Turkcell Iletisim Hizmetleri A.S. Sponsored ADR Stock

Ladies and gentlemen, thank you for standing by. I am Geli, your Chorus Call operator. Welcome, and thank you for joining the Turkcell's conference call and live webcast to present and discuss the Turkcell Second Quarter 2026 Financial Results. [Operator Instructions] The conference is being recorded. [Operator Instructions]

At this time, I would like to turn the conference over to Ms. Ozlem Yardim, Investor Relations and Corporate Finance Director. Ms. Yardim, you may now proceed.

Thank you, Geli. Good evening, everyone, and welcome to Turkcell's 2026 second quarter earnings call.

Before we begin, I would like to kindly remind you to review our safe harbor statement, which is available at the end of our presentation. Our earnings release and today's presentation are available on our Investor Relations website.

Our CEO, Mr. Ali Taha Koc, will begin with an overview of our business performance followed by our CFO, Mr. Kamil Kalyon, who will take you through our financial results. After the presentation, we will open the line for your questions.

It's now my pleasure to hand over to our CEO, Mr. Ali Taha Koc.

Thank you very much, Yardim. Good evening, everyone. Welcome to Turkcell's second quarter 2026 results call. Today, I will take you through our operational and strategic performance for the quarter. After my remarks, Kamil will cover the financial results in more detail, and then we will be happy to take your questions.

The key message this quarter is clear. We continue to deliver real growth in a challenging environment. Macro conditions remain demanding with inflation still above 30%. We keep on delivering real revenue growth for the eighth consecutive quarter, supported by disciplined pricing, continued postpaid additions and improved churn.

And our strategic growth areas, Digital Business Services, Fixed Wireless Access, FWA, data centers, TV and Techfin took another step forward. Throughout all these slides, you will see one consistent story, disciplined, value-focused execution.

Let's begin with the numbers. Group revenue reached TRY 71.8 billion, up 2.5% year-on-year. I want to underline this. With inflation at 32%, this is genuine real growth, driven by consistent pricing actions and healthy commercial momentum across our businesses. EBITDA was TRY 30 billion with a margin of 41.8% and net income was TRY 5.2 billion. Our profitability continues to reflect the strength of our disciplined operations and balanced capital allocation approach.

On the operational side, momentum was strong across the board. We added 284,000 postpaid subscribers in a single quarter. Turkcell Fiber business added 31,000 net subscribers. Mobile ARPU was realized at TRY 448, while residential fiber ARPU reached TRY 570. Techfin revenue was up 7% to TRY 4.1 billion. Digital Business Services revenue grew 33% to TRY 8.7 billion. Data center and cloud revenue increased 10% to TRY 1.6 billion and Superbox, our Fixed W Access technology added 64,000 subscribers. These businesses are becoming core engines of Turkcell's growth and reinforce our strategy of building a more diversified and resilient business model.

Now let me go deeper into each business, starting with mobile business. Our mobile business delivered an outstanding quarter. We crossed the 40 million mobile subscriber milestone for the first time in Turkcell's history. This is a testament to the strength of our network, our brand and our commercial execution. Our postpaid base reached 32.5 million subscribers, driven by 284,000 net additions in the quarter and 2.4 million over the last 12 months.

Prepaid performance remained broadly stable this quarter, as we successfully continue the transition of our mix towards postpaid, which now accounts for 81% of our mobile base. This mix shift is significant as postpaid customers deliver higher lifetime value through lower churn and multiservice adoption. Churn tells the same compelling story. Monthly average churn improved to 1.6%, down significantly from a year ago. Strong net additions combined with declining churn proved one thing. Customers are choosing Turkcell with long-term loyalty.

On pricing, mobile ARPU, excluding M2M, grew 27% year-on-year. Given the predominantly contractual nature of our postpaid base, pricing actions are gradually reflected in ARPU as contracts renew. Our strategy remains consistent. We take disciplined pricing actions to sustain real revenue growth, supported by our strong brand and superior service quality. One of the most dynamic drivers of our connectivity business today is Fixed Wireless Access.

Let me now turn to our FWA performance. Superbox is our Fixed Wireless Access, FWA offering, which we view as the next wave of growth in home Internet. We are the undisputed market leader with a 74% share of the FWA, Fixed Wireless Access market. After a soft start to 2025, growth has accelerated for 4 consecutive quarters. We added 64,000 subscribers this quarter alone, expanding our total Superbox base to 818,000. The strong momentum we are building here is particularly encouraging.

Looking ahead, 5G will act as a catalyst. Superbox, our FWA offering delivers fast, reliable plug-and-play home Internet today, and 5G will elevate that experience to an entirely new level, further accelerating market demand. Superbox enables us to capture broadband demand quickly and efficiently, while working hand-in-hand with our fiber strategy. And fiber remains the backbone of that strategy.

Let's move to fixed broadband. Our fixed broadband strategy is straightforward, grow on our own fiber, price with discipline and deliver a premium service and experience. Turkcell Fiber reached 2.6 million subscribers with 31,000 net additions in the quarter and 138,000 over the last 12 months. We continue to increase the share of customers served through our own fiber infrastructure, reaching 80%, up 3 percentage points year-on-year. The increase reflects our sharp focus on expanding the highest value part of our fiber business.

The strength of our fiber business goes beyond scale, reflecting the quality of our subscriber base. 88% of our residential fiber subscribers are on 12-month contracts, while monthly churn improved to 1.1%. Together, these metrics provide exceptional revenue visibility and reinforce the resilience of our fiber business.

On pricing, residential fiber ARPU grew 37% year-on-year, outpacing the inflation rate. Combined with continued improvements in churn, these results demonstrate the strength of our fiber proposition and the value customers place on our service. At the same time, we continue to expand in Türkiye with strong discipline. We passed 194,000 new homes in this quarter, bringing total home passes to 6.7 million across 31 different cities with a take-up rate of 41%. Take-up rate is one of the metrics we track closely, as it demonstrates that we are expanding where demand is strongest.

Connectivity also opens the door to our digital customer services, starting with TV+. TV+ now serves 2.7 million subscribers. Subscriber momentum continues to gather pace throughout the year. Net additions increased from 62,000 in the fourth quarter of last year to 106,000 in the first quarter of this year and accelerated further to 123,000 this quarter.

Content is a key driver of the TV business. Our strategic partnership with HBO Max launched in November has significantly enriched our content offering and resonated well with customers. As a result, viewing time increased by 14% quarter-on-quarter and 64% year-on-year. TV+ is about more than just the numbers of subscribers. It strengthens engagement across our ecosystem. Users that actively use TV+ interact with Turkcell more frequently, adopt more of our services and build deeper, longer-lasting relationships with us.

Now let's move to our fastest-growing part of the group, Digital Business Services. Digital Business Services delivered an outstanding quarter with revenue up 33% year-on-year to TRY 8.7 billion. This strong performance reflects the depth, scalability and market strength of the digital infrastructure platform we have built over the years. Today, our data center footprint spans 4 different locations: Kocaeli, Ankara, Tekirdag and Izmir.

Following the activation of a new module during the quarter, our active IT capacity reached 54 megawatts. We are now taking this platform to the next level. Construction of hyperscale data center facilities dedicated to Google Cloud's Türkiye region in Ankara is underway. A partnership of this caliber is a strong endorsement of the quality of our infrastructure and further strengthens Turkcell's position at the center of Türkiye's digital transformation.

Including our hyperscale data center investments, our total investment amount reached EUR 612 million. As of Q2, data center and cloud represent 2.3% of our group revenues. While still a developing revenue stream today, we see this business as one of Turkcell's most promising long-term growth platforms.

Growth in system integration was supported by both hardware and services. More importantly, we entered the second half of the year with more than 1,500 new contracts and a system integration backlog of TRY 16 billion. This contracted backlog provides exceptional revenue visibility and reinforces our confidence in the sustainability of future growth.

Finally, let me turn to our Techfin businesses, another critical pillar of the Turkcell ecosystem. Our Techfin businesses contributed 6% of the group revenue this quarter and continue to strengthen the diversity of our earnings base. Paycell delivered another strong quarter, with revenue increasing 22% year-on-year to TRY 2.4 billion. Pay Later transaction volume surged 84%, while POS transaction volume grew 67%. Consequently, total payment volume across the Paycell ecosystem reached TRY 39 billion during this quarter.

Paycell now serves 6.8 million active users across a broad range of everyday payment services, while the ongoing expansion of our POS solution is further strengthening our merchant ecosystem. Together, these customer and merchant capabilities continue to reinforce the scale and the resilience of our payment platform.

At Financell, our focus remains firm on profitability and portfolio quality. These efforts resulted in a significant improvement in net interest margin, while increased from 4.5% to 7.8%, while the cost of risk remained well under control at 3.4%. Revenue was 12% lower year-on-year, reflecting our disciplined approach to portfolio management. Financell continues to lead the consumer finance market with a 43% market share by number of loans. Our 16.1 million pre-approved credit customers provide significant potential for future growth.

As we close the quarter, one key message stands out. Our core connectivity business continues to perform with resilience, while the businesses we have been investing in and are becoming increasingly important drivers of our growth and profitability. We remain committed to executing our strategy with discipline, investing in high-return, long-term growth while continuously enhancing operating margins.

Before I conclude, let me briefly touch on our outlook. Since the beginning of the year, the macroeconomic environment has evolved, and we now anticipate year-end inflation to settle around 28% compared with our previous assumptions of 23%. Even with this revised inflation assumption, our financial guidance remains unchanged.

Finally, I want to express my sincere gratitude to the entire Turkcell team. Their dedication and commitment are behind every achievement we have shared today.

With that, I will hand it over to Kamil for a more detailed review of our financial results.

Thank you, Ali Taha bey. Let me now take you through our financial results. During the second quarter, inflation proved more persistent than anticipated with regional geopolitical tensions adding further pressure to the macro outlook.

Despite these headwinds, delivering positive real growth clearly underscores the inherent stability of our business model. This performance is a direct result of our strong brand equity, disciplined pricing strategy and solid commercial momentum across every segment. Simply put, these results give us full confidence in the quality and long-term sustainability of our growth trajectory.

Turning to our financial performance in this environment. We generated TRY 71.8 billion in revenues, marking an impressive 2.5% year-on-year growth. Turkcell Türkiye continued to drive group expansion, delivering TRY 1 billion in incremental revenue with accelerated momentum across the corporate segment played a pivotal role in supporting this performance.

