Globe Telecom's Core Net Income Expanded by a Solid 19% YOY, Reaching P17.6 Billion in 9M24

Globe Telecom closed the first nine months of 2024 with unprecedented heights in its consolidated gross service revenues, setting new quarterly and year-to-date records. The company achieved consolidated gross service revenues of P124.0 billion and P41.8 billion, higher by 2% year-on-year and quarter-on-quarter. These results were attained despite the ongoing normalization of home broadband and the impact of the ECPay deconsolidation. Mobile and corporate data businesses significantly contributed to this solid performance, accounting for a combined 83% of the total consolidated gross service revenues, up from ​80% the previous year. Mobile revenues rose 5%, and corporate data revenues grew 14% compared to the same period in 2023. Data revenues continued its robust momentum, accounting for 86% of consolidated gross service revenues, up from 82% last year. Assuming the deconsolidation of ECPay from Globe's books in the first nine months of 2023, to make the periods comparable, the total consolidated gross service revenues would have grown by 4%.

The mobile business posted a record P87.7 billion in revenues, surpassing its previous peak of P83.2 billion reported a year ago, showcasing improvements across all brands. The company's strategic market initiatives and ongoing network enhancements contributed to this record performance, ensuring that Globe's offerings remained competitive and appealing to customers. As a result, mobile revenues now account for 71% of the total consolidated gross service revenues, up from 69% in the same period last year. Moreover, Globe's mobile customer base expanded, reaching 60.2 million subscribers by the end of September 2024.

Mobile data revenues likewise surged to a record-breaking quarterly high of P24.8 billion, reaching a record P72.9 billion for the first nine months of 2024. This represents a 9% increase from its previous high of P67.0 billion reported a year ago. The upsurge in mobile data revenues was largely due to Filipinos' growing dependence on mobile applications for a wide range of online activities. Mobile data now accounts for a larger share of mobile revenues, growing from 81% last year to 83% this year. During this period, mobile data traffic increased to 4,843 petabytes from 4,360 petabytes reported in the corresponding period of 2023. Conversely, traditional mobile voice and SMS revenues declined by 5% and 13%, respectively, as consumers shift their communication preferences toward data-centric platforms.

During the nine-month period, the corporate data business achieved a record P15.5 billion in revenues, up 14% year-on-year. The overall growth was fueled by the 16% increase in Information and Communication Technology (ICT) and 13% surge in core data services. Business Applications Solutions (BAS) were the significant contributor to ICT revenue expansion, with 31% increase year-on -year. The company's dedication to providing customized digital solutions tailored to meet the needs of its enterprise clients propelled this outstanding performance.

In contrast, home broadband revenues were lower 6% year-on-year to P17.9 billion by the end of September 2024. This decrease was predominantly due to the reduction in fixed wireless services as consumers continued to move away from this technology into fiber products. This shift contributed to the resilience of fiber revenues, with a 2% year-on-year increase driven by strong demand for high-speed connectivity, which partially compensated for the overall softness in home broadband revenues.

Globe's fixed wireless revenue decline is gradually slowing down, aligning with the company's expectations. The increasing popularity of GFiber Prepaid (GFP) presents a promising growth opportunity for Globe's overall broadband revenues. As of the first nine months of 2024, GFP acquisitions surged by 52x compared to 2023. GFP continued to expand rapidly, achieving a subscriber base of 146,000 and demonstrating exceptional customer engagement, with reload rates reaching an all-time high of 81%. This growth reflects Globe’s effective customer acquisition strategy, with GFP acquisitions specifically doubling quarter-on-quarter, underscoring a robust market demand for flexible and affordable prepaid fiber services. Globe also implemented a strategic rightsizing of its broadband offerings, aligning its subscriber base with individual usage habits, which contributed to a 7% year-on-year increase in fixed-wired subscribers while optimizing focus on high-value customers. These results showcase Globe’s commitment to adapting its broadband strategy to meet the evolving needs of Filipino households.

The total home broadband subscriber base decreased by 3% in the current reporting period, from 1.75 million in the previous year to nearly 1.70 million. Additionally, HPW data traffic also dropped from 232 petabytes to 153 petabytes in the same period.

