy. This involves reevaluating target locations and fine-tuning our rollout volume, shifting focus to high-potential regions like Visayas and Mindanao.

Speaker #2: Paired with our subsea cable backbone and data center roadmap, this disciplined approach ensures every port deployed drives maximum value while supporting our customers' growing digital needs.

Speaker #2: Next slide. The company maintains a resilient balance sheet and ample liquidity, supporting our commitment to financial discipline. We continue to maintain a disciplined leverage position with total debt of around $28.3 billion, and a stable cost of debt of 5.75%.

Robert Leo A. Yu: We continue to maintain a disciplined leverage position with total debt of around PHP 28.3 billion and a stable cost of debt of 5.75%. Our conservative gearing is reflected in a net debt to equity ratio of 0.2 times and a gross debt to equity ratio of 0.4 times. Furthermore, our DSCR remains comfortably within our covenants at 1.4 times, providing sufficient cushion above our bank covenants as we monitor the interest rate environment for future optimization. Lastly, as you may have read in our press release, we are updating our full year 2026 guidance. As Grace mentioned, persistent inflation since Q2 has really created headwinds across the entire company. To keep our targets aligned with current economic conditions, we are making a practical adjustment to our outlook. We are now projecting revenue growth of 4% to 6%.

Robert Yu: We continue to maintain a disciplined leverage position with total debt of around PHP 28.3 billion and a stable cost of debt of 5.75%. Our conservative gearing is reflected in a net debt to equity ratio of 0.2 times and a gross debt to equity ratio of 0.4 times. Furthermore, our DSCR remains comfortably within our covenants at 1.4 times, providing sufficient cushion above our bank covenants as we monitor the interest rate environment for future optimization. Lastly, as you may have read in our press release, we are updating our full year 2026 guidance. As Grace mentioned, persistent inflation since Q2 has really created headwinds across the entire company. To keep our targets aligned with current economic conditions, we are making a practical adjustment to our outlook. We are now projecting revenue growth of 4% to 6%.

Speaker #2: Our conservative gearing is reflected in a net debt to equity ratio of 0.2 times and a gross debt to equity ratio of 0.4 times, furthermore our DSCR remains comfortably with our within our covenants at 1.4 times providing sufficient cushion above our bank covenants as we monitor the interest rate environment for future optimization.

Speaker #2: Lastly, as you may have read in our press release, we're updating our full-year 2026 guidance. As Grace mentioned, persistent inflation since the second quarter has really created headwinds across the entire company.

Speaker #2: To keep our targets aligned with current economic conditions, we're making a practical adjustment to our outlook. We are now projecting revenue growth of 4% to 6%.

Speaker #2: To protect our profitability, we are leaning into strict cost discipline to maintain EBITDA margins between 58% to 59%. We're also optimizing capital expenditure to a range of $17 to $20 billion, which allows us to continue funding our core infrastructure while keeping our target return on invested capital steady at 15.5% to 16.5%.

Robert Leo A. Yu: To protect our profitability, we are leaning into strict cost discipline to maintain EBITDA margins between 58% to 59%. We are also optimizing CapEx to a range of PHP 17 billion to PHP 20 billion, which allows us to continue in funding our core infrastructure while keeping our target return on invested capital steady at 15.5% to 16.5%. This is a disciplined reset to navigate near-term headwinds. Converge remains operationally strong, and we are confident in the long-term strength of our business. I will pass the floor now to Benj, who will report on our operating performance during the quarter.

Robert Yu: To protect our profitability, we are leaning into strict cost discipline to maintain EBITDA margins between 58% to 59%. We are also optimizing CapEx to a range of PHP 17 billion to PHP 20 billion, which allows us to continue in funding our core infrastructure while keeping our target return on invested capital steady at 15.5% to 16.5%. This is a disciplined reset to navigate near-term headwinds. Converge remains operationally strong, and we are confident in the long-term strength of our business. I will pass the floor now to Benj, who will report on our operating performance during the quarter.

Speaker #2: This is a disciplined research reset to navigate near-term headwinds. Converge remains operationally strong, and we are confident in the long-term strength of our business.

Speaker #2: I'll now pass the floor to Bench, who will report on our operating performance during the quarter.

Speaker #3: Thanks, Robert. Our residential customer base remained just below 3.1 million, as inflationary pressures picked up sharply this second quarter, as Robert just mentioned. The average headline inflation rate reached 6.8% in the second quarter of 2026, up from 2.8% in the first quarter.

Benjamin Rex Emilio B. Azada: Thanks, Robert. Our residential customer base remained just below 3.1 million as inflationary pressures picked up sharply this Q2, as Robert just mentioned. Average headline inflation rate reached 6.8% in Q2 2026, up from 2.8% in Q1. The lower income household segment of the market was heavily impacted by the soaring oil prices and eventually other daily necessities. Overall, postpaid gross adds tracked well, consistent with the last three quarters, showing persistent demand in the high to middle income market segment. The monthly churn rate of our postpaid brands came in at 2.7% for the quarter. Unlike in previous quarters, this quarter's elevated churn rate can be attributable mostly to macro challenges and less on customer experience. In fact, our customer experience metrics improved meaningfully versus the prior quarter.

Benjamin Azada: Thanks, Robert. Our residential customer base remained just below 3.1 million as inflationary pressures picked up sharply this Q2, as Robert just mentioned. Average headline inflation rate reached 6.8% in Q2 2026, up from 2.8% in Q1. The lower income household segment of the market was heavily impacted by the soaring oil prices and eventually other daily necessities. Overall, postpaid gross adds tracked well, consistent with the last three quarters, showing persistent demand in the high to middle income market segment. The monthly churn rate of our postpaid brands came in at 2.7% for the quarter. Unlike in previous quarters, this quarter's elevated churn rate can be attributable mostly to macro challenges and less on customer experience. In fact, our customer experience metrics improved meaningfully versus the prior quarter.

Speaker #3: The lower-income household segment of the market was heavily impacted by the soaring oil prices and, eventually, other daily necessities. Overall, postpaid gross ads tracked well, consistent with the last three quarters, showing persistent demand in the high- to middle-income market segment.

Speaker #3: The monthly churn rate of our postpaid brands came in at 2.7% per quarter. Unlike in previous quarters, this quarter's elevated churn rate can be attributed mostly to macro challenges and less to customer experience.

Speaker #3: In fact, our customer experience metrics improved meaningfully versus the prior quarter. Tickets resolved within 24 hours rose approximately 8%, and mean time to repair improved by roughly 63%, both compared to the first quarter of 2026.

Benjamin Rex Emilio B. Azada: Tickets resolved within 24 hours rose approximately 8%, and meantime to repair improved by roughly 63%, both compared to Q1 2026. This is further corroborated externally. The Department of Information and Communications Technology's latest Oplan Bantay Signal Report for Q2 recognized Converge for the lowest average latency at 5 milliseconds and the fastest download speeds nationwide at 158 Mbps, alongside an 84% decline in customer complaints between January and June 2026. Ookla independently affirmed this performance as well, naming Converge FiberX the best internet in the Philippines based on its speed test intelligence analysis for H1 2026. Moving on to enterprise. This segment delivered a solid 13.4% year-on-year revenue growth based on monthly recurring charges.

Benjamin Azada: Tickets resolved within 24 hours rose approximately 8%, and meantime to repair improved by roughly 63%, both compared to Q1 2026. This is further corroborated externally. The Department of Information and Communications Technology's latest Oplan Bantay Signal Report for Q2 recognized Converge for the lowest average latency at 5 milliseconds and the fastest download speeds nationwide at 158 Mbps, alongside an 84% decline in customer complaints between January and June 2026. Ookla independently affirmed this performance as well, naming Converge FiberX the best internet in the Philippines based on its speed test intelligence analysis for H1 2026. Moving on to enterprise. This segment delivered a solid 13.4% year-on-year revenue growth based on monthly recurring charges.

Speaker #3: This is further corroborated externally. The Department of Information and Communication Technology's latest OPLAN Bantai Signal Report for the second quarter recognized Converge for the lowest average latency at 5 milliseconds, and the fastest download speeds nationwide at 158 Mbps.

Speaker #3: Alongside an 84% decline in customer complaints between January and June 2026, Ookla independently affirmed this performance as well, naming Converge FiberX the best internet in the Philippines based on its Speedtest Intelligence analysis for the first half of 2026.

