KYIV Q1 2026 Earnings Call

Operator (AI Assigned): does Q1 2026 results presentation. For those of you who have joined the Zoom webinar, if you would like to ask a question, you can use the Raise Hand button, which can be found on the black bar at the bottom of your screen at any time to join the queue to ask a question, and you will be called upon during the Q&A session. For those of you watching on the webcast, if you would like to submit a written question, please use the Ask a Question tab at the top right of your screen. These questions can also be sent in at any time during the presentation. As a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Cole Akeson, you may begin.

Cole Akeson (Group Director of Investor Relations): Thank you. Good afternoon and good morning. Thank you all for joining us to discuss Kyivstar Group's or Kyivstar's Q1 results. I am Cole Akeson, group director for Kyivstar Investor Relations. Joining me today are Kaan Terzioğlu, Chairman of the Board, Oleksandr Komarov, the CEO, Boris Dolgushin, our CFO, and Anand Ramachandran, Chief Corporate Development Officer for VEON. Oleksandr will begin with strategic and operational highlights, followed by Boris with a review of our financial performance. We will open the line for questions. Before we begin, please note that today's presentation contains forward-looking statements which involve risks and uncertainties. Further details are available in our SEC filings, including our Form 20-F, filed 16 March 2026. Our earnings release and presentation are available on our investor relations website. With that, I'll hand over to Oleksandr.

Oleksandr Komarov (CEO): Thank you, Cole. Hello, everyone. We started 2026 with strong execution. Our telecom core is resilient. Our digital ecosystem is scaling. The two businesses fit each other. Let me start with the numbers. Revenue reached $323 million. This is an increase of nearly 27% year-over-year. EBITDA grew more than 23% to $173 million. We focus on cash generation. Equity free cash flow grew almost 32% to $87 million for the quarter. Second, our digital transformation. Digital revenue more than tripled year-on-year, reaching almost 21% of our total revenue in Q1 2026. This is an increase of more than 5 percentage points quarter-on-quarter and more than 13 percentage points from a year ago. Our platforms have scaled.

Oleksandr Komarov (CEO): We now serve more than 28 million non-unique digital customers, a number now larger than our mobile subscriber base. We also streamlined our reporting this quarter, integrating identity services into our digital enterprise vertical to provide a clearer and more consistent view of performance. Identity services are undergoing a transition away from traditional A2P messaging to more varied API-based platforms, becoming more digital than traditional analog mobile. We also moved to reporting customers across service lines on 3-month active basis to provide better comparability between lines and over time. Accordingly, we provide reclassified numbers for past periods to ensure comparability and maximum visibility. Third, our MultiPlay strategy. MultiPlay customers use voice, data, and at least one of our apps. They generate more revenue individually and are less likely to churn. MultiPlay customers grew 31.6% to 8.1 million.

Oleksandr Komarov (CEO): They now make up nearly 40% of our active mobile base. This engagement drives the top line. Mobile RPU rose 14.1% year on year to $3.80. Finally, our strategic investments. In February, we consolidated Tabletki. Tabletki is Ukraine's leading online healthcare marketplace. It processed $258 million in gross merchandise value over the 2 months of consolidation for the quarter. We expanded our cooperation with SpaceX to resell Starlink internet to enterprise customers. Over 5 million customers already use our Direct to Cell messaging services, and we will launch live data later this year. As for our Q1 financials, telecom revenue grew 8% to $256 million. Customers are moving to 4G and using more data. Digital revenue grew 257% to $67 million.

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

Oleksandr Komarov (CEO): Our cash position remains strong at $353 million. Now, let's look at the mobile business where we serve 22 million customers. Our annualized churn rate was 16% for the quarter. We remain the country's clear market leader. Mobile ARPU grew 14% to $3.80. Customers are moving to 4G and using more data. Data consumption grew 31% to almost 15 GB per user monthly. Nearly 70% of our mobile base is now on 4G. Our fixed broadband base grew almost 12% to 1.2 million customers. This includes 52,000 new users from our recent Shtorm acquisition. Broadband and digital entertainment work closely together. Today, nearly 46% of our broadband users also subscribe to Kyivstar TV. Cross-sales and synergies bring us back to the core of our digital growth strategy, MultiPlay.

