PLDT Inc. Q3 FY2025 Earnings Call

Good afternoon, everyone, and thank you for joining us today. I'm Jinggay Nograles, Head of Investor Relations at PLDT. It's my pleasure to welcome you to our 9-month financial and operating results briefing. With us today to discuss PLDT's performance and strategic direction are our Chief Financial Officer, Mr. Danny Yu; Chief Operating Officer, Mr. Butch Jimenez; Corporate Secretary, Marilyn Victorio-Aquino; Chief Legal Counsel, Attorney Joan De Venecia-Fabul; Head of Consumer Business, Mr. John Palanca; Head of Enterprise Business, Mr. Blums Pineda; ePLDT President and CEO, Viboy Genuino, along with our OICs for Smart, Lloyd Manaloto and Ms. Marjorie Garrovillo. Before we start, I want to remind everyone that we will have a Q&A session following the presentation. Now, I would like to invite our Chief Financial Officer, Mr. Danny Yu, to discuss PLDT's financial performance.

Good afternoon, everyone, and thank you for joining us today. Allow me to present PLDT's financial and operating highlights for the first 9 months of the year. Our service revenues net of interconnection cost reached PHP 145.9 billion, up 1% year-on-year, driven by steady demand across fiber, data, and ICT. Cash OpEx, subsidies, and provisions were down 2%, showing our focus on spending control even as we support growth areas. EBITDA rose 3% to PHP 82.8 billion with margin steady at 52%, amidst higher revenues and lower OpEx. Telco core income came in at PHP 25.3 billion, down 5%, mainly due to higher depreciation and financing costs from network and IT investments. On the other hand, core income was stable at PHP 25.8 billion, supported by Maya's sustained profitability. Our share in Maya's core net income reached PHP 603 million for the period, a PHP 1.5 billion turnaround from last year's loss. Maya remained profitable for the third consecutive quarter, showing consistency that solidifies its position as the country's leading fintech ecosystem. In summary, our 9-month results show a stable top line, resilient EBITDA, and improving contribution from digital businesses. Consolidated service revenues reached PHP 145.9 billion, up 1% year-on-year. If we exclude legacy services, total revenues rose 3%, showing the continued expansion of our growth areas. Within these growth segments, fiber revenues grew 7%, reflecting solid demand for reliable connectivity. Mobile data and fixed wireless revenues were up 1%, with usage and 5G adoption continuing to rise. Please note that beginning this quarter, we will now include fixed wireless access, FWA, within our growth segments for our wireless business. The base numbers have been adjusted accordingly to provide like-for-like comparison and reflect organic growth. Fixed wireless growth is driven by the expanding 5G base and stronger network coverage. For enterprise, corporate data and ICT revenues grew 2%, returning to growth in the third quarter as government and public sector projects started to ramp up after election-related delays in the first half. ICT on its own grew 27%. Overall, the shift towards these growth areas, namely fiber, data, fixed wireless, and ICT continues to offset the decline in legacy revenues. Focusing on the third quarter, I'd like to point out that all major business units delivered positive growth even with legacy drags showing recovery, especially for our mobile and enterprise groups. Consolidated service revenues rose 2% year-on-year to PHP 48.8 billion. Excluding legacy services, total revenues rose 4%. Wireless consumer revenues were up 1% with mobile data and fixed wireless delivering 3% growth year-on-year. Home revenues climbed 3%, while fiber revenues were up 6%. Enterprise, as mentioned earlier, is now back on its growth path, still a 2% increase year-on-year with corporate data and ICT up 5%, while ICT services on its own grew 51% year-on-year as government projects begin pushing through. Overall, the third quarter marked a broad-based recovery with improvements in both mobile and enterprise, reflecting steady execution and disciplined growth across the group. Now let's take a closer look at each of the business units. Home revenues grew 4% year-on-year to PHP 45.7 billion, driven mainly by continued fiber demand. Fiber revenues were up 7% to PHP 44.5 billion, now accounting for 97% of total home revenues. We added 265,000 net fiber subs year-to-date, up 67% versus last year. The total fiber base is now 8% higher year-on-year. On prepaid, we have selectively introduced prepaid fiber in appropriate growth markets, specifically targeting quality subs, who have a high probability of topping up regularly. In this way, we not only secure revenue growth but also sustainable profits in the long run. Prepaid sub count has grown 15 times since the end of 2024. ARPU held steady at PHP 1,470, the highest in the industry, driven by our value-based bundles such as video and gaming. Churn remained low at 1.9%, reflecting strong customer loyalty and consistent network quality. To further extend our reach, we have launched Air Fiber and Laser Internet providing fiber-like speeds in hard-to-reach areas at lower cost. This technology expands