Chunghwa Telecom Q2 2025 Earnings Report

Chunghwa Telecom EPS Results

• Actual EPS: $0.43
• Consensus EPS: $0.42
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

Chunghwa Telecom Revenue Results

• Actual Revenue: $1.90 billion
• Expected Revenue: $55.92 billion
• Beat/Miss: Missed by -$54.02 billion
• YoY Revenue Growth: N/A

Chunghwa Telecom Announcement Details

• Quarter: Q2 2025
• Date: 8/5/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, August 5, 2025
• Conference Call Time: 3:00AM ET

Chunghwa Telecom (NYSE:CHT) Co., Ltd., together with its subsidiaries, provides telecommunication services in Taiwan and internationally. It operates through Consumer Business, Enterprise Business, International Business, and Others segments. The company offers local, domestic long distance, and international long distance fixed-line telephone services; mobile services such as prepaid and postpaid plans; broadband plans; and internet and data services. Chunghwa Telecom Co., Ltd. was incorporated in 1996 and is headquartered in Taipei City, Taiwan.

Chunghwa Telecom Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 revenue (NT$56 billion), operating income, net income and EPS all topped the upper end of guidance, marking five straight years of second-quarter growth and a ten-year high in Q2 revenue.
• Positive Sentiment: Enterprise ICT revenue surged 27% yoy (recurring ICT +25%), driven by IDC (+40%), AIoT (+75%) and cloud (+140%), underscoring robust segment momentum.
• Positive Sentiment: In Taiwan’s mobile market, Chunghwa’s share rose to 40.7% and 5G share to 38.7%, supporting 2% yoy mobile service revenue growth and a quarter-over-quarter ARPU increase.
• Positive Sentiment: Fixed broadband revenue grew 1.8% yoy while ARPU climbed ~2%, as 70% of new adopters chose ≥300 Mbps plans and 1 Gbps subscriptions multiplied.
• Negative Sentiment: International subsidiary revenue fell 41% yoy due to one-time project recognition in the prior year, though Southeast Asia still delivered double-digit growth.

Presentation

[Operator]

Afternoon, ladies and gentlemen. Welcome to ZhongHua Telecom Conference Call for the Company's Second Quarter twenty twenty five Operating Results. During the presentation, all lines will be on listen only mode. When the briefing is finished, directions for for submitting your questions will be given in the q and a session. And for your information, this conference call is now being broadcasted live over the Internet.

[Operator]

A webcast replay will be available after the conference is finished. Please visit CHT IR website, www.cht.com. Twir, under the IR Calendar section. And now I would like to turn the call over to Ms. Angela Tsai, Vice President of Financial Department. Thank you. Ms. Tsai, please go ahead.

[Angela Tsai, VP - Finance at Chunghwa Telecom]

Thank you. I'm Angela Tsai, Vice President, CEO of Financial Department for Zhonghua Telecom. Welcome to our second quarter twenty twenty five results conference call. Joining me on the call today are our President, Rongxilin and our Chief Financial Officer, Audrey Xu. During today's call, management will begin with the recent strategic achievements and provide an overview of our business in the second quarter, followed by a discussion of our segment performance and the financial results.

[Angela Tsai, VP - Finance at Chunghwa Telecom]

After, we will move on to the question and answer portion of the call. On Slide two, please read our disclaimers and notes concerning forward looking statements. Now I will turn the call over to President. President Lin, please go ahead.

[Rong-Shy Lin, President at Chunghwa Telecom]

Thank you, Angela, and hello, everyone. Welcome to our second quarter twenty twenty five results conference call. We are pleased to report our exceptional financial results with revenue, operating income, net income and EPS exceeded the upper end of our forecast. For both the second quarter and the first half of the year, second quarter revenue achieved reached a ten year high for the same period, fueled by the solid growth momentum of the core business and expanding ICT segment. Notably, ICT revenue also set a new record for any second quarters since 2021.

[Rong-Shy Lin, President at Chunghwa Telecom]

These achievements underscore our strong commitment to innovation, operational excellence, and delivering sustained value to our stakeholders. Meanwhile, I'll continue to execute our sea, land, and the sky strategy to enhance the network resilience and the seize future opportunities. In July, we officially launched the Southeast Asia Japan table two s h two, enhancing network performance across the Asia Pacific region and supporting the rapid growth of bandwidth intensive application such as AI and the cloud computing. In addition to the previously announced investment in E 2 A, the Transpacific undersea cable connecting Asia to North North America, we announced that to invest in new Asia United Gateway AUG is the submarine cable in July, which connects the Asia and is expected to bring in revenue after its completion in 2029. In terms of our multi multi orbit satellite business, in the second quarter, Zhuhai Telecom not only obtained the new exclusive commercial license for one way but LEO services, but also extend the satellite services to broader use, including the inflight Wi Fi services for aviation industry and the the applications for maritime industry.