Oleksandr Komarov (CEO): MultiPlay customers grew almost 32% year-over-year to 8.1 million. They now make up nearly 40% of our active mobile customer base. They also generate higher revenue. The average MultiPlay customer generates $5.30 in a monthly ARPU. That is nearly 40% more than the average mobile customer. They spend more now in digital suite, but they also spend more on connectivity. Let's look closer to our digital revenue. Digital revenue grew by 2.6x to $67 million. It now makes up almost 21% of total revenue. Three points about this performance. First, strategic acquisitions enhance our scale. The consolidations of Uklon and Tabletki drove the bulk of this quarter's surge. That said, the growth is also broad-based. We see momentum across all verticals. Uklon, Helsi, Tabletki, Kyivstar TV, and the digital enterprise business.

Oleksandr Komarov (CEO): Third, we have a structural cost advantage. Our telecom customer base provides low acquisition costs. Our MultiPlay bundles act as an optimized distribution model. This synergy allows us to scale platforms, profitability, and maintain strong unit economics. Moving to Uklon, our mobility platform. In Q1, Uklon generated nearly $33 million in revenue and more than $12 million in EBITDA. This reflects both a scaled business in Ukraine and a growing business in Uzbekistan. The platform processed nearly 44 million rides and 1.5 million deliveries, the latter reflecting an almost 10% rise quarter-on-quarter. Active customers rose to more than 5 million for the quarter. We are expanding the product range. Customers can now book intercity bus tickets directly in the new Uklon Travel. We continue to explore new ways to develop Uklon further as a comprehensive one-stop mobility platform.

Oleksandr Komarov (CEO): Our digital enterprise business is great gain in scale with more than $16 million in revenue and 9% increase year-over-year. We manage 2,200 active B2B contracts, up 31% year-on-year. Big data and AI drove the majority of this quarter's growth. The segment's revenue grew 75% to $4.4 million. Cloud revenue grew 42% to $2.3 million. Advisor, our self-service advertising platform primarily focused on small and medium-sized businesses, expanded to over 4,000 registered clients. The division also contains Kyivstar.Tech, which binds our ecosystem together and is responsible for some of our most cutting-edge work. An example is our work in cooperation with the Ukrainian government and leading international partners to produce our sovereign LLM, which is trained exclusively on Ukrainian language data to meet the unique needs of Ukrainian clients.

Oleksandr Komarov (CEO): Moving to entertainment, Kyivstar TV remains the largest media streaming service in Ukraine. Revenue grew 390% year over year to $10.5 million. Last year's shift to gross revenue recognition is complemented by strong organic momentum spurred by two factors. First, customer expansion and engagement. Our customer base reached a new record at the more than 3 million. As I mentioned earlier, more than 46% of our fixed broadband base now subscribes to our TV platform. Second, our original content continues to inspire engagement. New crime drama, Tykhonya, is the most-watched title in the platform's history. Exclusive Ukrainian content attracts new customers and strengthen our ecosystem. We are looking forward to soon being exclusive Ukrainian broadcaster of an upcoming boxing match featuring world heavyweight champion and proud Ukrainian, Oleksandr Usyk. On the healthcare, Helsi is Ukraine's leading health tech platform.

Oleksandr Komarov (CEO): We served 4.9 million active digital customers in Q1. Patients booked 2.4 million appointments through the platform. We are scaling the platform paid services. Customers paying the premium offerings increased by more than half quarter-on-quarter to reach more than 87,000. Revenue grew nearly 32% year-over-year to more than $2 million. Helsi powers appointment scheduling, prescriptions, and health records, including integration with Ukraine state health system. The platform makes care easier and faster to access, a win-win for patients and doctors alike. Customers are upgrading for a range of advanced health insights. Our Helsi Superpower Telecom bundle helps drive these conversions. Helsi highlights our commitment to corporate social responsibilities and ESG. We are expanding access to digital healthcare for Ukrainians during the wartime. We have Tabletki.ua, the leading online healthcare marketplace. We consolidated this business in February.