our coverage and improves service availability in underserved locations. Overall, Home continues to deliver solid growth, underpinned by fiber leadership, high ARPU, and expanding access through new technologies. Let's now move on to Enterprise. Year-to-date revenues reached PHP 35.6 billion for the first 9 months, broadly steady year-on-year, while corporate data and ICT revenues rose 2% year-on-year to PHP 26.7 billion. Within this, ICT revenues grew 27% year-on-year, driven by strong demand for managed IT services up 115%, data center colocation up 25%, and cybersecurity services up 12%. Importantly, the business unit returned to growth during the third quarter, reversing early year softness as delayed government projects pushed through. Enterprise revenue rose 5% versus the second quarter with corporate data and ICT up 7%, led by a 40% increase in ICT services. Corporate data and ICT now account for 75% of total enterprise revenues, reflecting our continued shift toward high-value services. PLDT also continues to strengthen its leadership in AI and data infra, positioning the group at the forefront of the country's digital transformation. We recently launched Pilipinas AI, the country's first sovereign AI platform hosted at VITRO Santa Rosa. This platform enables the enterprise to build and deploy AI models locally, giving businesses access to GPU-powered computing on demand. For our wireless business, revenues reached PHP 63.2 billion for the first 9 months, down slightly by PHP 0.3 billion versus last year due to legacy brands. Data revenues, which now include mobile data and fixed wireless rose 1% year-on-year to PHP 57.3 billion, accounting for 91% of total wireless revenues. For the third quarter alone, data revenues were up 3% year-on-year, reflecting steady demand and continued monetization discipline. Fixed wireless sustained strong momentum with revenues up 18% year-on-year as Smart leads the market by revenue share. If we remove fixed wireless, mobile data revenues rose 1% to PHP 56 billion. Performance was supported by stable data traffic growth, disciplined monetization, and customer value management initiatives that help optimize spend and reduce marketing costs. 5G adoption continues to expand, with the number of 5G devices up 39% year-on-year to 10.5 million, while data traffic rose 6% year-on-year to 4,393 petabytes. The share of 5G devices in the total base improved to 18%, driving higher data usage and improved customer experience. As we continue to innovate on the product side, we also stay focused on cost discipline across the group. Total cash OpEx, subsidies, and provisions for the first 9 months of the year came in at PHP 63.1 billion, down PHP 1.1 billion or 2% versus last year. The biggest savings came from compensation and benefits down 7%, reflecting continued workforce optimization. Selling and promotions were also lower by 18%, driven by better campaign targeting and spend efficiency. Subsidies were also down by 25%, reflecting Smart's deliberate shift towards higher quality acquisition and tighter credit screening for postpaid device plans. On the other hand, repairs and maintenance rose 4% to PHP 23.6 billion, reflecting ongoing network expansion and site rollouts. Contract-specific services were up 25%, tied to the ramp-up of key enterprise and ICT projects. For the first 9 months of 2025, EBITDA reached PHP 82.8 billion, up 3% year-on-year with margin steady at 52%. This performance reflects the combined impact of a PHP 1 billion rise in revenues along a PHP 1.1 billion discipline for decline in operating costs. The 52% EBITDA margin has held firm, demonstrating our ability to defend profitability even in a very competitive environment. Telco core income reached PHP 25.3 billion, down 5% year-on-year, mainly due to higher depreciation and financing costs from network and infrastructure investments. Core income was steady at PHP 25.8 billion, supported by continued earnings from Maya, whose consolidated core income hit PHP 1.6 billion year-to-date. Maya remained profitable for the third straight quarter, continuing to gain scale through higher transaction volumes, growing deposits, and steady expansion in its lending and merchandise businesses. This quarter also includes PHP 2.6 billion in accelerated depreciation and noncash charge related to modernization of our core and IT systems and the retirement of legacy assets. Reported income stood at PHP 25.1 billion, lower year-on-year, mainly reflecting the absence of last year's higher foreign exchange and derivative gains as well as the accelerated depreciation booked this quarter. CapEx for the first 9 months stood at PHP 43 billion, down from PHP 52.3 billion for the same period last year. CapEx intensity improved to 27% from 33% a year ago, driven by lower spend on network and IT as major projects near completion. For the full year, 2025 CapEx guidance is lowered further to PHP 60 billion, lower than the original guidance of PHP 68 billion to PHP 73 billion. This is mainly due to more favorable pricing and terms. We continue to invest in new cell sites, LTE and 5G upgrades, home fiber ports, data center development, and