TKC

TURKCELL ILETISIM HIZMETLERI A.S. - Q3 2025 Filing Summary

Business Context and Reporting Period

This Form 6-K, filed on November 7, 2025, reports the financial results for the third quarter and nine months ended September 30, 2025. The financial statements are prepared in accordance with IFRS and restated for hyperinflationary conditions under IAS 29, reflecting the purchasing power of the Turkish Lira (TRY) as of September 30, 2025. The Group operates three primary segments: Turkcell Türkiye (telecom and digital services), Techfin (financial services), and Other (international and energy businesses).

Key Financial Metrics

Note: Net Income for Q3 2024 included a one-off gain of TRY 14.9 billion from discontinued operations (sale of Ukraine assets), which is not present in Q3 2025.

Material Changes vs. Prior Period

• Revenue Growth: Consolidated revenue increased 11.2% year-over-year (YoY) in Q3 2025, driven by robust ARPU growth in Turkcell Türkiye and a 20.0% surge in the Techfin segment.
• Profitability: EBITDA rose 10.5% YoY, while EBIT grew 18.6% YoY. Profit from continuing operations increased 31.8% YoY.
• Net Income Volatility: Reported Net Income decreased 71.6% YoY. This decline is primarily attributable to the absence of the one-off gain from the sale of Ukraine operations recorded in Q3 2024, rather than operational deterioration.
• Segment Performance:
  • Techfin: Revenue grew 20.0% YoY, led by Paycell (41.7% growth). However, EBITDA margin contracted 6.0 percentage points due to higher mobile payment costs.
  • Data Center & Cloud: Recorded 50.6% YoY growth, a key strategic pillar.
• Operational Metrics: Mobile postpaid subscribers increased by 569,000 net additions, raising the postpaid share to 79%. Mobile ARPU (excluding M2M) grew 11.9% YoY.

Guidance, Outlook, and Risks

• Revised 2025 Guidance: Management has upgraded its full-year 2025 outlook:
  • Revenue growth: ~10%.
  • EBITDA margin: 42% - 43%.
  • Operational CAPEX to Sales ratio: ~23% (reduced from prior guidance).
  • Data Center & Cloud revenue growth: ~43%.
• 5G Spectrum Acquisition: On October 16, 2025, Turkcell secured 160 MHz of spectrum for USD 1.2 billion (excl. VAT), the maximum allowed for a single operator. This creates a liability of approximately USD 1.5 billion (incl. VAT) and extends license validity to 2042. Future payments will be 5% of gross mobile service revenues starting April 2029.
• Macroeconomic Risks: Financial projections assume an annual inflation rate of ~32%. The company faces currency risks, currently holding a net short FX position of USD 9 million, which may increase due to the 5G tender commitment.
• Regulatory Contingencies: Ongoing investigations by the ICTA regarding R&D obligations, refund procedures, and identity verification regulations pose potential risks of administrative fines, though many have been paid with early payment discounts.

Investor Verification Checklist

• IAS 29 Impact: Verify the specific inflation adjustment factors applied to non-monetary assets and liabilities to understand the real purchasing power of reported figures.
• 5G Tender Liability: Confirm the exact payment schedule and the impact of the 5% revenue royalty (starting 2029) on future cash flow projections.
• Techfin Margin Pressure: Analyze the sustainability of Paycell's revenue growth against the rising cost of mobile payment processing.
• Discontinued Operations: Ensure comparisons of Net Income exclude the one-off Ukraine sale gain from Q3 2024 to assess true operational performance.
• FX Exposure: Monitor the net short FX position given the significant USD-denominated 5G liability and the volatility of the TRY/USD exchange rate.