Earnings call transcript: PLDT Q2 2025 misses EPS forecast, stock dips

PLDT Inc. reported Q2 2025 EPS of $0.70, missing the $0.76 forecast by 7.81%, leading to a 1.92% stock decline despite revenue of 95.72 billion PHP aligning with projections. While the earnings miss prompted investor concern, the company highlighted robust gross profit margins of 72.23%, a 5.36% dividend yield, and its digital banking arm Maya achieving profitability for the first time, contributing 4.6 billion PHP to core income. PLDT continues to drive growth through fiber expansion and 5G rollout, managing costs, and targeting debt reduction, though it faces ongoing regulatory and competitive headwinds.

Analysis

PLDT Inc. reported a mixed second quarter for 2025, with an earnings per share (EPS) of $0.70 that missed the $0.76 consensus forecast by 7.81%, triggering a 1.92% decline in its stock price. Despite this bottom-line miss, the company demonstrated operational stability with service revenues of 95.72 billion PHP remaining largely flat year-over-year and EBITDA growing 3% to 55.5 billion PHP, supported by disciplined cost management. Growth drivers were evident in the Home segment, where fiber revenues increased by 7%, and in the strategic push into 5G, where ARPU for 5G users (PHP 300) is nearly triple that of LTE users (PHP 101). A significant bright spot is the digital banking arm, Maya, which achieved its first profitable semester and contributed 4.6 billion PHP to PLDT's core income, marking a substantial turnaround and providing a powerful, high-growth diversification from the core telecom business. However, the company faces considerable headwinds, most notably the regulatory uncertainty surrounding the 'Connecta Pinoy Bill,' which management has identified as a potential disincentive for future infrastructure investment and is prepared to challenge legally. While the company maintains an attractive valuation with a P/E ratio of 8.82x and a strong dividend yield of 5.36%, investor sentiment remains cautious due to the earnings miss and the looming regulatory risks.

Key Decisions for Investors

• Investors should weigh the attractive valuation, reflected by a P/E ratio of 8.82x and a 5.36% dividend yield, against the near-term headwinds from the EPS miss and stock underperformance.
• The performance of the digital banking arm, Maya, is a critical catalyst to monitor, as its recent profitability and strong growth trajectory could unlock significant value and drive a re-rating of the stock.
• The primary risk to monitor is the regulatory outcome of the 'Connecta Pinoy Bill', as its passage into law could materially impact PLDT's long-term capital expenditure strategy and competitive positioning.
• Consider the potential for a second-half recovery in enterprise revenues and stabilization in the mobile segment, as management has guided for delayed contracts to be booked and new product innovations to take effect.