submarine cables. These projects will strengthen network quality and support the growth of enterprise and digital services. As of the end of September, net debt stood at PHP 289 billion, translating to a net debt-to-EBITDA ratio of 2.61x, slightly higher than the prior quarter, but still within our target range. Our gross debt was at PHP 299 billion with 60% of maturities falling beyond 2030, providing a long runway and minimal near-term refinancing pressure. About 13% of total debt is U.S. dollar-denominated. With only 5% unhedged, keeping foreign exchange exposure very manageable. The average interest cost was 5.49%, up slightly from last year's 5.08% as lower rate maturities are refinanced. Our interest coverage ratio remains healthy at 3.37x, while our average debt maturity is 6.5 years. PLDT remains investment grade with ratings from S&P and Moody's. In terms of cash flow, we recorded PHP 1.1 billion in proceeds from tower sales and completed a PHP 20.5 billion final dividend payment for 2024 during the period. Incidentally, PLDT hit positive free cash flow as of September 2025, ahead of its forecasted 2026 target. Looking ahead, we are working towards reducing leverage to around 2.0x net-debt-to-EBITDA, which will be supported by our asset monetization program as well as lower CapEx. Now let me now discuss Maya, the Philippines all-in-one fintech platform powered by Maya Bank and Maya Philippines. It's a fully integrated platform that unites digital payments, savings, and lending for both consumer and enterprises. Maya has created a powerful two-sided network where more customers drive more transactions, generating richer insights, which enables higher cross-sell of products and ultimately delivers scale and profitability. Maya continues to lead with strong performance across deposits, loans, and payments. Maya remains the number one merchant acquirer and card payment processor. It delivered PHP 532 million in net income in the third quarter, sustaining profitability while growing. Banking customers nearly doubled year-on-year to 9 million, while its cumulative borrower base grew 81% to 2.4 million. Deposits reached PHP 57 billion, up 59% year-on-year and total loans disbursed since its inception hit PHP 187 billion. Maya continues to onboard millions into the formal financial system, especially younger users and underserved segments. It continues to be the digital bank of choice for young customers across the country. Of the 9 million customers in just over 3 years, 84% comprise Gen Z and millennials and 76% are based outside of Metro Manila. Of the 2.4 million borrowers that Maya has given credit to, over half are first-time borrowers with no previous lending history. Maya's deposit base has grown to PHP 56.7 billion as of September, more than doubling from the end of 2023. It disbursed PHP 36 billion in the third quarter alone, bringing its total loan disbursement since launch to PHP 187 billion. The loan book now stands at PHP 27 billion with loan-to-deposit ratio at 48%. Net interest margin rose to 18.9% for the first 9 months, while maintaining a healthy portfolio with an NPL ratio of 6.3%. Maya continues to expand its fintech ecosystem through product innovation and strategic partnerships. Maya launched Maya Black, its premium credit card in the third quarter, receiving a very strong response from the customers. Around 40% of Maya Black cardholders are first-time credit users, underscoring Maya's role in democratizing credit access to Filipinos. Maya also launched an innovative personal loans product in the previous quarter that incentivizes users to make periodical savings habitual by offering higher rates. Maya is also leveraging its relationship with established businesses like Cebuana Lhuillier to expand credit to unbanked customers through over 3,500 branches and 25,000 agents nationwide. In summary, Maya's strong growth across payments, deposits, and lending reflect the power of a fully digital integrated ecosystem. PLDT continues to mark progress in its sustainability journey as manifested in its latest ESG ratings, which continue to register improvements as you will see on the slide. We continue to align with global best practices, and we have started to take part in global conversations. At the Climate Week in New York, PLDT and Smart represented the Philippines at the United Nations Global Compact Leaders' Summit, where we showcased a homegrown innovation that integrates localized mapping of natural hazards and remote monitoring of network facilities into a single visual dashboard. We were also featured in the Philippines 2025 Voluntary National Review presented by the Department of Development, highlighting the country's progress on sustainable development goals. Other highlights during the quarter include a workshop with our supply chains where we cascaded our biodiversity policy, particularly in the context of network rollouts. Smart also secured a PHP 2 billion green loan with proceeds to be used to accelerate the rollout of our 5G network nationwide, which is more energy-efficient. Now that concludes our prepared remarks for PLDT's 9-month results. We're now open for questions.