On the profitability side, I want to highlight our deliberate strategy around 5G. As the clear leader at every stage of the 5G transition, we intentionally stepped up our marketing investments this quarter to further solidify customer adoption and translate our 5G leadership into long-term commercial value. Even when measured against an exceptionally strong comparable base, we delivered a healthy EBITDA margin of 41.8%, which sits fully in line with our full year expectations.

Next slide, please. Moving on to net income. I would like to briefly outline the key dynamics shaping our financial performance this quarter. Following the commercial launch of 5G, depreciation of the associated assets commenced this quarter. Roughly half of the year-on-year increase in depreciation is attributable to the 5G license. As expected, the resulting increase in depreciation impacted the bottom line, while marking an important transition as our 5G investments moved into active deployment and monetization.

This impact was partially offset by higher monetary gains associated with the capitalization of the 5G license compared with the same period last year. Despite the year-on-year increase in our net debt position, our active treasury management continued to deliver tangible benefits. Excluding FX effects, we generated higher financial income while reducing financial expenses with both contributing positively to our bottom line year-on-year.

Moving to our Equity Accounted Investments. TOGG in which we are proud to be a founding shareholder, continued to scale its operations during the quarter. As the business matures, the heavy start-up losses of its early years have now largely normalized, delivering a more favorable contribution to the group year-on-year.

On the tax side, our tax expense was significantly lower year-on-year, supported by the fixed asset revaluation effect and tax incentives tied to our growing data center business, leading to a meaningful improvement in our effective tax rate. Bringing all these factors together, we delivered a strong bottom line performance, translating into a net income of TRY 5.2 billion.

Next, I'd like to walk you through the main drivers behind our net FX loss. Before discussing this quarter's FX impact, let me first emphasize that we continue to manage both FX and interest rate risk proactively with a disciplined approach that balances risk, hedging costs and financial returns. On the borrowing side, the [ USD 1 billion ] Murabaha facility we secured last quarter increased the FX component of our debt portfolio. This exposure is largely balanced by our sizable FX-denominated cash and financial assets, which provide a natural offset against of our FX liabilities.

At the same time, we actively manage these assets under our treasury strategy to optimize returns while maintaining a disciplined approach to FX risk. Another factor contributing to the FX impact this quarter was our remaining 5G license installments. With 2 payments still outstanding, these obligations remain subject to FX revaluation.

Furthermore, the accelerated pace of TRY depreciation compared to previous periods has naturally added to our reported FX expenses. We constantly evaluate alternative hedging strategies. However, under current market dynamics, the cost of fully hedging our FX exposure remains elevated. We believe our current approach strikes an effective balance between managing FX risk and maintaining cost efficiency.

Finally, it is essential to evaluate our finance expenses holistically rather than focusing solely on reported FX loss. As part of our proactive liquidity management, we utilize FX swaps to convert hard currency liquidity into Turkish lira and deploy the resulting funds into high-yielding money market instruments and deposits.

While the cost of these transactions is recognized as FX losses for accounting purposes, the resulting Turkish lira liquidity generates meaningful interest income, which is recorded separately and therefore, is not captured in the FX loss line. Therefore, the reported FX loss should not be viewed in isolation as it captures only one component of the broader economic outcome of our treasury strategy.

Next slide, please. Turning to our investments. Our operational CapEx to sales ratio stood at 25% in the second quarter, bringing our first half ratio to 23.2%. We allocated the 81% of our operational CapEx directly to our core business, primarily supporting 5G network rollout and the continuous expansion of our fiber infrastructure. During the quarter, we added 194,000 new fiber home passes, expanding our total footprint to 6.7 million. Meanwhile, the fiberization rate of our base stations reached 47.5%, further strengthening the quality and the resilience of our integrated network.

Beyond our core telecom infrastructure, we continue to expand our renewable energy portfolio. In April, we acquired a 12.1 megawatt solar power plant in Mersin, bringing our active solar generation capacity to 74.4 megawatts. We expect this capacity to increase further over the coming quarters as projects currently under the development become operational.

We also made further progress in our data center investments. We activated the final module of our Ankara data centers and broke ground on the data center infrastructure supporting the Google Cloud region in Türkiye. With these investment milestones covered, let me now turn to our balance sheet position.

Turning to our balance sheet. Our financial position remains strong with cash and cash equivalents reaching TRY 89 billion at quarter end. Our cash position remained resilient compared to year-end 2025, despite significant planned cash outflows, including the first 5G license installment, the annual wireless usage fee and bonus payments.

The Murabaha financing completed during the period further strengthened our liquidity position and provided additional financial flexibility. We remain focused on proactive liquidity management, balancing efficient funding with the preservation of a strong balance sheet. As anticipated, these planned cash outflows resulted in net debt of TRY 44 billion. Importantly, our leverage ratio remained very low at just 0.4x, well within our comfort zone and among the strongest levels in our peer group. Looking ahead, our robust liquidity fully covers all remaining 5G license obligations and debt maturities over the next 4 years.

Next, let's take a closer look at our FX exposures. Finally, let me touch upon our foreign currency risk management. As part of our proactive treasury strategy, we selectively used FX swaps to optimize returns on our cash balances, converting a portion of our hard currency liquidity into Turkish lira to benefit from attractive TRY yields. At the same time, we maintained a substantial portion of our cash in hard currencies, providing a natural hedge against our FX liabilities.

At quarter end, 60% of our cash was held in hard currencies, while 87% of our financial debt was denominated in hard currencies. At the end of second quarter, we had USD 4.3 billion equivalent of FX denominated financial liabilities, balanced by USD 2.6 billion equivalent of FX denominated financial assets and effective hedging portfolio of USD 1.2 billion.

The year-on-year increase in FX liabilities primarily reflects our 5G license obligations and related investments, the expansion of our data center capacity and the BOTAS tender, all directly linked to the execution of our long-term investment strategy. As a result, our net short FX position remained comfortably within our medium-term target range of plus or minus USD 1.5 billion.

With that, I will hand the call back to the operator, and we would be happy to take your questions. Thank you very much.

[Operator Instructions] The first question is from the line of Cesar Tiron with Bank of America.

Congratulations on the results. I have 3 questions. Sorry about that. The first one is very easy. Just wanted to understand what would be the drivers that would help you reaccelerate growth in the second part of the year so that it's more in line with the guidance you provided. I'm talking about revenue growth.

The second question, I would like to understand a little bit better why the margins at Paycell and Financell are so volatile. So for example, if I look at the Paycell margins, there was a 5.5% decrease this quarter versus last year. To the opposite, the Financell margins increased by almost 20 percentage points. So I'd like to understand that a little bit better.

And then the third question is on the CapEx. We've seen, I think, your key competitor increasing slightly CapEx guidance in light with the FX volatility and that high inflation. Are you still comfortable with your current CapEx guidance?

Thank you very much. I will start from the third question. Yes, we are still confident about to reach our guidance in the CapEx side, even if there would be, how can I say, FX increases. As you know, coming from history, we are very disciplined about the CapEx spending side. Therefore, we will be carefully -- we carefully spending our money, and we think that we do not expect more deviation in the CapEx guidance side.

In the second question, Paycell side, I think last 2 years period in Paycell, we are focusing on the POS solutions in physical POS solutions and the other side. Therefore, the profitability of these transactions a little bit eroding the Paycell's EBITDA margin, while we have a very important amount of growth in the Paycell side. But sometimes these POS transactions can be a little bit erode the EBITDA. But in totally, we are very happy to see the performance of the Paycell side.

Regarding the Financell side, due to the economical conditions in Türkiye, there are, how can I say, tightening policy. Therefore, the demand for the terminal or the equipment side is a little bit how can I say, poor this year. Therefore, this directly affects the Financell credit lines and the activities. But since the cost of financing is reducing in this way, therefore, you can see higher EBITDA margins in the Financell side. Therefore, the volatility is coming from this one. But we are still very happy to the contribution of the Techfin side into our overall picture.

So for the first part, so we are expecting the growth in the second half? Because currently in the telecom market, the competition is naturalizing and it's becoming more realistic competition is in the market right now compared to mobile number portability if you compare to last year. This year is a little bit better. And we have a dynamic pricing actions we put in the first half of the year. So the impact of that price changes is going to be support our second half growth. And I'm pretty sure that the DBS and fintech continues to support our growth in the second half of the year.

The next question is from the line of Maddy Singh with HSBC.

My question is a follow-up on the growth outlook. So just wondering when do you see the impact of recent price hikes to become fully visible in the growth and it goes towards your guidance of high single-digit level. So if you could give some color around that, that will be very helpful.

And then the second question is on your FWA offering. Very interesting to see the growth in that segment. So if you could help understand of your current customer base of around 800,000, if I remember correctly, are they all on 4G devices or those devices they have are capable of using 5G as well. So do they need to upgrade their device basically to benefit from the 5G transition. So that will be helpful to understand.

And in terms of the pricing of FWA, what kind of discount or parity it has versus the fiber product? If you could talk about the offering itself, what speed customers are getting now and what speed they're likely to get at 5G. If you could give some dynamics around the products, that will be very helpful.

Thank you very much for your question. First of all, the first part, the growth impact because of the lag effect of our price change and also a 12-month contract. So beginning from the end of the Q4, you're going to see the impact and the growth much clearer.

For the FWA part, FWA is currently, as you may know, we got the highest frequency band and we had the biggest investment in the 5G. So we have a higher capacity. And our 5G offerings are supporting Wi-Fi 7 as well. So what we are doing right now is we are just offering this product to all of the customers in Türkiye who has old-fashioned technologies using like DSL. And then on top of it, it is a very portable and plug and play easy to use device. So there's a huge appetite from the market, they want to buy it.

And at the beginning, we just -- for our own 4G users, 4G Superbox users, we started to swap them with our 5G devices because currently, 4G -- current 4G Superbox only support 4G technology, but we deploy 5G all around Türkiye. So that's in order to utilize that kind of capacity, they need to have a 5G equipment.

And if you compare the pricing of our Superbox compared to the fiber, Superbox pricing is a little bit above fiber prices, but there is a huge impact of the usability. So it's very easy. You can go and grab that device and you can plug and play and then you can use it very easily.

Did I hear that correctly? The Superbox is more expensive than fiber?

Comparable prices, again, just a little bit. So just they're close because you put some limits on the Superbox tariffs. So which is 250 gigabytes or 500 or 1 terabyte. So depending on the limits that you have, the price can change, but it's comparable prices.