Speaker #3: Moving on to Enterprise, this segment delivered a solid 13.4% year-on-year revenue growth based on monthly recurring charges. The SME subsegment, which accounts for nearly 30% of total Enterprise revenue, posted a 16% increase year-on-year through subscriber growth.

Benjamin Rex Emilio B. Azada: The SME sub-segment, which accounts for nearly 30% of total enterprise revenue, posted a 16% increase year-on-year through subscriber growth, with the corporate sub-segment continuing its double-digit growth at 15%. Corporate comprises almost 60% of total enterprise revenue. During the last quarter, we successfully onboarded several major clients, including a key local government unit that is leading that digital transformation, two prestigious multi-campus university systems, and a major national logistics provider. Securing wins across the public sector, education, and commercial logistics proves our enterprise value proposition is resonating across diverse sectors. That growth is anchored on our clear infrastructure edge. We have also a healthy pipeline of growth potential in this segment. The recently issued Executive Order 119, that Dennis talked about a while ago, mandates stricter cybersecurity, data residency, and sovereign hosting rules for government systems. Converge is positioned to address this requirement.

Benjamin Azada: The SME sub-segment, which accounts for nearly 30% of total enterprise revenue, posted a 16% increase year-on-year through subscriber growth, with the corporate sub-segment continuing its double-digit growth at 15%. Corporate comprises almost 60% of total enterprise revenue. During the last quarter, we successfully onboarded several major clients, including a key local government unit that is leading that digital transformation, two prestigious multi-campus university systems, and a major national logistics provider. Securing wins across the public sector, education, and commercial logistics proves our enterprise value proposition is resonating across diverse sectors. That growth is anchored on our clear infrastructure edge. We have also a healthy pipeline of growth potential in this segment. The recently issued Executive Order 119, that Dennis talked about a while ago, mandates stricter cybersecurity, data residency, and sovereign hosting rules for government systems. Converge is positioned to address this requirement.

Speaker #3: With the corporate subsegment continuing its double-digit growth at 15%. Corporate comprises almost 60% of total enterprise revenue. During the last quarter, we successfully onboarded several major clients, including a key local government unit that is leading their digital transformation, two prestigious multi-campus university systems, and a major national logistics provider.

Speaker #3: Securing wins across the public sector, education, and commercial logistics proves our enterprise value proposition is resonating across diverse sectors. That growth is anchored on our clear infrastructure edge.

Speaker #3: We also have a healthy pipeline of growth potential in this segment. The recently issued Executive Order 119 that Dennis talked about a while ago mandates stricter cybersecurity, data residency, and sovereign hosting rules for government systems.

Speaker #3: Converge's position to address this requirement: our tier three, AI-ready data centers in Angeles and Caloocan power Converge Cloud as a fully compliant local alternative to foreign-hosted servers.

Benjamin Rex Emilio B. Azada: Our Tier 3 AI-ready data centers in Angeles and Caloocan power Converge Cloud as a fully compliant local alternative to foreign-hosted servers, delivering lower security risks, resilience against international disruptions, and full data protection under Philippine law. This allows state agencies to migrate off costly foreign servers and onto secure home soil, guaranteeing legal protection under Philippine courts, mitigating cyber threats, and ensuring uninterrupted service. At the same time, our Bifrost and SEA-H2X subsea cable systems are now ready for service, and this gives us direct international connectivity and cable cut resilience, making us a top contender for demand from global hyperscalers and OTT players, some of whom have already contracted capacity on these systems. Overall, our B2B strategy is executing smoothly with a bright future in mind. Our infrastructure advantages are expanding our pipeline, and that pipeline is converting directly into high-value enterprise clients.

Benjamin Azada: Our Tier 3 AI-ready data centers in Angeles and Caloocan power Converge Cloud as a fully compliant local alternative to foreign-hosted servers, delivering lower security risks, resilience against international disruptions, and full data protection under Philippine law. This allows state agencies to migrate off costly foreign servers and onto secure home soil, guaranteeing legal protection under Philippine courts, mitigating cyber threats, and ensuring uninterrupted service. At the same time, our Bifrost and SEA-H2X subsea cable systems are now ready for service, and this gives us direct international connectivity and cable cut resilience, making us a top contender for demand from global hyperscalers and OTT players, some of whom have already contracted capacity on these systems. Overall, our B2B strategy is executing smoothly with a bright future in mind. Our infrastructure advantages are expanding our pipeline, and that pipeline is converting directly into high-value enterprise clients.

Speaker #3: Delivering lower security risks, resilience against international disruptions, and full data protection under Philippine law. This allows state agencies to migrate off costly foreign servers and onto secure home soil, guaranteeing legal protection under Philippine courts, mitigating cyber threats, and ensuring uninterrupted service.

Speaker #3: At the same time, our Bifrost and CH2X subsea cable systems are now ready for service, and this gives us direct international connectivity and cable-cut resilience, making us a top contender for demand from global hyperscalers and OTT players.

Speaker #3: Some of whom have already contracted capacity on these systems. Overall, our B2B strategy is executing smoothly, with a bright future in mind. Our infrastructure advantages are expanding our pipeline, and that pipeline is converting directly into high-value enterprise clients.

Speaker #3: I'll now hand you over to Corporate Sustainability Officer and Attorney Larisse Esteban-Paula.

Benjamin Rex Emilio B. Azada: I will now hand you over to Corporate Sustainability Officer, Attorney Laurice Esteban-Tuason.

Benjamin Azada: I will now hand you over to Corporate Sustainability Officer, Attorney Laurice Esteban-Tuason.

Speaker #1: Thank you, Bench. Good day, everyone. Over the past quarter, Converge continued turning our sustainability strategy into real, measurable impact. This included: first, enhancing board skills through an ESG simulation activity; second, gaining recognition for our youth program on digital safety; third, bridging remote communities through connectivity; fourth, championing female-led businesses; and fifth, continuing our participation in promoting diversity and inclusion.

Laurice Esteban-Tuason: Thank you, Benj. Good day, everyone. Over the past quarter, Converge continued turning our sustainability strategy into real measurable impact, including first, enhancing board skills through an ESG simulation activity. Second, gaining recognition on our youth program on digital safety. Third, bridging remote communities through connectivity. Fourth, championing female-led businesses. And fifth, continuing our participation in promoting diversity and inclusion. Sharing this update with sustainability governance, last 8 July, our board of directors and senior management participated in an executive session on sustainability governance, facilitated by Ms. Jessica Cheam, founder and CEO of Eco-Business. Using a realistic climate transition plan case simulation, our board actively participated and worked through complex ESG data, scenarios, and strategic trade-offs to strengthen our oversight of long-term business risks. As sustainability requirements are strengthened across Philippine companies, this initiative ensures our board maintains sustainability as a core topic within our business strategy.

Speaker #1: Sharing this update with Sustainability Governance last July 8th, our Board of Directors and senior management participated in an executive session on sustainability governance facilitated by Miss Jessica Cham, founder and CEO of EcoBusiness.

Speaker #1: Using a realistic climate transition plan case simulation, our board actively participated in working through complex ESG data scenarios and strategic trade-offs to strengthen our oversight of long-term business risks.

Speaker #1: As sustainability requirements are strengthened across Philippine companies, this initiative ensures our board maintains sustainability as a core topic within our business strategy. Alongside governance, we are equally committed to protecting our customer communities.

Laurice Esteban-Tuason: Alongside governance, we are equally committed to protecting our customer communities. In data privacy and security, Converge was honored by the National Privacy Commission with the Kabataang Digital Award during Privacy Awareness Week 2026. This award honors Project PIGLET, Privacy Integration through Guided Learning of Emerging Technologies, an initiative that builds digital literacy and privacy awareness among young students and their families across Metro Manila, Mindoro, and Pampanga. We dedicate this award to the youth as we strive to continue building a digital space that is safe, responsible, and hopeful for the next generation. Building on a secure digital space, we support our broader evolution from a telecommunications provider to a full-fledged technology company as we launch Tech for Good: Code for the Future, Build New Paths in Oriental Mindoro.

Speaker #1: In data privacy and security, Converge was honored by the National Privacy Commission with the Kabataang Digital Award during Privacy Awareness Week 2026. This award honors Project Piglet—Privacy Integration through Guided Learning of Emerging Technologies—an initiative that builds digital literacy and privacy awareness among young students and their families across Metro Manila, Mindoro, and Pampanga.

