VEON Ltd. Sponsored ADR Stock

Hello, and welcome to VEON's 2Q '26 Results Presentation. [Operator Instructions]. Today's presentation will be followed by a Q&A session where we will take questions from the room as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Anand Ramachandran, you may begin.

Thank you, Lucy. Good morning and good afternoon to everyone joining us for VEON's second quarter results. We are the largest NASDAQ-listed company in Dubai, and we are taking this opportunity to host this call out of New York and are very pleased to be able to doing that. So we thank the people in the room who've joined us. Thank you for the people who've joined us on the webcast. My name is Anand Ramachandran, Chief Corporate Development Officer.

Let me introduce management in the room. Next to me is Kaan Terzioglu, our Group CEO; next to him, Burak Ozer, our Group CFO. As usual, Kaan will begin with the strategic and operational highlights, followed by Burak with a review of our financial performance, and we'll then open up the call for Q&A. Before we begin, do note that today's presentation contains some forward-looking statements involving risks and uncertainties.

Further details are available in our SEC filings, including our Form 20-F. Our earnings release and presentation are also available on our Investor Relations website. With that, let me hand the call over to Kaan.

Thank you, Anand. Good morning, everyone. So exciting to have you in the room here in New York and do this earnings release here. Beyond excellent financial results, this quarter marks another important milestone in VEON's transformation. We are becoming much more than a telecommunications company.

Today, VEON is building one of the world's largest digital ecosystems across emerging markets, combining connectivity, financial services, digital consumer platforms and enterprise solutions.

Our telecom networks connect more than 150 million customers. Our digital platforms deepen those relationships every day. The result is stronger growth, stronger cash generation and increasing shareholder returns. Most importantly, today's results give us the confidence to raise the outlook for the year.

Let me explain how we think about VEON today.

Everything begins with connectivity. Connectivity is not the destination. It is our foundation. It is our competitive advantage. It gives us scale, it gives us distribution edge. It gives us trust, and it gives us daily engagement with millions of customers.

On top of that foundation, we have built three digital growth engines: financial services, digital life, digital enterprise.

They reinforce one another. Every new service strengthens the customer relationship. Customers stay longer. They spend more. They generate more data. Better data improves AI. Better AI creates better products. Better products create more cash. That cash allows us to invest again. That is the VEON Flywheel.

Once you understand the Flywheel, results are much easier to understand. Growth is broad-based. Telecommunications continues to grow twice fast compared to traditional players. Digital is growing substantially faster, multiple times faster. Digital now contributes almost 27% of our total revenues.

Cash generation continues to improve. Since August '24, we have already bought back $183 million worth of shares. Today, we are taking the next step.

Starting with this year, we commit to canceling at least $100 million of shares every year, not as a onetime action, but as a sustainable capital allocation framework. I am particularly pleased with the consistency of our execution. That consistency is why we are raising our full year guidance.

A little color. Reported EBITDA growth was affected by three exceptional accounting items. Bangladesh benefited from a provision release last year. Profit comparisons include the Pakistan Tower transaction last year. And this year, it includes the non-cash fair value adjustment on Kyivstar Group warrants.

If you adjust for these items, our underlying business is even stronger. Revenue grew 18%, EBITDA grew more than 15%. Like-for-like earnings per share actually grew 88% year-on-year. This is the clearest measure of our true momentum.

On the subject of consistency, Pakistan continues to deliver outstanding performance. Ukraine continues growing with extraordinary circumstances. Kazakhstan, Uzbekistan and Bangladesh all delivered. This matters. It tells us that VEON operating model is becoming repeatable across markets.

Only a few years ago, digital represented a relatively small part of VEON. Today, digital has become one of our main growth engines. Our digital platforms now reach more than 227 million customers. Importantly, all three digital businesses are profitable: Financial Services, Digital Life, Digital Enterprise.

They scale efficiently, they require less capital and they generate attractive returns. Digital revenues grew more than 53%. Digital EBITDA increased more than 66%. Digital is now generating profits and cash more than telecom business.

Financial Services best demonstrates how the Flywheel works. We do not begin with lending. We begin with engagement. Customers use payments every day. Daily engagement builds trust. Trust creates data, data improves underwriting. Underwriting enables lending, insurance and wealth management.

Pakistan demonstrates this model at scale. JazzCash has evolved from a payments application into a complete financial ecosystem. Our acquisition of TPL Insurance represents another important milestone in that journey. And our Mastercard partnership will accelerate AI-enabled financial products across every market.

If there is one slide, I hope you will remember, it is this one. Connectivity brings customers. and digital deepens engagement. Engagement increases loyalty. Higher cash generation funds better products. Every turn of the wheel strengthens the next. That is why multiplay customers already generate significantly higher value and why we believe we are still in the early chapters of the story.

With that, I will hand over to Burak to take you through the financials in more detail. Burak?

Thank you. In second quarter, revenue grew 17% to $1.27 billion, with growth across all of our five markets. First half revenue also grew 17% to $2.47 billion [Break] 7.6% to $929 million, driven by disciplined pricing and rising customer engagement. Digital revenue grew 53.6%, reaching $342 million, reflecting broader adaptation across platforms and products plus our recent acquisitions.

EBITDA reached $552 million, up 6.2% at a 43.4% margin. First half EBITDA grew 11.5% to USD 1.07 billion. Telecom and Infrastructure EBITDA were $428 million, down 3.8% at a 46.1% margin. As Kaan noted earlier, the year-on-year comparison reflects last year's Bangladesh provision release.

Digital EBITDA grew 66.2% to $123 million. Digital is less capital intensive than telecom, and that's driving strong cash conversation as it scales. Profit and EPS for the period reflects $489 million of gain on the Pakistan tower sale in second quarter of last year and a $22 million fair value loss on KGL warrants in this quarter.

Cash generation was strong in the period. Operating cash flow rose 238% in the quarter to $463 million and 51% for the first half to $860 million. Equity free cash flow after leases and licenses grew 47.5% for the first half to $320 million.

EFCF for the second quarter was impacted by prepayment of taxes in Pakistan that will not reoccur.

Now turning to the balance sheet and capital allocation. We ended the quarter with $2.2 billion in cash, including $468 million at headquarters. Net debt, excluding leases, was $1.8 billion with lease adjusted leverage at 1.1x. We completed a $1.4 billion bond offering this quarter, substantially addressing our 2027 maturities ahead of schedule and extending average headquarters debt maturity beyond four years. With that, I'll hand the call back to Kaan.

Thank you, Burak. Let me return to capital allocation. Since August '24, we have bought back $183 million of shares. We delivered exactly what we said we would. Now we are institutionalizing that discipline. Beginning this year, we will cancel at least $100 million of shares annually. Returning capital to shareholders is now part of our long-term financial framework.

We are seeing strong execution. Digital is scaling faster than expected. Cash generation continues to strengthen. And as a result, we are increasing our guidance. Revenue growth is now expected to be 15% to 18%. EBITDA growth is now expected to be 9% to 12%. Our capital expenditure outlook remains unchanged.

These revisions reflect confidence in the underlying strength of our business. Looking ahead, please join us at our Capital Markets Day in New York on November 16. There we will present the next chapter of VEON's long-term strategy and value creation.

Let me leave you with one thought. Connectivity provides the foundation. Digital creates the growth and the Flywheel generates the returns. Our second quarter results demonstrate that this strategy is working.

And I believe we are only at the beginning. Thank you very much. Operator, now we can take the questions.

Operator, may I suggest we start with questions in the room, and then I'll probably queue you in to get questions from online attendees. May I start in the room, it would be great if you could put your hand up. There's a mic which will come around to you. If you could state your name and your institution and then your questions, that would be great.

Tim?

Jesse with BTIG. Of the guidance increase, how much was currency and how much was organic? And where are you specifically seeing outperformance versus original expectations?

So, as I mentioned, consistency was one of the key drivers. You may notice a little bit out-of-cycle results from Kazakhstan, but this is normal, and it is fundamentally due to the VAT regulations change in the country, which was a six percentage points increase. Now in the concept of how much of this devaluation, how much is performance, our business model is very simple. The way to do business in frontier markets in emerging markets relies on your ability to continuously in a disciplined way to adjust your prices with nominal GDP growth. And we rely on the fact that GDP and GDP growth is the best indicator of our wallet share success.

Now devaluation and inflation will converge in 3-, 5-, 7-year cycles. We are keeping our discipline on that front. And currently, we are expecting actually about 9.5% inflation in weighted average in our markets. This is up from 8%. And the overall devaluation is 3% less than what we have expected to happen.

From a currency perspective, the currency assumptions in Q1 versus Q2 did not change. So it was mainly organic from a growth perspective.

Vincent Fernando from Zero One Investment Research. Just want to talk a bit about your financial services business. So, I see that you've achieved about 45% year-over-year growth in the first half. What's the latest in terms of your regulatory kind of, I guess, development outlook, particularly with Bangladesh. So maybe you could talk about the latest for Pakistan, which I know is much more mature, Bangladesh and Ukraine, which is very early, but do you start to have an outlook for Ukraine, maybe even when new licenses might be available, et cetera?

So let me, first of all, give a little bit of a color on our business. Our business is really doing extremely well in Pakistan. We have 60 million bank accounts on a monthly basis, 27 million active users of our platform, JazzCash. We issue 225,000 nano loans every single day. We transact close to 16% of Pakistan's GDP. We have 1.6 million merchants on our network. We are a financial giant when it comes to the landscape.

Naturally, with that comes a responsibility to work hand-in-hand with the authorities, including Finance Ministry and Central Bank to make sure that we are basically serving the people in the right levels. I'm confident that the regulatory environment will also support us to expand our capacity to even grow our lending potential.

We would actually, this success we believe, is quite repeatable in other markets, especially in Bangladesh and in Uzbekistan. That's why we are working again with the new government of Bangladesh in terms of creating the right platform for us to launch which we will start with payment services and later on move into full-scale financial ecosystem in Bangladesh as well. And I expect that to happen in Q3.

With regard to our operations in Uzbekistan, in order to accelerate deployment of similar services in all the countries, we are looking forward to getting necessary digital banking licenses in every single market we have. We do have already payment solutions and digital wallets in Uzbekistan and Kazakhstan. In Ukraine, we are looking for the regulatory environment to allow us also to proceed in the same direction.

Ukraine [Technical Difficulty] to kind of have a halfway solution before you can have your own full license that you work with, maybe a bank to start building a financial services type of platform.

It's early to give you a clear answer on that. But clearly, we will be looking for every possible business model in terms of how we can serve our customers the way they deserve the service.

Tim Ryan, Oppenheimer. You have a great relationship with SpaceX and Starlink. Could you just describe that relationship, how it's evolving? Also, how is the quality of the service that they're providing to you? And how do you think that changes that connectivity changes these value-added services over time based on the fact that we're going to have connectivity almost everywhere?

As I mentioned, connectivity is the foundation. It's our competitive advantage. And there is no excuse for it is not to be available. It has to be ubiquitous. It has to be affordable, accessible because all our business model relies on that connectivity in the Digital Services part.

Now if you assess the situation in different countries, we operate in emerging markets and frontier markets. In Ukraine, there's an ongoing war going on. And there are cases where our infrastructure, terrestrial infrastructure may not be accessible due to land mines. It might be on the front line. There might be energy outages. And in those cases, we have observed that it is essential to integrate our terrestrial network with the satellite platforms, and that's exactly what we did.

As of last quarter, more than six million people utilized the capabilities of connecting their smartphones without any other additional equipment directly to satellites and utilize messaging and live data services. This is remarkable because if you think about it, this allows us to be relevant to our customers literally every single minute in a day. And also, it gives us the advantage that being a trusted partner when it comes to connectivity. We are expanding these capabilities to other markets to Kazakhstan to Bangladesh. We do not see Starlink as a substitution.

We are complementary to each other. And we are naturally in our markets in sovereign countries with soar regulations protected in a way to keep our license and our technical responsibilities in each country to serve the populations in a safe and secure manner. I look forward to extending our partnership with Starlink, but also clearly, there is going to be many other alternatives.

We will do our best to make sure that our customers are always connected so that they can always do financial services on our platforms. They can always do access marketplaces, healthcare services, education services, entertainment services if they are our customers on connectivity side.

So I know you've had text for a little while, and that sounded like it was working well. How is the data connectivity going? And related to that, too, do you have an exclusivity for a period of time with them?

First, in terms of quality, we have initiated the light data services in Ukraine, and we are optimizing certain applications. And Sasha is also here, our CEO in Ukraine. And those applications are optimized in a way that they can function in this light data environment. We do not have exclusivity. I do not believe in exclusivity. Customers have the exclusivity to select their telecom operators when it is necessary.

Thank you. I don't see any other questions in the room. So operator, shall we pass to the online attendees for their questions.

[Operator Instructions] Our first question comes from Nicholas Paton with Edison Group.

A couple of questions. So, the first one on the guidance. I'm struck by how much the guidance has changed since the full year '25 numbers. So, at the low end of the guidance, full year '25, we're at 9% and we're now at 18% for the top end of the guidance for second quarter. And on EBITDA, we've gone from 5% at the low end to now 12% at the top end. Can you just run us through briefly, the key drivers of that change. And I guess the question from investors is, what makes you so sure that you can achieve those numbers now when you were unsure you couldn't achieve those numbers at the top end of the scale at the full year '25 numbers?

And the second question is regarding the new businesses. I mean the numbers are, I'm going to hate myself for saying this, but they really are an impressive set of numbers. And the digital businesses have been growing like crazy. But when you look at the digital businesses, let's say, three to five years in time, are you still able to leverage the capital returns that come from the established fixed asset base? Or do you have to invest more in the fixed asset base? And how do those returns on capital change between the core telecom business and the digital business, let's say, in three to five years' time?

And I'm reminded of your answer, Kaan, I think it was on the first quarter, and maybe it was the full year numbers when you went through the difference between the digital and the core telecom returns on capital, I thought that was a very interesting and instructive answer. So, I'd be interested to hear an update on that and to hear how you think those capital returns change through time.

Nicholas, thank you very much. Actually, you're absolutely right. I wish we could have been more precise 2 quarters ago. But Flywheel is working and Flywheel is working better than we expected. And as you have rightly pointed in your second part of your question, it is growing. It is growing 50%, 60% year-on-year, and it is beyond what we have expected. But it's not only about the top line growth. The EBITDA growth of Digital Services is also above our expectations, significantly above. Actually, EBITDA grew 66%.

So the margin on the Digital Services is expanding as well. So those two things combined gives us the confidence to raise our guidance. And I think what we see, it's a sustainable business model. We are systematically seeing that more customers are embracing our solutions. and we still have room to sustain this growth. When it comes to cash-generative capacity. Now our original business idea a year ago when I talked with you that the Digital Services would deliver a margin of 20% to 25%.

We are at 36%. And Digital Services has a CapEx to revenue ratio of 7%, 36%, minus 7% makes 29%. On the foundation side, we do have a margin of 45% and 20% goes to CapEx, and you end up with 25%. So actually, that's why I'm saying the Digital Services cash generation capacity has exceeded our expectations as a business model a year ago, which I'm very happy to see.