Understood. And in terms of any response from competition on that side, have you seen anything?

So 74% market share, I think, answered your questions.

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

Congratulation on good results. My first question is about the strategic perspective, EBITDA. I remember that when you were appointed as the CEO in your mind, you were maybe expecting or you foresee to have 2% on the [indiscernible] side in the future. You have -- your ambitious targets at that time and we are progressing the company any year. But I would like to ask a strategic perspective question.

You have more value [indiscernible] now, but you are getting more than the mobile operators. When do we think we will see the other areas like in digital platforms, data center to have more significant contribution in your revenues. Could we expect any 3-year plan that at least give us the direction maybe in the following quarters. Maybe it's nothing real now, but at least that kind of thing will get us -- in a position to get that digital platform, more that [indiscernible] operators at least [indiscernible] to point that because currently, the Turkcell is a bit under realm in our view, we have difficulty to understand the diversification.

But we understand that the market is focusing on the weak ARPU, at least at this moment. So I think any clarification on that or any long-term perspective as you did in the past in data center, it could be very helpful. Sorry for the long question.

And the second one is about the short-term perspective. In your earnings release, you mentioned that ARPU improvement could come in the fourth quarter. And should we assume that in the fourth quarter, are we going to see some improvements? Or you mean it's going to be in 2027?

Thank you very much for the question. So when I started this role, I have a dream. So I have still that dream, but I'm going to executing it firmly and with a disciplined approach.

So what we happened in 2016, Turkcell started its journey in the DC provider. It built its first DC in 2016. And then it started the DC business as a colocation provider. So colocation business is very good, profitable, good business. But in order to come up with like a dream of becoming another Turkcell, you need to add the service business on top of it.

So that's the reason that we have a huge agreement with Google Cloud, like $3 billion of investment to reach that dream because with the colocation business, it is limited because what happens and it affects very deeply about all these political issues. If no one can buy servers, they don't need colocation services as well. So currently, you can see that the price of the servers are going high and then because of the processor and the RAM crisis, the price of each server is getting higher and higher. So on top of it, everyone is looking for the services, cloud services. So that's the reason that we have a huge agreement with the Google Cloud.

Currently, this year, our revenue of the DC and Cloud revenue reached 2.3% of overall revenues. It was 1% or something a couple of quarters back. It went up to 2.3%, but we are constantly improving that percentage and revenue. And with -- we started the construction of our Google Cloud data centers. And in 18 months, hopefully, we're going to start on 2 years, we're going to start selling services. And the service business is going to bring more revenue. And I'm pretty sure that in 5 to 6 years, we are going to see more revenues coming out of that. And we are expecting at 2030, '31, 10% to 15% of the revenue is going to come from our data center business.

But that is a long-term story. And then also with the AI, I'm pretty sure that the value -- this investment value is going to be more recognized because in order to have AI capability, you definitely need a data center. And guess what? Currently, we have 54 megawatts of capacity for AI usage. And if anybody can bring their servers or the AI chips, we have the location for them. So that's the reason that I have -- I'm very optimistic about the revenue, and it's going to come.

Any other question?

Cemal, can you repeat the second question please.

Second question. I'm sorry, I forgot that the second question, Cemal.

On ARPU side, in your earnings release, you expect a recovery in ARPU in fourth quarter and onwards. Do you mean after fourth quarter is '27 or we are going to see it in the fourth quarter?

So what -- we just put a dip in the ARPU levels, and then I'm pretty sure that it's going to slowly increase, but we are going to see the real impact in 2027.

Yes. But you will get the signals, the positive signals because we are investing a lot of things to make our ARPU high starting from this year. Therefore, you will be seeing the signals in the third quarter of 2026, most probably in fourth quarter, but the exact results will be taken in 2027.

And one follow-up related to your backlog from system integration projects. We see that TRY 16 billion versus TRY 10 billion [indiscernible] in the previous quarter. Should we expect gradual increase in the following quarters? Or should we expect more significant improvement maybe late 2027 or 2028 on that front?

Yes. When you look at our Q1 results and Q2 results, we had very, very important significant projects coming from the governmental bodies and the other side. Therefore, we see the valuable effects of these projects this year. Most probably, they will because when you start a big project in a company or in the governmental side, there are a lot of following projects are coming from the projects.

Therefore, our expectation in 2027, these projects will be continuing in the 2027 because as we explained previously, the most important or strong muscles of our company, we are not only focusing on the individual side only. We are also very, very strong in the enterprise side in the market. Therefore, that's why Google or the other big companies are choosing us as a partnership.

Yes, we have a very good technical expertise, but our sales force regarding this enterprise side is very strong. Therefore, we invested this service line 6 years ago or 7 years ago, but we are now harvesting this investment in these years. And most probably, it will continue in the coming years.

The next question is from the line of Jamie [indiscernible] with Barclays.

I have just one quick question, and apologies if you covered it in the past. But I wanted to understand better or maybe you could break down for me the expected payments for the 5G tender. I know there was a payment in Q1, including the VAT, but correct me if I'm wrong. So what was the specifically 5G payment in Q1? And what are the expected payments in the next quarter? And what is the timing for that?

It is just 3 installments. The first installment also included the VAT. It happened in January of this year. The second installment is going to be in December this year and it's around $400 million. And the third and the last installment is going to be next year 2027 May and it's again, like around $400 million.

Yes. And the first installment amount is USD 625 million.

Because it includes the VAT as well. So we paid the VAT upfront.

[Operator Instructions] The next question is from the line of Yasin Sarihan with Yapi Kredi.

I have 2 questions. So do you expect any changes to the credit limits as far as that there is a limit to installment of newly devices. And this is so important for the 5G penetration and also for the Financell.

And my second question is that have you started to see the contribution from the 5G on ARPU growth?

And my last question is related to data center. So how much EBITDA data center generate in the second part of this year? And if you have any -- could you share us details about the data center or any other -- I mean, the segment for Digital Business Services?

Thank you very much for the question. The first part is very important for us, especially with the 5G penetration. It's around 35% right now of all of our users, 30% to 35% of them has the 5G phones. But in order to support that, we are supporting the local production also late last year, we had the agreement with Samsung to produce in Türkiye, which is going to be included that production is going to be A series phone, and it's going to be below TRY 20,000.

But with the latest development, especially on the RAM crisis and then also supply chain issues, we are seeing that the production of the phones are getting more expensive. So that's the reason that we are doing lots of lobbying in order to increase that limit. But in our planning, we always keep that amount, TRY 20,000 fixed. But if it's changed, I'm pretty sure that it's going to positively affect our outlook, especially for the Financell. But I'm pretty sure that last 18 months ago, they changed that limit.

I'm pretty sure that soon because we are not going to be able to find any phone, which is smaller than $20,000 (sic) [ TRY 20,000 ], so we cannot do any installments. But on top of it, we can do 3 installments besides 12 installments, we can do 3 installments. But overall, I'm pretty sure that for the penetration, that limit needs to be changed.

The second thing that the 5G, we can see that the usage amount of the usage and then the data usage has increased. And on top of it, the 5G is going to improve our ARPU slowly. And I'm pretty sure that the users who are using 5G, they have higher ARPUs. And then when we move them all to our customers from 4G to 5G with the 5G capable phones, I'm pretty sure that our ARPU is going to have a positive impact on that. And...

Regarding the EBITDA margins of the DC operation, we are not expecting any erosion in our EBITDA margins. When we look at our business plans, we see that the EBITDA margins that will come from this DC operation will not erode our EBITDA margins.

Well, without -- with the 5G ARPU levels, we are bringing a new concept called FWA Fixed Wireless Access. So we are double using our 5G spectrum for the cell phones as well as the home Internet. So we are going to see a growth and revenue growth from the FWA part as well.

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

Thank you very much, and see you in the third quarter call.

Thank you very much for sparing time.

Thank you for joining us. Bye.

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

Ladies and gentlemen, thank you for standing by. I'm [ Paulina ], your Chorus Call operator. Welcome, and thank you for joining the Turkcell's conference call and live webcast to present and discuss the Turkcell first quarter 2026 financial results. The conference is being recorded. At this time, I would like to turn the conference over to Mrs. Ozlem Yardim, Investor Relations and Corporate Finance Director. Mrs. Yardim, you may now proceed.

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

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

We successfully tested remote driving of a TOGG 10F over 150 kilometers distance. At the same time, we conducted live speed test across Türkiye. Türkiye has 81 different cities and live from all the cities, we have 5G and with 5G speeds exceeding 2,000 megabit per second means more than 2 gigabits. No one has that kind of capability. No one has that kind of speed other than Turkcell. We secured the best frequencies, delivered superior network quality and executed the strongest launch campaign. Our market is now more solid and resilient than ever.

Next page, please. We started the year with flawless execution across all our domains. We have been the leader in the mobile. We are the leader today, and we will continue to lead the future. By securing 40% of the 5G spectrum in the tender, we further reinforced our long-term capacity dominance. On the fixed side, we are driving value-led growth by promoting multi-gigabit per second fiber offerings. Currently, 20% of our customers are on 1 gigabit per second, means 1,000 megabit per second and above plan. Digital Business Service delivered robust growth through corporate digitization, supported by sustained momentum in data center and cloud services.

We further strengthened our balance sheet by securing $1 billion in Murabaha financing. This preserves our investment capacity while supporting a healthy leverage profile. Finally, we continue to expand our strategic partnership. We introduced up to 50% discounts on Samsung smartphones to support 5G penetration. We also secured a managed service collaboration with ASFAT in the defense industry and a strategic cooperation with HBO Max to strengthen our TV platform strategy.

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

We continue to prioritize subscriber quality and rich content packages to strengthen our leadership. Our data center and cloud business maintained its strong trajectory with revenues increased by 20.8% as we continue to scale our digital infrastructure. Overall, these results once again proved our ability to monetize the broader digital ecosystem.

Next page, please. Now let's look at the operational drivers behind our performance this quarter. Market competition remained relatively stable. We have 661,000 postpaid net additions in this quarter, our strongest total mobile net additions in the past 14 quarters. This performance reflects the success of our targeted offers and our focus on high-value subscriber growth. The share of postpaid subscribers rose by 4.6 points year-on-year to 81%. Mobile ARPU remained broadly flat year-on-year. This reflects the lagged impact of last year's competitive pricing, our contract-based structure as well as the rapid increase in inflation in the first quarter.