Speaker #1: We dedicate this award to the youth, as we strive to continue building a digital space that is safe, responsible, and hopeful for the next generation.

Speaker #1: Building on a secure digital space, we support our broader evolution from a telecommunications provider to a full-fledged technology company as we launch Tech for Good, code for the future, and build new paths in Oriental Mindoro.

Speaker #1: In partnership with the Stairway Foundation and Layer Tech Labs, this hands-on robotics and coding literacy initiative empowers underserved youth, including indigenous Mangyan students, with open-source software programming skills, helping narrow the educational digital divide.

Laurice Esteban-Tuason: In partnership with the Stairway Foundation and LAYERTech Software Labs, this hands-on robotics and coding literacy initiative empowers underserved youth, including indigenous Mangyan students, with open-source software programming skills, helping narrow the educational digital divide. Beyond the tech realm, we are equally focused on economic empowerment. Under our Tech for Good philosophy, we launched She Connects: Women Powering Business through Technology in partnership with the Quezon City government and the Network for Enterprising Women. This campaign equips female entrepreneurs and MSMEs with essential digital tools focusing on cybersecurity, operational efficiency using generative AI, and social media growth. Following its successful pilot in Quezon City, we plan to roll out She Connects to female-led businesses nationwide.

Speaker #1: And beyond the tech realm, we are equally focused on economic empowerment. Under our Tech for Good philosophy, we launched She Connects—women powering business through technology—in partnership with the Quezon City government and the Network for Enterprising Women.

Speaker #1: This campaign equips female entrepreneurs and MSMEs with essential digital tools, focusing on cybersecurity, operational efficiency using generative AI, and social media growth. Following its successful pilot in Quezon City, we plan to roll out She Connects to female-led businesses nationwide.

Speaker #1: And turning to our culture of diversity, equity, and inclusion, Converge actively championed diversity during Pride Month 2026 as we rolled out SOGIE awareness webinars for employees, hosted Pride Bazaars, and permanently unveiled our facilities' Rainbow Lane to symbolize our commitment to a diverse and inclusive workplace.

Laurice Esteban-Tuason: Turning to our culture of diversity, equity, and inclusion, Converge actively championed diversity during Pride Month 2026 as we rolled out SOGIE awareness webinars for employees, hosted pride bazaars, and permanently unveiled our facility's Rainbow Lane to symbolize our commitment to a diverse and inclusive workplace. We also supported external initiatives on diversity by providing high-speed fiber connectivity and hosted an interactive booth for over 300,000 attendees at the Love Laban Pride Festival in Quezon City. Overall, these initiatives move our sustainability strategy into direct execution, strengthening board governance, protecting young digital citizens, opening technological doors for the next generation, supporting local MSMEs, and driving inclusion. With that, I will now turn the floor back over to Owen. Thank you.

Speaker #1: We also supported external initiatives on diversity by providing high-speed fiber connectivity and hosted an interactive booth for over 300,000 attendees at the Love Laban Pride Festival in Quezon City.

Speaker #1: Overall, these initiatives move our sustainability strategy into direct execution—strengthening board governance, protecting young digital citizens, opening technological doors for the next generation, supporting local MSMEs, and driving inclusion.

Speaker #1: And with that, I will now turn the floor back over to Owen. Thank you.

Speaker #2: Thank you very much, Attorney Larisse, and to the rest of our management team for their presentation. Let me now walk through some of the questions in the queue.

Owen Kieffer Ocampo: Thank you very much, Jaime Laurice, and to the rest of our management team for their presentation. Let me now walk through some of the questions on the queue. First question. Can you comment on Converge's flat subscriber growth while competition subscriber base grew quarter on quarter? May I hand it to Benj?

Owen Ocampo: Thank you very much, Jaime Laurice, and to the rest of our management team for their presentation. Let me now walk through some of the questions on the queue. First question. Can you comment on Converge's flat subscriber growth while competition subscriber base grew quarter on quarter? May I hand it to Benj?

Speaker #2: First question: Can you comment on Converge's flat subscriber growth while competitors' subscriber base grew quarter-on-quarter? May I hand it to Bench?

Speaker #3: Yeah, I'll take that. And I think there's also a similar question from Parvin, right, on the slowdown in growth. So I'll answer both together.

Benjamin Rex Emilio B. Azada: Yeah, I will take that. I think there is a similar question from Parvin, on slowdown in growth. I will answer both together. This quarter's headwind, as I described a while ago, is really the elevated inflation rate, which is unfortunate. The resulting flat subscriber base is really showing that we are still trying to sell the right product at the right segment of the market. To illustrate this, our FiberX adds is still consistent as before. It is more of the lower cost plans, especially Surf2Sawa, where we saw bigger churn and lower turn installs. Also, we have been tightening up and being very strict in ensuring that our sales partners adhere to the policy of selling the right product to the right segment, and not mis-selling or overselling.

Benjamin Azada: Yeah, I will take that. I think there is a similar question from Parvin, on slowdown in growth. I will answer both together. This quarter's headwind, as I described a while ago, is really the elevated inflation rate, which is unfortunate. The resulting flat subscriber base is really showing that we are still trying to sell the right product at the right segment of the market. To illustrate this, our FiberX adds is still consistent as before. It is more of the lower cost plans, especially Surf2Sawa, where we saw bigger churn and lower turn installs. Also, we have been tightening up and being very strict in ensuring that our sales partners adhere to the policy of selling the right product to the right segment, and not mis-selling or overselling.

Speaker #3: So this quarter's headwind, as I described a while ago, is really the elevated inflation rate, which is unfortunate. And the resulting flat subscriber base is really showing that we're still trying to sell the right product to the right segment of the market.

Speaker #3: And this to illustrate this, our FiberX, ads, is still consistent as before. it's more of the, low lower cost, plans on especially S2S where we we saw bigger churn and, lower turn ins and in installs.

Speaker #3: Also, we've been tightening up and being very strict in ensuring that our sales partners adhere to the policy of selling the right product to the right segment, and not mis-selling or over-selling.

Speaker #3: So, to ensure that we do not cannibalize higher plans for lower plans, nor unnecessarily reduce our pool, or, you know, oversell a plan to a household that, in the long term, can't afford it and therefore will result in churn within a few months.

Benjamin Rex Emilio B. Azada: To ensure that we do not cannibalize higher plans for lower plans, nor unnecessarily reduce ARPU or oversell a plan to a household that in the long term can't afford it, and therefore will result in churn within a few months. This reflects our deliberate strategy to make sure that we are focused on customer lifetime value.

Benjamin Azada: To ensure that we do not cannibalize higher plans for lower plans, nor unnecessarily reduce ARPU or oversell a plan to a household that in the long term can't afford it, and therefore will result in churn within a few months. This reflects our deliberate strategy to make sure that we are focused on customer lifetime value.

Speaker #3: So this reflects our deliberate strategy to make sure that we are focused on customer lifetime value.

Speaker #2: Thank you very much, Bench. Let me go to the next question. With your CAPEX guidance decline, will this be pushed to 2027, or will the 400,000 to 500,000 annual target port deployment be maintained moving forward?

Owen Kieffer Ocampo: Thank you very much, Benj. Let me go to the next question. With your CapEx guidance decline, will this be pushed to 2027, or will the 400,000 to 500,000 annual target port deployment be maintained moving forward? Hand it to Robert.

Owen Ocampo: Thank you very much, Benj. Let me go to the next question. With your CapEx guidance decline, will this be pushed to 2027, or will the 400,000 to 500,000 annual target port deployment be maintained moving forward? Hand it to Robert.

Speaker #2: hand it to Robert.

Speaker #3: Yep, I can take that. So I think, in general, the 400 to 500 will probably be maintained. But as far as some of the decrease in projected CAPEX for this year, it may or may not be.

Robert Leo A. Yu: Yep, I can take that. I think in general, the 400,000 to 500,000 will probably be maintained. As far as some of the decrease in projected CapEx for this year, it may or may not be. As you know, every year, our sales teams are involved with regards to our CapEx rollout. We will revisit with them on demand in these areas if there is still for next year. Not sure at this point in time, because it is quite an extensive exercise for us to roll out CapEx.