Thank you, Danny, for your insights. Before we start taking questions, I want to reintroduce our business leaders present here. I would also like to acknowledge our COO, Mr. Butch Jimenez, and Aayush Jhunjhunwala from Maya, who is also joined by the CIO of Maya. Additionally, those of us in the room include our Head of Consumer Business Home, Mr. John Palanca, our Head of Enterprise Business, Mr. Blums Pineda, ePLDT and Vitro President, Viboy Genuino, and our OICs for Smart, Lloyd Manaloto and Marjorie Garrovillo. Also present are our CFO, Mr. Danny Yu, our Chief Legal Officer, Ms. Joan De Venecia-Fabul, and our Corporate Secretary, Ms. Marilyn Victorio-Aquino. The first question comes from Nicky Franco of Abacus Securities, directed at Maya. With Maya's lending remaining strong in Q3 '25, what were the primary factors behind the decline in net income during that period? Were there any one-off events attributed to this? Aayush, would you like to address that?

Sure, Jinggay. Thanks for the question. There are a couple of factors that led to a slight decline. One factor was the minor impact of the removal of gaming links, which began in August 2023 following the BSP's direction. Additionally, as Danny mentioned, we launched the Maya Bank Black Credit card, and we also introduced personal loans, as I noted in the previous call. As we grow these longer-duration loans, they will continue to cause some excess provision impact in the near to medium term until the portfolio matures. These are the two main factors contributing to this.

Thank you, Aayush. All right. It looks like we also have some questions here from Arthur Pineda of Citi.

Several questions, please. Firstly, with regard to the KPA and the IRRs, which have been released and signed by the President, how do you see this impacting your profitability as well as your investment profile going forward? I'm just wondering, do you see the new revenue opportunities as outweighing the revenue risks with regard to upcoming competition? Second question I had is with regard to mobile. I mean, we've seen this has been trailing that of your competitor for the third straight quarter. What's driving this difference in performance? Is there any issue that the company needs to work out? And the third question is on enterprise. You mentioned an uptake in government projects earlier. I'm just wondering, are you seeing sustained uptake into the fourth quarter, given that we've seen a slowdown in the broader macro momentum and government spending?

Thank you, Arthur. We have three questions here. Let's address your second question first, which is about wireless. It has been lagging for some time. Are there any performance differences you'd like to point out? Marjorie or Lloyd, would you like to respond to this question?

All right. So for the wireless business, whilst we have been trailing behind Globe in actual revenue, when you actually review the growth rates, we could see that the Smart Wireless group has achieved a flattish growth rate for year-to-date 2025 versus Globe, which is actually more of a negative. Number two, the actual Q3 achievement versus last year, Smart is also ahead, right, versus Globe. Now what's interesting is that we have managed to use tools like hyper targeting, we actually have been able to secure a higher quality subs space so much so that our ARPUs for Smart have improved. So we're actually at a positive 2.5% on our ARPU for Smart versus Globe, for example, which is at negative 5.5%. We believe that with tools like this and focusing on how we could generate more positive growth, we should be able to at least stabilize and sustain our mobile resilience.

