425: Kyivstar Group Advances Nasdaq Listing with Strong Q1 2025 Results and Strategic Acquisitions

Kyivstar Group, a subsidiary of VEON Ltd., announced the public filing of its Form F-4 registration statement with the SEC, progressing its Nasdaq listing plans following robust first-quarter 2025 financial performance and key digital service acquisitions.

Summary

• VEON Ltd. has publicly filed a registration statement on Form F-4 for its subsidiary, Kyivstar Group Ltd. (PubCo), in connection with its planned listing on the Nasdaq Stock Market.
• The listing is anticipated to occur following the completion of a business combination agreement with Cohen Circle Acquisition Corp. I, which was announced on March 18, 2025.
• Kyivstar Group reported total operating revenue of USD 255 million for Q1 2025, a 37.1% year-on-year increase in USD terms and 49.6% in local currency.
• Excluding the impact of a customer appreciation program in Q1 2024 (estimated USD 46 million), local currency revenue growth was 20.1% year-on-year.
• Profit for the period reached USD 44 million, up 22.2% year-on-year in USD and 33.7% in local currency, with a profit margin of 17.3%.
• Adjusted EBITDA for Q1 2025 was USD 140 million, a 50.5% year-on-year increase in USD and 64.6% in local currency, achieving an adjusted EBITDA margin of 54.9%.
• Multiplay customer base grew by 40.7% year-on-year to 6.1 million, representing 29.5% of one-month-active mobile customers.
• Total digital monthly active users (MAU) across Kyivstar's digital applications reached 10.3 million in Q1 2025, up 32.9% from 7.7 million a year earlier.
• Kyivstar completed the acquisition of Uklon, a leading Ukrainian ride-hailing and delivery platform, for approximately USD 155.2 million in April 2025.
• The company increased its ownership stake in Helsi, Ukraine's largest digital health platform, from 69.99% to 97.99% in May 2025.
• The closing of the business combination is expected during the third quarter of 2025, subject to Cohen Circle's shareholder approval and other customary conditions.
• Kyivstar Group is expected to be the only pure-play Ukrainian investment opportunity listed on U.S. stock markets, trading under ticker symbols KYIV and KYIVW.

Sentiment

Score: 8

Explanation: The document conveys a highly positive outlook, emphasizing strong financial performance, strategic growth initiatives through acquisitions, and the unique investment opportunity presented by the Nasdaq listing. Despite acknowledging risks related to the war, the tone is confident about resilience and future potential, supported by concrete financial metrics and market positioning.

Positives

• Strong financial performance in Q1 2025 with total operating revenue up 37.1% year-on-year in USD to $255 million, and Adjusted EBITDA up 50.5% year-on-year to $140 million.
• Robust local currency growth with revenue up 49.6% and Adjusted EBITDA up 64.6% year-on-year, demonstrating resilience despite the ongoing conflict.
• Significant growth in multiplay customers (up 40.7% to 6.1 million) and total digital monthly active users (up 32.9% to 10.3 million), indicating successful digital strategy adoption.
• Strategic acquisitions of Uklon (ride-hailing) for $155.2 million and increased stake in Helsi (digital health) to 97.99% expand Kyivstar's digital ecosystem and growth potential.
• Kyivstar is positioned as Ukraine's leading digital operator with #1 market share in mobile and fixed broadband, and a national champion brand.
• The company maintains a strong balance sheet with $489 million in cash and cash equivalents and no external debt as of Q1 2025.
• VEON and Kyivstar intend to invest USD 1 billion in Ukraine from 2023-2027, signaling long-term commitment and support for the country's digital infrastructure.
• The expected Nasdaq listing will provide U.S. and global investors with a unique pure-play Ukrainian investment opportunity, offering scarcity value.
• Kyivstar's valuation at 3.7x Q125 EV / LTM Adj. EBITDA is a significant discount compared to global peers (median 7.1x) and EMEA/APAC single country peers (median 6.5x), suggesting potential upside.