Robert Yu: Yep, I can take that. I think in general, the 400,000 to 500,000 will probably be maintained. As far as some of the decrease in projected CapEx for this year, it may or may not be. As you know, every year, our sales teams are involved with regards to our CapEx rollout. We will revisit with them on demand in these areas if there is still for next year. Not sure at this point in time, because it is quite an extensive exercise for us to roll out CapEx.

Speaker #3: As you know, every year our sales teams are involved with regards to our CAPEX rollout. And so, we will revisit with them on demand in these areas.

Speaker #3: if there is still for next year. So, not sure at this point in time because it's quite an extensive exercise for us to roll out CAPEX.

Speaker #2: Thank you, Robert. We have a next question in the chat box: What's the number of FiberX subscribers at the end of Q2, and do you believe growth will accelerate—sorry, reaccelerate—in Q3 and Q4?

Owen Kieffer Ocampo: Thank you, Robert. We have the next question on the chat box. What is the number of FiberX subscribers end of Q2? Do you believe growth will re-accelerate in Q3 and Q4?

Owen Ocampo: Thank you, Robert. We have the next question on the chat box. What is the number of FiberX subscribers end of Q2? Do you believe growth will re-accelerate in Q3 and Q4?

Speaker #3: Do you have that number, Owen, or Robert? Um, yeah, I can take that. I mean, it's tied to the next question as well, on disclosure being reduced.

Benjamin Rex Emilio B. Azada: Do you have that number, Owen or Robert?

Benjamin Azada: Do you have that number, Owen or Robert?

Robert Leo A. Yu: Well, I can take that. It is tied with the next question as well on disclosure being reduced. Generally, flat to slightly higher on FiberX. We are no longer experiencing negative net adds on FiberX for Q2, but flat or slightly higher. As Benj mentioned, gross adds were still at the same level as before, what previously disclosed. Churn is still the one that we are trying to manage. Hopefully, if we get churn down and we maintain the gross adds, which we believe we can, then growth should re-accelerate. The reason we have reduced disclosure is we see our peers do not disclose as much. I feel like given the attention they provided to our products now, both on prepaid and postpaid, this has become a source of competitive tension for us.

Robert Yu: Well, I can take that. It is tied with the next question as well on disclosure being reduced. Generally, flat to slightly higher on FiberX. We are no longer experiencing negative net adds on FiberX for Q2, but flat or slightly higher. As Benj mentioned, gross adds were still at the same level as before, what previously disclosed. Churn is still the one that we are trying to manage. Hopefully, if we get churn down and we maintain the gross adds, which we believe we can, then growth should re-accelerate. The reason we have reduced disclosure is we see our peers do not disclose as much. I feel like given the attention they provided to our products now, both on prepaid and postpaid, this has become a source of competitive tension for us.

Speaker #3: So generally, slight to slightly higher for flat to slightly higher on FiberX. We are no longer experiencing negative net adds on FiberX for Q2, but flat or slightly higher.

Speaker #3: As Bench mentioned, growth ads were still at the same level as before—what was previously disclosed. Churn is still the one that we're trying to manage.

Speaker #3: So hopefully, if we get churn down and we maintain the gross adds, which we believe we can, then growth should reaccelerate. Now, the reason we've reduced disclosure is we see our peers don't disclose as much.

Speaker #3: And I feel like, given the attention they provided to our products now, both on prepaid and postpaid, this has become a source of competitive tension for us.

Owen Kieffer Ocampo: Thank you, Robert.

Owen Ocampo: Thank you, Robert.

Speaker #3: I've also answered that, Mark's question.

Robert Leo A. Yu: I think I've also answered Mark's question.

Robert Yu: I think I've also answered Mark's question.

Speaker #2: Let's now move to Nikki's. What is the size, in terms of revenue, of foreign-hosted cloud capacities? How does this compare to PH-hosted capacity?

Owen Kieffer Ocampo: Let's now move to Nicky's. What is the size in terms of revenue of foreign hosted cloud capacity? How does this compare to PH hosted capacity?

Owen Ocampo: Let's now move to Nicky's. What is the size in terms of revenue of foreign hosted cloud capacity? How does this compare to PH hosted capacity?

Robert Leo A. Yu: Foreign hosted cloud capacity.

Speaker #4: I think the the the the the local is quite interesting, no? you know, the whole country, I think there's more than 800 million cloud dollars as payment outside in the third third country for hosting the cloud services.

Dennis Anthony Uy: I think the local is quite interesting. You know the whole country, I think there's more than USD 800 million as payment outside in the third country for hosting the cloud services. Despite this Executive Order 119, I think there's a huge opportunity. We get this by at least 10% to 50% in the longer term. In terms of the international hosted, we have few but not that big. Usually the hyperscaler, all these OTTs, they're looking some casting for the content. Gaming, some which are mostly you have this provider to support our consumer base here in the Philippines. Enterprise, I think this is a local, small, big enough.

Speaker #4: So that, despite this EO 119, I think there's a huge opportunity we get despite this 10 to 20% in the longer, in the longer, longer term.

Speaker #4: But in terms of the international hosted, we have a few but not that big, no? So, usually the hyperscalers, all this OTT, they're looking for some caching for the content, no?

Speaker #4: Gaming, some of which are mostly, you have this provider to support our consumer base here in the Philippines. But enterprise—I think this is a local sport—it's bigger now.

Speaker #2: Thank you very much, Sir Dennis. Next question—has competition intensified? Globe now appears to be aggressively adding fixed broadband subscribers. Bench, would you like to take this?

Owen Kieffer Ocampo: Thank you very much, Sir Dennis. Next question. Has competition intensified? Globe now appears to be aggressively adding fixed broadband subscribers. Benj, would you like to take this?

Owen Ocampo: Thank you very much, Sir Dennis. Next question. Has competition intensified? Globe now appears to be aggressively adding fixed broadband subscribers. Benj, would you like to take this?

Speaker #5: I would say that, you know, there's always been competition, right? Whether it's intensified or not, I think it's just different ways of competing, probably.

Benjamin Rex Emilio B. Azada: I would say that there has always been competition. Whether it is intensified or not, I think it is different ways of competing, probably. We are focused on going into new areas. That hence the rollout in Visayas and Mindanao, and we are continuing to roll out ports. We are also wiring up more buildings as well as industrial estates in order to acquire customers, both B2B and B2C. Globe, I think, has taken a slightly different approach of just trying to use up or sell out their existing port capacity, and doing that predominantly with their prepaid product. We are much more targeted in where we sell our prepaid services. We do not sell it in every neighborhood or in every building. We focus it on the lower middle income to lower income classes, and focus our sales in the middle and upper class on our FiberX core product.

Benjamin Azada: I would say that there has always been competition. Whether it is intensified or not, I think it is different ways of competing, probably. We are focused on going into new areas. That hence the rollout in Visayas and Mindanao, and we are continuing to roll out ports. We are also wiring up more buildings as well as industrial estates in order to acquire customers, both B2B and B2C. Globe, I think, has taken a slightly different approach of just trying to use up or sell out their existing port capacity, and doing that predominantly with their prepaid product. We are much more targeted in where we sell our prepaid services. We do not sell it in every neighborhood or in every building. We focus it on the lower middle income to lower income classes, and focus our sales in the middle and upper class on our FiberX core product.

Speaker #5: We are focused on going into new areas, right? Hence the rollout, besides in Mindanao— we’re continuing to roll out ports, and we’re also wiring up more and more buildings as well as industrial estates.

Speaker #5: In order to acquire customers, both B2B and B2C, Globe, I think, has taken a slightly different approach of just trying to use up or sell out their existing port capacity.

Speaker #5: ...and doing that predominantly with their prepaid product. We're much more targeted in where we sell our prepaid services. We do not sell it in every neighborhood or in every building.

Speaker #5: We focus on the lower middle income to lower income classes, and focus our sales in the middle and upper class on our FiberX core product.

Speaker #2: Thank you, Bench. Next question: What was the reason for high churn in prepaid? Did these customers go to no broadband or to competitors?

Owen Kieffer Ocampo: Thank you, Benj. Next question. What was the reason for high churn in prepaid? Did these customers went to no broadband or to competitors?

Owen Ocampo: Thank you, Benj. Next question. What was the reason for high churn in prepaid? Did these customers went to no broadband or to competitors?