Having said that, please don't forget foundation. is our competitive edge. And we will not stop investing in that. And we will keep investing in where it is necessary, just like in Pakistan, we have recently bought some spectrum.

We are now lighting up the spectrum for 4G, extended 4G and 5G. We will do exactly the same in our other markets. But the balance of our growth coming from digital will slowly actually put us in a better position in terms of cash generation capacity. And I'm happy that it is happening faster than we expected. I apologize that the expectation was not spot on two quarters ago, but I think we are on the right side of that equation.

Can, if I may just add on to that. At the end of first quarter, I think we pointed out that we wanted to see how the macro impact of what was happening in the Middle East and oil prices weighed on operations. So we've made a very clear point of, therefore, our holding on EBITDA just to get better clarity on how things evolved. And clearly, sitting here today, it's pleasing to see that they've turned out better than we thought, not just on the margin side, but also on the revenue side. So I think that's also the additional fact that I wanted to point out that leads to where we are today relative to year-end.

And last, on your CapEx question, whether we will spend more in the future? Yes, but the CapEx ratio will not go over 7% with the growth in revenue accelerating. So definitely, we'll stay with the same CapEx ratios on our digital businesses.

Sorry, just to follow up, 7% CapEx to sales for the digital businesses in isolation.

Yes, that's today what we spend.

Yes. But you're saying that it won't go above that in the future either.

Yes, because of the growth in the revenue projections.

I would expect it to decline in a way.

And business is evolving. I think the message is we're very pleased with the momentum of the business. Business is evolving. Margins are turning out better than where we expected. The Flywheel, as Kaan pointed out, is working and working incredibly well, and we take it as we go along. But as things stand, as Burak pointed out, we expect this business to continue to generate pretty material cash. And as the business grows, hopefully, we continue and see it progressing in the same direction.

Our next question comes from Adrian Cundy with Emerging & Frontier Capital.

I have two questions. One about just sort of your use of headquarter liquidity going forward, given that you've really turned the corner on the debt restructuring and that you've moved into a positive free cash flow to equity profile. Nearly $1 billion of cash at the headquarters and no major repayments until out beyond what you're upstreaming 2031, 2033. Can we sort of expect further reinvestment of that cash into any of the key countries, particularly if they need to capitalize digital bank? Or do you think you can continue to grow those opcos with their domestic cash flows? And M&A broadly, is that now new markets that are you keeping an eye on given that you have dry powder at the headquarters? That's my first question.

Now my second question comes down to sort of the coming back to the capital and CapEx intensity, and thank you for the 7% number just now. 5G launching in Pakistan, Uzbekistan talking about significant investment in 5G post the sale of Mobiuz, 40% of subs by 2030, something as I saw a headline. Kazakhstan, obviously, Bangladesh will come. And then there is Starlink. What do the relative margins look like between a Starlink data ARPU versus a terrestrial ARPU on 5G, which is more profitable? And what do you sort of see the balance of? And where will you be focusing your 5G investment? And are you confident that you can continue extended 4G, early-stage 5G in high-density areas at the current CapEx sales ratios?

Adrian, let me first start with the part about M&A. We are extremely disciplined when it comes to decisions about growing through inorganic means. Now naturally, there are very accretive in-market consolidation opportunities that we will always be looking after. But I truly believe that our stock price at today trading at 3.5x EBITDA is not at the level that we would be looking into acquisitions at a broad level. And I will keep that discipline very, very strong over the next couple of years.

So that's number one. But of course, in-market consolidation, naturally accretive synergies, these are things that we will be in the market continuously. Now you asked about the profitability of Starlink versus our other networks, terrestrial networks. If you look to the cost of producing mobile data via terrestrial networks in terms of deployment of towers, equipment, et cetera, versus having access to satellite connectivity. And let me give you an example in Kazakhstan.

Kazakhstan, the size of Kazakhstan is probably bigger than the entire United States and 20 million people live there. If I would try to deliver license requirements just in railways and roads based on terrestrial networks, it would cost me a fortune. So, I do not see actually cost differentials or additional cost when it comes to access to satellite platforms. I consider it actually quite reasonable when it comes to comparing the cost of satellite connectivity versus terrestrial connectivity.

Having said that, this is not about substituting terrestrial networks, fiber networks with satellites. It's complementing it when it is needed. And I think with that regard, the utility value to the customer definitely is much higher than the cost of the technology it brings.

And just to add to that, as Kaan said during the presentation, we will definitely use cash for shareholder return. On top of that, he just mentioned the M&A opportunities that we have in order to grow our business for in-market consolidation and maybe on the fintech side in priority. Last but not least, we will be addressing some higher cost debt that is sitting on the balance sheet today to make sure that we kind of balance the cost to debt ratio there in terms of interest expenses.

Our next question will come from Matthew Harrigan with Benchmark StoneX.

Great. Firstly, when you look at the digital side, I mean, clearly, you're a market leader in some areas where there's very substantial TAM witnessed in other markets, and you can see a really nice growth curve all the way around. But you're also involved on the LLM side as a critical player working with Google Gemma and COSCO clearly. How do you see the utility of LLM models developing for your Frontier markets? And are they eventually monetizable in concert with your partners?

And then secondly, clearly, in some other markets, you'd be trading at, people would be talking about targets of 5x EV to sales rather than 5x EV to EBITDA. But when you think about valuation without giving out a number, I mean clearly, Pakistan is one of the cheaper markets in the world, I mean, even relative to the Morgan Stanley MSCI for your markets basket. But how do you feel about valuation in terms of, I mean, should be people to be doing 10-year models rather than 5-year models? I mean, growth rates relative to GDP? I mean, do you think you get a fundamental re-rating of Pakistan or clearly, Ukraine, I mean, if that starts trading like Poland, you've got an immediate pop in Kyivstar.

But just kind of playing in a capital markets professor, just any thoughts you had on valuation without trying to say, I know you're not going to say what you think your stock is worth. And congratulations on the results and guidance.

Yes. Thank you, Matthew. Let me start with the second question you asked because clearly, we will be this year doing more than $0.5 billion of sales, and maybe I'm on the low side giving this number in Pakistan alone on financial services. And if you look to the benchmarks, financial services businesses of this nature, is just about to be IPO-ed for 7, 7.5x the revenues, not EBITDA. So clearly, this excites me a lot because it shows the value that we are creating in the marketplace.

Now Pakistan is a $2 billion run rate business for us. Among that, about $0.5 billion coming from financial services shows the potential of the country, 250 million people and 20 million outside of Pakistan. I think it's a unique market. We are blessed to be given the chance to serve Pakistan around the world, and we will continue investing. And I think the question you asked whether the valuations would reflect that, markets always get it right, and I'm confident in that.

So, time will show it. Now looking to the first question you asked, AI. I was reading today the CEO of Ooredoo making a very relevant comment. He says, I am seeing AI everywhere, except for P&L. But in reality, there is, I believe, a fundamental reality we have to focus on.

Value proposition, right? A company exists because it proposes a value to the customer. Customers matter still. The old type telecom companies, what is their value proposition? Number of minutes, number of SMSs, number of gigabytes. A digital operator, the transformation we have been going through for three, four years now sells meaningful Digital Services.

It's not enough. AI will change this as well. We will be providing customers an intelligence platform. And I don't like to talk about this super intelligence quantum this and that. It's simple. We provide customers a chance to become superheroes, a doctor, a better doctor, a teacher, a better teacher, a farmer, a more productive farmer, a small business owner to be more efficient.

A value proposition like a better version of yourself for $2 a month for $0.50 a transaction, I think is unbeatable. And that's where we are heading. And that's our AI strategy. It will be all about sovereign LLMs. It will be all about embedding AI into our super apps, which has more than 65 million users today. We do not have a problem of customer acquisition cost. We have a speed to market, bringing these LLMs at the fingertips of 600 million people.

I see a huge revenue potential. And we are working with every single country in our portfolio, developing these LLMs. I believe developing sovereign LLMs is by itself a business, but developing data inference capacity for the customers is another business. And those are the things that we are working on.

If I could add, Kaan, I think, Matt, as you're aware, Kaan mentioned $182 million of stock bought back to date. So, I think that's a very clear indication of management's perception of the stock being significantly undervalued. Today, we've again announced we're going to cancel minimum $100 million of stock per year. So, this is the velocity with free cash flow as we generate that should be the clearest vindication reflection of what we think about the stock price.

Clearly, you're the experts, you're doing your own numbers. As Kaan mentioned, there are comparables out there. But from our perspective, to generate that cash and use it to basically reflect in what is a very undervalued stock and therefore, buying it back is probably the clearest signal that we can provide in the market and that we'll continue to do.

Thanks. Very much look forward to your Capital Markets Day should be interesting.

Our next question comes from Max Findlay with Rothschild & Co.

My questions are more focused on performance within your different markets. So Bangladesh feels like it's split between a continuingly tough telco market, but you're managing to offset this with some impressive digital performance and cost performance as well. So first, on the telco performance, Telenor was very cautious about recovering in the market, but both from incoming phones and your operational KPIs look to be heading in the right direction.

Your EBITDA margin stabilized quarter-on-quarter, and I think expanded year-on-year if you exclude a one-off from last year. So it'd be interesting to get your thoughts on how recovery proceeds from there. Secondly, relating to Bangladesh, digital grew there about $12 million in absolute terms. Can you provide some color on what contribution came from holding the rights to the World Cup? And what we should expect from this in Q3 and kind of broader expectations about the fintech business, which you hope to get live in the second half of the year?

Then a final question on Kazakhstan. It was obviously a very difficult quarter there with performance deteriorating sequentially from Q1. The strategy change there, as I understand, was to target higher-value customers and to do this by bundling services. But local currency ARPU fell 1.5% year-on-year and margins have dropped by 7% year-over-year in Q1 and maybe 9% this quarter. So I guess the question is, is the shift in customer strategy working? And what can we expect in terms of margin recovery in the near term?

Thank you, Max. Let me start with Bangladesh. Clearly, I'm happy to see the stabilization of the market, and we have been consistently growing in the last three quarters year-on-year. And this quarter is an interesting one because I think it shows the potential of the country. There has been significant energy outages in Bangladesh in April and May to the level that the entire country has reduced its data consumption by 15%.

Now in an emerging market, you would expect data consumption to go up 40% year-on-year. This happened because of energy outages and practically because of the Hormuz Strait crisis, oil being not available in certain places. So despite this, we managed to grow our business. But what really excites me in Bangladesh, we broke all records. And I was talking with Google executives recently.

They said, we have never seen such a thing like this in World Cup in terms of broadcasting the games to Bangladesh population in and outside of Bangladesh. I was actually yesterday at a restaurant, and I met a Bangladesh guy. And the moment I said, do you know Bangladesh and Toffee, he said, yes, I watched all the games from Toffee at $5 rather than $20.

So it is good to see that we are even getting in New York some attention. But in terms of the monetization potential of Digital Services, the growth you see there is thanks to the World Cup. And I congratulate the United States. I think they run the best World Cup that I have seen, but it also had a major impact in Bangladesh, and we are very happy to see that. And I'm more positive than other players in the market in terms of the progress and development of Bangladesh. I think when the energy stabilization also normalizes, we will see higher growth rates from the country. Now coming to Kazakhstan.

There are a couple of things that we need to keep in mind. First of all, VAT rates have increased, right, 6%. And this is a significant change, and we were not able to adjust this to the pricing. Normally, we are better in doing this. But in this particular case, 6% disappeared from top line. And you can imagine the impact of that to the EBITDA. The second important issue is we have a model of bundling smartphones into family packages. It's a great idea, but it also has a temporary fluctuation in the marginality because of the way it is accounted for.

So those two important dynamics had an impact. I'm not concerned. Kazakhstan is the most advanced digitally aligned market that we have in our portfolio. And we are actually doing quite well despite the fact that we are providing 4G advanced services in Kazakhstan. We have a unique advantage in terms of customer satisfaction and Net Promoter Scores. So overall, I see the Kazakhstan as a temporary issue in terms of margin erosion. But I'm sure that Kazakh market will prove itself to be an extremely dynamic and successful market as the time passes this year.

And just to add on top the Bangladesh, on top of the World Cup, there was a pricing adjustment we did year-over-year for our services that also impacted the revenue growth.

Yes. So I think just to complete that, digital is 13%. The World Cup helped at 13%, but it's not as if we want to call that a one-off. I mean the plans in motion, there's a lot of other things. So we're hoping for that momentum to kind of continue to sustain itself.

There are countries which loves crickets like Pakistan. There are countries which likes football like Bangladesh. And every Bangladesh is either a Brazilian fan or an Argentina fan. You can go to during the World Cup time, the country is full of Argentina and Brazil flex. So it was good that Argentina made to the last final game for us.

Shame there's no more tariff anomaly supporters in Bangladesh, but we live and home. Just coming back on the EBITDA margin point on Kazakhstan. I mean, is this margin like depressed at the moment because you're bundling it in with low-margin equipment revenues. So you don't expect further deterioration, but the kind of margins stay around the kind of 40%, 45% kind of range where they've been Q1, Q2. Is that the right way to interpret that?

Max, first of all, let me correct one thing. We do not subsidize equipment. So it's not a matter of margin dilution because of subsidies of equipment. It is a matter of revenue recognition, which recognizes some of that margin in the previous quarters rather than this quarter. It's a cyclical movement of the volumes of business having the impact because the way the service and equipment integration into packages results in different type of an accounting procedure.

In simple terms, we recognize equipment revenue upfront and the higher-margin service revenue gets recognized over the term. Therefore, as the business grows, we recognize more lower margin revenue upfront.

And that's the success, that's actually success of business growing that we recognize more lower margin revenue upfront and then the higher-margin service revenue will come in turn.

And this, combined with the 6% VAT impact, you can understand where we are.

Our next question comes from Ahmed Mostafa with Inam.

Two questions from my side. First, digital EBITDA margin reached 36% this quarter. So what are the main levers and medium-term milestones for further margin expansion? And second, which markets still have the most headroom to increase multiplay penetration.

Thank you. Thank you for the question. Now let me answer it this way. There are markets already where a number of digital service customers have exceeded a number of our telecom customers. And when I look to advanced markets, especially the Pakistan being the highest, I think we are getting close to 38% of our revenues coming from financial and Digital Services. And this is just a continuum because as we bring the right services to each market on financial services side, entertainment side, healthcare, education and AI services, I think we are going to see a constant increase.

Our multiplay customer base was raised this quarter about 4.5%, which is actually the healthy trend that we would like to continue. The biggest upside that I see in this space is still Bangladesh, and this is related to smartphone penetration in the country. There is an interesting metric that I want to share with you. If you look to GSMA reports for the five countries that we operate in, there's 530 million people less. Number of people connected to Internet is 288 million. Number of digital service customers we have is 228 million people.