[Rong-Shy Lin, President at Chunghwa Telecom]

Moreover, for the land, we have partnered with NTP to successfully present present the world's first cross border co performance conducted in both Taiwan and Osaka at the same time through ION. The old photonics network in XPRO 2025 demonstrating the ultra low latency and its application. Notably, we are honored to receive the highest MSCI ESG rating of triple a in May. The only Taiwan Telecom to be recognized the highest rating reflecting our strong performance in governance and data privacy and the carbon management. We also earned the prestigious 2025 Taiwan data center service competitive strategy leadership award from Frost Sullivan, recognizing our AI ready data center capability.

[Rong-Shy Lin, President at Chunghwa Telecom]

In addition, our long standing commitment to cooperate governance was reaffirmed by the Taiwan Stock Exchange, which recognized us as one of the top 5% of listed companies. Now let's move on to the business overview of the 2025. Please turn to Page five to review our success in Taiwan mobile market. In the second quarter, we further strengthened our leadership position in Taiwan mobile market. According to the data from Taiwan's telecom regulator, our mobile market share rose to 40.7% as of June, reaching a new high.

[Rong-Shy Lin, President at Chunghwa Telecom]

We also achieved the highest subscriber share among peers at 39.1%, driven by the continued growth of postpaid subscribers. Both revenue and the subscriber shares increased year over year, highlighting our solid and sustained growth momentum. Our five gs market share reached 38.7%, maintaining our leading position in this segment supported by robust network quality, the ongoing expansion of our subscriber base, and the continued five gs migration. Mobile service revenue grew approximately 2% year over year. Additionally, the average must be increased by 38% as more user upgraded to five gs, helping stabilize mobile ARPU, which deliver a modest quarter over quarter increase in the second quarter.

[Rong-Shy Lin, President at Chunghwa Telecom]

Let's move on to Slide six for update of our outperforming fixed broadband business. In the second quarter, our fixed broadband revenue increased 1.8% year over year, driven by the success of our strategic bundle plan and our distinguished offering of symmetrical uplink and the downlink speeds for service above 300 megabits per second. Fixed broadband ARPU also rose approximately 2% on years as well, representing an increase of 14 NT dollars per month, an encouraging sign of value expansion. Our cross tier upgrade promotions featuring bundled service bundles plan such as MOD, Wi Fi, and the streaming services continue to perform well. Nearly 7070% of adopters opted for plans with speed of 300 megabits per second and high, including one gigabits per second services.

[Rong-Shy Lin, President at Chunghwa Telecom]

As a result, the number of subscriber with speeds of 300 megabits per second and above increased by 14% year over year, while those with speeds of one gigabit per second subscription multiplied impressively. Building on this momentum, we will continue promoting strategic bound to support ARPU growth. We also plan to incentivize existing mobile subscriber to add fixed broadband services, further expanding our market share. Slide seven provides a deeper overview of highlights from our consumer application services. In the second quarter, we were pleased to see solid growth across all consumer service categories.

[Rong-Shy Lin, President at Chunghwa Telecom]

Our multiple play package, which integrate mobile fixed broadband and the WiFi services achieved impressive year over year growth of 26%, marking it is fourteenth consecutive quarters of expansion. This momentum was largely driven by the successful launch of new fixed broadband promotion bundles in May. Our video business also maintained its strong growth trajectory with total subscriptions increasing 6% and the revenues increased five percent on year's basis. This was fueled by the growth of how many video subscribers, particularly among user thinking thinking live sport content. Additionally, our exclusive investment in Taiwanese dramas and there's a forecast of Korean variety shows has attracted a wider user base.

[Rong-Shy Lin, President at Chunghwa Telecom]

With a robust pipeline of new content scheduled for release, we are confident in accelerating user growth in the second half of this year. Meanwhile, our consumer cybersecurity services recorded the 20% year over year growth contributing to steady revenue gains in the line in line with our expectations. This performance was driven by our service offering to assist the users and the families to block malicious link, filter in appropriate content, and the managing Internet serving scheduling. Slide eight illustrated the key highlights in our enterprise ICT business. In the second quarter, we are excited by the strong performance of enterprise ICT business.