Oleksandr Komarov (CEO): In just 2 months, the platform contributed more than $5 million in revenue and more than $4 million in EBITDA. Customer volume is strong. The platform facilitated 15.3 million average monthly bookings in the first 2 months of the year. For the same period, gross merchandise value reached $258 million. We continue work on integrating Tabletki with Helsi and ultimately with Uklon delivery network. We expect these synergies to drive deeper engagement across our digital customer base. All these parts come together in our growth strategy. We intend our core connectivity business to maintain market leadership. We focus on retaining a high quality customer base and driving technological innovation. For example, over 5 million customers use our Direct to Cell satellite messaging, and we expect to launch light data later this year. In fixed broadband, we aim to expand market share.

Oleksandr Komarov (CEO): We plan to drive this expansion through both organic growth and targeted acquisitions. This market brings entire households into our ecosystem, mutually reinforcing the mobile and digital businesses. Third, our digital ecosystem. We anticipate scaling our digital platforms through organic momentum and strategic acquisitions. Our core strategy is to increase MultiPlay adoption and deepen daily engagement across our customer base. We continue to progress our strategy through both organic and inorganic growth. Most recently, we announced the expansion of our cooperation with SpaceX to include selling high-speed internet services to Ukrainian businesses and public institutions, allowing us to provide B2B and B2C customers a full-featured connectivity stack within Kyivstar packages. Now, Boris will tell us more about the financials.

Boris Dolgushin (CFO): Thank you, Oleksandr. Total revenue reached $323 million in Q1, an increase of nearly 27% year-over-year. This reflects UAH 14 billion in revenue, a 31% increase. EBITDA grew more than 23% to $173 million based on a 29% gain to UAH 7.5 billion. As discussed, our telecom margin expanded to more than 56%, while our digital platforms operated nearly 43% margin. This split reflects our strategy. We generate strong cash flow from our core network that partially goes to fund the rapid scaling of our digital ecosystem. Capital allocation remain disciplined. CapEx total $67 million, which nearly 21% of revenues. A significant portion of this capital goes towards network resilience during the war. Despite these critical investments, our cash conversion remains strong.

Boris Dolgushin (CFO): Equity free cash flow after leases and licenses grew 32% to $87 million. Turning now to the balance sheet. We ended the Q1 with $353 million in cash and deposits. The sequential decrease reflects our capital allocation to fund the Tabletki and Shtorm acquisitions. Gross debt, excluding leases, is $94 million. We carry immaterial external debt, mostly owed to parent company VEON. Lease liabilities total $393 million. This arise from our tower agreements with Ukrainian tower company and are fully recognized under IFRS 16. Excluding these lease liabilities, our net cash position is $259 million. Let me now hand the call back to Oleksandr.

Oleksandr Komarov (CEO): Thank you, Boris. Looking further ahead, we raise our full year outlook for 2026 on a mix of the ongoing strong execution and external influences that have been less turbulent than assumed in our base case. In hryvnia, we expect revenue to grow 18% to 21% and EBITDA to grow 14% to 17%. On our average exchange rate assumption of 45.5 hryvnia to the dollar, we expect revenue to grow 11% to 14% in US dollars and EBITDA 7% to 10%. While this is an upgrade to our previous guidance, it represents moderation from our Q1 growth rates due largely to base effects. This anticipates a comparison base that will no longer include the immediate aftermath of the 2023 cyberattack, a weaker spot exchange rate and the lapping of the Ukrland consolidation.

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

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

Operator (AI Assigned): Our first question comes from Max Findlay with Rothschild & Co.

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

Oleksandr Komarov (CEO): Let me start with the 1st question. This Kyivstar customer base decline is actually the reflection of the overall market trend. This trend is very much driven by few factors. The 1st factor is a decline in the number of double SIMmers across the market. The 2nd factor is the decline in the new gross adds because of a certain shelf price increase. The 3rd factor is overall demographic situation in Ukraine. It's a bit difficult to quantify, but the biggest factor is actually double SIMmers. That is very much situational and driven by very heavy blackouts we faced during the December, January 2024. Let me also draw your attention to 1 simple fact that according to the National Regulation Statistic, Kyivstar is maintaining subscriber market share year-on-year.

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

Boris Dolgushin (CFO): Mobile ARPU.