As we transition to 5G, we are taking a balanced approach. We are carefully managing pricing to protect our subscriber base while sustaining our clear leadership in the revenue market share. Our strategy is also reflected in lower churn rates, supported by an effective churn policy.

Next page, please. Moving on to our fixed broadband operations. We achieved a strong quarter in fixed broadband, supported by solid subscriber growth. We recorded 36,000 net fiber subscriber additions, including 21,000 from Turkcell fiber domain. Residential fiber ARPU increased by 9.7% year-on-year, supported by active upselling, pricing actions and the growing contributions of our IPTV offering. We expanded our Turkcell fiber home passed by 138,000 in the first quarter, reaching a total of 6.5 million home passes in 30 different cities. Our take-up rate reached 41.8%, reflecting effective monetization of our infrastructure investments and the strength of our fiber growth strategy.

Next page, please. Digital Business Services had a strong start to 2026, with revenues increased by 64% year-on-year. This performance was driven by higher hardware revenues from large-scale end-to-end corporate projects. We also delivered robust 21% growth in our data center and cloud business. Our system integration backlog remains strong, exceeding TRY 10 billion. Our cumulative data center investments have reached close to EUR 600 million. We are on track to finalize our fifth module in Ankara. Our Google Cloud hyperscale partnership is on track as we planned.

Next page, please. Paycell, the growth engine of this segment. In this quarter, Paycell revenues increased by 15%, fueled by strong momentum in our Post and Pay Later businesses. Active users of Pay Later increased by 16%, exceeding 3 million. On the financial side, revenues declined primarily due to ongoing installment limitations. Looking ahead, we see 5G penetration as a natural growth catalyst. A more supportive regulatory environment for installment limits would unlock the full expansion potential of this business. Despite revenue pressure, Financell's net interest margin expanded significantly by 3.6 percentage points to 8.3%, supported by lower funding costs. Balance sheet risk management remained disciplined with cost of risk is at 3.3%. I will now hand over to our CFO, Kamil Kalyon, to walk you through our financial highlights. Thank you.

Thank you very much, Ali Taha. Let me walk you through our financial results. We are very pleased with our solid first quarter performance with a 9% increase, our top line exceeded TRY 68 billion. This growth was primarily driven by Turkcell Türkiye, which rose 8.6% year-on-year. Our non-telco revenues were instrumental in this performance, particularly Digital Business Services. Accounting for 12% of our revenue this quarter, Digital Business Services delivered strong momentum through managed services. Our expanded postpaid base and fixed broadband services also provided a robust foundation for expansion.

Additionally, our other segments contributed TRY 0.5 billion to the top line, fueled by the robust performance of call centers and Belarus subsidiaries. The EBITDA margin was 41.4%. The increasing share of hardware sales from large-scale integration projects made a significant contribution to top line growth, but weighed on the overall margin mix. This impact was partially mitigated by disciplined cost management, favorable energy prices and reduced funding costs at Financell.

Next slide, please. Net income rose 15% to TRY 4.6 billion, primarily supported by strong operational performance and robust EBITDA generation. Another key driver was the monetary gain, which benefited from the capitalization of the 5G license and contributed TRY 4.2 billion year-on-year. This year, we are scheduled to make several major payments. We have proactively positioned ourselves to manage them effectively. The payment of the first installment of the 5G license in January amounting to USD 653 million, together with the recognition of future installments and higher swap transactions led to an increase in FX expenses.

In addition, the redemption of USD 500 million Eurobond last October and the license payment in the first quarter resulted in a slight increase in net interest expense. TOGG delivered a significantly stronger contribution compared to last year. This improvement was supported by effective cost management and pricing policies, while relatively stable Euro TRY parity also helped constrained FX funding costs and the cost of goods sold. Finally, the effective tax rate increased this quarter. This was driven by higher corporate tax expense and deferred tax impact stemming from the absence of inflation accounting in statutory financials.

Next slide, please. Now let's move on to CapEx management. In the first quarter of 2026, our CapEx to sales ratio stood at 21.5%. [ 85% ] of our operational CapEx was allocated to connectivity businesses, naturally reflecting our intensive preparations for the 5G rollout. On the fixed side, we continued our fiber expansion, adding 138,000 new home passes this quarter. Our base station fiberization has now reached 47%, significantly enhancing our overall network quality at 5G readiness. Data center investments accounted for approximately 5% of our CapEx with construction currently underway for the fifth module in Ankara data center. Seasonally, we experienced lower CapEx intensity in the first quarter. However, we expect higher figures in the upcoming quarters, driven by our ongoing investments in renewable energy and data center expansions for Google Cloud.

Next slide, please. Moving to our well-positioned balance sheet. The first quarter ended with a cash position of TRY 96 billion. In January, we completed the first installment payment for the 5G license and paid TRY 3.2 billion wireless usage fee. However, our cash position was significantly bolstered by the successful Murabaha syndication. Considering both cash and financial assets as part of our overall liquidity, we maintained a stable position quarter-on-quarter. Our current liquidity remains robust, providing full coverage for both the upcoming 5G payments and all debt maturities over the next 4 years.

Driven by the new line utilization and the impact of significant regulatory payments on our cash reserves, our net debt increased to TRY 49 billion. Consequently, and as expected, our net leverage ratio rose to 0.42x. We expect leverage to remain below the 1x threshold despite this being a high investment year.

Next slide, please. Lastly, foreign currency risk management. We proactively balance hedging costs supported by our strong natural hedge position. Currently, 77% of our cash is held in hard currencies, while 88% of our total FX-denominated debt is in hard currencies. To avoid excessive hedging costs during periods of relatively stable FX levels, we have strategically opted to maintain a higher short FX position, supported by USD 2.8 billion in FX assets and a USD 1.3 billion derivatives portfolio against USD 4.4 billion in FX debt, our net short FX position has now risen to USD 1.2 billion. This position reflects cash outflows related to 5G license, FX-denominated CapEx and our optimized use of hedging instruments.

Moving forward, we target an FX position of approximately USD 1.5 billion to support our ongoing investments and 5G obligations while maintaining the flexibility to adjust our strategy in line with market conditions. That concludes our presentation. We would now be happy to take your questions.

[Operator Instructions] The first question is from the line of Maddy Singh with HSBC.

My first question is on the consumer segment. I think your release rates consumer revenue growth was about 3%. So if you could talk about that, what is the context there? Because your overall revenue growth is high single digit in line with your guidance, but consumer growth is much slower. So if you could talk about the drivers? And then secondly, if you could talk about the pricing action within the mobile segment, how many -- have you revised the prices year-to-date? And how much was the price hikes, what periods or your future plans around the price hike as well? So that's the second question. And then finally, have you seen any impact on your operating costs from the higher fuel prices, energy costs and so on. So any potential impact there? If you could talk about that.

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

For the -- regarding the first question, this quarter, we have lots of great news with the Digital Business Services. And then our Digital Business Services and Paycell has a huge growth. And one of -- currently, we are the biggest digital integrator in Türkiye, and we are working very closely with the industry and other public sector. We gained lots of momentum on that perspective. So that's the reason that our growth is higher. Secondly, data center and cloud businesses grew around 21% year-over-year. So that's also helping us our growth. And Paycell also remains a strong contributor to say that it's our main growth engine. It grew 15%. So we have a balance sheet right now. So we have multiple options that we can grow. So consumer segment is still the biggest one, but we have other options that we can have a higher growth.

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

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

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

Thank you, Cemal. Thank you very much for the question. I'm going to answer the first one and the TOGG part and the tax part, Kamil is going to answer that. So let me start with our primary objective is to actually maintain a healthy ARPU growth that aligns with macroeconomic indicators. The mobile market currently was characterized by intense competition throughout 2025, as you may know. Consequently, our strategic churn management and pricing actions taken last year have had a temporary restrictive impact on our current ARPU growth because we already did this strategic churn management systems last year, so we can see the impact this year.

For the full year 2026, our target is to achieve ARPU growth that closely tracks the inflation cycle. However, we must remain mindful that any unexpected shifts in inflation dynamics as we can see that nowadays, will create some influence on our real growth trajectory. Our dynamic pricing model will manage this and continue to migration to higher value segments remain our key strategy to ensure ARPU resilience. We implement a strategy that will enable us to maintain a healthy growth. So 2025 has also affected this year's growth as our ARPU growth is coming with a lag.

So we need to always know that there's a lag between the inflation and our ARPU growth because we are doing our contracts, 12-month contracts. So that's the reason that increasing trend in inflation is also putting a pressure on current year's growth. But if you look at the numbers, we have a healthy ARPU for the users. And then also, we don't do any strange operations with the machine-to-machine communication. So our ARPUs are always stable and growth is there.

From the TOGG side, TOGG's net loss initially eased starting from the third quarter of 2025, Cemal, mainly supported by change in the special consumption tax base, which led to higher vehicle prices in the company. The new model [ TOGG 10F ] also supported the sales momentum in Q4 '25 and Q1 '26. Within the light of these facts in Q1 TOGG registered a net income of TRY 306 million. There are various reasons of this profit in the TOGG side. This improvement was mainly driven by the increased benefit of current incentive mechanism with higher vehicle sales. This is the first one.

The other one, financial expenses also improved due to relative stability of Euro TRY parity in Q1. Additionally, TOGG continues to record monetary gains under the inflation accounting due to its significant fixed asset base. Therefore, when you combine these 3 effects, the company declared a good result in Q1. We also expect the momentum in the coming periods. For the last question, as you know, from the tax side, the termination -- as you might be aware, the termination of inflation accounting in accordance with the Turkish Tax Procedural Law led to tax impact of indexation effects of accounts under capital items is no longer taken into account. With another saying, the inflation accounting in the local side is canceled or postponed for 3 years period. Therefore, there are some negative effects of this issue in the deferred tax side.

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

And do you expect any upward revision to your revenue growth after around 9% growth in first quarter, you have like 5% to 7%.

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

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

First of all, thank you very much for the comment. It's very -- you are making us happy with these comments. And also our marketing team is also very happy about the impact. Overall, what happened is -- so we missed that kind of great ads in Türkiye. And Turkcell has in its DNA to publish great ads. So I think it is -- go back to the future or whatever you can say that a long time before, we didn't have that kind of big great ads. But still true that everybody knows the -- especially the story is very nice. So -- and we're explaining the 5G technology with a very funny and Turkish style way, I can say that. So that's the reason that there's a huge interest on that and everybody's -- 5G speed is just very well aligned with the Turkcell terminology. So it helps a lot.