[Rong-Shy Lin, President at Chunghwa Telecom]

Group enterprise ICT revenue increased by 27% year over year with recurring ICT revenue also rising 25%. Both were encouraging results. Our core service pillars, including IDC, AIoT, and the cloud remained the primary revenue drivers, delivering robust year over year growth of 40%, 75 7140% respectively. Cybersecurity and the five g private networks also reported a healthy growth of 11150% respectively. A close look show that demand from the financial and the high-tech sectors continue to significantly contribute to the increase in IDC and the cloud revenues.

[Rong-Shy Lin, President at Chunghwa Telecom]

In the second quarter, IDC not only accounted for the largest share of absolute revenue growth, but also demonstrated strong future growth potential. Meanwhile, AIoT service saw a sharp revenue increase largely driven by project related to the smart energy, smart surveillance, smart building, and the smart transportation. Our five g private network deployment for the National Culture Center and the Exhibition Hall delivered a year over year revenue increase at at 1.5 times, while cybersecurity revenue rose 11% in respond to growing market demand. Among the newly secured projects in the second quarter, a highlight was our deployment of building remote surveillance platform for correctional institution nationwide. This project integrated the IBC cybersecurity AIoT and the VPN capabilities to support their smart surveillance operation.

[Rong-Shy Lin, President at Chunghwa Telecom]

We were also proud to share that our AIDC AI data center construction expertise continue to win recognition both domestically and internationally with new contract awards exceeding NT dollars 1,000,000,000 during this quarter. Lastly, we signed a contract to assist the leading petrochemical companies to implement AI powered image recognition and automatic optical inspection. This solution expected to expand to other chemical related sectors, generating additional revenue opportunity going forward. Slide nine illustrated our international subsidiaries performance. In the second quarter, revenue from our international subsidiaries declined by 41% year over year, primarily due to the project based fluctuations resulting from the one time revenue recognition from The US and the Japan subsidiaries for the same period last year.

[Rong-Shy Lin, President at Chunghwa Telecom]

Excluding the higher base sector effector, their performance actually exceeded our internal expectation for the second quarter. On the other hand, Southeast Asia market delivered a double digit revenue growth driven by the continued demand for the ICT services from high-tech companies. We are pleased to have secure ICT solution contracts in Vietnam and Singapore, which are expected to support continued growth in the region. While global market sentiment remained cautious amid ongoing uncertainty around tariffs and exchange rates, we continue to invest strategically for long term growth in The United States, Japan, and the Southeast Asia. In particular, we are targeting overseas AIDC related construction project for Taiwan based high-tech firms leveraging our proven capabilities in both air cooling and the liquid cooling solution.

[Rong-Shy Lin, President at Chunghwa Telecom]

Now let's move on to the performance summary of our three business group. As mentioned in the beginning, our revenue and the profit performance were all better than expected. In line with these results, in the second quarter, our CVG delivered solid year over year increase of 4.8% in income before tax driven by steady growth in the both mobile and the fixed broadband ARPU. In addition to stable performance of our core service revenue, CVG also benefit from higher smartphone sales as consumer accelerated the purchase in anticipation of potential tariff fluctuation. Our EVGs exceeded the expectations with strong ICT performance.

[Rong-Shy Lin, President at Chunghwa Telecom]

Total revenue rose 12% year over year, while ICT revenue grew even more significantly up 37% year over year. As a result, EBG reported a robust 5.4% increase in income before tax during this quarter. In contrast, our IPG first headwinds revenue and the income before tax both declined year over year, primarily due to softening demand for international fixed voice services and the decline in international roaming services. Now I would like to hand the call over to Audrey for financial updates.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

Thank you, President. Good afternoon, everyone. It's my pleasure to present an overview of our financial results for the 2025. Let's turn to Slide 12, income statement highlights. I will walk you through the key financial metrics for the 2025.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

During the second quarter in twenty twenty five, revenue reached over 56,000,000,000, making the fifth consecutive year of second quarter growth. This represents a 4.8% year over year increase of driven mainly this growth mainly driven by the expansion of our ICT business and higher sales revenue. Income from operations and net income rose by 5.23.5%, respectively, compared to the same period last year. This performance was supported by growth in our Internet data center business, steady increase in mobile and stronger sales contribution from our subsidiary, ZhongHua Precision Test Tech. Earnings per share increased from KRW 1.27 to KRW 1.31, reflecting consistent profitability and effective cost control.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