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

Max Findlay (TMT Equity Research Analyst): Brilliant. Brilliant. Thank you very much.

Operator (AI Assigned): Our next question comes from Ganesha Nagesha with Barclays.

Ganesha Nagesha (Research Analyst): Yeah. Hi. Congratulations on the results. A question from me on the digital segment. You had a very strong growth in the quarter. Just trying to understand on the Kyivstar TV and Uklon. The numbers were quite strong, similar to the Q4. What are the factors that are driving this? Just trying to understand, are there any seasonality in them? Like, how should we think of the growth for these two segments in the coming quarters? Thank you.

Oleksandr Komarov (CEO): Let me take it one by one. The Uklon growth is actually driven by 3 major factors. The first one is a growing number of riders. The second one is a growing number of rides per 1 rider. The third one is actually pricing, which was very much driven by energy crisis, global energy crisis, and the growing prices for the fuel and gas. These are 3 major factors that are affecting Uklon performance. We also observe a certain market share increase in the ride-hailing business, it was also supported by the growing, you know, much faster growing delivery business. In Kyivstar TV, we observe a certain, let's say, non-organic growth, very much driven by the 3P penetration.

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

Ganesha Nagesha (Research Analyst): Yeah. Very clear. Thank you.

Operator (AI Assigned): Our next question comes from Jesse Silverson with BTIG. Please unmute your line and ask your question.

Jesse Sobelson (Director and Strategic Opportunities Analyst): Good morning. Thanks for taking my question here. Can you help us think about the Starlink and Direct to Cell service? Is it a defensive coverage and resilience feature that protects users in ARPU or a standalone revenue line that could enable further monetization? I see, you know, the 5 million users here, but I am very curious on exactly how to think about that part of your business. Thank you.

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

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

Jesse Sobelson (Director and Strategic Opportunities Analyst): Great. Thank you for the detail there. I'd love to just follow up real quick on the M&A front and the environment there with the cash that you have. Can you just elaborate on maybe where valuations are in the space and if there's any particular verticals within Ukraine that you're currently focused on researching for further expansion? Thank you for taking my questions.

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

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

Jesse Sobelson (Director and Strategic Opportunities Analyst): Great. Thank you.

Operator (AI Assigned): Our next question comes from Matthew Harrigan with Benchmark.

Matthew Harrigan (Equity Research Analyst): Oh, thank you. You can hear me, of course, right?

Oleksandr Komarov (CEO): Yes.

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

Oleksandr Komarov (CEO): Let me start with, let me take a very brief description. What we faced at the end of 2020 was not a kind of hacker attack. It was one of the biggest acts of the cybersecurity war and terrorism in the world. Okay? Yes, you are right, we are one of the probably primary targets from the Russian perspective. At the same time, I feel ourselves really confident in our ability to protect Kyivstar infrastructure, and Kyivstar customers from the cybersecurity threats. Okay? We invested a lot since that incident. We have hired the biggest global consultants, and right now I think that we are much better protected than we used to be in 2023 with the support of the global companies like Microsoft, Cisco, and others. Okay?

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

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

Matthew Harrigan (Equity Research Analyst): What are your strategies for, you know, pushing the pricing, you know, forward when you get a more normal environment, maybe getting close to some comparable markets in Europe and other areas?

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

Matthew Harrigan (Equity Research Analyst): Great. Thank you so much.

Operator (AI Assigned): Our next question comes from Ali Zaidi with Inam. Please unmute your line, turn your video on, and ask your question.

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

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

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

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

Oleksandr Komarov (CEO): Thank you so much. Thank you.

Operator (AI Assigned): Our next question comes from Vincent Fernando with Zero One. Please unmute your line, turn your video on, and ask your question.

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

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

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

Vincent Fernando (Founder and Executive Director): Got it. Thank you.

Operator (AI Assigned): Our next question comes from Adrian Cundy with Emerging and Frontier Capital LLP. Please unmute your line, turn your video on, and ask your question.