Speaker #5: A little bit of both. I would say very often they go back to mobile data or to fixed wireless. Yeah.

Benjamin Rex Emilio B. Azada: A little bit of both. I would say very often they go back to mobile data or to fixed wireless. Yeah.

Benjamin Azada: A little bit of both. I would say very often they go back to mobile data or to fixed wireless. Yeah.

Speaker #2: Yeah, thank you. And this ties in with the next question: Do you expect to finish the year with more prepaid customers than at the start of the year?

Owen Kieffer Ocampo: Yeah. Thank you. I think it is tied up to the next question. Do you expect to finish the year with more prepaid customers than start of the year? So essentially, do we expect that we will have a growth in our prepaid subscriber base?

Owen Ocampo: Yeah. Thank you. I think it is tied up to the next question. Do you expect to finish the year with more prepaid customers than start of the year? So essentially, do we expect that we will have a growth in our prepaid subscriber base?

Speaker #2: So, essentially, do we expect that we will have growth in our prepaid subscriber base?

Speaker #3: Yeah, I can. Yes, so yes, yes is the answer. We typically don't disclose the actual numbers, but we do expect still meaningful growth in sub base for prepaid.

Robert Leo A. Yu: Yeah. Yes. Yes is the answer. We typically don't disclose the actual numbers, but we do expect still meaningful growth in subbase for prepaid.

Robert Yu: Yeah. Yes. Yes is the answer. We typically don't disclose the actual numbers, but we do expect still meaningful growth in subbase for prepaid.

Speaker #2: Thank you, Robert. What explains the faster growth in GAX than revenue growth? Is this a case of the company building future capacity faster than current demand?

Owen Kieffer Ocampo: Thank you. Robert, what explains the faster growth in G&A costs than revenue growth? Is this a case of the company building future capacity faster than current demand?

Owen Ocampo: Thank you. Robert, what explains the faster growth in G&A costs than revenue growth? Is this a case of the company building future capacity faster than current demand?

Speaker #3: Yeah, I can take that, Owen. it's a it's a it's a function of two things. One, we in the first half of this year, we as the management team decided to spend more on marketing as we wanted to catch especially on the prepaid side, catch more of these customers.

Robert Leo A. Yu: Yeah, I can take that away. It is a function of two things. One, in the H1 of this year, we as the management team decided to spend more on marketing as we wanted to, especially on the prepaid side, catch more of these customers. The other part of that really is, you are right, we are spending on more people as we roll out the data centers, hiring on that, as well as for salespeople for our subsea cable systems.

Robert Yu: Yeah, I can take that away. It is a function of two things. One, in the H1 of this year, we as the management team decided to spend more on marketing as we wanted to, especially on the prepaid side, catch more of these customers. The other part of that really is, you are right, we are spending on more people as we roll out the data centers, hiring on that, as well as for salespeople for our subsea cable systems.

Speaker #3: And then the other part of that, really, is you're right—we're spending on more people as we roll out the data centers, hiring on that.

Speaker #3: for, as well as for salespeople for our subsid cable systems.

Speaker #2: Thank you, Robert. I think that's okay. There you go. Another question from the chat box—so small.

Owen Kieffer Ocampo: Thank you, Robert. I think that's. Okay. There you go. Another question from the chat box. It's so small.

Owen Ocampo: Thank you, Robert. I think that's. Okay. There you go. Another question from the chat box. It's so small.

Speaker #5: Yeah, I think that's part of another question.

Benjamin Rex Emilio B. Azada: Yeah, I think part of the other question.

Benjamin Azada: Yeah, I think part of the other question.

Speaker #2: Have you seen any FiberX customers move to prepaid at Globe or Converge?

Owen Kieffer Ocampo: Have you seen any FiberX customers move to prepaid at Globe or Converge?

Owen Ocampo: Have you seen any FiberX customers move to prepaid at Globe or Converge?

Speaker #5: for for for Converge, we don't make it we don't make it an easy path to downgrade grade from from from FiberX to to Converge.

Benjamin Rex Emilio B. Azada: For Converge, we do not make it an easy path to downgrade from FiberX to Converge, so not a lot of that. Of course, if a customer moves house and then instead of transferring his line, disconnects and then applies subsequently for a prepaid line, there's nothing we can do about that. Have we seen moving to Globe? We are not able to trace whether they move to Globe prepaid in particular. We do have some statistics from our research of where we lose our customers to. Some do go to Globe, some go to local competitors who are not listed, like could be cable TV companies in each province. A lot go to PLDT Inc. Yeah.

Benjamin Azada: For Converge, we do not make it an easy path to downgrade from FiberX to Converge, so not a lot of that. Of course, if a customer moves house and then instead of transferring his line, disconnects and then applies subsequently for a prepaid line, there's nothing we can do about that. Have we seen moving to Globe? We are not able to trace whether they move to Globe prepaid in particular. We do have some statistics from our research of where we lose our customers to. Some do go to Globe, some go to local competitors who are not listed, like could be cable TV companies in each province. A lot go to PLDT Inc. Yeah.

Speaker #5: So, not a lot of that. Of course, some, if a customer moves house and then instead of transferring his line, disconnects and then applies subsequently for a prepaid line—you know, there's nothing we can do about that.

Speaker #5: Have we seen moving to Globe? We don't trace, we're not able to trace whether they move to Globe Prepaid in particular. We do have some statistics from our research of where we lose our customers to.

Speaker #5: Some do go to Globe. Some go to local competitors who were not listed, right? Like, could be cable TV companies in each province. And a lot go to PLDT.

Speaker #5: Yeah.

Speaker #2: Thanks, Bench. Next question: How much color can you give on your growth expectations for the medium term? Robert.

Owen Kieffer Ocampo: Thanks, Benj. Next question. How much color can you give on your growth expectations for the medium term? Robert?

Owen Ocampo: Thanks, Benj. Next question. How much color can you give on your growth expectations for the medium term? Robert?

Speaker #3: Yeah, I can take that. I think we haven't changed our internal view that we should hit 4 million subscribers by the end of 2027.

Robert Leo A. Yu: Yeah, I can take that. I think we haven't changed our internal view that we should hit 4 million subscribers by the end of 2027.

Robert Yu: Yeah, I can take that. I think we haven't changed our internal view that we should hit 4 million subscribers by the end of 2027.

Speaker #2: Thank you.

Owen Kieffer Ocampo: Thank you.

Owen Ocampo: Thank you.

Speaker #3: I would have said it would have been easier if you had asked me this question last year. I would say it's harder now.

Robert Leo A. Yu: I would've said it would've been easier if you were to ask me this question last year. I would say it's harder now.

Robert Yu: I would've said it would've been easier if you were to ask me this question last year. I would say it's harder now.

Speaker #2: I think, follow-up question. So, is the strategy to build a significant mass of customers first and then monetize them later?

Owen Kieffer Ocampo: I think a follow-up question. Is the strategy to build a significant mass of customers first and then monetize them later?

Owen Ocampo: I think a follow-up question. Is the strategy to build a significant mass of customers first and then monetize them later?

Speaker #3: I can take that. Absolutely not. I think, as you know, when we install prepaid, they have to pay ₱700 immediately for their first month's load.

Robert Leo A. Yu: I can take that. Absolutely not. I think as you know, when we install prepaid, they have to pay PHP 700 immediately for their first month's load. We do not give any freebies. I think since we report on a quarterly basis, we are very conscious that we are not trying to just capture subscriber market share and then monetize later. This business has been built on primarily reinvesting retained earnings, so sustainable cash flows or sustainable business model is very critical for us.

Robert Yu: I can take that. Absolutely not. I think as you know, when we install prepaid, they have to pay PHP 700 immediately for their first month's load. We do not give any freebies. I think since we report on a quarterly basis, we are very conscious that we are not trying to just capture subscriber market share and then monetize later. This business has been built on primarily reinvesting retained earnings, so sustainable cash flows or sustainable business model is very critical for us.

Speaker #3: And so we don't give any freebies. I think since we report ROIC on a quarterly basis, we're very conscious that we're not trying to just capture subscriber market share and then monetize later.

Speaker #3: You know, this business has been built on primarily reinvesting retained earnings, and so sustainable cash flows or a sustainable business model is very, very critical for us.

