425: Kyivstar Group Reports Robust Q1 2025 Financial Growth Amid Nasdaq Listing Preparations and Strategic Digital Acquisitions

Kyivstar Group announced strong first-quarter 2025 financial results, including significant revenue and EBITDA growth, alongside progress towards its Nasdaq listing and strategic acquisitions of Uklon and an increased stake in Helsi.

Summary

• Total operating revenue for Q1 2025 reached USD 255 million (UAH 10.6 billion), marking a 37.1% year-on-year increase in USD terms and 49.6% in local currency.
• Profit for the period amounted to USD 44 million (UAH 1.8 billion), up 22.2% year-on-year in USD and 33.7% in local currency, with a profit margin of 17.3%.
• Adjusted EBITDA reached USD 140 million (UAH 5.8 billion), representing a 50.5% year-on-year increase in USD and 64.6% in local currency, with an adjusted EBITDA margin of 54.9%.
• The company completed the acquisition of Uklon, Ukraine's leading ride-hailing and delivery platform, for approximately USD 155.2 million in April 2025.
• Kyivstar Group increased its ownership stake in Helsi, Ukraine's largest digital health platform, from 69.99% to 97.99% in May 2025.
• The Multiplay customer base, utilizing digital applications in addition to 4G data and voice, grew by 40.7% year-on-year to 6.1 million customers.
• Total digital monthly active users (MAU) across Kyivstar Group's digital applications reached 10.3 million in Q1 2025, a 32.9% increase from 7.7 million a year earlier.
• The reported revenue growth includes the impact of a customer appreciation program in Q1 2024, which lowered Q1 2024 revenue by an estimated USD 46 million (UAH 1.7 billion); excluding this, local currency revenue growth was 20.1% year-on-year.
• Excluding the impact of the customer appreciation program, local currency adjusted EBITDA growth was 10.2% year-on-year in Q1 2025.
• Kyivstar Group is progressing with its plans to list on the Nasdaq Stock Market following a business combination agreement with Cohen Circle Acquisition Corp. I.

Sentiment

Score: 8

Explanation: The document reports strong financial performance with significant year-on-year growth in revenue, EBITDA, and profit. Strategic acquisitions and clear progress towards a Nasdaq listing indicate positive future prospects and expansion. While there's a slight dip in profit margin and the 1Q24 revenue was impacted by a cyber incident, the overall tone and reported results are highly positive, demonstrating robust operational execution and strategic growth.

Positives

• Strong financial performance with total operating revenue up 37.1% year-on-year in USD and 49.6% in local currency.
• Exceptional Adjusted EBITDA growth of 50.5% year-on-year in USD and 64.6% in local currency, achieving a robust 54.9% margin.
• Profit for the period increased by 22.2% year-on-year in USD terms.
• Successful strategic expansion into digital services through the acquisition of Uklon (ride-hailing) and increased stake in Helsi (digital health).
• Significant growth in digital customer adoption, with Multiplay customers up 40.7% and total digital MAU up 32.9%.
• Progress towards a Nasdaq listing positions Kyivstar Group as a unique pure-play Ukrainian investment opportunity in U.S. stock markets.
• VEON and Kyivstar Group intend to invest USD 1 billion in Ukraine during 2023-2027, signaling long-term commitment and growth potential.

Negatives

• The profit margin slightly decreased from 19% in Q1 2024 to 17% in Q1 2025.
• The reported high year-on-year growth rates are partially influenced by a lower base in Q1 2024 due to an estimated USD 46 million revenue reduction from a customer appreciation program following a cyber security incident.

Risks

• Inability to complete the proposed business combination due to failure to obtain necessary shareholder approvals or satisfy other closing conditions.
• Potential changes to the proposed structure of the business combination as a result of applicable laws or regulations.
• Uncertainty regarding the SEC's decision to deem effective the Registration Statement.
• Challenges in meeting Nasdaq listing standards upon closing of the business combination and admission for trading.
• Impact of changes in applicable laws or regulations on business operations.
• Risks associated with the escalation or de-escalation of the war between Russia and Ukraine.
• Challenges related to the successful integration of the newly acquired Uklon business.
• Uncertainty regarding the continued growth in digital services.
• Other general risks and uncertainties detailed in the 'Risk Factors' section of the Registration Statement filed with the SEC.