I'd also like to mention that if you examine fixed wireless, the wireless network is experiencing rapid growth, fueled by our investment in 5G and 5G devices. This is one area we are concentrating on across our entire portfolio because we anticipate greater growth there.

Thank you, Marjorie. Thank you, Lloyd. Let's take your question on Enterprise next in terms of the sustained uptick in the fourth quarter. Blums, would you like to take that?

Yes, sure. Thanks for the question, Arthur. So with PLDT Enterprise, yes, we are seeing the continued momentum, as we mentioned before, into the fourth quarter and also into early Q1. As you can imagine, some of the nature of the projects will probably result in some slippage of award dates, which is normal. But we're seeing still that level of investment and activity. There's a lot of across both national government agencies and LGUs, continued demand here that we're serving on both the connectivity and the ICT side.

Can I add to that?

Yes, of course.

Just a couple of insights on where the government is going to land in terms of sustaining their investments in digital connectivity. Of course, I can't speak for the government at this point in time. But generally, what we see is that they are going to continue their trust and their investments in being able to connect the Philippines digitally. I don't see that slowing down. And I think that after realizing that they've spent too much on flood control, they've started to sense that maybe they should start shifting some of that expense or that spend to other areas and digitizing or providing digital connectivity to various aspects of Philippine society is something that they are prioritizing. So first, let's talk about data centers. The government or PBBM has already given the DICT an order for public sector data sovereignty. That becomes a big driver for the enterprise group in terms of possible revenues in the future, principally because we have the biggest data center in the Philippines, and we are the only ones that can provide GPU as a Service leading towards AI. Aside from that, the GIDA site investment or initiative of the government has just finished its bidding. PLDT, Globe has gotten its fair share of rolling out in GIDA sites. So that is going to add revenue for our company and continue the investments of the government in connectivity. Now tomorrow, I will be presenting to the PSAC, the Private Sector Advisory Council, a couple of more initiatives to digitize state universities in the Philippines, and the other one is health care centers in the Philippines. So it looks like they are realizing that we are far behind our Asian or ASEAN neighbors when it comes to digital connectivity, and it is one of the priorities that I think the President and the government is going to push forward in 2026 and beyond. So looking forward to a sustained investment of the government in connectivity.

Thank you, sir, Butch. The last question, which is on Konektadong Pinoy. Marilyn MAVA, would you like to take this one?

There are many potential opportunities, but it's challenging to evaluate them at this moment since this is the first country implementing the open access for all assets model. We are unsure how this will take shape in the Philippines. However, if new players emerge with the vision and commitment to invest in the Philippines, particularly in new infrastructure that can enhance our network, that presents a viable opportunity to consider. Such investments could strengthen our network and improve connectivity across the country, potentially helping to connect Filipinos more effectively, even in underserved areas, while also enhancing overall Internet connectivity. This is an area where we can explore opportunities and develop new partnerships. However, if it's solely about access, it's difficult to gauge the opportunities currently as we do not know how the open access model will be implemented in the Philippines.

So no indications on the IRRs based on what's been signed by the President so far?

I'm sorry?

Are there any indications on how we feel about the IRR?

Well, how we feel about the IRR. Mr. Pangilinan answered that earlier in the media briefing. Maybe Jinggay will read his answer.

Sure. He made a statement earlier that he shared with the media. When asked about PLDT's overall view on the final IRR, he responded by turning the question around. He questioned whether the law as written actually achieves its goals of providing cheaper Internet for everyone, wider coverage, and more infrastructure, noting that the law and its IRR do not impose any obligation on new entrants to build infrastructure. There is no requirement for them to start in geographically isolated or disadvantaged areas, and there is no service obligation to ensure coverage or quality. And if you recall, in the Ramos administration, there was a sound model under the service area scheme, where telcos were assigned specific regions and targets like reaching the number of households to be connected, right? And that created real infrastructure build-out at that time. And the Konektadong Pinoy law, on the other hand, does not have such provisions. So really, the question remains on whether it will truly deliver on its promises.