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

Adrian Cundy (SEA Consumer and Vietnam Specialist): I would assume that's overwhelmingly in the telecom business and relative telecom revenues, that's obviously, sustainably remains quite high, well above 21%. How much of that is really network resilience? How much of that is things like the 5G test bed? Given that really, 5G subs are now above 70% of your total, sorry, 4G subs are 70% of your subbase penetration, what is the, you know Given that, you know, older people tend not to be on data as much, what is the roadmap for boosting data through, and how much do you think you're eventually in a year or two out will your network be in 5G given that the government has a test policy there?

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

Boris Dolgushin (CFO): Yeah.

Oleksandr Komarov (CEO): Of the digital revenue stream? Yeah.

Boris Dolgushin (CFO): Adrian, thank you for the question. As we discussed in the previous call, so even if you exclude Uklon and Tabletki.ua impact, so we are growing about 60% year-on-year. Yeah. This growth is supported, kind of, complemented by the existing streams. Thank you. Our digital enterprise solution and Kyivstar TV, which as Oleksandr explained, is growing due to the unique content quite aggressively. It's in line with our promise, kind of, to grow the digital business at the high double digits to triple digit levels. We are executing this.

Adrian Cundy (SEA Consumer and Vietnam Specialist): How long do you think that's sustainable for, that sort of super normal growth rate?

Oleksandr Komarov (CEO): It will be a, kind of, forward-looking statement, to be honest. You know, the forward rate, you know, we are a bit careful and limited by the current rules imposed on us. You can make this trend by yourself. We were declaring our, let's say, organic growth rate, you know, 2025 organic growth rate in our presentation. You know, Boris just said where we are at the beginning of 2026, and I think that you can make your simulation quite easy.

Adrian Cundy (SEA Consumer and Vietnam Specialist): All right.

Boris Dolgushin (CFO): Adrian, if I may make our legal team slightly more comfortable. The raw numbers are of course on slide 7.

Adrian Cundy (SEA Consumer and Vietnam Specialist): Yeah. Yeah. Thank you.

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

Oleksandr Komarov (CEO): We want to strengthen our technological leadership versus the competition, okay. We are very close to finalize our license, 4G-driven license obligation, with population coverage almost 97%.with all the major roles covered by the LTE technologies, okay? My own perspective that this will be the main technological vehicle of mobile telecom for the next probably five, seven years. We do not expect 5G to be really introduced in Ukraine until end of the war. The most probable scenario is something like 12 months after the war, and that's why we are considering our investments in LTE technology as a strategic one. By the way, this is very much confirmed by the Ookla, you know, this external monitoring company, that actually awarded Kyivstar with all three available awards. The biggest network by coverage, the fastest network by speed, and the best one from the customer experience perspective.

Adrian Cundy (SEA Consumer and Vietnam Specialist): Just one final question on I wasn't aware of the sunset on 3G. If 30% of your base that's not on 4G right now, I mean, is there a device limitation there? Are, you know, are these old folks without a smartphone, and is that gonna, you know, when you migrate them off, is that gonna have an impact?

Oleksandr Komarov (CEO): It's a good question, but to be fair, 4G smartphones penetration is not an issue in Ukraine.

Adrian Cundy (SEA Consumer and Vietnam Specialist): Okay.

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

Adrian Cundy (SEA Consumer and Vietnam Specialist): Okay. Thank you. Congratulations again on what was a pretty exceptional quarter on execution and results.

Oleksandr Komarov (CEO): Thank you.

Adrian Cundy (SEA Consumer and Vietnam Specialist): You're welcome.

Oleksandr Komarov (CEO): Thank you very much.

Operator (AI Assigned): Our next question comes from Tim Savageau with Northland Capital Markets. Please unmute your line, turn your video on and ask your question.

Oleksandr Komarov (CEO): Tim, we don't hear you. Maybe you're on mute.

Tim Savageau (Senior Research Analyst): I seem okay. Maybe there I am. Okay. Can you hear me?

Oleksandr Komarov (CEO): It's okay right now.

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

Tim Savageau (Senior Research Analyst): Am I getting that right, and is there some offset on the cost factor or on the cost front, that's kind of a headwind to your strategic growth, your inorganic growth?

Oleksandr Komarov (CEO): Tim, I will ask Boris to answer this question. Okay? Boris, please.