Future Outlook

Kyivstar Group is actively pursuing its Nasdaq listing through a business combination with Cohen Circle Acquisition Corp. I, aiming to establish itself as the sole pure-play Ukrainian investment opportunity on U.S. stock markets. The company, in conjunction with VEON, has committed to investing USD 1 billion in Ukraine between 2023 and 2027, focusing on infrastructure, technological development, and strategic acquisitions. Management anticipates continued growth in digital services and successful integration of its recent acquisitions, Uklon and Helsi.

Management Comments

• "Kyivstar Group continues to deliver exceptional value to our customers and stakeholders, leveraging our market-leading network and innovative digital services to drive growth."
• "Our first quarter results reflect the strength of our digital operator strategy, delivering robust financial growth."
• "In parallel, we continue to invest in strategic opportunities that drive Ukraines digital future, such as the acquisition of Uklon and increasing our stake in Helsi."
• "We are excited to complement this operational performance with the continued progress towards our plans to list Kyivstar Group on the Nasdaq Stock Market."

Industry Context

Kyivstar Group's performance and strategic moves align with the broader global trend of telecommunication companies evolving into comprehensive digital operators. By acquiring Uklon (ride-hailing) and increasing its stake in Helsi (digital health), Kyivstar is diversifying its revenue streams beyond traditional connectivity, mirroring strategies adopted by major global telecom players to create digital ecosystems. The pursuit of a Nasdaq listing also reflects a growing appetite for international capital among companies in emerging markets, particularly those with strong digital infrastructure and services, even amidst geopolitical complexities.

Comparison to Industry Standards

• The document does not provide specific comparable companies or global benchmarks for direct financial or operational metric comparisons.
• Kyivstar Group's Adjusted EBITDA margin of 54.9% is generally considered strong for a telecommunications operator, indicating efficient operations and cost management.
• The significant year-on-year growth in Multiplay customers (40.7%) and total digital MAU (32.9%) demonstrates successful execution of a digital operator strategy, which is a key focus for many global telecom companies seeking to enhance customer engagement and ARPU.
• The strategic acquisitions of Uklon and Helsi are consistent with the industry trend of telecom operators expanding into adjacent high-growth digital verticals to capture more value from their customer base and diversify their service offerings.

Stakeholder Impact

• Shareholders (VEON and prospective Nasdaq investors): Positive impact due to strong financial results, strategic growth initiatives (acquisitions), and the potential for increased valuation and liquidity through the Nasdaq listing.
• Customers: Positive impact through expanded digital services (Uklon, Helsi, Multiplay offerings) and continued investment in network infrastructure and technological development.
• Employees: Potential for growth and stability within an expanding digital operator, with opportunities in new digital verticals.
• Ukraine: Significant investment commitment (USD 1 billion by VEON/Kyivstar) contributes to the country's digital infrastructure and technological development, supporting economic growth.
• Creditors: Improved financial health and strategic positioning may enhance creditworthiness.

Next Steps

• Completion of the business combination with Cohen Circle Acquisition Corp. I.
• Listing of Kyivstar Group's common shares and warrants on the Nasdaq Stock Market LLC.
• SEC to deem effective the Registration Statement on Form F-4 (File No. 333-287802).
• Cohen Circle to mail a definitive proxy statement/prospectus relating to the business combination to its shareholders.
• Cohen Circle to file a Current Report on Form 8-K with the SEC, making the updated investor presentation available.
• Continued investment of USD 1 billion in Ukraine by VEON and Kyivstar Group during 2023-2027.
• Successful integration of the acquired Uklon business.
• Continued focus on driving growth in digital services.

Key Dates

Recommendation

Keywords

Kyivstar Group, VEON, Cohen Circle Acquisition Corp. I, Nasdaq listing, Ukraine, telecommunications, digital operator, mobile services, internet, ride-hailing, Uklon, digital health, Helsi, Q1 2025 results, financial performance, EBITDA, revenue, profit, SPAC, business combination