So basically, 6 out of 10 people whoever gets connected to Internet is our customers already one way or the other. Now we need to push for equal inclusion for women on smartphone ownership. That's our #1 priority. And that will mean that we have to work hand-in-hand with the governments and equipment producers to increase the smartphone penetration and especially on female population.

Our next question comes from Jake Ng with New Street Research.

Jake, you are on mute.

This is Jake. So I understand that currently has a global framework agreement with Starlink and Starlink is present in Ukraine. You guys are working with them in Kazakhstan and Bangladesh already. Is there a possibility of us seeing this in Pakistan and Uzbekistan as well? Just this.

Thanks, Jake. I assume Chris is on vacation already. So please pass my regards to him and tell him both you and him invited to the Capital Markets Day. The answer is yes, as long as the government allows us to. So there are quite a number of regulations to get to this point, and it takes a while to show the government that this is an essential need for the populations. I think there should be no country in the world which would not be integrating their terrestrial networks with satellite platforms.

We should not consider this as a threat. This is a responsibility for the populations. And actually, I wish the regulatory environment would be forcing every single regulator operator to do this. We are doing ourselves, and we are working with all the countries' regulators to also demonstrate the value of doing this.

And on top, our contractual terms do give us benefits as we add on more countries with Starlink.

Is it possible to elaborate on any of these benefits you mentioned?

I suggest we keep the commercial details to ourselves. Thanks a lot for the question, but I don't think we can share that.

Our next question will come from Ali Zaidi with Inam.

I just have one question. So you have called out that there is a high energy cost in Pakistan and there are also energy-related disruptions in Bangladesh as well. So in Ukraine, you responded to that kind of problem like by buying the generation directly. So is it something you would consider in Pakistan and Bangladesh as well?

Good question. Of course, in Ukraine, we have a stronger appetite to deploy capital in terms of this type of investments. In other markets, we are looking for alternative methods, actually deploying solar farms only works if there is a strong grid distributing the energy in the country. And both in Bangladesh and Pakistan, the grid infrastructure is not at the level that we can do the same playbook. Having said that, more and more, there are site-based technologies that could allow us to do solar and wind generation for the specific sites.

Actually, last year, we have deployed one of those sites in Kazakhstan at a very remote location, which still works in a perfect manner. So we will be looking for those. There are already projects in place, especially in Pakistan to solarize some of our sites, giving very encouraging results.

And last question comes from Theodore O'Neill with Litchfield Hills.

I'm looking over the results for the quarter, and I'm struck by the fact that country by country, you've got with the exception of Bangladesh for reasons you already mentioned, you've got double-digit growth in revenue and dollars, but the mobile customer numbers are essentially unchanged. At some point, do you need to see those mobile customer numbers go up? Or is it partly what you just talked about, too, with the female population that you're trying to address?

Yes. So first of all, we are focused on the Flywheel that I described. How much of that customers are multiplay customers versus just an end-to-end SIM card or practically customers who are only using our voice services. And we are very satisfied with that evolution overall. In our markets, there is still a challenge, especially when it comes to Pakistan and Bangladesh, which are big populations in terms of smartphone availability.

So, our ability to make smartphones affordable and accessible and also penetrating into markets which there is very low smartphone ownership, especially the woman, I think, is a critical success factor.

Of course, we have programs to address those. but you will only see that growth picking up in the way that we want with regard to multiplay customer base if we can grow the penetration of smartphones in the markets.

See you on November 16th.

We have no further questions at this time. I'll now hand back to Anand Ramachandran for closing remarks.

Thank you so much. I'd probably take the last call for any follow-up questions in the room. I don't see any. So with that, guys, thank you very much for your time and attention. As Kaan said, we will have the Capital Markets Day in November and obviously, the third quarter results before that. Thank you very much for your attention and support to VEON. We'll keep talking but see you as a part of this group again next quarter. Thank you so much.

Thank you. Thanks.

Hello, and welcome to VEON's Q1 '26 Results Presentation. [Operator Instructions] As a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time.

Anand Ramachandran, you may begin.

Thank you. Good morning and good afternoon to everyone joining us for VEON's first quarter results. My name is Anand Ramachandran, Chief Corporate Development Officer at VEON. Joining me today are our Group CEO, Mr. Kaan Terzioglu, and next to him, our Group CFO, Mr. Burak Ozer. As usual, Kaan will begin with our strategic and operational highlights, followed by Burak with a review of our financial performance, and we'll then open up the call for Q&A.

Before we begin, please note that today's presentation contains forward-looking statements, which involve risks and uncertainties. Further details are available in all our SEC filings, including our Form 20-F. Our earnings release and presentation are available on our Investor Relations website.

With that, let me hand it over to Kaan.

Thank you, Anand. VEON has entered 2026 with clear momentum, double-digit growth, accelerating digital revenues, stronger cash generation and continued capital returns. Revenues in U.S. dollars grew 17% year-on-year. EBITDA increased 17.7%, and margins expanded by 20 basis points. Importantly, this growth translated into strong cash generation with equity free cash flow up 73.4% year-on-year to $246 million. This performance reflects the strength of our digital operator strategy, combining resilient connectivity, fast scaling digital platforms and disciplined capital allocation. As a result, we are raising our 2026 revenue outlook, which I will return to later.

Second, we are seeing strong acceleration across our digital portfolio. Digital revenues grew 57.7% year-on-year and now represents over 25% of our group revenues. Importantly, this growth is increasingly profitable with EBITDA margins of 34.6%. This quarter, we also refined our reporting by including enterprise identity and credentials management within digital enterprise. These are mature services that are increasingly shifting from traditional A2P messaging towards API-based platforms. On a comparable basis, excluding this reclassification, our digital revenues actually grew over 75%.

Third, we continue to execute multiple growth levers within disciplined asset-light framework. In Pakistan, we secured the largest spectrum allocation in the March spectrum auction strengthening capacity and supporting future growth. We are expanding our financial services footprint and our acquisitions of TPL Insurance and Apna Bank acquisitions to come are on the right course. We are deepening our ecosystem through targeted acquisitions, such as OLX and Tabletki. These initiatives enhance engagement expand monetization opportunities and reinforce our long-term growth platforms.

Finally, we remain firmly focused on shareholder value. We continue to believe our shares do not reflect the value and cash generation of the business, and we are acting on that conviction through our buyback program. At the same time, we are reducing leverage and maintaining financial flexibility. Management ownership remains a key signal of alignment, reinforcing our confidence in the value we are building.

Let us review our Q1 financial performance. Let's move to the next slide. Our strategy is translating into strong high-quality financial performance. Both Telecom and Digital segments are contributing meaningfully to profitability and cash flow, demonstrating the strength of our integrated model. Telecom revenues grew steadily while digital revenues increased significantly and now account for 1/4 of total revenues. As highlighted earlier, we are encouraged by the strength of our cash generation this quarter and continued reduction in leverage.

Next slide, please. Our growth continues to outpace inflation across our markets, reflecting the strength of our operating model. On a like-for-like basis, which adjusts for the divestment of Pakistan Towers, Kyrgyzstan business and the acquisition of Uklon and Tabletki, revenues grew 15.4% and EBITDA grew 15% year-on-year. This reflects our ability to execute fair value pricing supported by strong demand, high engagement and increasing customer reliance on both connectivity and digital services.

Let us move to our Digital performance, which continues to scale in size and quality. Let's go to the next page. Digital revenues reached $303 million for the quarter, now representing over a 1/4 of group revenues. The reclassification of enterprise identity and credentials management within digital enterprise, which I highlighted earlier, contributed $44 million for the quarter with prior periods reclassified for comparability. Growth remains broad-based, with financial services leading and strong contributions from entertainment, ride hailing and health care.

We also began consolidating Tabletki from February further strengthening our health care vertical in Ukraine. Our digital platforms continue to benefit from structurally low customer acquisition costs and highly efficient distribution creating a scalable competitive advantage across our markets. Importantly, digital services are structurally lower in capital intensity, supporting strong cash generation capacity.

Let's go to the next page. Multiplay customers remain a key growth driver. These customers use connectivity with digital services, and they deliver significantly higher value with ARPU now 3.9x that of voice-only customers. This fact also helped us raise overall ARPU to USD 2.3 for the quarter from $2 a year ago. Multiplay revenues grew almost 18% year-on-year and now represents 58% of consumer revenues.

Let me now update you on the operational performance across our markets in the next page. We are seeing strong operational momentum across the board. Pakistan and Ukraine continue to lead, while Kazakhstan and Uzbekistan delivered steady growth. Bangladesh is continuing its growth for a second consecutive quarter in a row. Digital momentum is consistent across all markets, supporting both growth and diversification. Our focus is clear. To sustain this momentum through disciplined execution and balancing revenue growth with profitability over the course of the year.

Next slide, please. Our financial services business in Pakistan continues to grow from strength to strength. JazzCash served over 29 million users during the quarter while our merchant base expanded to over 600,000 merchants. This is driving a powerful network effect. Transaction volumes remain robust. With last 12-month transaction value reaching USD 60 billion, or 15% of Pakistan's GDP, reflecting a sustained growth in usage and engagement. We are also scaling, lending at pace, with over 200,000 loans issued daily, while maintaining disciplined risk management. Asset quality remains strong and nonperforming loans, NPL ratios remain well controlled. Mobilink Bank's loan portfolio has reached $289 million and is supporting the continued expansion of our Digital Financial Services ecosystem. Together, these capabilities position us well to support financial inclusion and capture long-term growth.

Next slide, please. We have refined our definition of digital customers to reflect active users in quarter 1, providing a more comprehensive view of engagement across the quarter. Across our ecosystem, we now serve 229 million digital customers, including over 72 million digital-only users. Our platforms are becoming go-to super apps in our markets. Transaction value reached almost $63 billion over the last 12 months, reflecting both scale and deepening engagement. This creates increasing opportunities in cross-sell, advertising and monetization.

Next slide. Our Consumer Digital platforms continue to scale across multiple networks. Financial services, entertainment, health care, ride hailing and super apps now serve millions of users across our markets. Our premium digital brands are delivering a differentiated customer experience by seamlessly integrating connectivity with everyday lifestyle services such as health care, e-commerce and mobility. Together, these platforms deepen engagement and unlock multiple opportunities, providing people that are underserved with service quality they deserve.

Next slide, please. We are also building strong momentum in digital enterprise. Our platforms in augmented intelligence, cloud and data analytics are scaling across our markets, supported by almost 2,000 engineers and data scientists. Our AdTech platform reaches over 100 million screens, enabling increasingly sophisticated AI-driven targeting and monetization across our ecosystem. Within our Identity and Credentials management services, the focus is rapidly shifting towards secure real-time authentication as a primary defense against fraud and scams and protection of children.

Let's go to the next slide please. Augmented intelligence, or AI, is a core pillar of our value creation. For us, AI is not a stand-alone initiative. It's a productivity engine across networks, customer care, digital services and enterprise solutions. We are building sovereign local language AI capabilities. Our Ukrainian LLM, Syayvo, which means glow was named by Ukrainian citizens, showing its national importance and strategic value. Our ambition is to put AI to work in real-time economy, helping doctors deliver better outcomes, teachers reach further and farmers produce more. This is practical augmented intelligence, delivering measurable impact in everyday life.

We have over 1,000 prioritized use cases across the group. Over 1.4 million customers are using our AI products across our footprint. We are focused on turning AI from potential into performance.

With that, Burak, I hand over to you.

Thank you, Kaan. We continue to deliver strong financial results in the first quarter. Group revenue reached $1.2 billion, growing 17% year-over-year in U.S. dollar terms, with broad-based contributions across our markets. Digital services grew 57.7%, reaching $303 million and representing over 25% of total revenue. This reflects strong execution across both Telecom and Digital businesses.

Next slide please. EBITDA reached $517 million in Q1 '26, growing 17.7% year-on-year. Margins expanded by 20 basis points to 43%, reflecting operating leverage and continued cost discipline. This demonstrates our ability to grow profitability while maintaining a disciplined cost base.

Next page, please. Now turning to the balance sheet. We ended the quarter with $1.75 billion in cash, including $457 million at headquarters level. Gross debt remained stable at $4.9 billion. Net debt, excluding leases, stood at $1.76 billion, with leverage reduced further to 1.07x. This provides us with financial flexibility and resilient capital structure. We are also proactively exploring strategies to manage our upcoming debt maturities.

With that, I'll hand the call back to Kaan.

Thank you, Burak. And returning capital to shareholders remains a key priority. Our current $100 million buyback is underway with ADS buybacks continuing. We are committed to a minimum of $100 million in annual share repurchases subject to market conditions and liquidity. Following completion of the current program, shares repurchased under future programs will be canceled supporting long-term shareholder value.

Next slide, please. We have a long track record of navigating frontier markets. Volatility is not new to us. We are proactively executing targeted actions to mitigate the impact of recent energy price movements. Reflecting our strong first quarter performance and continued commercial momentum, we are raising our 2026 revenue growth outlook to 11% to 14%, while maintaining EBITDA growth guidance at 7% to 10%. We are making further investments in Pakistan, following the recent spectrum acquisition to support future growth. Capex intensity, excluding Ukraine, is expected to be in the range of 15% to 17%.

To conclude, VEON has made a strong start to 2026. We are delivering double-digit growth, scaling digital revenues profitably, strengthening our credit profile and returning capital to shareholders. At the same time, we remain disciplined and mindful of external volatility. Our model is increasingly diversified, resilient and cash generative, and we are confident in the opportunities ahead. Thank you for your continued support.

We will now open the line for questions.

[Operator Instructions] Our first question comes from Max Findlay with Rothschild & Co Redburn.

The EBITDA guidance implies a downgrade for the business ex Kyivstar and margin contraction of about 1% following Kyivstar's EBITDA upgrade earlier today. Are you able to walk us through what's changed since we last spoke?

Secondly, and linked to my first question, I was wondering if you could provide some color about what you're seeing in your markets now as a result of the Iran conflict, and what risk there is to further EBITDA margin compression? I obviously appreciate the high uncertainty around the situation.

And finally, I asked at full year results, whether your CapEx guidance was a bit conservative following the Pakistan auction. And I guess I'd like to know what has changed regarding your network build plans there? Is this CapEx being brought forward, that was perhaps targeted for next year? Or is this new CapEx?

Thank you, Max, for the question. I think second part of the question is kind of the answer to the first. We have reiterated our guidance as it is on the EBITDA side, and I would like to see the next 3 months to give a more clear picture about how the EBITDA growth will curtail.

If you would ask me, I do not think any margin compression will happen because we have strong control over our pricing. Our services are differentiated and the tolerance towards price elasticity is quite healthy in the markets that we operate in. Having said that, today, President Trump is in China. I would like to see a little bit more clarity on geopolitical landscape before making a change in our guidance on the EBITDA side.

Now looking into the impact we see in our markets, especially about the oil prices. Today, in South Asia, a barrel of oil goes in between $160, $180, not like in line with the Brent. And it is not about the pricing, but it is also the availability of fuel, which is important. And I am very glad to see that actually Pakistan over time has been diversifying its energy production capacity towards wind, solar and hydro. And the hydrocarbons have been steadily declining in the needs. But in markets like Bangladesh, we have seen some availability issues over the last couple of weeks. And I hope that the pricing -- liberal pricing of oil will adjust this availability issue over the time.

