Globe Telecom Posts 11% Profit Decline Despite Revenue Growth

Revenue Momentum Meets Capital Intensity

Globe Telecom recorded net income of P11.04 billion for the six months ending June, down from P12.44 billion in the same period last year, according to the company's financial report. The decline comes as the Philippine carrier accelerates infrastructure investment while navigating a diluted ownership position in its high-growth payments affiliate.

Revenue climbed 6% to P92.66 billion, driven by steady gains across mobile and broadband segments. Operating expenditure rose at the same pace to P47.79 billion, while depreciation costs jumped 8% to P28.67 billion as the telco builds out network capacity. Capital expenditure surged 39% to P26.3 billion, funding the deployment of 878 new 5G sites and 80,052 additional fiber-to-the-home connections.

The earnings compression reflects a broader shift in Globe's business mix. Mobile and broadband revenues each grew 6%, while corporate data services posted a 15% increase as enterprises invest in digital infrastructure. At the same time, Globe's equity share in Mynt Inc., the parent company of GCash, has decreased following the entry of Mitsubishi Corp. as a new investor in 2025.

GCash Contribution Expands

Despite the diluted stake, Mynt's rapid expansion is reshaping Globe's earnings profile. The e-wallet operator generated P22.4 billion in revenue during the second quarter, a quarterly high, contributing P3.7 billion to Globe's first-half results. Mynt now accounts for 28% of Globe's pre-tax net income, underscoring the growing weight of financial services in the telco's portfolio.

Mynt is preparing for an initial public offering in the fourth quarter with an estimated valuation of P92.3 billion, which would rank as the largest listing in Philippine history. The IPO is expected to provide liquidity and further validate the strategic importance of the payments business within Globe's ecosystem.

Margin Discipline in a Challenging Economy

Carl Raymond Cruz, Globe's president and CEO, noted that the company maintained a 52.6% margin while operating in a difficult economic environment. Consumer spending has softened amid elevated fuel prices, pressuring discretionary telecom expenditure. Cruz emphasized that ongoing investments are designed to preserve the company's competitive position as the industry contends with macroeconomic headwinds.

The telco's ability to grow revenue while absorbing higher infrastructure costs points to resilience in its core business. However, the gap between revenue growth and margin pressure highlights the capital-intensive nature of network expansion in emerging markets. Globe's strategy hinges on converting near-term infrastructure outlays into sustained market share gains and improved service quality.

Capital Allocation and Market Position

Globe's 39% increase in capital expenditure signals confidence in long-term demand for mobile data and fixed broadband. The rollout of 5G infrastructure and fiber connections aims to capture growing traffic volumes as Philippine consumers and businesses shift toward data-intensive applications. Corporate revenue growth of 15% suggests that enterprise clients are prioritizing connectivity and cloud-based solutions, a segment with higher margins and stickier customer relationships.

The telco sector in the Philippines remains competitive, with operators racing to expand coverage and capacity. Globe's decision to maintain aggressive capital deployment, even as profit margins compress, reflects a bet that network quality will differentiate winners in a market where price competition is intense.

The company's first-half performance sets a baseline for the remainder of 2026. With GCash poised for a landmark IPO and infrastructure investments beginning to translate into capacity gains, Globe's ability to stabilize margins while defending market share will determine whether the current earnings trajectory marks a temporary dip or a structural shift in profitability.