Globe Telecom Sees First-Half Profit Fall 11% on Infrastructure Costs

KEY TAKEAWAYS

·Globe Telecom's net income fell 11 percent to PHP 11.04 billion in the first half while revenue rose 6 percent to PHP 92.66 billion, driven by broadband and enterprise services.
·Depreciation costs climbed 8 percent to PHP 28.67 billion as the telco expanded infrastructure, and reduced ownership in GCash cut profit contributions from the mobile wallet.
·Management expects a second-half rebound by moderating capital spending and scaling ST Telemedia Global Data Centers Philippines to 30 megawatts by year-end.

Earnings Retreat Amid Network Investment

Globe Telecom recorded net income of PHP 11.04 billion in the first half of the year, an 11 percent decline from the same period in 2025, according to the company. The drop came even as the Philippine telecommunications and technology group lifted revenue 6 percent to PHP 92.66 billion through June.

The profit contraction reflects the cost of maintaining Globe's expansion pace. Depreciation expenses jumped 8 percent to PHP 28.67 billion, tied to ongoing infrastructure buildout across the archipelago. Operating expenses also rose 6 percent to PHP 47.79 billion over the six-month stretch.

Chief financial officer Juan Carlo Puno said the company expects to return to growth in the second half, citing momentum in core mobile and broadband services. Management plans to moderate capital deployment while pushing revenue from newer business lines, aiming to keep cash flow positive through year-end.

Broadband and Enterprise Drive Revenue

Mobile and broadband segments each posted 6 percent revenue gains, anchoring the top line. Globe added 640,000 net broadband subscribers in the period, bringing the base to more than two million. Roughly 1.1 million of the total now use GFiber Prepaid, the company's low-cost fiber product launched to reach price-sensitive households.

Corporate data and connectivity revenue climbed 15 percent, as businesses upgraded networks and adopted cloud-based tools. Demand for enterprise-grade infrastructure has accelerated since the shift to hybrid work models, and Globe has positioned itself as a supplier of managed services and colocation capacity.

The telco's subscriber growth contrasts with flat or declining wireless penetration elsewhere in Southeast Asia, where saturation has forced operators to compete on data pricing and quality rather than customer acquisition.

GCash Dilution and Data Center Ambitions

Globe's share of earnings from GCash declined after the mobile wallet's parent, Mynt, brought in Mitsubishi Corporation as an investor in 2025. The deal reduced Globe's stake and its claim on Mynt's profits ahead of a planned initial public offering on the Philippine Stock Exchange scheduled for October 19.

Puno said the company is grooming ST Telemedia Global Data Centers Philippines as a potential replacement for GCash's contribution to the portfolio. STT GDC Philippines, a joint venture building hyperscale facilities, expects to reach 30 megawatts of systemwide capacity by December. That scale would position it among the largest data center operators in the country.

The Philippines has attracted data center investment as regional cloud providers and content platforms seek alternatives to Singapore and Jakarta, where land costs and power constraints have tightened. Manila's proximity to subsea cable landings and a large pool of English-speaking technical staff have made it a viable hub for tier-two capacity.

Second-Half Outlook

Globe's forecast for a second-half turnaround hinges on sustaining broadband additions and corporate revenue while holding the line on capital intensity. The company has not disclosed revised full-year guidance, but management signaled confidence that revenue growth will outpace cost increases in the final two quarters.

The telco faces competition from PLDT, which has also emphasized fiber expansion and enterprise services. Both incumbents are racing to capture corporate clients migrating legacy systems to cloud infrastructure, a segment that offers higher margins than consumer mobile.

Globe's ability to convert revenue momentum into profit growth will depend on how quickly depreciation stabilizes as older network assets roll off the books and whether the company can extract returns from recent investments in 5G base stations and fiber backhaul. The data center venture and other adjacent businesses remain small relative to core telecom operations but represent potential diversification as voice and SMS revenue continues its structural decline across the region.

Asia's overnight moves, distilled into a five-minute read.

Earnings Retreat Amid Network Investment

Broadband and Enterprise Drive Revenue

GCash Dilution and Data Center Ambitions

Second-Half Outlook

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