But I think it's important to understand that the impact from the current weighted average inflation rate of 8.1% across our markets, we do expect to see double-digit inflation moving onwards. And that's, of course, something that we are watching very carefully.

With regard to investments in Pakistan, we have tripled our capacity on spectrum. And specifically with 700 megahertz spectrum getting into our fleet of spectrum, we will accelerate our deployments. It will be our coverage layer for 5G and also 4G nonstandard services as well. And that's why we decided to upgrade our guidance slightly. Having said that, if you look into our profile of our revenues.

Now 1/4 comes from digital services. Digital Services, CapEx to sales ratio is in higher single digits rather than higher 20s. And that's why we believe, over time, there will be a moderation of CapEx to revenue percentage in terms of investments. But still for the remaining of the year, we will accelerate our deployments in Pakistan because the average data consumption in Pakistan today is around 7.5 gigabytes per month which is 1/3 of what it should be. It's not that Pakistani's don't like to consume more. It's because the capacity is limited. So we believe that putting more capacity in place will give us the chance also to monetize that business.

Great. Could I just follow up on the EBITDA margin point? I think from what I understood, you're suggesting there will be no margin contraction. But given the upgrade to revenues and EBITDA guidance staying the same. If you take the midpoint of both, that obviously implies margin contraction. Are you suggesting that we should instead be thinking about you ending up at the full year at the top higher end of the EBITDA range, if margins are going to stay stable?

Max, I would suggest that we wait for Q2 end to give more clarity on that. At this particular stage, we wanted to stick to the guidance that we have given on the EBITDA side. But I think our pricing control and inflationary pricing discipline will allow us to keep our margin levels the same.

Our next question comes from Nicholas Paton with Edison Group.

Thank you very much for the additional information on the Pakistan Financial Services business, which I thought was very interesting. It reminded me of the work that we did in our initiation. And I think when I look back at that now, we were considering the transactions with MTN Fintech and Airtel Africa looking at potential valuations for that business. And it looks as though the business has grown something of the order of about 30% in EBITDA terms over the last year or so. And at the time, we were looking for a valuation of around about $1 billion for that business. I'm also aware that investors have been discussing a potential strategic investor for that or maybe even an IPO, have you any more thoughts about crystalizing value in that business?

I'm extremely happy with the progress we have with our financial services business in Pakistan. And specifically expanding our service lines into insurance and potentially to digital banking products that we do not cover today. I think there is a huge potential of serving a 250 million population in Pakistan and in addition to that 12 million population outside of Pakistan as Diaspora, there's a huge potential in this particular market, and I would like that growth to show itself a little bit more. What I'm even more excited is applying the same business model in a market like Bangladesh, where there is an additional 180 million population, with also a strong Diaspora footprint. And I think our intentions of at certain point, opening up this as an investment opportunity stays, but we will not worry as we see the growth rates actually are still allowing us to develop the business.

And should I infer from that, that if you were to look for a crystallization of the value in those businesses, you might look to for instance, merge the JazzCash business with businesses from other countries? Or would you try to look at options on a country basis?

We will keep an open mind in terms of how we see the consolidation. But clearly, there are certain aspects of the business which later on, actually turn into products such as digital assets, including stablecoins, remittances. These are global businesses. So some of these things actually could justify a global multi-brand strategy.

Our next question comes from Adrian Cundy with Emerging and Frontier Capital.

It's good to see you again. Congratulations, first of all, on beating our digital growth estimate this quarter. Last time we did the call, you said that you sort of had a vision of getting to 30% plus of turnover, sort of, by the end of next year, half from organic, half from potential M&A and 1% a quarter. You seem to be running ahead of that right now. So any -- do you think on an organic basis, you might even get to 30% earlier than planned given what's going on and particularly in Pakistan?

Well, I think, as I mentioned, really the momentum we see, not only just in financial services but entertainment, our digital premium products, health care marketplaces is very strong. And now actually, I see that a team we look to end of 2029 to achieve more than 50% of our revenues from digital services. And having that insight, I think half of that should come organic, half of that probably will come with acquisitions that we will see in the markets that we operate in.

But I'm very happy to see that we modeled our digital services growth, of course, as 35%-plus growth business, and it is proving to be almost twice as fast. And I'm happy to see that. But I don't want to give a guidance on the year on growth, that's not something we do at this particular time.

And just outside of sort of Ukraine and Pakistan and in terms of the growth capital for these -- for the digital wallet in Bangladesh, where you might be doing Kazakhstan and Uzbekistan. Do you see potentially a need for risk -- more risk capital or a primary issue in those businesses at the group level? And it sort of relates to earlier discussions you said about listing operating companies, particularly Jazztel in Pakistan. Is that still on the agenda given the current geopolitical situation?

I think it's important to look into these not only as crystallizing of the value, but having the right partners, right investors in place to develop resilience and strength. And from that perspective, we are, of course, always looking for what we can achieve around the world.

Okay. And if I just have a final question for -- on the debt. Last call, you indicated that you'd like to refinance the notes coming due before they become current in the fourth quarter of this year or address it. Do you sort of -- just for our modeling purposes, do you sort of have a target debt to capital in mind? And given that cash flow continues to accrue at the group level, will there be -- when you do move on the notes due in '27, do you need to refinance the whole $1 billion? Or will there be a principal payment and maybe an issue or something a bit longer duration at a smaller size that would provide a further acceleration of free cash flow to equity?

Let me ask Burak to answer that since they have been quite busy on this front. Please, Burak.

Yes. I mean the work has been going on, and we still plan to address the debt before it becomes current in November 26. So we are working on that. And all options are on the table. Of course, I think we will go for a minimum benchmark size whenever we go for it. And on top of that, we will have to decide based on all the capital inflows and outflows that we are foreseeing right now.

And if you sort of look 2, 3 years out, what sort of debt to capital structure would you see as optimal for the business?

Excluding leases, we don't want to cross the 1.5 mark, where we are at 1.07 today. So that's where we see ourselves.

[Operator Instructions] Our next question comes from Ahmed Mostafa with Inam.

I have a question on Uzbekistan. Customers are nearly flat or declining, but ARPU keeps growing. So how should we think about the growth strategy in this market?

Ahmed thanks a lot for the question. As you have noticed, our strategy is around multiplay nature of our services. And that practically means as customers move from being a single-play customer, meaning just consuming our voice services and transforming into consuming our digital services, the potential of ARPU quadruples and the churn goes down significantly. So that's also what we are observing in Uzbekistan.

Our customer base is maybe stable, but actually the type of services we provide is getting richer and richer. And that allows, especially with the family package models, a much higher traction in our wallet share.

Our next question comes from Himanshu Porwal with Gramercy.

Congratulations for a strong set of results. Just to get some clarity with respect to your financial services business. As in like how much of the Pakistan revenue comes from the financial services arm? And what are your plans on this very division itself, like the financial services? And do you plan to grow it outside of Pakistan on the similar verticals?

Sure, Himanshu, thanks a lot for the question. To give you an overall indication, for us, financial services business is about $0.5 billion business, a significant portion, almost 2/3 of it comes from Pakistan. And it's a combination of digital wallet services, insurance business, lending business as well as, of course, remittances. And we are serving almost 29 million customers actively, but we have 60 million. Actually, we just crossed the 60 million bank account number. So with that, we believe transacting more than 80% of Raast transactions and transacting almost 15% of GDP, we are already well-established financial services player basically.

Sorry, I mean -- I should have it more clear. I mean -- I meant more with respect to the lending business. Sorry about my...

You mean the percentage of lending business?

Yes...

Okay. Wait we...

So what we -- look, we don't get into that level of disclosure. But what we've indicated is that lending is -- roughly lending and interest income is slightly over half of the total revenues for the Pakistan business. So that's what we've indicated in the past. Clearly, as the business grows in size, we are aware that people want to know more, and that's something we are evaluating. And I guess over the next 6, 9 months, you'll see us providing more color around that. But for now, I think we'll probably leave it at that.

Yes, I can point it out 200,000-plus loans, Mobilink has a pretty big loan portfolio. So if you look at the connection services business as a whole, lending and interest income as yes, it's north of half of the total revenue base that we have today.

That is precisely what was my concern. And I mean, should we start seeing you guys as more of like NBFC sort of thing? Or are you going towards that? Are there any ambition of moving in that direction?

So Himanshu, I think you should definitely perceive us as a financial services company, which serves from wealth management to lending, to remittances to digital assets services in the country. So we are already, I think, from a number side, account number side and number of loan side, we are #1 in the country. And you will see us getting our fair share from the financial services business as a consumer-oriented financial services company.

Our next question comes from Jake Ng with New Street Research.

Just one question. Mobile ARPU growth in general and especially Ukraine was really impressive. Can you give more color on that? Is it really all from bundling and multiplay customers?

Look, if you look to our telecom growth, which is, I think, around 8%, 9% versus digital services growth, which is around 57%. And then there was another number which I disclosed, which was multiplay services growth, right? This is actually the telecom growth, but for the segment of customers who are consuming both telecom and digital services, but we do not recognize the revenue as digital service. We recognize the revenue as telecom service because it actually improves the data consumption. That grows more than 17%. So that is actually the sweet spot why our ARPUs are growing.

Even if our total number of telecom customers is stable at 150 million year-over-year, our ability to generate more telecom revenues from those customers are increasing because the customers who also consume our entertainment services, they consume more data. They even talk more on the phone and they stay longer with us. And those 3 drivers allows us to create more ARPU from the same customer base.

Our next question comes from Ali Zaidi with Inam.

I just have one question. Does Apna Microfinance Bank holds a different kind of license than MMBL? And can it like unlock any regulatory capabilities for JazzCash and MMBL in the future?

Well, we are definitely taking a very important role within the digitalization of the financial services landscape in Pakistan. And we truly believe that as we grow our footprint, including insurance businesses and Apna Bank, we will be basically operating as a digital bank, providing the services that our customers are in need of in the marketplace.

We have no further questions at this time. I will now hand back to Anand Ramachandran for closing remarks.

Thank you very much for your interest in VEON and for supporting us. As always, the Investor Relations team and all of us are available for any follow-up questions. We look forward to staying in touch. Till then, it's goodbye from us till the next quarter on this call. Thank you for your time.

Thank you very much.

Hello, and welcome to VEON's FY '25 and 4Q '25 Results Presentation. For those of you who have joined the Zoom webinar, if you would like to ask a question that you can use the raise hand button which can be found on the black bar at the bottom of your screen at any time to join the queue to ask a question. and you will be called upon during the Q&A session. [Operator Instructions] As a reminder, this conference is being recorded today.

Anand Ramachandran, you may begin.

Good morning and good afternoon to everyone joining us. Thank you for being with us for VEON's fourth quarter and full year 2025 results for the period ending 31 December 2025. My name is Anand Ramachandran, I'm the Chief Corporate Development Officer for VEON. Joining me today are Kaan Terzioglu, our Group CEO; and Burak Ozer, our Group CFO.

As usual, Kaan will begin with our strategic and operational highlights. After which, Burak will cover the financial results. We will then open the call for Q&A.

Before we begin, please note that today's presentation includes forward-looking statements, which involve risks and uncertainties. Actual results may differ materially due to the risks detailed in VEON's annual report and Form 20-F and other filings with the SEC. Our earnings release and presentation are available on our Investor Relations website.

With that, let me hand it over to Kaan.

Thank you, Anand. 2025 was a strong and transformative year for VEON. We delivered double-digit operational growth, accelerated our digital strategy, strengthened our balance sheet and unlocked significant shareholder value. Let me highlight a few key points.

First, our financial momentum is strong. In the fourth quarter, in U.S. dollars, revenues grew 17%, and EBITDA grew 29% in U.S. dollars year-on-year. For the full year, revenues increased nearly 10% in U.S. dollars and EBITDA grew 19%. We also crossed an important milestone, more than $2 billion of annual EBITDA with margins expanding to 45.7%.

The second theme this year is digital services revenue acceleration. Digital revenues grew 84% year-on-year in the fourth quarter and over 62% for the full year. Digital now represents more than 17% of group revenue, up significantly from last year. In Q4, more than 20% of our revenues were digital service revenues.

Following your request, we are including EBITDA for direct digital revenues to our set of disclosures. For 2025, EBITDA from digital services reached $207 million, with an EBITDA margin of 27.3%. This shows that digital ecosystem is not only growing quickly, it is also becoming profitable at scale.

The third theme is execution of our asset-light strategy. During the year, we completed the sale of our Pakistan tower portfolio, deconsolidated TNS Plus, reducing our leverage and strengthening our balance sheet. We launched direct-to-cell connectivity with Starlink, which is already live in Ukraine and Kazakhstan, and this capability will expand to Bangladesh in 2026. These initiatives demonstrate how we are combining connectivity, digital platforms and new technologies requiring less CapEx to create long-term growth.

Finally, we continue to unlock value for shareholders. The listing of Kyivstar on NASDAQ was a landmark achievement. This quarter, we are further increasing the float with a successful secondary offering, which was completed about a month ago. Today, Kyivstar is valued by the market at $2.4 billion, with VEON's stake worth approximately $2 billion alone.

During 2025, we strengthened liquidity, reduced leverage and continued to execute our share buyback program. We believe VEON's ADSs remain significantly undervalued. And today, we are announcing our policy of continuing to repurchase at least $100 million of shares annually.

Let's move to the next slide. Our strategy is clearly translating into strong financial results. Group revenue reached $4.4 billion in 2025, growing 9.9% in U.S. dollar terms. Telecom and infrastructure revenues grew 3% even after the consolidation of TNS Plus, [ Deodar ] and [ Kygyztan], supported by average revenue per user growth driven by strong subscriber engagement. On a like-for-like basis, as the retailers would call it, the same-store sales, the revenue growth would have been 11% for the year.

At the same time, digital revenues grew more than 62%, reaching $759 million. Digital growth is not just about scale. It is not a vanity. It is contributing to profitability and cash flow.

This year, we have exceeded EBITDA of $2 billion, with margins expanding 350 basis points to 45.7%. This reflects both operational discipline and benefits of scale.

Next slide, please. Our growth continues to outpace inflation across our markets. Pricing control empowered by value propositions remains strong. Our ability to implement fair value pricing, leveraging low customer acquisition costs and effective distribution, enables us to gain [ bullet share ] from customers.

Next slide, please. Our digital ecosystem continues to scale rapidly, Digital revenues reached $759 million, representing 17% of our group revenues for the full year. Financial services remain our largest digital category, with strong growth also coming from entertainment platforms, ride-hailing and delivery, premium digital services and enterprise solutions. Digital services business model have much lower capital intensity, which supports equally strong cash flow conversion.

