VEON (VEON) Q3 2025: Digital Revenues Jump 63%, Multiplay Drives 23% Customer Revenue Growth
Digital service adoption overtook SIM card users for the first time, marking a strategic inflection for VEON’s digital operator model. The company’s multiplay strategy is fueling ARPU expansion and retention, while asset-light execution and disciplined cost control are driving margin gains. With EBITDA guidance raised and digital monetization accelerating, VEON is positioning for sustained, technology-led growth across its emerging market footprint.
Summary
- Digital Engagement Surpasses Mobile: Monthly digital service users outnumbered SIM card users, signaling a business model pivot.
- Multiplay and AI Integration Accelerate: Multiplay user revenues rose 23% YoY, leveraging AI-powered platforms and super apps.
- Asset-Light and Capital Efficiency Focus: Portfolio streamlining and cash discipline underpin margin expansion and free cash flow strength.
Performance Analysis
VEON delivered a 7.5% YoY revenue increase in US dollar terms, with like-for-like growth at 10% after adjusting for portfolio changes. EBITDA surged 19.7% YoY, supported by operating leverage and cost discipline. Digital services, now 17.8% of group revenue (up from 11% a year ago), grew 63% YoY to $198 million, reflecting broad-based momentum in financial services, entertainment, and ride-hailing. The digital shift is material, with digital-only users doubling to 50 million and multiplay customers generating nearly four times the ARPU of voice-only users.
Profitability trends were robust, with EBITDA margin expanding 400 basis points YoY to 47%. Margin expansion was driven by both scale and cost control, even as digital businesses with structurally lower margins ramped. Non-cash charges related to the Kyivstar SPAC listing and Kyrgyzstan sale resulted in a quarterly EPS loss, but underlying operational cash flow and equity free cash flow ($584 million LTM) remained strong. Net debt excluding leases improved to $1.73 billion, with leverage at 1.13x, reflecting VEON’s asset-light strategy and healthy cash position.
- Digital Revenue Mix Shift: Digital services now account for 17.8% of total revenue, up sharply from 11% last year, accelerating the company’s transformation.
- Multiplay Adoption Drives ARPU: Multiplay customers, now 55.4% of revenue, grew revenue contribution 23% YoY and generate 3.8x the ARPU of voice-only users.
- Financial Services Scale: JazzCash in Pakistan processed transactions equal to 13% of GDP, with loan volumes and merchant payments both expanding rapidly.
Segment performance was broad-based, with double-digit local currency growth in most markets except Bangladesh, which returned to growth after a prolonged decline. Asset divestitures (Kyrgyzstan, TNS+) and the Kyivstar Nasdaq listing streamlined the portfolio and unlocked value, while capital intensity and cash discipline remained in line with guidance.
Executive Commentary
"In September, our monthly digital service users surpassed monthly telecom SIM card users for the first time. A defining moment in our journey as a true digital operator. This signals the scale of the opportunity ahead of us and the extraordinary growth still to come."
Kaan Tarziolu, Group CEO
"EBITDA for the quarter was $524 million, representing growth of 19.7%. The EBITDA margin stood at 47% for the quarter, up 400 basis points year-on-year, and was supported by operating leverage and disciplined cost management across all markets."
Burak Ozer, Group CFO
Strategic Positioning
1. Digital Operator Model and Multiplay Expansion
VEON’s pivot to a digital operator model—integrating connectivity, digital platforms, and financial inclusion—has reached a critical scale. The multiplay approach, where customers use at least one digital service alongside core telecom, is driving higher engagement, retention, and ARPU. In Q3, multiplay customers contributed 55.4% of total revenue and maintained a 3.8x ARPU premium over voice-only users. This model is now central to both the company’s growth narrative and its ability to monetize a rising digital-first population.
2. AI and Platform Integration
AI 1440, VEON’s augmented intelligence strategy, is being embedded across super apps, customer care, and entertainment platforms. Proprietary large language models are live in multiple languages, powering agentic features and driving 35 million MAUs across entertainment apps. AI-driven recommendation engines and digital assistants are reshaping engagement and enabling personalized monetization at scale, while enterprise AI solutions are opening new B2B revenue streams.
3. Asset-Light Strategy and Capital Allocation
Portfolio streamlining and asset-light execution are freeing up capital and reducing leverage. The Kyrgyzstan sale, TNS+ deconsolidation, and Kyivstar’s Nasdaq listing (at 2.3x book value) demonstrate disciplined capital recycling. The company retains an 89.6% stake in Kyivstar, maintaining strategic control while signaling openness to further dilution to attract international and local investors. A new $100 million share/bond buyback signals management’s confidence in long-term value creation.