But we are seeing that and we continue on the campaigns, especially on the consumer side, we have a huge campaign about the fivefold. And so we are waiting for that to be over. And this month and the next month, we are going to see the real impact. On top of it, we just brought a new market, which is called Fixed Wireless access. It means that we are going to give 5G Superbox and we have a new ad about it as well. So overall, we are expecting a positive impact, both the campaign and how we deploy our 5G technology in Türkiye.

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

Thank you very much for joining. And hopefully, we're going to see each other in the second quarter results. Thank you.

Thank you for joining us.

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

Ladies and gentlemen, thank you for standing by. I'm Paulina, your Chorus Call operator. Welcome, and thank you for joining the Turkcell's conference call and live webcast to present and discuss the Turkcell Fourth Quarter and Full Year 2025 financial results. [Operator Instructions] The conference is being recorded. [Operator Instructions]

At this time, I would like to turn the conference over to Mrs. Ozlem Yardim, Investor Relations and Corporate Finance Director. Mrs. Yardim, you may now proceed.

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

With that, I will now turn the call over to Mr. Ali Taha Koc.

Thank you, Ozlem. Good afternoon, everyone, and thank you for joining us today. We closed 2025 with a strong finish, exceeding all of our expectations. Revenues increased by 11%, and we achieved an EBITDA margin of 43.1%. Net income from continuing operation reached TRY 17.8 billion, up 23% year-on-year. These outcomes reflect disciplined execution and strong momentum across the business. 2025 was pivotal for our long-term strategic positioning. We were awarded the largest spectrum in the 5G auction and secured our fiber footprint through the agreement with BOTAS. This will strengthen our network leadership and expand our capacity to capture 5G demand.

We maintain a robust balance sheet through prudent financial management. This preserves flexibility and liquidity. We delivered shareholder returns through a solid dividend payment and launched a 3-year share buyback program. Turkcell is a technology company. We are reinforcing that identity through focused investments. In 2025, we allocated 15% of CapEx to strategic areas, primarily in data center, cloud infrastructure and renewables. These investments deepen our digital infrastructure, enhance energy resilience and support long-term value creation.

A major milestone for Turkiye is our strategic partnership with Google Cloud. We are building a hyperscale cloud region in Turkiye. This cloud region will help enterprises accelerate cloud adoption to secure their data sovereignty as well as excess advanced capabilities in AI, cybersecurity and digital platforms. Turkcell is at the center of Turkey's digital transformation. With this partnership, Turkcell will have sustainable technology-led growth. Next page, please.

Over the past 3 years, we have executed with discipline to show that Turkcell's leadership in connectivity and digital infrastructure. This transformation shapes how we operate today and how we allocate capital to deliver long-term value creation. Our capital allocation framework is built on 3 pillars. First one, investing in our business to sustain leadership and capture future growth. We continue to advance mobile rollout and expand our fiber footprint with 5G. Our fixed wireless access solution Superbox will extend our coverage beyond fiber. In parallel, we are investing in data centers and cloud, which will bring future growth. As we scale this business, we may also evaluate selective inorganic opportunities. Our expected CapEx intensity of around 25% reflects this investment cycle.

The second one, delivering attractive shareholder returns. Last year, we distributed 72% of net income from continuing operations. This is our ninth consecutive year of dividend distribution, 9 consecutive years. We also launched a new share buyback program and repurchased $58 million of shares to date, reflecting our confidence in long-term value of our business.

Thirdly, maintaining a strong balance sheet. We continue to diversify our funding sources from sustainable bond issuance to Islamic financing structures. We remain committed to maintaining net leverage below 1x, preserving flexibility to invest in growth while continuing to support shareholder returns. Overall, we have a crystal clear capital allocation plan to invest in strategic infrastructure, capture structural global opportunities and deliver sustainable shareholder value. Next page, please.

We can now move to the quarterly performance. The fourth quarter marked another period of solid execution for Turkcell's leadership. Performance was driven by operational excellence and supported by our key growth engines. With outstanding performance across all core segments. In this quarter, revenues grew by 7% year-on-year to TRY 63 billion. Results were underpinned by ARPA expansion, continued subscriber momentum and scaling of our data center business. All of these reinforce the strength and resilience of our growth model. Group EBITDA increased 12% to TRY 26 billion, reaching a solid 41.2% margin. Margin expansion reflects continued cost discipline and as well as the operational efficiency.

Focused financial management also supported our bottom line with net income from continuing operations increasing 11% to TRY 3.6 billion. We achieved 905,000 net postpaid additions in the fourth quarter. This is the strongest quarterly result in the last 6 years. This was driven by targeted value propositions as well as customer-focused strategy. Another good news, this growth also came with real ARPU expansion, reflecting balanced growth.

On the other hand, our data center and cloud business continued to scale with revenues growing by 32%, renewable energy installed solar capacity reached 62.2 megawatts. Next, please.

Let us turn to the key operational highlights that shape our great quarter. Competition remained elevated for much of the year, but it is moderately in the middle of the fourth quarter. 2025 was marked by record high mobile number portability. In this environment, our customer-centric approach and pricing strategy helped us strengthen our market leadership and expand our customer base. We had 2.4 million postpaid net additions for the year 2025, the highest level in the past 26 years. Rising share of the postpaid subscribers was a key driver of revenue growth. It increased by 4.7 percentage points year-on-year to reach 81%, strengthening the resilience and the visibility of our revenue base. Revenue quality also improved. Through our micro segmented pricing actions and AI-supported offers we migrated a significant portion of our subscribers to higher-tier packages.

As a result, mobile ARPU real growth is 5.4%. Innovative offerings, including family plans and a new loyalty platform like Tumbara, increased engagement and supported retention. As a result, our churn improved year-on-year to 2.7%. Next, please.

Turning now to our fixed broadband operations. Another strong year for Superonline, our fixed business as well. We expanded our base with net addition of 119,000 Turkcell fiber subscribers. Total fiber subscriber base reached 2.6 million. High-speed campaigns were instrumental in driving this growth. We expanded our offer to speeds of up to 1,000 megabits per second. Today, out of all of our customers, 1 in 5 customers subscribes to speeds above 500 megabit per second. This signals a clear shift toward premium connectivity with Turkcell Superonline only.

Residential fiber ARPU increased by 10.3% year-on-year. We expanded our fiber home pass to 6.3 million home passes. While increasing the number of home passes, we achieved a phenomenal performance on take-up ratio of 42%. Next please.

Our digital infrastructure strategy is central to Turkcell's long-term growth. We believe that cloud and AI infrastructure is structural, a must for every business in Turkiye. The Turkish cloud market is growing at 19% annually in dollar terms, supported by increasing digitization and rapid adoption of AI-driven workloads. Our partnership with Google Cloud marks a defining milestone. Establishing a Google Cloud region in Turkiye strengthens our country's digital ecosystem and enhances our position in the infrastructure value chain. This partnership diversifies Turkcell's revenue streams and reinforces our long-term growth profile.

Today, we operate 50 megawatts of active data center capacity, and it will be doubled by 2032. Over the same period, we expect our data center and cloud revenues to grow at least sixfold in U.S. dollar terms. Beginning in 2026. We expect this segment to generate approximately $100 million in EBITDA. We are uniquely positioned to capture this technological breakthrough with our scale, network assets, market leadership and strategic partnership, we are ready to benefit from this structural growth. Next please.

Digital Business Services delivered solid growth, with revenues increasing by 30% to TRY 7 billion, supported by stronger hardware sales. Our system integration backlog reached TRY 6 billion. Our data center and cloud revenues increased by 32% year-on-year. This outstanding growth was driven by capacity expansion. As this new capacity established a higher base, we expect growth rates to gradually normalize. Even so underlying demand remains robust and continues to support for further expansion. We expect to complete the final module of Ankara data center in this year, reaching the full capacity -- full technical capacity of our existing facilities.

In the first half 2026 construction of our new data centers under Google Cloud partnership will start. This will be our next phase of capacity expansion strategy. Techfin is one of our core strategic growth engine. Our techfin business delivered solid performance in 2025 with revenues growing by 21% and once again outpacing group growth. Paycell was the main driver of this growth. In the fourth quarter, its revenues increased by 40% year-on-year, supported by POS solutions and Pay Later services. Paycell increased its non-group revenue share by 18 percentage points to 77%, reflecting its ability to scale beyond the Turkcell ecosystem.

On the financial side, revenues declined by 6%, mainly reflecting the lower interest rate environment. The loan portfolio continued to expand despite tight regulatory conditions. Net interest margin improved to 6.3%, primarily driven by lower funding costs as well as disciplined risk management and better collection practices. Overall, techfin continues to enhance the diversification and quality of our revenue growth. Next page, please.

Now a few words on our renewable energy footprint. We are so proud of it. In the fourth quarter, we commissioned our largest active facility to date. Active solar capacity increased from 8 megawatts at the end of the last year to 62 megawatts in 2025. In total, we reached 164 megawatts of installed capacity across 8 different cities. These investments are already delivering financial benefits. During the year, our solar energy portfolio generated TRY 156 million in OpEx savings. Stronger contribution is expected in 2026. We will continue to expand our portfolio to enhance cost efficiency, strengthening operational resilience and support our 2050 net 0 commitment. Next page, please.

We exceeded our expectations in 2025. This underscores the resilience of our operating model and the consistency of our execution. Looking ahead to 2026, our focus remains on real profitable growth. We expect real revenue growth in the range of 5% to 7% with the strength of our core business and increasing contributions from strategic areas. We aim to deliver an EBITDA margin between 40% to 42%, reflecting ongoing operational efficiency while continuing to invest in growth. Our operational CapEx intensity is expected to be around 25%, consistent with our investment cycle in 5G rollout, digital infrastructure expansion and renewable energy projects. In our data center and cloud business, we anticipate revenue growth in the range of 18% to 20%. This reflects a normalization following the significant capacity expansions completed in 2025, while underlying demand remains healthy.

Overall, we believe our guidance balances growth, continued investments and sustainable value creation. With that, I will now hand over to our CFO, Mr. Kamil Kalyon, to walk you through our financial highlights.