Next slide. Multiplay customers are a key driver of our growth. These are customers who are using connectivity plus at least one of our digital services. Multiplay customers generate nearly 4x the ARPU of voice-only users, and their churn rate is 1/3. Today, multiplay accounts for 56% of our total consumer revenues and continues to grow rapidly. This demonstrates the power of our integrated connectivity and digital ecosystems.

Next slide, please. Growth across our markets remains balanced and resilient. Pakistan, Ukraine, Kazakhstan continued to deliver strong momentum. Bangladesh returned to positive growth during the year. Uzbekistan continues to expand steadily. This diversified footprint provides stability and long-term growth opportunities.

Next slide, please. Our financial services business in Pakistan continues to perform strongly. Monthly active users reached 21.5 million. The merchant base expanded to over 511,000. Transaction value reached $53 billion, equivalent to around 13% of Pakistan's GDP. Mobilink Bank scales rapidly with a loan portfolio of $264 million and a world-class loan quality. This positions us well to support Pakistan transition to a digital financial ecosystem.

Next slide. Across our ecosystem, we now serve more than 135 million active digital service users. Three-month active digital service users exceeded 200 million, already larger than our telecom subscriber base. Digital-only customers also grew strongly, reaching 33 million. Total transaction value across the ecosystem reached $55 billion, growing more than 50% year-on-year. This is not growth. This is a structural shift, demonstrating the scale and engagement of our digital platforms.

Next slide, please. Our consumer digital platforms continue to scale over several verticals: financial services, entertainment, health care, ride hailing, marketplaces and SuperApps, together now reached tens of millions of users across our markets. At the same time, our premium digital brands, virtual digital operators, such as [ Easy, Rocks, Hawk or Rise ] are creating unique experiences with integrated telecom and lifestyle services such as augmented intelligence, mobility, education, health care and e-commerce. These platforms deepen the engagement and create multiple monetization opportunities.

Next slide, please. Our enterprise platforms are also evolving into technology businesses serving governments and corporations. This quarter, we launched BuildX in Uzbekistan, strengthening our regional AI and software capabilities. Across our enterprise hubs, we now have around 2,000 engineers and data scientists building cloud, augmented intelligence and data analytics solutions. Our ad tech platform now reaches over 98 million screens, enabling AI-driven advertising across our entertainment platforms.

Next slide. Augmented intelligence is becoming a core part of our value proposition, from raw data to digital services, our next frontier is to offer our customers a better version of themselves, a priceless value proposition, superhero capabilities, making the doctor a better doctor; a teacher, a better teacher; a farmer, a more productive one. Through augmented intelligence capabilities, we are embedding AI across our platform, services and enterprise offerings. We are developing local language large models including Kazakh, Ukrainian models and Urdu, Uzbek, Bengali in the making. These initiatives are already delivering measurable results. I see no reason why we cannot offer the health care services today, available only to the [ wealthiest ], to everyone at a fraction of a cost. There is no reason why best doctor not to be in Karachi, best teacher not to be in Dhaka. Most productive farmers will be in [ Olmoti ] or Odessa.

Today, our augmented intelligence enabled customer care tools handles close to 1 million interactions each month, creating better experience at a fraction of a cost. I can see these numbers growing tenfold over the next 2 years.

With that, I will hand the call over to Burak.

Thank you, Kaan. Our group revenue reached $4.4 billion in 2025, growing 9.9% year-over-year in U.S. dollar terms. Adjusting for portfolio changes, revenue growth would have been around 11% in dollars and over 15% in local currency terms. Digital services were again the fastest-growing segment, reaching $759 million and representing 17% of the group revenue.

Next slide, please. EBITDA for the year reached $2.01 billion, representing 18.8% growth. Our EBITDA margin expanded to 45.7%, reflecting both operating leverage and disciplined cost management. Growth was supported by strong performance across Pakistan, Ukraine and Kazakhstan.

Next slide, please. Turning to the balance sheet. We ended the year with $1.73 billion of cash, including $557 million at headquarters. Net debt, excluding leases, declined to $1.75 billion, with leverage reduced to 1.09x EBITDA. This reflects a strong and sustainable capital structure.

With that, I'll hand the call back to Kaan.

Thank you, Burak. Returning capital to shareholders is always a priority. We completed our first $100 million buyback program in August '25. Our second $100 million program is currently underway. Going forward, our policy is to continue annual share buybacks of at least $100 million, reflecting our confidence in VEON's long-term cash generation capacity. Once our annual buyback program starts after the completion of the current buyback program, shares bought back will be systematically canceled.

Next slide. Let me conclude with our 2026 outlook. We will give our guidance in U.S. dollars. We expect revenue growth of 9% to 12%, EBITDA growth of 7% to 10%. CapEx intensity, excluding Ukraine, is expected to decline to 14% to 16%. We remain confident in the continued growth of both our core telecommunications and digital services businesses.

To conclude, VEON is delivering strong financial results, scaling a high-growth digital services ecosystem and unlocking sustainable shareholder value. We are optimistic about the opportunities ahead.

Thank you for your continued support and trust in our company. We will now open the line for questions.

[Operator Instructions] Our first question comes from Max Findlay with R & Co. Redburn.

This is Max Findlay from Rothschild & Co. Redburn. Firstly, I've got some questions on the Pakistan spectrum auction. So some might be surprised by the 50 megahertz in the 3,500 megahertz band you acquired. This bandwidth is normally associated with 5G. And I was wondering if it's an aspiration to build a 5G network in Pakistan or does the priority remain 4G?

Secondly, from my understanding, the costs are denominated in Pakistani rupees. Are there any escalators within the spectrum costs that we should be aware of?

Finally, can we expect a ramp-up in Pakistan's CapEx as you prepare on utilizing the new spectrum?

And then just a quick one. I noticed there was an update on the OLX Kazakhstan acquisition, which is still going through regulatory approvals. Are you able to provide any updates on expected closing?

Thank you, Max. Let me start with commenting Pakistani government for their visionary action and reforms in the spectrum allocation in the marketplace. Pakistan struggled with, almost for many years, a very low spectrum allocation to the mobile operators. Actually, it was below 300 megahertz that was being shared by 4 operators. In the new auction, they auctioned 600 megahertz for 3 operators, twice for 1 less operator. And they have tripled the spectrum at use in the country by doing this, at rupee-based pricing and at much lower pricing per spectrum. Hands off -- really a great success in terms of the execution. They raised $0.5 billion. But more importantly, they opened up a real chance to improve Pakistan's infrastructure.

Now during this auction, we have acquired 700, 2300, 2600 and 3500 bands, a total of 190 megahertz of spectrum, for a total cost of $240 million. This is a fantastic achievement. And the reason that we have invested broad-based different platforms is our belief that we're going to be improving the quality of 4G as well as deploying 5G networks.

It is not true that 3500 can only be used for 5G. It can be used actually, 2600 can also be used for 5G. But we need to keep in mind that the amount of 5G-capable phones in Pakistan has not even reached 5%. So we believe still in Pakistan there is a huge opportunity to improve the mobile broadband services for 4G platforms as well. This will not stop us deploying 5G in certain pockets where we see relevance. And we will be executing that strategy actually quite quickly since we are ready to roll out both advanced 4G solutions as well as 5G services in Pakistan.

Now with regard to OLX in Kazakhstan, we are actually waiting for regulatory approvals to close the transaction. I think it has already been taking a while, but I hope that it will be closed within Q2, and that's our expectation. But of course, regulatory approvals are always depends on speed of certain institutions.

Kaan, there was also a question on 5G CapEx in Pakistan. We've given CapEx guidance, Max, of 14% to 16%. So I think it's fair to expect us to be very disciplined when it comes to CapEx. So we would not expect any big [ lumps ] coming through. It's something the business will manage in the long run. And as Kaan said, we will be very, very disciplined in what we have as an asset-light strategy, where we spend where it's necessary for to maintain the network differentiation and service innovation that we want to keep.

But I would like to highlight that we are not afraid to invest. Our investments actually are returning to us in a very handsome way, because all the infrastructure that we built is actually the platform for our digital services to connect to customers. So we will, of course, keep you positive about if there will be any changes in the outlook.

Our next question comes from Theodore O'Neill from Litchfield Hills Research.

First question is about -- so your revenue growth was strong here for the year despite a somewhat challenging market. And I was wondering if you could separate out a little bit the success in pricing versus volume growth, digital services and portfolio changes, that mix to help the growth for the year?

Sure. So Theodore, I think our recipe for success relies on the fact that we rely less and less on selling raw data and number of gigabytes. But we managed to transform our customers consuming meaningful digital services, from digital banking to entertainment to health care, education, ride-hailing, marketplaces. And the ability to transition into what we call multiplay really creates an opportunity to build deep relationships with the customers, where our relationships are longer, meaning that churn is almost 1/3, and our revenue generation capacity is almost fourfold compared to a traditional single-voice user.

And we see actually this transition allowing us not only to deliver high growth on telecom space, but also on top of that, direct digital revenues coming from -- directly from these platforms. And we separate these things completely separate from each other. And that's the secret sauce of VEON's digital services operator model.

And as a follow-up, on digital revenue, could you discuss the next phase of growth, where that will come from, and the margin profile?

So the margin profile currently for 2025 is 27.3%. We have a business model that is architected to deliver equivalent cash flow generation capacity, whether it's telecom services or digital services. If you look practically to the telecom business model, you create about 47% EBITDA margin, but then you will have a heavy CapEx cost of almost 25%. And that leaves you with a 20% to 23% cash flow generation capacity.

On the digital services side, we build a model where you create 27% margin, but your revenue-to-CapEx ratio is 7%, which again leaves you a 20% cash generation capacity. And we are very happy with this balanced model as we grow.

Our next question comes from Adrian Cundy with Emerging & Frontier Capital.

Can I just talk about -- one question, can I just talk about capital allocation in the midterm? Obviously, your CapEx is headed in the right way, so 16% core plus whatever Ukraine has to do to keep things going. You have some leverage during '27. You're continuing $100 million in buybacks, but no sort of long-term visibility on when dividends may resume. And how do you just sort of like -- $0.5 billion at the group level, how do you sort of plan on using that? And a number of investors have spoken to have sort of some indirect questions saying what's the long-term sort of capital allocation vision for the company. I think it's a piece missing from your story.

Sure. Adrian, to be precise, in addition to the $200 million buybacks we announced, we are actually in the middle of the second announcement we have made -- once that is completed. Now we have announced the policy of continuing our stock buybacks of $100 million each year with an intention to cancel the shares that we buy back.

We have talked to our investors. What we hear from our investors is their preferred method of compensation in stock buybacks, not dividends. And as you can imagine, our business is a high-growth business. We see lots of opportunities to actually grow our business and continue delivering on that policy of minimum $100 million. So it doesn't set where that could be, but minimum $100 million, I believe, is a solid basis for our policy for the mid to long-term compensation for our shareholders.

I do not necessarily see a high-growth company like us being on the dividend path. And this is not a desirable outcome for our shareholders from what we hear from the investors.

Okay. A couple have asked me about it, that's why I asked, about the long term. I was thinking about a 3 to 5-year view more than anything. But again, sort of $650 million of equity free cash flow after leases, $100 million in buybacks, there is about $1.2 billion obviously of that at the HQ level. What is sort of the thinking on refinancing that? How much might be redirected to M&A at the group level? And what's your sort of liquidity -- group level liquidity sort of targets?

So Adrian, if you look to the last 6 quarters of our performance and if you look to the acquisitions that we have made over this time, you will notice one thing, disciplined. And every single acquisition that we have made, whether it be [ Hel-C ] or Uklon or solar generation sites in Uklon or OLX, Tabletki. These are all accretive businesses that we have invested in with the purpose of penetrating into adjacent markets in the countries that we are in. We will keep this discipline.

So please do not think that we are out there looking for acquiring assets that we can put our hands on. We focus on what matters: customer needs and customer demand. And we will continue doing this in the markets that we are in.

At a certain point, it is also obvious, we as a group, we are kind of maybe unnecessarily experience in operating in difficult markets. I'm not going to apologize for being successful in difficult markets, but this is a unique characteristic of our company. And if we see opportunities arising in markets where large-population countries who are underserved in nature, underpenetrated in nature, with the right regulatory environment, taxation schemes, we might show interest. But again, as I said, we are extremely cautious and disciplined in making this type of decisions. I believe the current growth potential that we have in our 5 markets is abundant.

And on top of that, Adrian, I mean, we have also set up an anchor for ourselves, which is 1.5 net debt excluding leases to EBITDA, which we are now well below that with 1.09, which have come down from 1.34 last year. Therefore, we have room in terms of our balance sheet from a debt perspective. But our strategy continues to put that down to the countries which we are at 50% level right now when you look at our debt. And we are aware of the fact that our debt at the HQ will come current when November comes. Therefore, actively working together with our investors, banks, et cetera, to address before that time, and have gained some way on that one.

Our next question comes from Nicholas Paton with Edison.

I guess I'm sort of interested by Ukraine. I think it's fallen off the radar a little bit with what's happening with the geopolitical situation, but the fourth quarter was quite a bit better than I expected to be, it was about 10% better on revenues and actually a full 18% on EBITDA. And so I was kind of interested to hear what you're thinking internally about the optionality of that business. What does it look like over the next couple of years if things continue as they are?

And as we heard, the [ Invest Ukraine ] event that you posted recently in Dubai, the potential when the war finishes is clearly very significant. And this might -- or in fact, it certainly is the time to invest if you want to have the full benefit from that. So what are you thinking about that upside case as well? Have you made any projections on where you think the business could go in those 2 scenarios? I'm sure you have, I just want to know what they are.

Nicholas, today, actually, we're going to have another call about Kyivstar operations, with regard to their quarterly and annual results. So more details you will be able to find there.

But let me share you my dream. 10 years from today, Ukraine will be the most prosperous, happy, healthy and high-quality living standard country in the entire European Union. That's what I believe. That's why we have been propagating the opportunities in Ukraine. Yes, today, there is war, tomorrow, there might be peace. Who knows when tomorrow will happen?

But I truly believe that the opportunities in Ukraine and the market dynamics, which is demonstrated in our business in terms of the digital appetite of the users, ability to provide services over digital platforms, whether it is health care or entertainment, these are abundant. And I believe with the regulatory environment getting more synchronized with European Union standards, this will give huge opportunities. And I really believe that this is an investment that was paid back to us in a very strong way. And I think we are proud to have an investable vehicle in NASDAQ coming from Ukraine, which will allow people to participate in this growth.

Our next question comes from Chris Hoare with NSR.

Great obviously to see the accelerating trends. I mean really very strong in the quarter. I just want to touch on the settlement with Dhabi Debbi Group, though. I wonder if you could give some context around that. Where that comes from, why you've decided to settle now? And then, obviously also, are there any other contingent liabilities that you think might crystallize over the next 2 or 3 years that you'd want to flag?

Chris, thanks a lot for asking the question and giving me the opportunity to explain. We are a peaceful company. Back in '21, I was deeply saddened with the decision of Dhabi Group in terms of exercising their put option. We went through a process -- we went through a process, and in those days, remember, it was in the middle of COVID, we came to a valuation, and we concluded on that exercise.