My questions are related to the KPA as well. Can you help us understand how the wholesale access pricing mechanism is going to be set? When you're being asked to open up your network, on what basis are wholesale access prices that you would be charging any access seekers? Is this completely on commercial terms? Is there a cost model associated with it? And the second question is on the spectrum. I think there's also spectrum management provisions which includes clawback of underutilized spectrum. Can you help us understand how that might impact the industry as well?

Yes. In terms of the pricing, I don't think there has been any specific model that was shared in the IRR, right? The way it was drafted was that the incumbents are to submit our price list in the reference access offer and that will be reviewed by the regulators to determine if it is fair, reasonable, and nondiscriminatory. So I think there's really no specifics at this time, Ranjan, on using any specific model.

Maybe I add to that. In fact, it is not clear to us because we already have open access, bilateral contractual commitments, right. We do open access on a contractual basis. But it's not clear to us, for example, whether or not the pricing that we have assumed based on voluntary contracts with counterparties will be the same price that will be approved by the regulator. And there is also a provision in the IRR, which says if it's a significant market player, then the regulator may scrutinize your pricing. And what that means is not clear to us, whether or not significant market players will be required to price down their offering compared to contractual commitments that they entered into before Konektadong Pinoy. It's not very clear to us. So on the spectrum underutilization, is that the question?

Spectrum management provisions, how we see this impacting our business?

There will be an impact on the business, but it's important to note that there is currently no standard for underutilization. The usage of spectrum varies based on application. For example, using it as a macro site will result in different utilization compared to using it to cover blind spots or handle ongoing issues. The spectrum management policy aims to address these differences. We hope to engage in discussions with stakeholders like ourselves who are utilizing the spectrum. Additionally, if they establish a definition for underutilization, it may involve a transition period. It wouldn't be fair to start recording spectrum usage immediately under a new definition of underutilization that we can't comply with right away.

Okay. It seems we have some questions here from an unclear source. The first question is about net debt. You mentioned that the net debt-to-EBITDA ratio will decrease to 2x; which year do you expect this to happen? The second question is regarding the fact that the net debt-to-EBITDA ratio is increasing much quicker than net profits. Where in the business is this trend occurring?

We continue to spend on IT network rollout and data center development. So that's where the debt goes now. With respect to projection, I think it will be about 3 to 4 years from now going to the 2.0. But certainly, I think the positive news is that we finally achieved positive free cash flow as of September, ahead of our forecast in 2026. That's one good news. And we hope to sustain this with lower CapEx moving forward as well as with our monetization program.

And we also have a question related to that regarding our positive free cash flows, how confident are we that we can sustain this into 2026?

We're confident because we will have lower CapEx moving forward, again, as mentioned earlier, because of our asset monetization program.

And also, this is a common question that was sent to us earlier. Any updates on the current asset monetization programs, namely the data center stake sale as well as the copper sales?

On the data center, we're currently in talks with a prospective investor, who intends to take around 49% of the business. At the same time, we're also exploring the possibility of doing a REIT listing for our data center, just in case the other falls through.

Thank you, Danny. All right. We have another question here from John Te of UBS.

Two questions. First is on the fixed broadband net adds, quite strong, 95,000 compared to your run rate of 70,000 in the first half. So how much of this was prepaid? How much of this was postpaid? And what drove the acceleration there?

Would you mind taking this?

Thank you for the question. Yes, we have been able to increase the install rates over the last quarter by utilizing not only our channels but also our installed team. I'm pleased to report that in the third quarter, we've experienced more than a threefold increase in prepaid subscriptions. Our approach has been quite different; I previously mentioned that while we're expanding our overall subscriber base to ensure that average revenue per user remains high and does not cannibalize postpaid, our strategy for acquiring prepaid subscribers has been very targeted. We are focusing on areas where prepaid is most applicable, and expanding from Tier A and Tier B municipalities to now include Tier C and other selective opportunities. As such, we may not see the same volumes, but we will attract quality subscribers who are more likely to top up. Since the beginning of the year, our growth has already exceeded 3x—specifically, 3.3x. Once we are ready to release our figures, I believe we will have a substantial subscriber base for prepaid. Currently, the majority of our growth is still coming from postpaid acquisitions.