Thank you very much, Ali Taha bey. Let me briefly walk you through our financial results. We delivered a strong performance for both the year and the quarter. Top line grew by 11% year-on-year, surpassing TRY 241 billion, quarterly growth was 7%. This performance reflects resilient execution in our core telecom business and continued scaling of our techfin platform. Turkcell Turkiye revenue increased by TRY 21 billion year-on-year. Growth was driven primarily by real ARPU expansion and sustained postpaid subscriber additions. Continued upselling and premium positioning further enhanced the quality of our revenue base. Techfin accounted for 6% of consolidated revenues contributed TRY 2.4 billion for the year. Performance was underpinned despite strong momentum in Paycell, particularly in POS solutions and Pay Later. Both verticals continue to expand transaction volumes and monetization. Next slide, please.

Now EBITDA performance. Exceeding the top line growth, EBITDA increased by 14% year-on-year to TRY 104 billion, reflecting efficient cost management, EBITDA margin surpassed 43%. The main positive contributors were employee and energy expenses. While payment expenses scaled alongside strong POS expansion, Paycell's primary growth driver this year. Radio-related expenses reflect the acceleration of our 5G readiness and ongoing network modernization efforts. As a result, EBITDA margin expanded by 1.2 percentage points demonstrating disciplined execution while continuing to invest for future growth. We remain focused on balancing strategic growth investments with long-term profitability. Next slide, please.

Profit from continuing operations increased by 23% year-on-year to TRY 17.8 billion, primarily driven by strong EBITDA growth. We maintained market leadership through solid execution and a diversified revenue mix supporting sustainable EBITDA generation. We had a larger debt position during the year. However, our proactive balance sheet management further supported bottom line performance by TRY 3.5 billion. Net finance income benefited from lower interest expenses, loan redemptions and reduced hedging costs amid stable FX conditions. In addition, maintaining a solid TL position allowed us to benefit from attractive local currency yields. Monetary adjustments continue to reflect moderating inflation dynamics and the residual impact of the Ukraine divestment in 2024.

Looking ahead, the capitalization of 5G license is expected to support normalization in this line. TOGG contributed positively this year, supported by improved pricing dynamics and the launch of the new model. We see additional long-term value creation potential as 5G-driven technological transformation accelerates. Income tax expense increased mainly reflecting the deferral of inflation accounting application in statutory financials. Next slide, please.

Let's take a closer look at our CapEx management. With a prudent CapEx approach, we closed the year at 22.6%, in line with guidance. We continue to advance both mobile and fixed infrastructure. Fixed investments accelerated adding 405,000 new while base station fiberization reached 47%. Excluding strategic areas, CapEx intensity remains stable at around 18% to 19% over the past 3 years reflecting consistency in our investment framework. Our investment profile reflects a focus on our strategic growth areas beyond traditional telecom. Operational CapEx intensity of 25% is aligned with our strategic priorities across 5G, data centers and renewable energy. We allocate capital with a clear focus on long-term value creation, favoring projects with strong return visibility and scalable cash generation.

Next slide, please. Moving now to our balance sheet. Our balance sheet provides flexibility to execute our strategic objectives while preserving financial resilience. We closed 2025 with a cash position of TRY 92 billion after dividend payments, loan repayments and the Eurobond redemption in the fourth quarter. Our solid liquidity position fully covers upcoming 5G payments and debt service obligations over the next 2.5 years. Net debt was TRY 15 billion. Net leverage improved to 0.1x supported by strong EBITDA generation. We remain committed to maintaining leverage below 1x while comfortably funding 5G payments and broader strategic investments. The increase in lease obligations reflects the onetime accounting impact of a 15-year BOTAS infrastructure renewable agreement in the fixed side. We continue proactive debt management and actively evaluate diversified financing opportunities to support our long-term growth strategy. Next slide, please.

Lastly on foreign currency risk management. We proactively monitored market conditions and swapped a portion of our U.S. dollar holdings into Turkish lira. As a result, 56% of our cash was held in TL at year-end. This allows us to benefit from higher local currency yields and supported net financial income. At the year-end, we had USD 3.4 billion in FX debt, USD 1.9 billion in FX-denominated financial assets and a derivative portfolio of USD 600 million. Derivative portfolio reflects our short-term FX swap transactions with volumes increasing towards year-end and fewer NDF transactions. The increase in our short-term FX position mainly reflects higher FX-denominated CapEx in the fourth quarter and a deliberate reduction of hedging instruments to avoid higher costs. We target managing our FX position around USD 1.5 billion to support investments and 5G license obligations. We may adjust this level proactively in line with market volatility.

This concludes our presentation. We are now ready to take your questions. Thank you very much.

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

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

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

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

Thank you for the presentation and congratulations for good results. My question is about your FX position. Maybe if could you further elaborate that. If I didn't understand wrong, you mentioned that you have short position now around $900 million. I couldn't understand the justification behind that any -- short position in U.S. dollar, maybe that will be more helpful because there's jump and you justify with some other things, I guess, investments that further evaluation could be helpful.

And the other question is, again, the data center sites. We visited one of your -- the data center, and it was really helpful for us. Thank you once again, and you spent time with us, and it was very helpful to know where Turkcell is going ahead. But Ali Taha bey, I'm receiving questions about the size of the investments. Currently, is a simple calculation, maybe you can just give us a better color with the size, you have already have 50 megawatts. And you will add additional 50 megawatts. And -- but during that period, $1 billion will be invested you and $2 billion will be invested by Google. For some -- just we see that question from also investors, isn't the small number, small megawatts as a hyperscale scalers shouldn't be expected a bigger megawatt numbers also in the investment side, please just help us to understand better? Or should we assume that this is the starting point. Going forward, this megawatt number could be much higher. That would be very helpful again.

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

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

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

Okay. Let's come to the data center business. Yes, that's my favorite topic and favorite question. Let me tell you that. Let me give you a brief information about the Turkiye. Turkiye's total cloud consumption is around 150 to 200 megawatts. So if you look at the corporates, it's there out of 70 to 80 megawatts. So overall, what we need to do is most of the corporate domain in Turkey is still building their own data centers and they do internal consumption. So that's the reason that 50-megawatt number is not a huge number. The good thing about the 50-megawatt is. So previously, what we were doing is we were preparing the infrastructure for the colocation services. So our first 50 megawatts, most of the banks, most of the airline companies are bringing their own servers and they have their own hardware, and we colocate them in our data centers. But for the Google Cloud, it's going to be full-blown system.

So we are going to build a data center. We are going to prepare for Google Cloud that infrastructure with electricity with cooling. But on top of it, Google will bring thousands, 10 thousands servers to Turkiye. So that's the reason that the investment is high. So they're going to have a full-blown system such a way that -- and so another thing is the space, 50 megawatts is good enough because these servers are going to be used by not only one company, hundreds of companies that are going to -- together, they are going to use it. That's the meaning of cloud actually. So they can utilize their service more and more. So that's the reason that 50 megawatts is a huge investment, and I'm pretty sure that our biggest target is to bring all of these companies or the industry players to move their old systems to this cloud -- state-of-the-art cloud regions.

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

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

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

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

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

Thank you very much.

Thank you, bye.

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

Ladies and gentlemen, thank you for standing by. I'm Constantino, your Chorus Call operator. Welcome, and thank you for joining the Turkcell's conference call and live webcast to present and discuss the Turkcell's Third Quarter 202 Financial Results. [Operator Instructions] The conference is being recorded. [Operator Instructions]

At this time, I would like to turn the conference over to Ms. Ozlem Yardim, Investor Relations and Corporate Finance Director. Ms. Yardim, you may now proceed.

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

With that, I will now turn the call over to Mr. Ali Taha.

Thank you, Ozlem. Good afternoon, everyone, and thank you all for joining us today. This quarter once again demonstrated Turkcell's strong momentum powered by disciplined operations, sharp execution and the strength of our growth engines. We delivered 11% revenue growth, reaching TRY 60 billion, driven primarily by our core telecommunication business. Strong ARPU performance, a growing subscriber base and rising data center revenues all contributed to this outstanding performance. Group EBITDA increased 11% to TRY 26 billion, achieving a solid 43.9% margin, a clear reflection of our continued cost discipline.

In addition to our operational success, prudent financial management strengthened our bottom line. Lifting net income from continuing operations up by 31.8% to TRY 5.4 billion. Competition remained intense this quarter. Even so, we added 569,000 net postpaid subscribers. Through targeted pricing and upselling, mobile ARPU rose 12%, once again proving our ability to deliver double-digit growth in a highly competitive environment. Residential fiber ARPU also grew by 17.3% year-on-year in the third quarter. Our strategic growth areas also continued to perform strongly. Data center and cloud revenues grew 51%, and our renewable energy capacity from solar fields across 4 cities in Turkiye has reached 37.5 megawatt. Next page, please.

We are proud to reinforce our leadership with the successful outcome of the 5G spectrum tender, a defining milestone for Turkiye's digital future. The results were exactly in line with our expectations and reaffirm our leadership position. We secured 160 megahertz of spectrum, the maximum capacity available to a single operator in this tender. This allocation enabled us to deliver speeds exceeding 1,000 megabit per second while paving the lowest cost per megahertz per subscriber among all operators. 5G will be commercially launched in April 2026, marking the beginning of a new chapter in Turkiye's digital transformation. It will empower industries such as manufacturing, transport, health care and education with high-speed connectivity to regions that currently lack fiber access.

Once 5G officially launches, these customers will be among the first to experience 5G speeds. And just as we have done over the past 30 years, we will continue to lead in this new era of connectivity. We are fully ready to shape Turkiye's 5G future and drive the next wave of digital transformation. Next page, please.

Let's take a closer look at the key operational highlights from the third quarter. Competition in the mobile market was strong as we expected, maintaining our dynamic and customer-centric approach, we continue to expand our customer base. We recorded 569,000 net postpaid additions, bringing our total net gains to 2 million over the past 12 months. As a result, our mobile subscriber base exceeded 39 million. Leveraging our AI-driven dynamic micro segmentation approach, we executed our upsell strategies with precision. We offered customers precisely targeted offers, moving the vast majority of our base to higher tier plan.

In addition, the share of postpaid subscribers, a key driver of revenue growth, rose by 4.6 percentage points year-on-year to 79%. These efforts, together with higher seasonality, delivered double-digit mobile ARPU growth of 12%, reflecting our continued focus on value-driven growth. Our mobile churn rate was 2.6%, primarily reflecting the ongoing competition and high activity in the number portability market. Next page, please.