But later on, it was obvious that our business in Pakistan did extremely well. We did not only do operationally and financially well, we managed to execute on the dream of being asset-light. We sold Deodar. We turned around big time our financial services business. And we could not not notice the bitter taste that our then minority investor, Dhabi Group, had, and we thought it was the right time to find a resolution to this issue. Therefore, I'm very glad to welcome him, His Highness Sheikh Nahyan, back to our cap table. And I think this is a issue that we are now going to leave behind. The management will have no distraction on thinking about this issue. And I'm so happy to basically proceed with a strong investor from the Middle East on our cap table.

And with regard to any other disputes like that, we are 100% peaceful now. This was an issue actually which we have indicated on our 20-F a long time ago. and I'm happy that one more issue is off the table.

Yes. And just in terms of the timing, is that -- sort of potentially make a potential Jazz IPO simpler? Or is there anything to sort of read into it from that perspective or no?

Look, I think our intentions are obvious, less conflicts, more peace, more prosperity for everyone. And I think this is, of course, an important thing with regard to opening up our monetization opportunities in Pakistan, both for financial services and Jazz itself.

And also before addressing the bonds, this would be a good time to clarify and bring clarity to all our investors, as I just mentioned a couple of minutes ago, that we will be addressing our bonds. So we believe that this would be the good time to clarify the situation and have a clear pathway forward.

Our next question comes from Vincent Fernando with [ Zero One].

So you're acquiring TPL Insurance with expected closing mid-2026. Can you walk us through the embedded insurance thesis behind that maybe distributing through Jazz Cash 74 million subscriber base? Maybe any color on maybe what target attach rate you're assuming you'd achieve? And is that -- is this a story we'd see maybe second half 2026 starting to be accretive to digital? Or it's more a 2027 story?

So Vincent, thanks for asking. Actually, insurance business has been already accretive to our business in Pakistan. It is sometimes, even if when I say it, it's hard to believe, on a daily basis, we are embedding about 900,000 insurance policies in our different products. This is happening today.

And one of the reasons why we thought acquiring an insurance company as part of our financial services offerings is the realization that why are we selling other people's products? Or why are we selling other people's products only if we can sell some of our own assets here as well?

So there are 2 important platforms. One part is Jazz Cash, which is selling lots of embedded insurance policies. But the other platform is FikrFree, which is actually a health insurance platform, which I also think that it's a huge opportunity for us as we focus on health care services. And TPL, it's a small insurance company with about $20 million, $25 million of top line, but this will give us the necessary licenses and platforms to build low damage cost insurance products.

One other sort of follow-up question for that. A lot of mobile money operators in emerging markets have converted to full digital bank licenses. I just want to get maybe the latest. Is there a digital banking license for Jazz Cash? Is that something actively pursuing right now with the state bank?

So digital financial services is one of our priority growth areas. And in all the markets that we are active in, we are actively seeking digital banking licenses. It's no secret. And with regard to Pakistan, our operation in Pakistan includes a microfinance bank and a digital wallet. Combination of these things create actually, with certain limitations, equal to digital banking license capabilities.

And imagine, with those limitations, we managed to create this business success story. Once those limitations will be gone, I think our business will even grow faster. So we are actively seeking those. And I'm confident that we build the necessary credibility in the eyes of the central banks, not only in Pakistan, but also in other central banks, to be allowed for digital banking licenses.

Our next question comes from Matthew Harrigan with StoneX.

You're devising local market LLM in concert with some very prominent international tech companies. And what's interesting is Xoom is actually taking a somewhat similar approach. They're not trying to have the costs for the LLMs in-house. They're working with really what they call a federated model, working with Google and everyone else, OpenAI. And interestingly, you're probably aware of it, there's something called Humanity's Last Exam, which is kind of an amusing acronym, HLE, it rates AI models. And what they did in-house using this composite approach and doing a lot of [ SLS ] for specific verticals actually graded out ahead of what even the latest [ Genesis ] model did. I would imagine that with your market specificity and the language differences, you must really be -- if you don't have it already, you must be working toward LLMs that are maybe vastly or considerably better than anything else that would work in the market. Do you have any thoughts about the progress -- I know this is kind of a down-in-the-weeds question, but do you have any thoughts about the progress you and your partners are making on the LLMs for the various markets?

Matthew, thanks a lot for the question. We have a couple of partners that we work with very closely. One of them is [ Seeker ], one of them is MeetKai, and we really work together to develop low-cost but very effective local language models. We have so far been successful with Kaz LLM, Ukrainian LLM is in the making. And in the meantime, we are working on Urdu, Bengali and Uzbek LLMs.

And the reason why we take this sovereign AI opportunity is because there is no other player in our markets. Our markets by themselves is entry barriers around payments, around access, digitalization, mobile broadband and affordability. So we are leveraging all those capabilities to make sure that we are uniquely positioned to capture this market.

And I'm very excited because this is actually the value proposition in terms of building the next step, right? Raw data is what everybody does. You sell gigabytes. Digital services, what very few does among us is, we are very successful in that, you sell subscription to services.

The third level, you make people better. A doctor having an agent as maybe an online assistant for him, taking notes; or a teacher helping with coaching and planning of educational programs. And we really focus on that part because this is what matters, customers getting a better service. And I believe there is no other player in the markets that we operate in who can deliver on this promise. We have the right distribution platforms, the SuperApps, we have [ Jenamda ], we have [ Simosa], we have [ Humby], we have [ Mikey Star ], all these platforms are just a click away from the customer to make them super human bigs. And that's the business which is most exciting in my mind currently.

Congratulations, especially on getting about 20% of the digital revenues. I think that's really key to the stock rerating on the valuation multiples.

Our next question comes from [ Ahmed Mustafa ] with Inam.

I have 2 questions. First is your 2026 guidance implies some margin compression, with EBITDA growth trailing revenue. So is this primary a function of the mix shift towards the high-growth digital payment segment, which carries a lower EBITDA margin but a higher free cash flow conversion rate due to its asset-light nature?

And second, the question is regarding the recent auction win in Pakistan. So could you provide more color on the deployment time line for the new spectrum? Specifically, when should we expect this added capacity to translate into visible operating metrics such as ARPU growth or lower churn in the 4G base?

Ahmed, thanks a lot. So if you look to 2025 performance of ours, and I made this comparison like if we were a retail business, like we would do -- like shop same-shop basis comparisons. And if you would do that, you would see that our revenues grew 11% and our EBITDA grew basically 18.8%. So on the back of that overperformance in terms of nominal EBITDA, when you compare the EBITDA guidance we have given, actually, you will see that it is not a low number. We will actually be growing our nominal EBITDA in a very significant way.

But we are also looking into the realities of this world. And it's not the dilution that potentially the digital services will bring. It has maybe some small element. But the real reality we are at today, none of our countries, except for Kazakhstan, is oil producing. And it is natural to expect $90 to $120 oil price per barrel oil price, which will potentially have an inflationary impact of 2% to 9% in the countries that we operate in.

Now I do expect that we would react in a positive way. We have pricing power in the markets that we can apply. But the timing of these things could have an impact. So that's the assumptions that we took into consideration when coming up with our guidance for the market.

Now with regard to Pakistan, we are, I think, allocated today the spectrum. The market is so spectrum-hungry that I think some of that will happen immediately. If you think about the average consumption of data in Pakistan, we are today at 7 gigabytes per person. In any other 4G mobile broadband environment, we are talking about 20 gigabytes per person consumption. So clearly, there is a bottleneck that is going to be disappearing. And I do expect some of that to come as early as towards the end of this year. And the rest will, of course, will come from new deployments, which we will see the impact in 2 years.

The good thing about our model is our sourcing mechanisms allow us to start paying for the CapEx when the equipment starts cash generation. So I believe we will be able to balance this process in terms of cash received from the customers and that is invested in the marketplace.

Our next question is a written question from [ Yejide Onabule ] from [ Bearing ]. It says, what are the plans for the 2027 bonds? Do they plan to come to market this year to refinance it? Are there any more acquisitions in the pipeline? Do we expect FCF to be positive this year? Is there a leverage target?

Burak, I will leave you to answer the question.

As I said on the previous answer that we are planning to address those bonds this year before they become current in November. Having said that, the amount will be dependable on what comes in and out in terms of our asset-light strategy, sales, our M&A portfolio that we have on the radar screen. So the amount is not decided as of today.

In terms of the free cash flow, we intend to turn minimum double-digit free cash flow to revenue going forward. And therefore, you could expect positive free cash flow from that perspective.

And was there a third question that I missed in terms of M&A.? I think that was the third question. Anand, yes?

Yes. So I think we are always, as Kaan pointed out, we are always looking at a bunch of targets. And as Kaan pointed out, expect us to be extremely disciplined -- continue to be extremely disciplined in the way we look at these assets. So we have a priority of growing the digital ecosystem. We have a priority of growing the financial services business. And clearly, we will look to make investments in telecom as the spectrum investment in Pakistan shows.

So absolutely, we will be opportunistic, and that's why Burak went back to the point of how much we decide to raise eventually will be a function of timing around that as well. But the one consistent theme around this is discipline and making sure that whatever we do is accretive to earnings, cash flows and shareholders' value.

Our next question comes from Adrian Cundy with Emergent & Frontier Capital, LLP.

I'm going to come back to digital revenues and EBITDA in this question. How -- what -- do you have sort of a midterm goal of sort of achieving what share of revenues in digital, given that roughly, as you were saying, your cash generation capacity, 20% revenue in digital, 25% in cellular? Do you sort of see digital achieving like 1/3 of the revenue in next 3 to 5 years or more just from a planning perspective? And how much of that do you think will need to be -- can be generated organically versus future acquisitions?

So the dream I have in 3 years, to 50%, 50%. Now we increase our percentage every quarter about 1 percentage point, right? So if you take that, 12% will come from organic growth. But I think as we have executed successfully in certain markets, there will be small opportunities to capture, not only actually capturing revenues or EBITDA by acquisitions, but talent.

We are very well aware of the fact that we are entering into some businesses where we need fresh talent and experience. That's why we acquired an insurance company. We know how to get a license. We can build from scratch. But sometimes it is better for us to actually capture the talent in the marketplace while we grow. So expect us, with this small type of spices in the countries that we operate in, which will not be big acquisitions, but it will give us the talent and the businesses and the products and the customer base. So I do like to see in 3 years from today, a 50% -- 50-50 balance in terms of our revenues.

And share of EBITDA would be similar given the cash generation?

Yes. Exactly. I think we will continue executing on the business model that I described before. Yes. .

Just an extension of that and maybe tie it in with the broader asset-light strategy, I mean, we've seen some announcements in Uzbekistan where you -- where there's been a small investment in data center. We've seen in Ukraine, of course, an investment in solar. And your Ukraine CEO has commented on previous calls that there is a dream in -- midterm dream in the country of building something up like a next-gen fiber network or an infrastructure network for the company along the lines of OpenNet in the U.K. or Singapore's [ Netlink Broadband Trust ].

How is that -- how are you going to juggle those 2 sort of things with the -- I mean you've made comments earlier on these calls about your resolute commitment to really keeping CapEx-light, and I think you've done so far so good with the sales ratios you have, the intensity. But what's the long-term -- how do you plan on juggling these sort of the necessity of, if you will, of things like data centers with a digital business, centric business?

Look, we are committed to being an asset-light company, and we will continue executing on that. But also, we are not dogmatic. There are realities in different countries. And Ukraine is one of those countries. This is a country which has a systemic gap in energy generation and distribution. Therefore, when we see the opportunities, especially from the perspective of hedging also the cash we generate in the country, we are looking for assets which are already revenue and EBITDA positive, accretive, to invest in.

With the acquisition that we have done in the solar generation, which was 15 megawatts, I would like to reach at least 30% of our energy consumption in Ukraine to be generated by our own solar capacity. And potentially, who knows, this is a country that needs rebuilding and reconstruction. And I would like to be part of that. But still we will keep in the midterm perspective and a road map for getting asset-light again.

So don't be surprised if you would do temporary investments in asset-heavy businesses in Ukraine. But later on, quickly move into finding the right investors for those type of assets as we execute our strategy. But our asset-light strategy has not changed. As I mentioned, country by country, it can show certain differences. Yes.

Our final question comes from Ali Zaidi with Inam.

So my question is like with Jazz MMBL now established as a digital financial ecosystem in Pakistan and with TPL also coming in, what do you think would be the relevant next steps of the digital financial ecosystem in Pakistan? And do you see enough growth within the loan book and the user base to like justify a stand-alone IPO?

Yes. Thanks a lot for the question. As I mentioned, in Pakistan, currently, we operate under certain microfinance bank license metrics. And those metrics require us to limit our loan book and growth to certain lower level limits. I look forward to upgrading our license to a full digital banking license in Pakistan, and that will, of course, open up new growth opportunities for us. I expect those things to be happening throughout this year. And as those happen, I think we will be in a better position to look into opportunities to monetize this asset.

We are very happy with the performance. I think the potential is huge. Keep in mind that Pakistan is a 250 million population country. And more importantly, a significant diaspora outside of the country doing quite a lot of remittances. 30% of Pakistan GDP comes from remittances coming from other countries. So being a real digital bank, ability to have foreign currency translations and a much wider base for lending, I think, is a huge opportunity in front of us. And I would like to first see that opportunity realized.

We have no further questions at this time. I will now hand back to Anand Ramachandran for closing remarks.

Thank you, James. Well, guys, thank you so much for joining us on the call. It's a pleasure as always. Any further questions, please do feel free to reach out to us and we'll be happy to assist with that in an instant. We look forward to seeing you in the next quarter. Till then, all the best.

Thank you very much. All the best.

Hello. Good afternoon, and good morning to everyone. Thank you for joining us today for VEON's Third Quarter 2025 results for the period ending 30th September 2025.

My name is Anand Ramachandran, Chief Corporate Development Officer for VEON. Allow me to introduce our senior management in the room today. Next to me is Mr. Kaan Terzioglu, our Group CEO; and next to him, Mr. Burak Ozer, our Group CFO. Today's presentation, as usual, will begin with the key highlights and business update from Kaan, followed by a discussion of the financial results from Burak. We will then open the line for Q&A.

Before we begin, please note that today's presentation may include forward-looking statements, which involve certain risks and uncertainties. These statements relate to the company's anticipated performance, 2025 guidance, market development, operational and network investments and the company's ability to realize its targets and initiatives. Our actual results may differ materially due to risks detailed in our annual report on Form 20-F and other filings with the SEC. The earnings release and presentation, including reconciliations of non-IFRS measures are all available on our Investor Relations website.

With that, let me hand it over to Kaan.

Thank you, Anand. Good morning, good afternoon, and welcome to everyone. Let me begin with a remarkable milestone. In September, our monthly digital service users surpassed monthly telecom SIM card users for the first time, a defining moment in our journey as a true digital operator. This signals the scale of the opportunity ahead of us and the extraordinary growth still to come.