EPS reached their highest levels in nine years for the second quarter period, reflecting the continued strength of our core operations. EBITDA also recorded modest gains during the quarter. EBITDA increased by 3.5% year over year, reaching 22,580,000,000.00 for this quarter. The growth reflects continued operational efficiency and healthy cash generating ability across our core business. The EBITDA margin was 39.8%, remaining broadly stable compared to last year.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

So now looking at the 2025 in column five to column eight. Revenue grew by 3.2% year over year, supported by momentum in our ICT business and strong performance of our subsidiary, Zhonghua Precision Test Tech, which contribute to overall sales growth. Income from operations and net income rose by 5.13.9%, respectively. These gains were driven by the ongoing growth of our IDC and cloud services, along with steady performance from our subsidiaries. Earnings per share for the first half totaled NT2.57 EBITDA increased by 3.4% year over year to TWD 55,110,000,000.00.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

The EBITDA margin was 40.09%, broadly in line with the same period last year. This replaced stable operational efficiency. Now let's turn to Slide 13, balance sheet highlights. Total assets increased by 1.9% as of 06/30/2025, compared to the year end 2024. This growth was primarily driven by an increase in other current monetary assets, which further strengthened our liquidity position.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

Property, plant and equipment declined by 1.7% as depreciation expense exceeding net additions of fixed asset during this quarter. This reflects our continued emphasis on capital discipline and asset efficiency. Total liabilities increased by 20.9%, primarily due to higher dividend payable in this quarter. Our current ratio remained above 100%. This highlights healthy short term liquidity and financial flexibility.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

Our reported debt ratio stood at 30.28%, reflecting the impact of dividend payable recorded at the end of the second quarter. If we exclude the effect of dividend payable, the adjusted debt ratio would be 23.15%. This will show a slight decrease compared to the year end 2024. In addition, net debt to EBITDA remains at zero. Taken together, these indicators highlights our solid financial position and prudent capital structure.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

Moving to Slide 14, cash flow summary. Cash flows from operating activities decreased by 0.2% year over year, primarily due to higher settlements of accounts payable in the first half of the quarter. Capital expenditures increased by 11.9% year over year, primarily due to the front loaded deployment of five gs, four gs equipment in the first half of the year. While this resulted in temporary increase in CapEx, we continue to take a disciplined strategic approach to capital allocation and full year mobile related CapEx will remain on track to be lower than in 2024. As a result of these factors, free cash flow declined by 6.8% year over year.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

This is in line with expectations given the investment timing. We continue to maintain a strong cash position and stable operating inflows, which provides a solid foundation to support business growth and shareholder returns. Now let's move to Slide 15, performance relative to Q2 twenty twenty five guidance. During the 2025, revenue exceeded our targets. Key performance measures, including income from operations, net income, EPS, EBITDA and EBITDA margin, all came in above guidance by modest margins.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

For the 2025, revenue also outperformed expectations. In addition, income from operations, net income, EBITDA and EBITDA margin all exceeded our internal forecast. This better than expected results were driven by the steady growth of our core business, enhanced profitability in our ICT and strong sales of mobile phones and related products and lower than expected operating costs. This reflects our ongoing efforts to streamline operations and maintain disciplined cost control. That concludes our financial results for the second quarter.

[Audrey Wen-Hsin Hsu, Senior EVP & CFO at Chunghwa Telecom]

We now open the floor for questions and welcome your insights.

[Operator]

After your name is announced, please ask your question. When you are speaking, please be louder and closer to the microphone. If you find that your question has been answered before it is your turn to speak, please press star key and number two to cancel your question. You're also welcome to send questions via chat box on the webcast page.

[Operator]

We will begin with the questions from telephone and then move on to the queries from the web. Now please press star key and 1 if you would like to ask questions. Thank you. Ladies and gentlemen, we are now in Q and A session. If you have questions, please press star key and number one on your telephone keypad.

[Operator]

And you may also send questions via chat box. Thank you. We are now in Q and A session. And you are also welcome to send questions via chat box on the webcast page. Thank you.

[Operator]

Ladies and gentlemen, if there are no further questions, I will turn it back over to President Lin. Okay.

[Rong-Shy Lin, President at Chunghwa Telecom]

Thank you for your participation. See you. Bye bye.

[Operator]

Thank you, President Lin, and thank you, ladies and gentlemen, for your participation in Chunghwa Telecom's conference. There will be a webcast replay. Please visit ww.dht.com. Tw/irunder the IR calendar section. You may now disconnect. Thank you again, and goodbye.

Participants

Executives

• Angela Tsai, VP - Finance
• Rong-Shy Lin, President
• Audrey Wen-Hsin Hsu, Senior EVP & CFO