Now let's move on to our fixed broadband operations. With a focus on fiber customers, we had a net add of 33,000 this quarter, bringing our Turkcell fiber base to over 2.5 million. Including sales over other operators' infrastructure, we introduced 55,000 new customers to high-quality fiber services. Our fiber strategy is best described by a simple principle, high quality and high speed. With this approach, since last year, we remain committed to offering 1,000 megabit per second speeds and delivering greater value to our customers. Year-on-year, the number of subscribers on these plans more than tripled. With effective pricing adjustments, a higher proportion of customers on 100 megabit per second plus plans and 88% commitment rate to 12-month contracts, our residential fiber ARPU grew 17.3% year-on-year in the third quarter.

As we continue to strengthen our fiber network, we expanded our footprint with 107,000 new home passes, reaching 6.2 million households. Our 42.6% take-up rate is a clear indication that our fiber investments are effectively planned. Next page, please.

Let me now turn on to our strategic areas, beginning with Digital Business Services. Digital Business Services delivered robust 97% revenue growth, reaching TRY 4.9 billion, supported by recurring service income and stronger hardware sales. The backlog from system integration projects reached a remarkable TRY 5 billion. Data center and cloud revenues continued their strong momentum, increasing 51% year-on-year in real terms. We had targeted an 8.4 megawatt capacity expansion at the beginning of 2025, guided by our vision of keeping Turkiye's data within Turkiye, and we successfully activated that capacity in this quarter.

Thanks to our early-stage investment, we have established a strong market position, becoming the leading player in the enterprise colocation market. We are preparing for our next strategic move in data centers and cloud businesses, which will further strengthen our leadership. Next page, please.

Now moving on to another of our strategic pillars, techfin. Our techfin ecosystem, representing 6% of consolidated revenues achieved 20% year-on-year growth in the third quarter, outpacing the group's overall performance. This growth was mainly driven by our digital payment company, Paycell, which achieved a 42% increase in revenues. Within Paycell, POS and Pay Later services were the key contributors supported by favorable regulatory revisions in mobile payment limits and broader adoption of POS solutions.

Our Financell brand, providing customers with fast and flexible financing solutions continued to expand its loan portfolio, reaching TRY 7.5 billion despite the high interest rate environment. The net interest margin improved to 5%, driven by more favorable funding costs. Financell continued to support the sales of Samsung A26, locally manufactured 5G smartphone exclusive for Turkcell with a total of 54,000 contracted sales since its launch in April. Next page, please.

Despite global geopolitical and macroeconomic headwinds, we delivered performance that exceed our expectations over the first 9 months of the year. In line with these strong results and the revised CPI outlook, we are upgrading our 2025 guidance. Reflecting our solid momentum and confidence in the sustainability of our results, we are revising our revenue growth expectations upwards to around 10% and raising our EBITDA margin target to 42% to 43% range. Even as we continue our intensive investment cycle, we are revising our operational CapEx to sales target to around 23%, mainly driven by the acceleration in revenue recognition. As for our data center and cloud revenues, we are also revising our growth guidance upwards to around 43%.

With that, I will now hand over to our CFO, Mr. Kamil Kalyon, to walk us through the financial highlights.

Thank you very much, Ali Taha. We had a solid quarter driven by continued momentum in our core business and techfin expansion. We achieved 11.2% year-on-year revenue growth, fueled by strong execution across our key business lines. Turkcell Turkiye remained the main top line driver, contributing TRY 5.5 billion of additional revenue. This was supported by double-digit real ARPU growth, a larger postpaid base and solid performance from digital business services. Techfin added TRY 569 million in revenue, driven by solid growth at Paycell, particularly across POS and mobile payment verticals.

On profitability, margins reflected our ongoing investments to enable 5G rollout and to capture the strong growth momentum in Paycell transaction volumes. At the same time, personnel and energy costs contributed positively to our overall performance. Overall, we maintained a solid profitability level, demonstrating the strength of our operating leverage and disciplined cost management. Next slide, please.

Profit from continuing operations increased 31.8% year-on-year to TRY 5.4 billion, reflecting focused execution and effective cash management. EBITDA contribution totaled TRY 2.5 billion for the quarter, remaining the key driver of profit growth. Despite persistent competition, Turkcell sustained its leadership through a clear strategic focus and efficient execution. We prudently managed our net finance income and expenses this quarter, resulting in a year-on-year contribution of TRY 1.5 billion. With FX depreciation decreased to nearly half of last year's level, we recorded a positive FX impact of TRY 912 million.

Despite a higher nominal debt level versus Q3 2024, our strong financial discipline and proactive funding strategy led to a decline in interest expenses to TRY 677 million. Meanwhile, although interest income remained limited, returns were supported by a well-diversified and efficiently managed investment portfolio. Our strong cash position, together with the slower inflation growth year-on-year resulted in a monetary loss this quarter. Next slide, please.

Turning to our investment strategy with a clear focus on 5G readiness. CapEx intensity was 17.4% this quarter, reflecting our continued commitment to strengthening network infrastructure and preparing for next-generation technologies. With the largest spectrum allocation secured from the 5G tender, we are maintaining our investment momentum at full speed. This quarter, approximately 80% of CapEx was directed towards our core businesses, mobile and fixed broadband. Our base station fiberization rate surpassed 45% this quarter, laying the groundwork for a seamless and efficient 5G transition. In our data centers, we activated an additional 8.4 megawatts of IT capacity, bringing the total to 50 megawatts. On the renewables side, solar capacity reached 37.5 megawatts with further expansion expected in Q4. We have started to see savings from renewable energy investments this year with a more visible impact expected in 2026.

Given the expected ramp-up in 5G investments and seasonal factors in Q4, we continue to manage our CapEx with a disciplined and value-focused approach. Our revised guidance reflects both the progress of our investment programs and our commitment to efficient capital allocation. Next slide, please.

Moving now to our balance sheet. Our cash position reached TRY 122 billion in Q3. The second dividend installment will be paid in Q4, while under the 5G tender, the first 2 installments are scheduled for 2026. We consider our current liquidity as strong, sufficient to cover upcoming 5G payments and debt service over the next 2.5 years. We are well prepared, having issued a Eurobond earlier this year and secured Murabaha fundings on favorable terms in the first half. Our net leverage ratio increased slightly to 0.2x, but remains comfortably within healthy levels, reflecting our continued financial discipline. Given the 5G payment schedule, we expect leverage to remain below 1x in the upcoming periods. Debt repayments of around USD 1 billion are expected to be completed by year-end, of which USD 800 million is denominated in foreign currency. Next slide, please.

Finally, a brief update on our FX risk management, 81%. As of Q3, we held USD 3.9 billion FX debt and USD 3 billion FX-denominated financial assets and USD 800 million derivatives portfolio. We maintain a dynamic FX risk management strategy. We actively manage a short-term derivatives portfolio to mitigate potential FX volatility while accounting for higher hedging costs. We closed the quarter in a neutral FX position. Following the acquisition of the 5G license, our net foreign exchange position is expected to increase. We will closely monitor market conditions and proactively manage this position over the next 1.5 years until the full 5G license payments are completed. Therefore, during this period, we will not apply our neutral position definition.

That concludes our presentation. We look forward to addressing your questions. Thank you very much.

[Operator Instructions] The first question comes from the line of Singh Maddy with HSBC.

My first question is on your CapEx and dividend outlook, especially given the recent 5G auction win. I wonder -- for this year, you have given the guidance for CapEx, so that's fine. But I was wondering whether next year, we should expect a significant jump in the CapEx to sales intensity and whether this spectrum payment is going to affect the dividend payments at all? So that's the first question. And then the second question is on your pricing action during the quarter? Did you increase any prices? And how was the competitive response to that? Are you comfortable around the pricing environment? So that's the second one.

And then the final one, actually on your final comment about the net short FX position, you said the definition will not be applicable going forward. So can you please explain what do you mean by that? And how should we think about the FX losses going forward, yes?

Thank you very much, Maddy, for the questions. First question and third question will be responded by me. First of all, -- for the next year, CapEx intensity, we are not expecting higher jumps. As you know, starting of this year, we declared 24% CapEx sales ratio for this year. Now we revised it to 23%. For the next year period, we do not -- we will not be in a position exceeding the 24% around the CapEx intensity levels will be around this 24%. We will see the budget figures that will come from the business lines.

The other one, as you know, our dividend policy is distributing our 50% net income of the year. We are proposing to the general assembly and general assembly decided. As you know, we have -- as [indiscernible] said, we are a very dividend-friendly company. And if you chase our company, we will be -- we have been distributing dividends for many years period. Therefore, for the 2026, our AGM has not been decided about this issue, but our dividend policy is still distributing the 50% of the net income.

For the third question, as you know, we are declaring our FX position as minus -- plus USD 200 million. And when we look at the 5G tender, the results and officially, the tender results will be ratified by the governmental bodies approximately in January 2026. Therefore, the FX position -- net FX position or this liability will be in our balance sheet starting from 2026. Therefore, we will look at the position at that time. But as Ali mentioned, the 5G tender price will be paid within 3 installments. In the first installment will be in January 2026. Therefore, it means that 1/3 of the tender price plus 20% VAT amount, which corresponds 44% or 45% of the total amount will be paid in January 2026.

Therefore, we will look at the -- our FX position in January 2026, and we will decide how we will manage this FX position starting from 2026. As you know, the decision will be taken under the scope of the macroeconomical conditions, hedging costs and Turkish internal macroeconomic conditions. Therefore, we will see it in January 2026.

I will hand over the mic for the second question to Mr. Ali.

Regarding the price adjust, I will divide this question into two different parts, mobile side and the fixed side. For the -- as the leading mobile operator and the leader and the biggest operator, mobile operator in Turkiye, we have adjusted our prices in almost every quarter between 2021 and 2024 to reflect the inflationary environment. Considering the slowing pace of inflation and competition conditions in the market, we updated our prices in January and July into 2024. Following 14% price increases implemented in January 2025, we carried out further price adjustments on our micro segmented packages such as youth and regional offers in June and August.

On top of price adjustments, thanks to our successful upsell performance, we registered above inflation mobile ARPU growth of 12%. With respect to fixed broadband market, following the competition, we increased prices in December 2023, August 2024, March and October 2025. We are driving ARPU growth by increasing the share of customers within a 12-month commitment, boosting transition to high-speed packages and also widening the price gap between our TV+ bundled offers and data-only packages. This successful efforts and initiatives enables us to outperform inflation and achieve at the fixed market -- fixed broadband market, 17% real growth performance in our residential fiber ARPU.