Globe's non-telco revenues dropped 56% year-on-year compared to the P4.1 billion reported at the end of September 2023. This substantial decrease was mainly due to the deconsolidation of ECPay from Globe's books following the sale of its 77% stake to Mynt. However, if this deconsolidation had been factored into Globe's records during the first nine months of 2023, the overall non-telco revenues would have been lower by only 15%.

Total operating expenses, including subsidy, fell 2% from P60.4 billion as of September 2023 to P59.1 billion in the current reporting period. This decline resulted from the company's ongoing cost-saving measures as well as the deconsolidation of ECPay. Reduced spending in various areas, such as marketing, provisions, repairs & maintenance and other expenses, contributed to this decrease. On a comparable basis, assuming ECPay's deconsolidation in Globe's books during the first nine months of 2023, the total operating expenses (including subsidy) would have been relatively flat year-on-year.

Consolidated EBITDA, rose a solid 7% compared to the previous year, achieving a record P64.9 billion. This improvement was driven by the 2% rise in consolidated gross service revenues, and the 2% reduction in operating expenses, including subsidy. Notably, the company's EBITDA margin showed remarkable resilience, maintaining a steady 52% since the first quarter of 2024, surpassing the full-year guidance of 50%.

Mynt, Globe's fintech arm, sustained its growth trajectory, solidifying its position as the dominant cashless ecosystem in the Philippines. GCash, the preferred platform for digital financial services, expanded its user base and profitability. Through GCash, Filipinos have gained access to a wide range of financial tools, empowering them in their financial journey. Globe's share in Mynt's equity earnings
for the first nine months of 2024 soared to a record P3.5 billion, representing a 14% contribution to Globe's pre-tax net income, compared to 6% in the previous year. Mynt's equity earnings also outperformed prior year’s by a robust 114%.

Globe's net income posted a 6% increase from a year ago, registering P20.6 billion this period, from P19.4 billion the preceding year. This was primarily driven by the robust EBITDA growth, which negated the rise in depreciation expenses incurred during the period. Excluding the one-time gain from the tower sale, normalized net income would have stood at P17.8 billion, or up by 20% from the year earlier.

Additionally, excluding the impact of non-recurring charges, foreign exchange, and mark-to-market charges, Globe's core net income expanded by a solid 19% year-on-year, reaching P17.6 billion during the first nine months of 2024. On a comparable basis, assuming that ECPay had been deconsolidated from Globe's books during the first nine months of 2023, core net income would have grown by 22%.

Globe's balance sheet remained healthy, comfortably satisfying bank covenants. Total debt improved from P250.0 billion as of end-December 2023 to P240.9 billion this period. Globe's key gearing ratios for this period include Gross debt to EBITDA of 2.54x, Net debt to EBITDA of 2.30x, and debt service coverage ratio of 1.65x.

"Our unwavering resilience and agility have propelled us forward, leading us to extraordinary accomplishments. The robustness of our business model is evident in the impressive EBITDA we've achieved, along with a notable increase in Core NIAT during the first nine months of the year." said Ernest L. Cu, President and CEO of Globe Telecom Inc.

“With our country's digital economy poised for expansive growth, Globe is committed to empowering Filipinos across all economic segments. Our focus remains on unlocking value as a hyper-focused digital company, winning customers through network improvement and digital innovations while strengthening our core telco business.” Mr. Cu added.

Globe Telecom, Inc. is a leading digital platform in the Philippines, with major interests in telecommunications, venture capital and venture building, shared services and digital marketing solutions. The company serves the telecommunications and technology needs of consumers and businesses across an entire suite of products and services including mobile, fixed, broadband, data connectivity, internet and managed services. In 2019, Globe became a signatory to the United Nations Global Compact, committing to implement universal sustainability principles. Its principals are Ayala Corporation and Singtel, acknowledged industry leaders in the country and in the region.

​It is listed on the Philippine Stock Exchange under the ticker symbol GLO and had a market capitalization of US$5.9 billion as of the end of September 2024.