Speaker #2: Thanks, Robert. We have a couple more questions on the line. Hold on. Andrew, let me just finish the questions in the queue before I move to you.

Owen Kieffer Ocampo: Thanks, Robert. We have a couple more questions on the line. Hold on. Andrew, let me just finish the questions on the queue before I move to you. What is being done to reduce churn in prepaid and go back to growth?

Owen Ocampo: Thanks, Robert. We have a couple more questions on the line. Hold on. Andrew, let me just finish the questions on the queue before I move to you. What is being done to reduce churn in prepaid and go back to growth?

Speaker #2: What is being done to reduce churn in prepaid and go back to growth?

Speaker #5: Yeah. Prepaid, predominantly, we're optimizing our distribution channels, right? So, especially in the provinces. We're also encouraging our FiberX MSP partners, who tend to be more mature and have a bigger base, and therefore more resources, to start taking on the prepaid business as well.

Benjamin Rex Emilio B. Azada: Yeah. On the prepaid, predominantly, we are optimizing our distribution channels. Especially in the provinces, we are also encouraging our FiberX MSPs partners, who tend to be more mature and have a bigger base, and therefore more resources to start taking on the prepaid business as well. That will hopefully impose better operational discipline and sales discipline.

Benjamin Azada: Yeah. On the prepaid, predominantly, we are optimizing our distribution channels. Especially in the provinces, we are also encouraging our FiberX MSPs partners, who tend to be more mature and have a bigger base, and therefore more resources to start taking on the prepaid business as well. That will hopefully impose better operational discipline and sales discipline.

Speaker #5: And that, you know, will hopefully impose better operational discipline and sales discipline, and bring us back onto growth. Also, there are programs to ensure that the customers stay with us.

Benjamin Rex Emilio B. Azada: And bring us back onto growth. Also, there are programs to ensure that customers stay with us. We are really focused on customer lifetime value, and therefore, reminders to top up. Also, reaching out to these customers as load, as top-up expires. These are all the lots of little things that we are doing in order to reduce churn and to go back to growth.

Benjamin Azada: And bring us back onto growth. Also, there are programs to ensure that customers stay with us. We are really focused on customer lifetime value, and therefore, reminders to top up. Also, reaching out to these customers as load, as top-up expires. These are all the lots of little things that we are doing in order to reduce churn and to go back to growth.

Speaker #5: We're really focused on customer lifetime value and therefore, you know, reminders to to top up, you know, also re reaching out to these customers as as loads as top up expires.

Speaker #5: These are all the kind of the lots of little things that we're doing in order to reduce churn and to go back to growth.

Speaker #2: Okay, thanks, Bench. And I'll tie it up with the next question. On Q2 churn, was it the majority, yes? Do you have a sense of if these are older or newer As to As subscribers?

Owen Kieffer Ocampo: Okay. Thanks, Benj. I will tie it up with the next question. On Q2 churn, was Surf2Sawa the majority? Yes. Do you have a sense of if these are older or newer Surf2Sawa subscribers? Do you intend to recapture these subs, and how?

Owen Ocampo: Okay. Thanks, Benj. I will tie it up with the next question. On Q2 churn, was Surf2Sawa the majority? Yes. Do you have a sense of if these are older or newer Surf2Sawa subscribers? Do you intend to recapture these subs, and how?

Speaker #2: Do you intend to recapture these subs, and how?

Speaker #5: I think we have the database. We have the information of where's located this subscriber is. We are we we contact them. We we gain back and give them a sort of a a few days of free load and that that that that they can we can win back them.

Dennis Anthony Uy: I think we have the database. We have the information of where located this subscriber is. We contact them. We gain back and give them a few days of free load, and we can win back that. So we are doing now, one by one, with the locality of the partners and make sure we can have at least a win back on this kind of service to them. This is just only we need to go face-to-face with the consumer to make sure we can bring back on these services and bring back the service to them.

Speaker #5: So we are doing now one by one with the locality of the partners and make sure we can have at this win-back on this kind of service to them.

Speaker #5: This is just only—we need to go face to face with the consumer to make sure we can win back on these services.

Speaker #5: We bring back the service to them.

Speaker #2: Thank you very much, Sir Dennis.

Owen Kieffer Ocampo: Thank you very much, Mr. Dennis.

Owen Ocampo: Thank you very much, Mr. Dennis.

Speaker #3: I think data-wise, yes. S2S was the majority of the churn. In terms of a sense of whether they're older or newer, based on the data we reviewed, nothing really stood out as far as whether they were newer or not.

Robert Leo A. Yu: I think data-wise, yes, Surf2Sawa was the majority of the churn. A sense of whether they are older or newer, based on the data we reviewed, nothing really stood out as far as whether they were newer or not.

Robert Yu: I think data-wise, yes, Surf2Sawa was the majority of the churn. A sense of whether they are older or newer, based on the data we reviewed, nothing really stood out as far as whether they were newer or not.

Speaker #2: Thank you, Robert. One last question before we hand it over to Andrew. Could you provide an update on the demand power issue?

Owen Kieffer Ocampo: Thank you, Robert. One last question before we hand it over to Andrew. Could you provide an update on the manpower issue?

Owen Ocampo: Thank you, Robert. One last question before we hand it over to Andrew. Could you provide an update on the manpower issue?

Speaker #5: Pretty much resolved already. We've hired everyone that we had targeted to hire. In terms of numbers, the focus now is on just accelerating repairs.

Benjamin Rex Emilio B. Azada: Pretty much resolved already. We have hired everyone that we had targeted to hire, in terms of numbers. Focus now is on just accelerating repairs. That is why our statistics have actually, our performance has actually improved, in terms of mean time to repair. Yeah.

Benjamin Azada: Pretty much resolved already. We have hired everyone that we had targeted to hire, in terms of numbers. Focus now is on just accelerating repairs. That is why our statistics have actually, our performance has actually improved, in terms of mean time to repair. Yeah.

Speaker #5: That's why our statistics have actually—you know, our performance has actually improved in terms of mean time to repair. Yeah.

Speaker #2: Thanks, Bench. Max Francis, let me just hand the floor over to Andrew first, and then we'll tackle your questions in a bit. Andrew?

Owen Kieffer Ocampo: Thanks, Benj. Max Francis, let me just hand the floor over to Andrew first, and then we will tackle your questions in a bit. Andrew?

Owen Ocampo: Thanks, Benj. Max Francis, let me just hand the floor over to Andrew first, and then we will tackle your questions in a bit. Andrew?

Speaker #5: Thanks, Owen. yeah, I guess Robert, last quarter we talked I asked about how you would go from Q1 revenue growth of about 3, 4% to your guidance.

[Analyst]: Thanks, Owen. I guess, Robert, last quarter we talked, I asked about how you would go from Q1 revenue growth of about 3%, 4% to your guidance, and I think we talked about that. I think the answer was bringing down churn. I guess my question is, the ways that you are implementing, the measures you are implementing to reduce churn, what has not worked? Going forward, what are the new ways that you are trying to bring down this churn? That is my first question. The second question is, what are the other growth opportunities? Broadband is getting crowded. What are the other growth opportunities that you are exploring? Those are my two questions. Thank you.

Speaker #5: And I think we talked about that, and I think the answer was bringing down churn. So I guess my question is: with the way that you're implementing the measures to reduce churn, what hasn't worked? And, going forward, what are the new ways that you'll be trying to bring down this churn?

Speaker #5: So that's my first question. And the second question is, what are the other growth opportunities? Because, you know, broadband is getting crowded. So what are the other growth opportunities that you're exploring?

Speaker #5: those are my two questions. Thank you.

Speaker #3: Yeah, maybe I can take the second one first, and Bench can provide details on churn initiatives. As Dennis had mentioned, we have a bunch on the enterprise side.

Robert Leo A. Yu: Yeah, maybe I can take the second one first, and Benj can take detail on churn initiatives. As Dennis Anthony Uy had mentioned, we have a bunch on the enterprise side. We are gaining a lot of traction on both regular enterprise as well as wholesale customers. We have a new data center. We have launched a cloud platform. We are, again, a lot of traction is also what Benj had presented in his slides earlier as well. I think those will be the source of growth as well, in addition to just traditional connectivity and new areas where we are rolling out our network.

