PLDT: revenue barely grows while profit falls 24% as margin compresses to 9.7%

PLDT reported third-quarter 2026 results in late September: revenue of PHP 54,201 mn, operating profit of PHP 11,584 mn and net profit of PHP 5,271 mn. Revenue grew just 0.9% year on year after 2.2% in the second quarter, while net profit fell 24.0% and the net margin dropped from 12.9% to 9.7%. Our conclusion: fairly valued – the portal model shows only -2% to fair value, and an 8.1% dividend yield with P/E of 12.0 and net debt/EBITDA of 2.86 leaves no cushion. Our view: the share is fairly valued; upside on the portal model -2%.

Our view: is there upside

Our view in numbers

Key takeaways

— Revenue added just 0.9% year on year after 2.2% a quarter earlier – growth decelerated

— Net profit fell 24.0% and the net margin compressed from 12.9% to 9.7%

— Quarterly operating profit of PHP 11,584 mn is 21.4% of revenue versus 23.0% a year earlier

— Leverage at 2.86x LTM EBITDA leaves no cushion, with net debt of PHP 286,396 mn on the balance sheet

— An 8.1% dividend yield at P/E of 12.0 rests on the price, not on profit growth

— The portal model shows -2% to fair value – almost no upside

Key figures, PHP bn

Revenue added just 0.9% year on year after 2.2% a quarter earlier – growth decelerated

In the third quarter of 2026 PLDT's revenue was PHP 54,201 mn, up 0.9% from PHP 53,709 mn a year earlier. A quarter earlier growth was 2.2%, so the dynamic decelerated.

Over the trailing twelve months revenue accumulated to PHP 221,300 mn. Quarterly figures sit in a narrow PHP 54–56 bn band, and the third quarter was the low point of that band over the past year.

The slowdown to 0.9% matters because the company carries debt at 2.86x LTM EBITDA. At this rate of revenue growth, debt service and dividends fall on an almost flat base.

Net profit fell 24.0% and the net margin compressed from 12.9% to 9.7%

Third-quarter 2026 net profit was PHP 5,271 mn against PHP 6,934 mn a year earlier, a fall of 24.0%. The net margin declined from 12.9% to 9.7%.

With revenue almost unchanged, the profit drop means costs grew faster than income. Quarterly operating profit was PHP 11,584 mn, or 21.4% of revenue, versus PHP 12,336 mn, or 23.0%, a year earlier.

Over the trailing twelve months net profit was PHP 19,129 mn. That is well above the quarterly level, but the quarter's profit is falling year on year, and that defines the picture.

Quarterly operating profit of PHP 11,584 mn is 21.4% of revenue versus 23.0% a year earlier

Third-quarter 2026 operating profit was PHP 11,584 mn. A year earlier it was PHP 12,336 mn, a decline of 6.1% against revenue growth of 0.9%.

The operating margin fell from 23.0% to 21.4%. This 1.6 percentage point compression explains most of the net profit decline: on revenue of PHP 54,201 mn each point of margin is worth about PHP 542 mn.

Operating profit is not disclosed as a separate line for the trailing twelve months, but the quarterly dynamic shows cost pressure intensified. That is the key risk to profit in the next report.

Leverage at 2.86x LTM EBITDA leaves no cushion, with net debt of PHP 286,396 mn on the balance sheet

Net debt at the latest annual balance sheet date was PHP 286,396 mn. The ratio of net debt to trailing twelve-month EBITDA is 2.86. That level leaves no cushion if profit falls.

Trailing twelve-month EBITDA was PHP 100,185 mn. On revenue of PHP 221,300 mn that is about 45% of revenue, which supports debt service, but quarterly profit is falling and coverage could deteriorate.

Leverage matters for the dividend: at 2.86x EBITDA the company must direct part of cash flow to debt service, not only to shareholder payouts.

An 8.1% dividend yield at P/E of 12.0 rests on the price, not on profit growth

The trailing twelve-month dividend yield is 8.1%. With LTM net profit of PHP 19,129 mn and a market capitalisation of PHP 228,803 mn, P/E is 12.0.

The 8.1% yield looks high, but it rests on the share price, not on profit growth. Quarterly net profit fell 24.0%, and if that dynamic persists the payout base will shrink.

With debt at 2.86x EBITDA and falling profit, the dividend is not protected from a cut. Our estimate: the payout for the current year will depend on whether profit holds at the LTM level of PHP 19,129 mn.

The portal model shows -2% to fair value – almost no upside

On the portal model the fair value of the share is 2% below the current price. This is our own calculation, not a market consensus or a target price.

The valuation rests on EBITDA growth and a target multiple. With revenue growing 0.9% and profit falling, the model sees no upside: EV/EBITDA LTM is 5.14 and P/E LTM is 12.0.

The share is held in the live model strategy Frontier AI Selection. That is a membership fact, not an argument for the verdict.

Valuation on the latest reported figures

Tracked metrics of the idea

The metrics we track our idea "PLDT (13 ideas)" of 2026-07-16 by - at the idea date and now. The share price moved -14% over the period. Original write-up: https://frontier.eninvs.com/region/us/article/ideas

Idea: at publication and now

Bottom line

The strong side of the report remains revenue: PHP 54,201 mn and 0.9% year-on-year growth. But profit fell 24.0%, the net margin compressed from 12.9% to 9.7%, and the operating margin from 23.0% to 21.4%. Leverage at 2.86x LTM EBITDA and an 8.1% dividend yield leave no cushion with falling profit. Our conclusion: fairly valued – the portal model shows -2% to fair value. Our view: the share is fairly valued; upside on the portal model -2%.