4. Financial Services as a Growth Engine
Financial services, led by JazzCash in Pakistan, now represent 54% of digital revenue and are scaling rapidly. JazzCash processed transactions equal to 13% of Pakistan’s GDP, with 153,000 daily nano-loans and a merchant network of 700,000. The company is pursuing a full digital bank license, aiming to deepen financial inclusion and leverage fintech expertise across other markets, including Bangladesh and Ukraine.
5. Geographic Diversification and Local Execution
VEON’s footprint spans high-growth, underpenetrated markets with favorable demographics and digital adoption trends. Localized execution—such as entertainment platforms tailored to regional content and language, and city-by-city ride-hailing expansion—enables the company to capture unique market opportunities and build defensible positions against global and regional competitors.
Key Considerations
VEON’s Q3 reflects a decisive shift to digital services, multiplay monetization, and capital-light execution, positioning the company for sustained growth and improved capital returns. Investors should weigh the following:
Key Considerations:
- Digital Revenue Scale and Sustainability: The digital mix is rising, but long-term margin dynamics will depend on managing lower-margin digital services while scaling efficiently.
- Multiplay ARPU Uplift: Sustaining the 3.8x ARPU premium as multiplay penetration expands will be key to ongoing revenue growth and retention.
- Fintech Replicability: JazzCash’s success in Pakistan sets a template, but regulatory and market dynamics in other countries may limit direct replication.
- Capital Allocation Discipline: Continued asset-light moves and selective buybacks support capital efficiency, but future value crystallization (e.g., further Kyivstar dilution) will need careful execution.
Risks
VEON faces macro, regulatory, and operational risks across its emerging market footprint. Currency volatility, geopolitical uncertainty (especially in Ukraine), and evolving digital regulation may impact results. The digital pivot introduces lower-margin revenue streams, requiring ongoing efficiency gains to protect margins. Asset divestitures and capital allocation decisions carry execution risk. Management’s ability to sustain ARPU uplift and multiplay engagement as digital adoption matures will be critical to long-term outperformance.
Forward Outlook
For Q4 2025, VEON guided to:
- EBITDA growth of 16–18% in local currency terms for the full year (raised from 14–16%).
- Revenue growth of 13–15% in local currency terms; 7–8% in US dollars.
For full-year 2025, management maintained capital intensity guidance (17–19% excluding Ukraine) and expects:
- EBITDA growth of 10–11% in US dollars if exchange rates hold steady.
Management highlighted continued digital adoption, multiplay monetization, and asset-light execution as drivers, while noting that macro and FX volatility remain watchpoints.
- Digital platform scaling and AI integration to support margin expansion.
- Share/bond buyback program and further portfolio optimization to drive capital returns.
Takeaways
VEON’s Q3 marked a strategic inflection as digital engagement eclipsed mobile, multiplay monetization accelerated, and asset-light execution drove margin gains. Investors should focus on the sustainability of ARPU uplift and the replicability of fintech and digital models across markets.
- Digital Shift Is Now Core: The digital operator model is central to VEON’s value creation, with multiplay and AI driving both engagement and monetization.
- Margin Expansion Amid Digital Mix: Despite lower digital margins, disciplined cost control and capital efficiency are supporting robust EBITDA growth.
- Execution in Fintech and Asset-Light Strategy Will Be Pivotal: Replicating JazzCash’s financial inclusion gains and managing future asset monetization are key for long-term upside.
Conclusion
VEON’s Q3 2025 results underscore a business in transformation, with digital services, multiplay engagement, and asset-light execution driving both growth and capital returns. The company’s ability to sustain ARPU uplift and replicate fintech success across its portfolio will be decisive for future outperformance.
Industry Read-Through
VEON’s digital operator pivot and multiplay monetization model offer a template for telecom and digital platform convergence in emerging markets. As digital engagement surpasses mobile in user count, operators globally may look to multiplay and AI-driven super apps to drive ARPU and retention. The JazzCash case highlights the scale of fintech opportunity in underbanked markets, while asset-light execution and capital discipline are increasingly critical as digital margins compress. The Kyivstar SPAC listing and openness to further dilution signal a trend toward unlocking value from infrastructure and digital assets, with implications for capital allocation strategies across the sector.