Robert Yu: Yeah, maybe I can take the second one first, and Benj can take detail on churn initiatives. As Dennis Anthony Uy had mentioned, we have a bunch on the enterprise side. We are gaining a lot of traction on both regular enterprise as well as wholesale customers. We have a new data center. We have launched a cloud platform. We are, again, a lot of traction is also what Benj had presented in his slides earlier as well. I think those will be the source of growth as well, in addition to just traditional connectivity and new areas where we are rolling out our network.

Speaker #3: We're gaining a lot of traction. on on both regular enterprise as well as wholesale customers. we have a new data center. we've launched a cloud ser cloud platform.

Speaker #3: And again, a lot of traction is also what Bench had presented in his slides earlier as well. So I think those would be the sources of growth as well, in addition to just traditional connectivity and new network.

Speaker #5: And to answer the first part of the question, Andrew, you know, earlier this year, we were having network troubles in one part of Metro Manila.

Robert Leo A. Yu: To answer the first part of the question, Andrew, earlier this year, we were having network troubles in one part of Metro Manila, and we had significant churn there across all brands. When we repaired the network there and attempted to, number one, prevent, arrest churn there, and number two, win back the customers that had already recently churned by doing a number of campaigns there door-to-door and some events. That did not really work. That is what we found. I think what has to happen really is, if it is a service-related issue that drives churn in a particular area, an immediate pivot to win back does not really work. What did work in that same area is a new acquisition drive for new customers, and that did work. Other things that I guess have had a positive impact.

Benjamin Azada: To answer the first part of the question, Andrew, earlier this year, we were having network troubles in one part of Metro Manila, and we had significant churn there across all brands. When we repaired the network there and attempted to, number one, prevent, arrest churn there, and number two, win back the customers that had already recently churned by doing a number of campaigns there door-to-door and some events. That did not really work. That is what we found. I think what has to happen really is, if it is a service-related issue that drives churn in a particular area, an immediate pivot to win back does not really work. What did work in that same area is a new acquisition drive for new customers, and that did work. Other things that I guess have had a positive impact.

Speaker #5: And we had significant churn there, across all brands. when we repaired the network there and tried to attempted to to bring to bring well, number one, prevent arrest churn, there and number two, win back the customers, that were that had already recently churned.

Speaker #5: by doing a number of campaigns there and door to door and some events, that didn't really work. That's what we found. So I think what has to happen really is if it's a if it is a service related issue that drives churn, in a particular area, an immediate pivot to win back does not really work.

Speaker #5: But what did work in that same area is a new AC acquisition drive for new customers, and that did work. Other things that I guess have had a positive impact: very recently, we announced a service pledge in certain parts of Metro Manila.

Robert Leo A. Yu: Very recently, we announced a service pledge in certain parts of Metro Manila to guarantee quick repairs. That has been received quite well. That has not come through in the numbers yet, but we are seeing it being received by the market.

Benjamin Azada: Very recently, we announced a service pledge in certain parts of Metro Manila to guarantee quick repairs. That has been received quite well. That has not come through in the numbers yet, but we are seeing it being received by the market.

Speaker #5: to to guarantee quick repairs. that that has been received quite well. We have that's not come through in the numbers yet, but we're seeing it being received received by the market.

Speaker #2: Thanks a lot. Thank you, Bench, Robert. Thank you, Andrew, for your questions. Let me now resume the questions from the queue. Could you quantify how the stated heavy demand for subsidy cables is expected to translate into revenues and margin?

[Analyst]: Thanks a lot.

Owen Kieffer Ocampo: Thank you, Benj. Robert. Thank you, Andrew, for your questions. Let me now resume the questions from the queue. Could you quantify how the stated heavy demand for subsea cables is expected to translate into revenues and margin?

Owen Ocampo: Thank you, Benj. Robert. Thank you, Andrew, for your questions. Let me now resume the questions from the queue. Could you quantify how the stated heavy demand for subsea cables is expected to translate into revenues and margin?

Speaker #3: Sure. I can take that. so I'll give an example. So for buy frost, we have had very we're in advanced discussions with someone who is looking to take up almost half of our capacity on buy frost.

Robert Leo A. Yu: Sure. I can take that. I will give an example. For Bifrost, we are in advanced discussions with someone who is looking to take up almost half of our capacity on Bifrost, which would allow us to recover a good portion of our investment upfront. However, that revenue is recognized over a 20 or 25-year period, depending on the length of the contract. Margins are good. They are not as good as traditional enterprise. Because these are 20-year contracts, then you might be looking at a, call it, 10% to 12% return on invested capital versus a 15% to 16% return on invested capital on our residential business, which then has recontracting risk. This is, I guess, the balancing act that I am pushing on the team as the CFO.

Robert Yu: Sure. I can take that. I will give an example. For Bifrost, we are in advanced discussions with someone who is looking to take up almost half of our capacity on Bifrost, which would allow us to recover a good portion of our investment upfront. However, that revenue is recognized over a 20 or 25-year period, depending on the length of the contract. Margins are good. They are not as good as traditional enterprise. Because these are 20-year contracts, then you might be looking at a, call it, 10% to 12% return on invested capital versus a 15% to 16% return on invested capital on our residential business, which then has recontracting risk. This is, I guess, the balancing act that I am pushing on the team as the CFO.

Speaker #3: Which would allow us to recover a good portion of our investment upfront. However, that revenue is recognized over a 20 or 25 year period, depending on the length of the contract.

Speaker #3: Margins are good. They're not as—they're not as good as traditional enterprise. But then because these are, you know, 20-year contracts, then you might be looking at, call it, a 10 to 12% return on invested capital versus 15 to 16% return on invested capital on our residential business, which then has re-contracting risk, right?

Speaker #3: So this is, I guess, the balancing act that I'm pushing on the team as the CFO.

Speaker #2: Thanks, Robert. Andrew, I'll just lower your hand unless you have a question. Perfect. All right. Thank you. And I think we have the last question on Q.

Owen Kieffer Ocampo: Thanks, Robert. Andrew, I will just lower your hand unless you have a question. Perfect. All right. Thank you. I think we have the last question in queue before we close the meeting. Why did the lower price brands see higher churn amidst difficult macro environment? Just a bit confused because you would expect it to be a more resilient brand, given its better affordability and the option it provides customers to budget pay their top-ups based on their monthly income.

Owen Ocampo: Thanks, Robert. Andrew, I will just lower your hand unless you have a question. Perfect. All right. Thank you. I think we have the last question in queue before we close the meeting. Why did the lower price brands see higher churn amidst difficult macro environment? Just a bit confused because you would expect it to be a more resilient brand, given its better affordability and the option it provides customers to budget pay their top-ups based on their monthly income.

Speaker #2: Before we close the meeting, why did the lower-priced brands see higher churn amidst a difficult macro environment? I'm just a bit confused because you would expect it to be a more resilient brand, given its better affordability and the option it provides customers to budget their top-ups based on their monthly income.

Speaker #5: Yeah, I I think it's it's a case where the the inflationary environment disproportionately affected the the lower class, right? the lower income class where basic necessities have become really expensive, transport and and food to the extent that you know, they had to cut out what is seen as you know, maybe necess still necessity, but less so.

Benjamin Rex Emilio B. Azada: Yeah. I think it's a case where the inflationary environment disproportionately affected the lower class, the lower income class, where basic necessities have become really expensive, transport and food, to the extent that they have to cut out what is seen as maybe still necessity, but less so. Unfortunately, maybe not all our base, but I am guessing here, probably a third of our base in the Surf2Sawa is really on the lower income, above poverty line, but lower income. So what we would say D2 class. So that is why it is. But definitely, you will see that those who are in the middle class or even the lower middle class, we did not see as dramatic impact on churn.

Benjamin Azada: Yeah. I think it's a case where the inflationary environment disproportionately affected the lower class, the lower income class, where basic necessities have become really expensive, transport and food, to the extent that they have to cut out what is seen as maybe still necessity, but less so. Unfortunately, maybe not all our base, but I am guessing here, probably a third of our base in the Surf2Sawa is really on the lower income, above poverty line, but lower income. So what we would say D2 class. So that is why it is. But definitely, you will see that those who are in the middle class or even the lower middle class, we did not see as dramatic impact on churn.

Speaker #5: And unfortunately, maybe not all are our base, but probably—I'm guessing here—probably a third of our base in the S2S is really on the kind of lower income, right?