Okay. A quick follow-up for Danny. There was a PHP 2-plus billion charge in depreciation over the last nine months, but it's safe to assume that most of it came from the third quarter. Regarding interest expense, even though the debt has not changed, there was a significant year-on-year spike. Would this mainly be related to leases for towers and similar expenses?

I'll take the second question first. The reason for the increase in interest is mainly due to an increase in the weighted average rate by around 49 basis points. That's one. The second reason for that is also an increase in the weighted loan average by around PHP 19 billion compared to the previous year. So that's for the second. What was the first question again?

Accelerated depreciation of PHP 2.6 billion...

It's mainly retirement of legacy assets as well as modernization of our IT and network core system and the accelerated depreciation is a fast-paced capital-intensive industry, and it's rapidly changing. So we have to continually review the economic life of these assets.

And most of it occurred in the third quarter, right?

Yes, in the third quarter. I think we recorded that in July of this year.

Okay. So some questions that were sent in as well. This one is for Enterprise. You recently launched SmartSafe as well as Pilipinas AI. How do you see these contributing to your revenues moving forward?

I will address SmartSafe, and Viboy Genuino, the President of ePLDT and Vitro, will discuss the Pilipinas AI announcement. Regarding SmartSafe, we have already been introducing this to customers since the third quarter, but we officially launched it just last week. SmartSafe utilizes specific technology on the Smart network, allowing users to conduct transactions through a mobile app without needing an OTP. This provides a seamless login experience while maintaining security comparable to that of OTPs. It also eliminates the risk of OTP interception, which is becoming increasingly common. In terms of revenue, we aim to collaborate with other B2B companies that have applications, such as those in banking and government, to integrate this feature into their next app releases. We are excited to have several institutions interested in this and looking to launch it as soon as possible. We will keep the team updated on further developments.

Yes. Thank you, Jinggay, for the question on Pilipinas AI. So yes, we launched this in the third quarter of this year. The basic concept is to be able to offer a platform for enterprises to be able to run AI use cases. The main issue of enterprises now is that they want to run AI use cases or proof of concepts, but they don't know how to utilize it and how to build the infrastructure around it. They have to source for the GPUs. They need to talk to a staff provider. They need to talk to a data center. They need to provide the connectivity and the cybersecurity requirement. We're basically taking this pain point away from the customer and letting them run these different applications on a as-a-service model wherein they can run the POCs on an hourly, daily, weekly, or monthly view. And we've seen a lot of interest coming from enterprise customers, who really want to experiment and run AI use cases. So we're very happy to be able to offer this service to our customers. We're the first company in the Philippines to actually bring in NVIDIA H200 GPUs, the most advanced GPUs of NVIDIA currently, and we're seeing a lot of interest in it.

Thank you, Viboy. This question is from an indiscernible source. And this question is for Danny. Noting that your debt levels have increased this year despite continuous lower CapEx guidance. Is this mainly for refinancing? Increased net debt despite lower CapEx guidance. So is the increased debt because of mostly refinancing? Or are there new...

Mostly refinancing. Yes, mostly refinancing.

All right. From Tony Watson, can you share any thoughts on a potential Maya IPO or spin-off?

I think we'll stay clear of that. I think we are focused on driving the business and any IPO decisions will be led by the shareholders. But we, as management, are fully focused on just executing and scaling our products.

Thank you, Aayush. Just doing a last scan for questions here. If there's any from the floor. Okay. It looks like there are no further questions. With that said, I'd like to thank everybody for your time today and joining us for our 9-month briefing. If you have any further questions that you'd like to send to us, please feel free to reach out to us via e-mail. And with that, we look forward to presenting our full year results by February of next year. All right. Thank you, everyone. Have a good afternoon.

Thank you.

Thank you.

Thank you.