Boris Dolgushin (CFO): Yeah. Tim, thank you for the question. I think when you look at the Q1, you choose the organic growth without, as you said, kind of Tabletki.ua and Uklon acquisition because we didn't have Uklon consolidated in 2025. If you look at this, we are at 16%. I'm talking organic terms. I'm not putting dollars here because you also have definitely the translation impact on our numbers. We are about 16% in terms of both revenue and EBITDA growth year-on-year. We are continuing this trend for the rest of 2026. We gave the guidance of 18% to 21% in revenue, 14.17% in EBITDA, which is in line with this guidance.

Boris Dolgushin (CFO): Despite the fact that we do have some factors stressing negatively our performance, such as definitely utilities prices you mentioned, or the EU roaming regulation introduction, which is quite a significant impact for 2026. As you can see, we are trying to offset them both in terms of the telco growth and in terms of the digital growth that we just discussed.

Tim Savageau (Senior Research Analyst): Okay. Great. To follow up, you know, I think we've seen a pretty notable uptick in MultiPlay subscribers really the last 2 quarters in particular. I mean, would you attribute that to bringing in some of the new digital services in terms of acquisition and in terms of maybe those subscribers already having that service? I know, and this might be a tough one, but whether you expect that MultiPlay trend to continue or, you know, what exactly you would attribute this uptick we've seen really in the last couple of quarters in MultiPlay?

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

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

Tim Savageau (Senior Research Analyst): Okay, thanks very much. Appreciate it.

Operator (AI Assigned): Our next question comes from Nicholas Peyton with Edison Group. Please unmute your line, turn your video on and ask your question.

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

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

Boris Dolgushin (CFO): Yeah.

Oleksandr Komarov (CEO): With the excellent marginality demonstrated by Uklon, which is actually at the lower end, but close to We count this one? Okay. Which is close to 40%. Sorry. People understand.

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

[Company Representative] (Kyivstar Group) (Company Representative): Maybe, Nicholas, for the future, if you think about the ride-hailing business, and if you think about driverless cars or Kyivstar businesses, you know, which are not having a driver. I think the future of this business will become more, I think, asset heavy as we see. It's not the issue of today, of course. 3 years out, I think driverless car will be actually a CapEx heavy business, more CapEx heavy business.

Nicholas Paton (Equity Research Analyst): Interesting. Okay. Thanks for that.

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

Nicholas Paton (Equity Research Analyst): Okay, thank you for that.

Operator (AI Assigned): Our next question comes from Vincent Fernando with Zero One. Please unmute your line, turn your video on and ask your question.

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

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

Vincent Fernando (Founder and Executive Director): Got it. Is there any exclusivity in the agreement?

Oleksandr Komarov (CEO): No, there's no exclusivity. Okay. So far we are the only one reseller, official reseller of Starlink services in Ukraine.

Vincent Fernando (Founder and Executive Director): Got it. I know it's maybe only been about a week. Are you already seeing what kind of customer, you know, ramp you're seeing already? Maybe in the early phase for now.

Oleksandr Komarov (CEO): So-

Vincent Fernando (Founder and Executive Director): Is it already starting to be marketing or marketed or?

Oleksandr Komarov (CEO): Definitely very early stage. B2B market is relatively developed, but being a B2B organization right now, you should order, you know, the Starlink device through your employee and to compensate, okay, through the salary. You are not able like a B2B organization, okay, to order this service directly from the Starlink. We will be the first only one official representative of Starlink in Ukraine.

Vincent Fernando (Founder and Executive Director): Great. Thank you.

Operator (AI Assigned): Ana.

Oleksandr Komarov (CEO): Please go ahead.

Operator (AI Assigned): Our last question comes from Ahmed Mostafa with Inam. Please unmute your line, turn your video on, and ask your question.

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

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

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

Ahmed Mostafa (Analyst): Great. Thank you.

Operator (AI Assigned): We have no further questions at this time. I will now hand back to Cole Akeson for closing remarks.

Cole Akeson (Group Director of Investor Relations): Well, we'll keep this very brief. Thank you as always for your interest in Kyivstar. We are proud to have presented another strong quarter, and we look forward to speaking to you in the following quarter. Thank you again.