Speaker #5: above the poverty line, but lower income. So what we would say D class, right? D2 class, right? So that's why it is sort of—but it definitely, but you'll see that, you know, those who are in the middle class or the lower, even the dramatic churn, impact on churn.

Speaker #3: Yeah, I think to add to that, BDA, which is a lower middle-income segment, still has the same level of churn as the previous quarter.

Robert Leo A. Yu: Yeah, I think to add to that. BIDA, which is a lower middle-income side, still has the same level of churn as the previous quarter, so no change. It is really Surf2Sawa, which is really addressed to the mass market.

Robert Yu: Yeah, I think to add to that. BIDA, which is a lower middle-income side, still has the same level of churn as the previous quarter, so no change. It is really Surf2Sawa, which is really addressed to the mass market.

Speaker #3: So, no change. It's really S2S, which is really addressed to the mass market.

Speaker #2: Thanks, Robert. Thanks, Bench. And I think we have an additional question on the queue. How much is there overlap in terms of homes passed with Globe?

Owen Kieffer Ocampo: Thanks, Robert. Thanks, Benj. I think we have an additional question on the queue. How much is there overlap in terms of homes passed with Globe? Is it that 90% of potential customers for prepaid have access to Globe and Converge?

Owen Ocampo: Thanks, Robert. Thanks, Benj. I think we have an additional question on the queue. How much is there overlap in terms of homes passed with Globe? Is it that 90% of potential customers for prepaid have access to Globe and Converge?

Speaker #2: Is it that 90% of potential customers for prepaid have access to Globe and Converge?

Robert Leo A. Yu: We do not know how many ports Globe has. I guess if they were at 4 million, then the maximum overlap would be 50% or something like that, since we have almost 9 million ports from a location perspective. We unfortunately do not have the data. But I would assume for Metro Manila, we have significant overlap, Cebu and Davao, but maybe less so on the provincial areas where, again, this is where it is a growth market for us.

Robert Yu: We do not know how many ports Globe has. I guess if they were at 4 million, then the maximum overlap would be 50% or something like that, since we have almost 9 million ports from a location perspective. We unfortunately do not have the data. But I would assume for Metro Manila, we have significant overlap, Cebu and Davao, but maybe less so on the provincial areas where, again, this is where it is a growth market for us.

Speaker #3: We don't know how many ports Globe has. I mean, I guess if they were at 4 million, then the maximum overlap would be 50%, right? Or something like that, since we have almost 9 million ports.

Speaker #3: from a from a location perspective. we don't we unfortunately do not have the the the data but I would assume for Metro Manila we have significant overlap.

Speaker #3: Cebu and Davao but maybe less so on the provincial areas where again this is where it's a growth market for us.

Speaker #2: Thanks, Robert. And I think there's another question now. Besides depreciation, what else drove the 13% increase in GNA?

Owen Kieffer Ocampo: Thanks, Robert, and I think there is another question now. Besides depreciation, what else drove the 13% increase in G&A?

Owen Ocampo: Thanks, Robert, and I think there is another question now. Besides depreciation, what else drove the 13% increase in G&A?

Speaker #3: Yeah, so G&A, again, marketing and then repairs and maintenance are the two biggest drivers. And then you have additional personnel expenses. But for the most part, marketing and repairs and maintenance.

Robert Leo A. Yu: G&A, again, marketing and then repairs and maintenance are the two biggest drivers, and then you have additional personal expenses. But for the most part, marketing and repairs and maintenance. And repairs and maintenance is something that we have been highlighting as increased spending, given the network issues that we were facing in the past several quarters.

Robert Yu: G&A, again, marketing and then repairs and maintenance are the two biggest drivers, and then you have additional personal expenses. But for the most part, marketing and repairs and maintenance. And repairs and maintenance is something that we have been highlighting as increased spending, given the network issues that we were facing in the past several quarters.

Speaker #3: And this has been—repairs and maintenance is something that we've been highlighting as increased spending given the network issues that we were facing in the past several quarters.

Speaker #2: Thanks, Robert. I think that—oh, wait, hold on. Who do you see as the main competition for prepaid?

Owen Kieffer Ocampo: Thanks, Robert. I think that. Oh, wait, hold on. Who do you see as the main competition for prepaid?

Owen Ocampo: Thanks, Robert. I think that. Oh, wait, hold on. Who do you see as the main competition for prepaid?

Speaker #5: Yeah, I would say Globe, because they're openly advertising it, right? PLDT is really under the radar, below the line in terms of their marketing on that.

Benjamin Rex Emilio B. Azada: I would say Globe because they are openly advertising it. PLDT Inc. is really under the radar below the line in terms of their marketing on that.

Benjamin Azada: I would say Globe because they are openly advertising it. PLDT Inc. is really under the radar below the line in terms of their marketing on that.

Speaker #2: Thanks, Bench. I think that is all I'm checking. No. Okay. No questions missed on the Q. And I guess that closes the Q&A portion.

Owen Kieffer Ocampo: Thanks, Benj. I think that is all. I am checking. Okay. No questions missed on the queue, and I guess that closes the Q&A portion. Let me just give a summary of the entire presentation. Q2 2026 has been a test of financial discipline. While persistent macroeconomic inflation during Q2 created temporary headwinds for our residential segment, Converge's core model still proved resilient, cushioned by the high growth momentum of our enterprise business. Enterprise revenue surged 15% year-on-year, driven by stellar growth in both our SME segments and large corporate. As businesses across the Philippines continue their digital transformation, we are seeing growing demand that we are capitalizing on. This enterprise acceleration provided a critical counterweight that kept our top line expanding with consolidated revenues growing 3.1%.

Owen Ocampo: Thanks, Benj. I think that is all. I am checking. Okay. No questions missed on the queue, and I guess that closes the Q&A portion. Let me just give a summary of the entire presentation. Q2 2026 has been a test of financial discipline. While persistent macroeconomic inflation during Q2 created temporary headwinds for our residential segment, Converge's core model still proved resilient, cushioned by the high growth momentum of our enterprise business. Enterprise revenue surged 15% year-on-year, driven by stellar growth in both our SME segments and large corporate. As businesses across the Philippines continue their digital transformation, we are seeing growing demand that we are capitalizing on. This enterprise acceleration provided a critical counterweight that kept our top line expanding with consolidated revenues growing 3.1%.

Speaker #2: Let me just give a summary of the entire presentation. So, the second quarter of 2026 has been a test of financial discipline. While persistent macroeconomic inflation during the second quarter created temporary headwinds for our residential segment, Converge's core model still proved resilient, bolstered by the high growth momentum of our enterprise business.

Speaker #2: Enterprise revenues surged 15% year on year, driven by stellar growth in both our SME segments and large corporate. As businesses across the Philippines continue their digital transformation, we're seeing growing demand that we are capitalizing on.

Speaker #2: This enterprise acceleration provided a critical counterweight that kept our top line expanding, with consolidated revenues growing 3.1%. Our enterprise business sustained bright light for our first half top line growth, and will continue its momentum with a significant pipeline in place.

Owen Kieffer Ocampo: Our enterprise business sustained the spotlight for our H1 top-line growth and will continue its momentum with a significant pipeline in place, as mentioned by Benj, to help us get to our target of 4% to 6% revenue growth for the year. Again, thank you for everyone in joining our H1 results briefing. If there are any questions post this call, please feel free to shoot us an email. Happy to address your questions there. Thank you very much and have a great rest of the week.

Owen Ocampo: Our enterprise business sustained the spotlight for our H1 top-line growth and will continue its momentum with a significant pipeline in place, as mentioned by Benj, to help us get to our target of 4% to 6% revenue growth for the year. Again, thank you for everyone in joining our H1 results briefing. If there are any questions post this call, please feel free to shoot us an email. Happy to address your questions there. Thank you very much and have a great rest of the week.

Speaker #2: As mentioned by Bench, to help us get to our target of 4 to 6% revenue growth for the year. Again, thank you for everyone to in joining our our first half results briefing.

Speaker #2: If there are any questions post this call, please feel free to shoot us an email. happy to address your questions there. Thank you very much and have a great rest of the week.

Speaker #3: Thanks everybody.

Robert Leo A. Yu: Thanks, everybody.

Robert Yu: Thanks, everybody.

[Analyst]: Goodbye

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