Across our footprint, more than 0.5 billion people, and we see a rising digital adoption, expanding connectivity and powerful demographic momentum. These markets are not just large. They are accelerating, underpinned by innovation and low base effects that create multiple vectors of sustained growth. At the heart of this opportunity is our digital operator model, uniquely positioned to capture and drive this transformation. By combining connectivity, digital platforms and financial inclusion, we are unlocking sustainable growth and enduring value creation for customers, communities, governments and shareholders alike.

And now let's start the key messages from our Q3 results. I am pleased that we have delivered another strong quarter, starting with our financial performance. Our revenues grew 7.5% year-on-year in U.S. dollar terms. U.S. dollar EBITDA increased by 19.7% year-on-year. This is yet another $1 billion-plus revenue quarter and a $0.5 billion plus EBITDA quarter. On the back of this performance, we are raising our fiscal year 2025 EBITDA outlook. We now expect 16% to 18% EBITDA growth for the year in local currency terms, up from 14% to 16% earlier.

Second, we are driving exceptional momentum in expanding our digital services portfolio. Direct digital revenues grew 63% in U.S. dollar terms and now contribute 17.8% of our total group revenues. Our AI 1440 strategy is becoming central to our operations with ongoing work on large language models and increasing integration into Agentic AI-powered customer-facing solutions. We are delivering localized multilingual features at scale through our super app platforms.

Third, we continue to make good progress in executing our asset-light strategy. We have completed the sale of our Kyrgyzstan operations this quarter, further streamlining our portfolio and focusing on core growth markets. Our global framework agreement with Starlink aims to bringing direct-to-sell satellite connectivity to all of VEON's operating markets, ensuring resilient connectivity even in hard-to-reach areas. Kyivstar is on track to launch nationwide coverage subsequent to approvals. Beeline Kazakhstan is planning to launch services in Kazakhstan as we plan to test activities over the next couple of months.

And finally, we continue to deliver for our shareholders. The landmark listing of Kyivstar on NASDAQ unlocked significant value with a current market valuation of $2.8 billion compared to $1.25 billion of equity, which is 2.3x of its book value. We retain an 89.6% stake in Kyivstar, which is worth $2.5 billion at Kyivstar's current market price. We are pleased that uncertainties regarding VEON's going-concern status have been mitigated, reflecting stronger liquidity and a more resilient balance sheet. And finally, our Board has approved another $100 million share and/or bond repurchase program, a clear demonstration of our confidence in our growth prospects and our continued commitment to deliver value to all our investors.

Let's move to Q3 key financial metrics. Let me summarize our performance for the quarter. Telecom and infrastructure segment revenues on a like-on-like basis that adjusts for TNS+ this divestment grew 3.5% versus the reported 0.5% number that you see on this page. This reflects the impact of our differentiated networks, products and services in continuing to drive ARPU and subscriber engagement while reducing churn.

Our direct digital revenues were up 63% and represents 17.8% of total group revenue. On profitability, our EBITDA margin continues to grow. Year-to-date margins have expanded by 320 basis points year-on-year and reflect both scale efficiencies and cost discipline. Last 12-month EPS stands at $8.89, up 60.2% year-on-year. However, the reported EPS for Q3 alone was a loss of $1.84 per share as we recorded 2 noncash charges totaling $259 million. First was a charge of $162 million related to the SPAC sponsor shares in connection with the Kyivstar listing, which is treated as a share-based compensation according to IFRS and has been recognized in the third quarter. Second was a charge of $97 million for the sale of our Kyrgyzstan business, triggering a cumulative currency translation adjustments.

For the avoidance of doubt, Q3 results has contributed $76 million to our shareholders' equity. I will emphasize that these noncash charges have no impact on VEON's underlying operational performance, cash generation or financial guidance, which remains firmly supported by our strong organic growth and margin expansion across our key markets.

Moving on, our last 12 months CapEx intensity, excluding Ukraine, was 17.7%, and it is in line with our guidance. Net debt, excluding leases, stood at $1.72 billion as of September. The improvement in leverage to 1.13x reflects our operational and financial discipline and the success of our asset-light strategy. Our last 12 months equity free cash flow reached $584 million. Finally, we ended the quarter with a cash balance of $1.67 million, including $653 million at the headquarters level.

Let's look at our growth trajectory, and I will highlight 3 key points. First, on a like-for-like basis, which adjusts for deconsolidation of TNS+, the Uklon acquisition and the sale of Deodar and Kyrgyzstan business, our revenues would have grown 10% in U.S. dollars versus the reported 7.5%. Secondly, our EBITDA rose 19.7% in U.S. dollars, underscoring the resilience of our strategy and the quality of execution. Finally, I am pleased that our momentum continues to exceed inflation and nominal GDP growth, showcasing our ability to implement fair pricing while capturing greater share of customer wallet share.

Let me dive into our digital revenue performance. Starting last quarter, we began breaking out the components of our digital service revenues to provide you with greater transparency into growth and potential of our digital businesses. Let me make 3 points here. First, financial services are the largest component, accounting for 54% of total digital revenues, growing 33% year-on-year. Second, growth is pretty broad-based with solid contributions across our entertainment, ride-hailing, enterprise and premium digital brand segments. Third, our sustainable cost advantages are how our low customer acquisition costs and optimized distribution model is driving this growth. These enable us to scale profitably and maintain strong unit economics.

Let's look into our progress with regard to multiplay users. Multiplay users count customers that use at least one digital service in addition to our voice and data connectivity services. Multiplay is a key feature of our digital operator strategy and growth story. 4G enables multiplay, making increased 4G adoption is a key growth driver. And it is this 4G base that is increasingly shifting to multiplay, driven by our extensive and relevant suite of digital products and services.

The multiplay segment drives growth through stronger customer engagement, higher data consumption, more frequent usage of voice services, improved retention and ARPU expansion. Our multiplay customers generate 3.8x the ARPU of a voice-only subscriber. Encouragingly, this ratio continues to sustain even as multiplay adoption expands as a proportion of our overall subscriber base. In the third quarter, 55.4% of our total customer revenues were generated by multiplay customers, and this segment grew revenue-wise 23% year-on-year.

Let's look into different operations growth performance. And I'll use local currency terms across our markets for this. We have delivered strong double-digit revenue growth across all of our markets, apart from Bangladesh. While the headline revenue growth for Beeline Kazakhstan shows as single digit, revenues on a like-for-like basis, adjusting for TNS+ deconsolidation was up 23.3%. In Bangladesh, we are encouraged that the revenue returned to year-on-year growth for the first time in 14 months in September 2025. Our profitability trends across markets were strong as well. Headline numbers for Beeline Kazakhstan and Beeline Uzbekistan were impacted by tax effects. However, after adjusting for these, organic profitability trends remain very strong.

Finally, please note that our consolidated financial results for Ukraine include full consolidation of Ukraine Tower Company, UTC, whereas the stand-alone disclosures for KGL Group that are also released this morning excludes UCT. We can take specific questions and discuss market-specific issues during the Q&A session.

Let me now turn into the Financial Services business success story in Pakistan. This business is the largest component of our Financial Services business, which I have highlighted earlier. This quarter, we completed the operational separation of JazzCash. JazzCash will continue to provide technology and services to MMBL. Both are now fully owned subsidiaries of VEON. This is a key step in accelerating growth and unlocking value across our digital financial services portfolio.

The business continues to deliver strong growth, as you see on this page. Gross transaction value for the quarter rose 40% year-on-year, representing 13% of Pakistan's gross domestic product on a last 12-month basis. This was driven by a 48% increase in total transactions and a 38% increase in transactions per user. JazzCash with its over 700,000 merchant base processes over 80% of all Raast payments value under the Prime Minister's Cashless Society initiative.

Loan origination expanded sharply this quarter with the daily average number of digital loans rising by nearly 26%. The average of 153,000 micro loans disbursed on a single day in Q3. More recently, JazzCash achieved a major milestone with its highest ever single-day lending disbursement of PKR 1.1 billion through 200,000 loans. We are extremely proud of what JazzCash has achieved. With its trusted brand, deep market reach and a growing ecosystem, JazzCash is leading Pakistan's rapid transition to a cashless economy and is positioned to unlock meaningful long-term value for VEON.

Let us now have a closer look at the continued momentum of our digital ecosystem. We continue to see strong and broad-based growth across platforms with the total monthly active users growing now to 143.3 million, up 39% year-on-year. Our digital-only user base has more than doubled to 50 million and now represents nearly 35% of our total digital users.

As I highlighted earlier, digital engagement exceeded mobile engagement for the first time in September, an important milestone that highlights how our platforms are becoming the primary customer interface and unlocking new opportunities for cross-sell, advertising and digital services monetization. Over the last 12 months, transaction values grew 50% to reach $48.8 billion throughout our financial services platforms.

Let's look in a more detailed outlook to our digital portfolio, and we focus on consumer-centric platforms on this page. Our Financial Services segment has increased by 25% to reach 42.1 million users across all platforms. I highlighted JazzCash earlier. Simply in Kazakhstan, Beepul in Uzbekistan continue to scale their roles as the financial layer of our digital ecosystem in their countries.

Our entertainment platforms delivered a strong quarter as well. Tamasha in Pakistan and Toffee in Bangladesh achieved record levels of engagement, fueled by the excitement of Asia Cup Cricket tournament. This also drove a sharp uptick in advertising demand. In Ukraine, Kyivstar TV's revised partnership has elevated direct customer engagement to an entirely new level. Meanwhile, BeeTV in Kazakhstan and Kinom in Uzbekistan continued to gain solid traction, reinforcing the growing strength of our regional entertainment portfolio.

Our super apps continue to scale, positioned as one-stop digital hub. These platforms are seamlessly integrating essential services from health care to entertainment and driving deeper customer engagement across our footprint. Uklon's ride-hailing service reached 3.6 million users and recorded strong growth in active riders, trip volumes and digital engagement in Ukraine and Uzbekistan. Our premium digital brands, spanning life cycle, digital identity, productivity tools saw users grow strongly to 3.3 million. With evolving lifestyle and content integrations, these platforms are designed to meet evolving customer needs with curated high-value experiences.

Let's move to our enterprise platforms. These platforms are transforming from internal enablers to market-facing technology leaders, driving next generations augmented intelligence and innovation. This opens up new revenue pools and strengthens our position as next-generation digital operator. QazCode, Kyivstar Tech, Garaj, U-Code and bCloud are winning new contracts, delivering augmented intelligence solutions, cloud services and data center solutions to corporate and government clients, expanding our presence in fast-growing enterprise technology markets. Across these companies, we have now nearly 2,000 engineers, software developers, data scientists executing at scale to build commercializable next-generation digital products.

Our advertising technology business, VEON AdTech, is scaling rapidly, powered by augmented intelligence and big data. It reaches over 70 million screens across our footprint, delivering measurable return on investment for advertisers. Built on our own AI and data infrastructure, the platform provides 360-degree advertising ecosystem, enabling precise audience targeting, real-time optimization and creating a powerful new monetization layer across our digital portfolio.

Let's turn now how we are embedding augmented intelligence across our ecosystem. We call it AI1440, augmented intelligence for every single minute in a day. In Kazakhstan, our Kaz-LLM is now alive in 4 languages, Kazakh, Turkish, English and Russian. -- powering agentic features across multiple platforms. In Ukraine, Kyivstar Tech is co-developing the country's first sovereign Ukrainian language model with the Ministry of Digital Transformation, a landmark step in building national AI capabilities. We will extend this capability to Uzbek, Bangla and Urdu and deepen market-specific intelligence.

Across our applications, AI is becoming truly agentic and reshaping customer engagement from self-service to entertainment and education. In entertainment, AI recommendation engines now reached nearly 35 million monthly active users across Tamasha, Kinom, Kyivstar TV, [ Rithmm ] and Hitter. On Tamasha, AI already drives over 1/3 of all live TV sessions and nearly 60% of video-on-demand plays. Its AI news channel has alone became the third most watched channel on the platform. The news channel is sometimes having male or female news anchors that presents the news on live TV.

In customer care, our SIMOSA AI chat assistant now autonomously manages customer journeys for nearly 1 million users every month. Our customized personal growth solutions are seeing strong adoption with our consumer audience. Janymda AI Tutor engages 17,000 monthly users, while Ryze AI tools processed over 16,000 requests, helping students write their CVs. We are also innovating with AI for enterprise. QazCode successfully launched Aventa AI, an enterprise-grade AI native platform designed to scale agentic workflows across HR, finance and procurement functions.

In summary, augmented intelligence is now a leading layer in our ecosystem, delivering measurable impact for us across all our markets.

I will now hand over to Burak, who will take you through the financials in more detail.

Thank you, Kaan. Looking at group revenues, we delivered total revenue of USD 1.115 billion in the third quarter, representing a growth of 7.5% in U.S. dollar terms. As previously noted by Kaan, the quarter included the deconsolidation of TNS+ in Kazakhstan, the consolidation of Uklon and the sale of Deodar and our Kyrgyzstan business. On a like-for-like basis, that adjust for this, our revenues grew 10%, underscoring the continued momentum across our operating markets. Direct digital revenues grew 63% year-on-year to reach $198 million. Digital services now account for 17.8% of total revenues, up from 11% a year ago.

Turning the page to profitability. EBITDA for the quarter was USD 524 million, representing growth of 19.7%. The EBITDA margin stood at 47% for the quarter, up 410 basis points year-on-year and was supported by operating leverage and disciplined cost management across all markets. We note that our digital services now account for 17.8% of group revenue. While digital margins are structurally lower, their significantly lower CapEx intensity ensures comparable cash conversion relative to telecom services. As our revenue mix continues to shift in this direction, we remain focused on sustaining EBITDA growth at scale while enhancing group-wide capital efficiency and long-term free cash flow generation.

Turning now to the balance sheet. We ended the quarter with USD 1.67 billion in cash and deposits, of which USD 653 million is held at headquarters. Net dividends upstream from operating companies during the quarter totaled USD 96 million and USD 285 million for the year-to-date. Gross debt stood at USD 4.86 billion, up slightly from June and reflected the completion of our USD 200 million bond issuance during the quarter. Approximately half of our external debt is now held at operating company level, providing natural currency hedging. Net debt was USD 3.48 billion, while net debt, excluding leases, improved to USD 1.73 billion, bringing leverage down to 1.13x EBITDA.

Let me now hand the call back to Kaan.

Thank you, Burak. Let me conclude with our outlook for the year. Despite ongoing macro and geopolitical challenges, VEON continues to execute strongly across all markets. We are revising our EBITDA outlook for the full year and now expect EBITDA growth of 16% to 18% in local currency terms for the full year. We are maintaining our revenue guidance of 13% to 15% growth in local currency terms.

In U.S. dollar terms, we expect this to translate to 7% to 8% revenue growth and 10% to 11% EBITDA growth for the full year, assuming no significant fluctuations in exchange rates from current levels. Our capital intensity, excluding Ukraine, remains with 17% to 19% range. These targets are based on a blended weighted average inflation rate of 8.2%.

