PLDT: revenue grows, but EBITDA falls on higher costs, and debt remains high

On May 14, 2026, PLDT reported results for the first quarter of 2026. Revenue rose 2.2% to PHP 56,513 million, but EBITDA fell 13.6% to PHP 26,046 million, and net profit declined 1.6% to PHP 8,918 million. At the current price, the shares look rather attractive: multiples are below historical averages, and the dividend yield exceeds 8%, but margin pressure and debt warrant caution.

Key takeaways

— Q1 2026 revenue rose 2.2% on higher data and voice revenues

— EBITDA fell 13.6% due to higher expenses, including interconnection and depreciation

— Net profit declined 1.6% on higher expenses and foreign exchange losses

— Operating cash flow for the quarter fell 7% to PHP 22,751 million

— Capital expenditure fell 23% to PHP 12,388 million, supporting free cash flow

— Net debt rose to PHP 280,928 million, with Net Debt/EBITDA LTM at 2.86

— Shares trade at P/E LTM of 8.16 and EV/EBITDA LTM of 5.30, with dividend yield of 8.03%

Attractiveness

Key figures, PHP bn

Q1 2026 revenue rose 2.2% on higher data and voice revenues

In the first quarter of 2026, PLDT's consolidated revenue reached PHP 56,513 million, up 2.2% year-on-year. Growth was driven by data and voice service revenues, while non-service revenues from device sales fell 13% to PHP 1,608 million.

Service revenue rose 3% to PHP 54,905 million. In the fixed-line segment, voice revenues grew from PHP 8,032 million to PHP 9,164 million, and corporate data and ICT rose from PHP 7,877 million to PHP 8,104 million. In the wireless segment, mobile revenue increased from PHP 23,768 million to PHP 23,929 million.

EBITDA fell 13.6% due to higher expenses, including interconnection and depreciation

EBITDA for the first quarter of 2026 was PHP 26,046 million, down 13.6% year-on-year. The EBITDA margin fell from 50.2% to 42.4%. The reason is a 5% rise in operating expenses to PHP 42,752 million, mainly due to higher interconnection costs, depreciation, and contract-specific services.

The company's report states EBITDA of PHP 28,288 million for the quarter, but that figure includes adjustments different from the standard calculation. Based on our data from the financial statements, the EBITDA decline reflects margin pressure that may persist if cost growth continues.

Net profit declined 1.6% on higher expenses and foreign exchange losses

Net profit for the first quarter of 2026 was PHP 8,918 million, down 1.6% year-on-year. The net margin fell from 16.4% to 15.8%. In addition to higher operating expenses, net foreign exchange losses of PHP 1,265 million weighed on results, versus a gain of PHP 544 million a year earlier.

This was partly offset by a PHP 401 million lower income tax provision and a PHP 940 million increase in equity share of associates' earnings. Basic earnings per share were PHP 40.98 versus PHP 41.71 a year earlier.

Operating cash flow for the quarter fell 7% to PHP 22,751 million

Operating cash flow in the first quarter of 2026 was PHP 22,751 million, down 7% from PHP 24,545 million a year earlier. Despite the decline, OCF remains well above net profit, reflecting high depreciation and non-cash items.

Over the trailing twelve months, operating cash flow reached PHP 98,700 million, covering capital expenditure and dividend payments. However, the quarterly OCF decline points to some deterioration in profit-to-cash conversion.

Capital expenditure fell 23% to PHP 12,388 million, supporting free cash flow

Capital expenditure in the first quarter of 2026 was PHP 12,388 million, down 23% from PHP 16,142 million a year earlier. The capex reduction, combined with operating cash flow of PHP 22,751 million, resulted in positive free cash flow of about PHP 10,363 million for the quarter.

The investment cut may reflect the completion of major network expansion projects. This is positive for cash flow but could limit future growth if the company does not sustain adequate investment levels.

Net debt rose to PHP 280,928 million, with Net Debt/EBITDA LTM at 2.86

At the end of the first quarter of 2026, PLDT's net debt stood at PHP 280,928 million, up from PHP 269,207 million a year earlier. Over the trailing twelve months, net debt rose by PHP 11.7 billion, and by PHP 13.9 billion from the previous reporting date.

The net debt to EBITDA ratio for the trailing twelve months is 2.86. This is a moderate level for a telecommunications company, but it does not include lease liabilities and may limit the ability to increase dividends or buy back shares.

Shares trade at P/E LTM of 8.16 and EV/EBITDA LTM of 5.30, with dividend yield of 8.03%

With a market capitalization of PHP 244,143 million, PLDT shares trade at a P/E LTM of 8.16 and EV/EBITDA LTM of 5.30. These multiples appear below average for the telecommunications sector, suggesting potential undervaluation.

The trailing twelve-month dividend yield is 8.03%, making the shares attractive for income-oriented investors. According to the portal's model, the share's upside to fair value is +10%. The stock is held in the Frontier AI Selection strategy on the portal.

Valuation on the latest reported figures

Bottom line

In the first quarter of 2026, PLDT showed modest revenue growth, but EBITDA and net profit declined due to higher expenses and currency losses. Reduced capital expenditure supported free cash flow, and the dividend yield above 8% remains attractive. However, debt increased, and the Net Debt/EBITDA ratio of 2.86 points to limited financial flexibility. At current multiples of P/E 8.16 and EV/EBITDA 5.30, the shares look rather attractive, especially given the +10% upside on the portal's model. To confirm the positive scenario, the company needs to stabilize margins and control debt.