As Turkcell, we continue to focus on value as the main differentiation point from the competition. Hence, rather than competing on price, we focus on creating additional value for our customers. And we will continue to closely monitor market conditions and the competition in the upcoming quarters as well.

If I may ask a follow-up on the spectrum part. So the payment is in hard currency. I was wondering whether the asset itself will be recognized in hard currency as well.

Normally, as you mentioned, the payments will be done in U.S. dollar terms. Therefore, we will -- our liquidity position is fair enough to make all the payments in both in TL side and the U.S. dollar side. Therefore, starting from the January 2026, we will look at the macroeconomical conditions, FX rates, TL rates and the most important one, the hedging rates, for example, hedging costs are very important in order to decide. But as I said, we have enough TL and the U.S. dollar money in our hands. Therefore, we will decide it in January 2026 by taking into consideration the macroeconomical conditions on that date. It's a little bit early to give a guarantee or to give a color how we will make the payments. We can prefer to make dollar payments or maybe we can prefer to make TL payments. But at TL, we will be keeping our U.S. dollar money in our hands, and it will not create additional problem from our perspective.

My question was more on the balance sheet entry on the asset side. So you will recognize the spectrum as an asset, right? But the value, I'm not sure whether that will be put in a lira number or a dollar number.

Normally, it will be included into our balance sheet in 2026, and we will make this capitalization in the TL terms. And as you mentioned -- as you imagine, that starting from 2026, this asset will generate an inflation profit starting from the depreciation in the income side starting from 2026.

The next question comes from the line of [indiscernible] with Barclays.

Congrats on the results. I have just a couple of questions. So my first one is on your 2026 outlook. Do you think that the revenue growth that you've delivered in 2025 or planning to deliver is sustainable going forward given the 5G regime coming? And also -- and also on your profitability, do you think like current margin -- EBITDA margin levels are sustainable for next years? And second question is also on your -- do you have any long-term target for your net leverage? Or maybe where do you see the net leverage ratio next year and going forward after the 5G payments are done?

I can start with the first one. Let me talk a little bit about the current year, the great year and a great quarter. So we had another solid operational and financial results this quarter and which was actually beyond our initial plans. We continue to expand our subscriber base in both mobile and fixed segments, while delivering a real ARPU growth in each quarter of 2025 through our dynamic tariff and pricing management, higher postpaid share, also successful upselling actions and rising demand for high-speed connection also supported our ARPU performance.

So consequently, in the first 9 months, our consolidated revenue grew by 12% year-over-year. And also techfin, if you talk about the techfin in the first 9 months, delivered a 25% year-over-year growth, making a very meaningful contribution to our top line. Also, our strategic investments, data center and cloud services also achieved robust revenue growth of 51% compared to the same period last year and significantly exceeding our previous full year 2025 guidance. EBITDA grew by 15%, leading to a 43.7% EBITDA margins. Building on our strong 9-month performance, we have revised our full year both revenue growth and as well as the EBITDA margin expectation and guidance.

So to remain prudent while revising our guidance, we also considered the reduced magnitude of price adjustments compared to last year. And we are expecting a very competitive environment in the following years on 2026 expectation as we are in the planning process. It is too early to comment. However, our goal is to maintain our micro segment management strategy, along with our AI-driven technologies, along with our revenue growth initiatives and continue growing above the inflation rate.

For the second question, as I mentioned in my presentation, at the end of this year, we will be paying the second installment of our dividend payment, and we have some additional repayment of debt for 2025. And in January, as I mentioned, we will be paying the 44% of the total tender price for the 5G side. Therefore, our expectation is this leverage ratio would be around 0.7 or 8x. And as I mentioned in my presentation, again, our aim is to keep this level lower than the 1x.

[Operator Instructions] The next question comes from the line of [indiscernible] with [indiscernible].

Good results. Actually, all of my questions have been answered.

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

Congratulations for the good results. My question is rather some technical issues in the income statement. We see monetary loss in third quarter versus like the monetary gain in the previous quarters. Could you just tell us more about the changes that lead to monetary losses in this quarter because it offsets a portion of the higher-than-expected operating profit when we go to the bottom line? And the other question is again about the TOGG participation side, we see lower losses unlike the previous 2 quarters. Do you think it's going to be the permanent? Should we expect lower the losses contribution from the TOGG, your subsidiary side? That's my second question.

And again, could you just give any direction about 2026 from your side? And again, I would like to ask what kind of value-added -- the things that could come into surface in 2026 as now the 5G is done, please, in terms of licensing. What are the opportunities rather than the organic growth of the company? What could be changing in 2026 from your perspective?

Cemal, thank you very much for your technical questions. First question regarding the first question, yes, you're right. Our monetary gain declined by TRY 2.4 billion compared to Q3 of 2024. There are certain reasons. One of them is the slowdown in inflation rates. As you know, last year, inflation was in the same period around 8.9%. Now currently, it's declined to 7.5%. Therefore, this is the first reason for the lower monetary gain. The second one and the most important one, as you know, we sold our Ukraine business in 2024. It means that you are taking a significant portion from your balance sheet, especially generating inflationary income in your balance sheet.

Therefore, due to this effect, Ukraine subsidiary sale led to a negative composition against nonmonetary assets. And furthermore, the capital reduction executed in our Netherlands company subsidiary in Q4 in 2024 indirectly led to a monetary loss due to indexation in Q3 2025. Therefore, this is the reasons of this one starting...

Sorry for interrupting, but before passing to the next question, when I look at the -- my question is rather compared to second quarter, what -- I know that there might be changes from quarter-to-quarter, but even what changed from second quarter to third quarter? The inflation is higher, the quarter-over-quarter change. I don't know if you have any justification for the Q-over-Q comparison, the year-over comparison fair. Just if you have any comments before answering the next question.

Normally, from Q3 -- Q2 to Q3, you're asking in 2025. Am I right?

Yes, yes, yes.

As far as I remember, we do not have a significant change regarding the year-over-year side. Yes, the Ukraine business is very important for this one. But Q2, Q3, we do not have a significant change in the inflationary side. But as you know, this -- some of the -- how can I say, in the CapEx side, there are some CapEx amounts are eliminated, as you know, for the 5G side and the 4G side. Therefore, this might affect the inflationary accounting side. But in Q2 and Q3, I do not remember the significant result. But starting from Q2 or Q3, we have started to generate inflationary loss for this year. But for -- starting from 2026, our 5G license amounts and the additional CapEx amounts will be included in our balance sheet, and we will be starting to see significant amount of monetary gain in our balance sheet starting from 2026. But for this year, as I mentioned, the main loss item is coming from the Ukraine sale asset and the inflation rates.

The second question is regarding the TOGG. As we mentioned in our previous calls, there are some problems, especially in the market -- electric vehicle market in 2025. And starting from the Q2, TOGG started to take the necessary actions for the cost optimization. And as you might remember, there are certain changes in the special consumption tax base in third quarter. And this change led to an increase in vehicle prices, which was also supported by the launch of the new model. Therefore, TOGG recorded a moderate improvement in its performance during this quarter. Most probably this improvement will continue in Q4.

Therefore, starting from -- we hope that Q3 2025 would be a significant milestone for the TOGG side. In the coming periods, we are expecting more performance from the TOGG side. But as you know, this is a production investment and there are heavy EBITDA -- amortization expenses of the company. But we are -- we can observe the positive impacts of the precautions that are taken by the TOGG company for this quarter. We hope that this performance will continue in Q4 because you know the new model is also in the markets right now. And there are some extra models are presented to the market, especially 4x for electric vehicles. There are important demand for these cars. Therefore, we will see the positive impact of these actions in the Q4 also.

Regarding the 5G, Cemal, thank you very much for the great question. Yes, 5G era is starting. So starting from April 1, 2026, we are going to launch 5G all over the Turkiye, and it's going to create new value-added services and opportunities. Especially with 5G, a new era of flexible and personalized tariff is the beginning. The age of one-size-fits-all plans is coming to an end. And today, for example, Turkcell serves more than 39 million mobile subscribers, which means 39 million unique tariff possibilities. In this environment, our goal is to maintain the highest level of customer satisfaction by offering plans tailored to each individual's need.

We also aim to accelerate 5G adoption because 5G is going to bring high speeds, lower latency, but we need to -- our customers to have 5G phones. So we also aim to accelerate 5G adoption by supporting device financing and establishing new partnerships with smartphone manufacturers. Following our recent collaboration with Samsung, for example, we have already bought 100,000 5G-enabled devices. We plan to -- which are built in Turkiye, domestically produced A26 phones, Samsung phones. We plan to form similar partnership to further increase the number of 5G-ready phones in the market. Through these initiatives, we will make the next-generation devices more accessible as well as drive broader 5G usage across our customer base.

So in order to give you a brief information about what is the difference between 4G and 5G, 4G technology was designed primarily for people, but 5G opens the door to a world where machines communicate with each other, enabling smart cities, connected factories, smart factories, industrial automation. And as a new value-added services over the next 5 years, we anticipated that the autonomous driving and connected car sectors will gain momentum in Turkiye. During this period, data consumptions and speed requirements are expected to rise significantly. And additionally, similar increases in data demand, speed requirements will emerge across government services as well as logistics, supply chain, smart manufacturing, the energy sector and smart city ecosystem, driven by the adoption of hybrid and private 5G networks.

So stay true that 5G will unlock new revenue opportunities across not only the automotive industry, but also the government services and logistics and energy and smart cities. So as new technologies mature, Turkcell is positioned to be a leading operator, enabling Turkiye digital transformation through 5G and delivering the best and the greatest 5G technology to our customers.

So how we are going to do it is the tender is a solid proof for it. So by securing large-scale 5G frequency resources, we gain a significant competitive advantage in both capacity and the quality because we got the highest frequency spectrum. The wider the spectrum will allow us to deliver superior customer experience in densely populated areas, ensuring high speed, low latency connectivity even under heavy network loads. It also enables us to serve a much larger number of people. So we are going to bring this fixed wireless access customers. We call it Superbox 5G, fiber-like performance. Even if you don't have a fiber, we are going to provide you 1,000 megabit per second speeds with our Superbox 5G-enabled boxes. So even if you don't have your fiber in your house in anywhere you go, we are going to provide the best speeds within a wireless domain, and it's going to give you a huge flexibility and then it's going to come up with a huge efficiency.

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

Thank you very much for joining us, and I hope to see you in the next quarterly meetings. Thank you very much for attending.

Thank you for joining us. Hope to see you for the year-end results. Thank you.

Thank you.

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