In closing, we are pleased with our business momentum. Looking ahead, we remain confident in VEON's trajectory and the opportunities before us. As I highlighted earlier, the Board has approved another $100 million share and/or bond repurchase program, reinforcing VEON's confidence in long-term value creation. VEON is well positioned to sustain growth and long-term value creation for our shareholders, customers and communities we serve. Thank you for your attention and support.

Now we can open the line for Q&A.

[Operator Instructions] Our first question comes from Jesse Sobelson with BTIG.

This is Jesse Sobelson with BTIG. I just wanted to ask about the recent transaction involving Kyivstar and the decision to bring the asset public via SPAC. Could you share the motivation for choosing a SPAC structure for this process? And then additionally, you noted that you own nearly 90% of the asset. Looking ahead, how are you thinking about your future ownership stake? Would you consider selling a portion of the holdings to generate liquidity? How would you balance the liquidity versus maintaining control of the asset?

Thank you very much, Jesse, for the question. So with regard to Kyivstar's de-SPAC transaction, we are a true believer in Ukraine's future, and that's why we are championing invest in Ukraine now initiative throughout the world. And we thought it would be the right thing for us to find a deal certain fast track to list Kyivstar. And that's why we have opted for a de-SPAC process. And I'm very glad to conclude it on a successful basis as Kyivstar is now listed in NASDAQ at a valuation, which is 2.3x its net equity value of $1.25 billion at $2.8 billion. I think this was a very, very successful transaction from our side.

Now naturally, SPAC comes with additional cost, given that deal certainty element and the speed of transaction process. But overall, I think being a pioneer in making sure creating opportunities for international investors in Europe and U.S. in participating for the future growth of Ukraine, I think it was the right thing. Now looking with the same perspective, we are keen to allow more investors to invest in Kyivstar. So we will be open for diluting our current position further to allow people from Ukraine, first of all, to have a chance to invest in Kyivstar and any credible international investor to also come in and be part of the success story that will be built in Ukraine. And we will continue championing our invest in Ukraine now initiative all around the world as well. Thank you.

Our next question comes from Nicholas Paton with Edison Group.

Just a quick question on Kyivstar. There's quite a lot of cash at the head office level. I think it's $600 million or so. What's the plan for that? And how easy will that be to repatriate up the chain?

I think Nicholas, $653 million is the headquarters cash at VEON, not Kyivstar.

Kyivstar $470 million.

$470 million would be the right amount for Kyivstar. And as you know, we are still at war. So Martial law still stays in place. During the Martial law, there are limitations on upstreaming. There is $1 million per company type of a dividend limit. But what we would like to see actually is just in line with our Invest in Ukraine Now initiative, you will see us actually investing in Ukraine. And we have been active with Helsi acquisition and Uklon acquisition. We believe that there is a unique opportunity to build a digital ecosystem in the country. And naturally, based on the needs of the country, whether it is energy resilience, energy storage needs or investing in growth opportunities, we will be also looking into those. But in the meantime, our objective is to make sure that we keep our cash safe in assets that are in either generating cash or creating capacity for us to protect ourselves from potential devaluations.

Our next question comes from Adrian Cundy with Emerging & Frontier Capital.

Sorry, my video is not functioning well today. So I just [indiscernible] you can see my picture. I have 2 questions. First, relating to UTC and just infrastructure in general within Kyivstar, will we be seeing you continue to pursue divestment on the Pakistan model of tower assets in the Ukraine? Or is VEON planning to retain control of that for the foreseeable future, particularly given that Kyivstar is now talking about a significant network upgrade and is beginning to touch on 5G in line with the national development strategy.

And the second question I have relates to the financial services in Pakistan. Now that JazzCash and the bank are stand-alone entities, how do you sort of see them working with the [indiscernible] business? Can we get some more color on what type of loans are being extended? And finally, do you sort of see further initiatives and value extraction for the Pakistan business?

Well, let me start answering your first question about our tower business in Ukraine. Naturally, it's no surprise, I think no secret that we have a strategy of being asset-light, and we see actually tower operations more valuable under the management of independent tower companies, which allows sharing of infrastructure among multiple operators. So it's no different in Ukraine. So the first step was us creating our independent tower company is, I think, a move in the right direction, but we will be looking for opportunities around sharing infrastructure in the country in a more effective way and ultimately, making sure that the tower operations are owned and operated by an independent party, which can further focus on marketing activities of this infrastructure.

There are multiple benefits of separating towers from the operating companies. As you know, our telecom industry has been heavily penalized by cross-subsidization of business models like infrastructure businesses and service businesses. And in everything we do, we try to avoid that and make sure that we focus on the right customer rather than cross-subsidizing different businesses. So you will see more actions and news on that front. We are one of the biggest infrastructure providers, of course, in Ukraine, but I believe no telecom company can afford to have its own exclusive networks. We need to learn to share networks, and that's the path for increasing cash generation capacity for our businesses. So -- and that's the first question.

The second question, financial services business. In countries like Pakistan, the unmet demand in financial service area is huge. People who are unbanked, who have no way of having access to financial services is an existing opportunity that we have supported. So that's why we have our microfinance bank, MMBL as well as our digital wallet operator, JazzCash, serving our customers there. We have close to 50 million bank accounts and a monthly active user base of 22 million people.

On an average day in Q3, we issued 153,000 nano loans. These loans are around $30 to $40 in nature. And they are really the type of money that a taxi driver would need if they would have a flat tire or they need to have 1 day advance of putting gasoline into their tank or a housewife would need that $30 to buy some flour, sugar and eggs to make some cookies and sell in the marketplace. These are really the type of loans that provides lifeblood to practically to small businesses, to family businesses, and we are very proud to make this work.

Now naturally, we have also a merchant network of 700,000 merchants. These networks also allow us to significantly drive cashless economy in the country. We operate a significant portion of entire Raast transactions, which is the mobile payment clearance platform, and we transact almost 13% of total GDP. So for us, it's not only being big, but it is being really serving the customers on a daily basis. And this business is growing at 33% year-on-year, and it is, I think, going to be an extremely successful case study when it comes to the digital banking and fintech businesses. We will, of course, be looking into how we can take this business even at a higher scale. And you might see actually some strategic investors also looking into this together with us.

What was the third question again? Can you repeat it, please?

I guess the follow-up is just on that on even a stand-alone, is there any -- are you looking at value extraction or value recognition for your digital assets in places like Pakistan?

I think the answer is clearly, yes, as the opportunities come to the right level and scale. For us, digital services portfolio we have serves 2 important purposes. One is the multiplay strategy that we have on our regular telecom business. As our customers use our digital services, they stay longer with us, they consume more. And then, of course, the direct digital revenue potential of these service lines from entertainment to financial services drives additional growth for us. And to be precise, the ARPU level increase and the churn reduction of digital services impact on our SIM user base has nothing to do with the direct digital revenues that we report. These are 2 different growth. The growth on one side drives our business on telecom side and the other one drives the business on the digital services. And when the right scale arrives, of course, we will be looking for crystallization of the value of our digital services portfolio.

Our next question comes from Ahmed Mostafa with Inam.

I have two questions. Jazz delivered a strong EBITDA margin uplift this quarter. And yet you have indicated that consolidated margins may soften over the long run as digital services say. So how do you manage this trade-off between scale and profitability? And second, you have raised your EBITDA growth guidance for this year. So could you walk us through the main drivers behind this improvement in the EBITDA margin?

Ahmed, good point. We thought the digital services businesses would be having a bigger dilution on our EBITDA margins. So far, we failed on that. Yes, our EBITDA margins are also improving compared to the business as our digital services are growing. But I think I attribute that on really discipline when it comes to operational cost management of our operations. But let me also give the word to our CFO, Burak, anything you would like to add on that?

Yes. On top of the discipline in terms of driving efficiencies on cost side, we are also having disciplined price actions, price increases that we are taking in line with the market conditions that would beat the inflation, devaluation plus the GDP growth. So those 2 combined together definitely is helping our margin.

Our next question comes from Vincent Fernando with Zero One.

We can't hear you yet.

Operator, shall we try again move to the next question maybe come back to Vincent.

Can you hear me now?

Yes.

I apologize for that. I just want to ask again on the JazzCash and MMBL. Now that you have these more operating independently, do you plan to also try to take some of the capabilities in that -- in those businesses and then maybe bring it to expand your fintech business in other markets?

The other question is that when you look at the MAUs for JazzCash, it's about 20.6 million, I think, most recently. Your total telco subs are 72.7 million. So there's still a lot of room to actually convert just your existing subs into JazzCash or MMBL customers. So are there other strategies you have to sort of increase the penetration for that as well? Those are my 2 questions.

Vincent, I think you're spot on in terms of both organic and accelerated growth opportunities in this business. Now you need to keep in mind that Pakistan is still a frontier market where 4G penetration as well as smartphone penetration has certain limits in terms of the penetration capabilities. I translate those into upsides that are in front of us. So one of the key initiatives that you will see us focusing on in Pakistan is smartphone ownership. Affordable smartphones will be critical. And they will come up with, of course, their own embedded digital services on top of that.

So we have quite a lot of appetite in this conversion. And I would like to make sure that everybody who is our customer is having access to the digital services, whether it be on financial services or entertainment or health care or education to have access to these platforms. So you're right. In addition to the growth that we see, I think the organic growth can accelerate, and that's the basis of the sustainable growth expectation we have from the marketplace really.

Now with regard to our ability to leverage the competencies and the experiences that we built in Pakistan in other markets, absolutely. And that's why we are very excited about the growth potential in Bangladesh and potentially in Ukraine. And the know-how that we have in terms of risk managing a bank, first of all, but also having credit scoring engines fine-tuned for these type of nano loans, all these capabilities are applicable in all the markets. And of course, our intention is to make sure that we leverage these, just like our intention around making Uklon or Helsi, our health care platform or our ridesharing platform also be available through all the super apps we have in all the countries.

Got it. Just one little quick follow-on on that. So Pakistan, I believe, has a digital bank licensing framework. But I guess under MMBL, you also have a license there. Do you -- is there value in you having one of those digital bank licenses? Or is it that you can actually operate -- you can have MMBL, I guess, operate on parts where you want more banking services, JazzCash and payments? Just want to understand if that's something that's part of the road map or maybe just not needed?

We operate currently under the microfinance banking license. However, I believe that we can do more and we can contribute more to the Cashless Economy Initiative of Prime Minister, that will require us to upgrade our license to a digital bank, full digital bank license, and we are in the process of looking for ways of achieving that sooner rather than later. I think the success story of JazzCash is very visible and recognized very strongly by the Pakistani government as well. They want the same. We want the same. And I think we will get to a level of much higher capabilities if we upgrade it to a full digital bank license, and we are working on it.

Our next question comes from Ali Zaidi with Inam.

So my question is related to ride-hailing. We have seen that it already contributes -- it's like the third largest contributor to the digital revenue. So do you have any plans to like explore other markets for this business, specifically Pakistan considering recent exits of the major player in that country. Do you see a potential for like an entry and growth in this segment?

So Ali, the ride-hailing business is really -- when you look to the markets, it's a city-by-city operation. So currently, it operates in 28 cities, 27 of those cities are in Ukraine. One is in Tashkent in Uzbekistan. And we clearly have an ambition and appetite to grow this business in a certain priority list to other markets. Whether this will be starting from Kazakhstan or Pakistan or at the same time, we are working on different sort of initiatives, but it will be a city-by-city decisions as every city has different characteristics.

Our next question comes from Matthew Harrigan with The Benchmark Company.

I feel more confident in putting out a positive VEON preview than I do on T-Mobile or Comcast, which is -- I'm not sure whether that's good or bad from my perspective. But one thing that's interesting and clearly, the dynamics for you are different because you're such a market leader. But when you look at T-Mobile in the U.S., they have a very strong benefit from switching share relative, obviously, Verizon and AT&T to other large competitors that don't have as good a network, but still definitely big animals that they're wrestling with.

And if you really assume that there's not a lot of growth in the U.S. mobile market, just by virtue of their switching share, they can continue to put up really, really nice numbers. And your -- that analysis, I guess, would be pertinent to you on the full gamut of apps that you're running as well as mobile. But are you such a market leader that anything that comes along with device innovation or any perceptions of network quality don't affect you that much because almost by definition, you're so much larger than your competitors that it's -- you almost definitionally have to erode a little bit? Or do you think that as you do get CES, you see -- and I know people are not buying iPhone 17 Pros in Pakistan very often.

But do you feel like with switching share and device innovation and awareness of how powerful these apps are and how good it is to have the best mobile network when you're running these apps that it can help you? Or do you think that you're kind of largely a function that just really, really correlates with the overall market growth in mobile and the demand for the app? Sorry, a little long-winded there, but I'm sure you get the gist of it.

Matthew, I think the opportunity that in front of us is exciting from 2 perspectives, not only that we have the digital services, which are attractive to our customers, but also there are so many customers who are still not yet connected even. We're going to be having 90 million additional people who will be having access to 4G networks, who will be buying their first smartphones. And hopefully, those smartphones will be bought from us with our applications installed on them with their ability without having maybe a credit card that they can pay for the services for the games, for the videos for the channels that they need. And that's why I'm excited because, yes, we are big. We are -- except for Bangladesh, we are #1 in all the markets that we operate in. And in Bangladesh, we are #1 if you compare our entertainment platform and the other super apps that we have.

And I truly believe that as our customers who have never touched yet any other service than calling somebody, and there are 40 million of them on our network. Those people will have a smartphone. They will have their first connection. They will watch their first movie online on mobile networks. And we are looking forward to those days and 40 million of them will be there to basically be our customers. That's why I believe the organic growth is an incredible opportunity. That's why I opened it with that slide. But the acceleration that will come through digital services will just be unmatchable as an opportunity for us to grab.

Okay. No, that's -- you're in a better position than having to fight to grab market share in a privileged position, but you kind of are the market growth. That's a good place to be.

[Operator Instructions] Our next question comes from Vincent Fernando with Zero One.

There's a little lag, but I'm here. So I just want to double tap again on the fintech in Pakistan. You reported $23.8 million EBITDA for the third quarter. Are you able to give any color on maybe how much of that -- like where can we start to look at a run rate? Because you did $20.3 million in the second quarter, USD 23.8 million EBITDA in third quarter. I'm just trying to try to find a base for run rate. Is it relatively recurring in nature? I just want to understand that.

Yes. Our financial services business in Pakistan is actually quite a steady growth business. So over the last 6 quarters, every quarter, we have been seeing a continuous growth of 40% to 30% every single quarter. And looking into our future, I see no reason for this to go down. I think we'll continue keeping that lines. Clearly, the lending business has a balance sheet criteria in terms of growth. But currently, I feel comfortable with those.

We have no further questions at this time. I will now pass back to Anand Ramachandran for closing remarks.

Thank you. Thank you. Well, guys, thank you so much for dialing in as usual. Thank you so much for your support of VEON. As always, please e-mail us, call us here if you have any questions at all, and we'll continue talking. But till then until the next quarter, thank you, and bye-bye.

Thank you very much.