Negatives

• Q1 2024 revenue and Adjusted EBITDA were negatively impacted by an estimated USD 46 million (UAH 1.7 billion) due to a customer appreciation program following a cyber security incident at the end of 2023, which distorts year-on-year growth comparisons.
• The ongoing war in Ukraine has resulted in the loss of approximately 3.1 million subscribers as of December 2024 (compared to January 2022) due to migration, loss of territories, and technical subscriber base clean-up.
• Electricity prices/tariffs surged by 28.1% in 2023 and 27.3% in 2024, increasing operating costs for Kyivstar.
• The company's independent auditors included a going concern emphasis paragraph in their opinion due to the effects of the ongoing war in Ukraine.

Risks

• Network infrastructure, equipment, systems, and other assets are subject to disruption, damage, and failure due to the war in Ukraine.
• Operations may continue to experience disruptions, and substantial additional operating costs may be incurred due to the war.
• Risk of nationalization or confiscation of operations and assets.
• Reputational harm as a result of the ongoing war in Ukraine.
• Changes in customer demand due to migration and population shifts.
• Operating in a highly competitive market, potentially leading to difficulties in expanding or retaining the customer base.
• Investing in frontier markets like Ukraine is subject to greater political, legal, and economic risks.
• Inability to keep pace with technological changes and evolving industry standards could harm competitive position.
• Difficulty in securing necessary spectrum or licenses, and high acquisition/deployment costs for 5G could adversely affect service quality and increase expenses.
• The telecommunications industry is highly capital intensive, requiring substantial and ongoing expenditures.
• Inability to raise additional capital, or only at significantly increased costs.
• Indebtedness and debt service obligations could decrease cash flow.
• Exposure to cyber-attacks, including the 2023 incident, which may lead to compromised services or data leaks.
• Recognition of substantial impairment charges from time to time.
• Equipment and systems are subject to disruption and failure, including due to the war, potentially leading to customer loss or reduced confidence.
• Exposure to foreign currency exchange loss, fluctuation, and translation risks.
• Revenue performance can be unpredictable as a large majority of customers do not have long-term fixed contracts.
• Strategic partnerships and relationships carry inherent business risks.
• Inability to contract with suppliers of telecommunications equipment due to sanctions or restrictions on services to businesses in Ukraine.
• Dependence on senior management and highly skilled personnel; inability to retain or motivate key personnel could impact competitive position and strategy implementation.
• Core growth strategies of expanding digital offerings and investing in 4G connectivity may not be successful.
• Success depends on implementing strategic initiatives and integrating acquired businesses; expected benefits may not be realized if not successfully implemented.
• Dependence on third parties for certain services, equipment, infrastructure, and other products.
• Ability to profitably provide telecommunications services depends on interconnection agreements and access to third-party infrastructure, over which there is no direct control.
• Loss of important intellectual property rights or third-party claims of infringement could harm the business.
• Insurance coverage, customer indemnifications, or other liability protections may be unavailable or inadequate.
• The highly regulated telecommunications industry and uncertain judicial/regulatory environment may result in unanticipated outcomes.
• Violations of and changes to applicable sanctions and embargo laws, including export control restrictions, may harm the business.
• Potential for tax claims and repeated tax audits.
• Changes in tax treaties, laws, rules, or interpretations, including deferred tax asset recognition, could harm the business.
• Changes in regulatory requirements in banking and financial systems and currency control restrict activities.
• Laws restricting foreign investment could materially harm the business.
• New or proposed changes to laws or new interpretations of existing laws may harm the business.
• Inability to detect and prevent fraud or misconduct by employees, partners, or third parties.
• Subject to anti-corruption laws.
• Collection and processing of sensitive personal data subject to evolving data privacy laws and heightened regulatory obligations, incurring costs and requiring business practice changes.
• Involvement in, or subject to, legal liability in connection with disputes and litigation with regulators, competitors, and third parties.
• Licenses are granted for specific periods and may be suspended, revoked, or not extended/replaced upon expiration; potential for fines/penalties for alleged violations.
• Inability to procure timely permissions and registrations for base stations.
• Business may be adversely impacted by work stoppages and other labor matters, including mobilization.
• Adoption of new accounting standards and regulatory reviews could affect reported results and financial position.

Future Outlook

Kyivstar Group anticipates completing its business combination and listing on Nasdaq during the third quarter of 2025, positioning itself as the first U.S.-listed pure-play Ukrainian investment opportunity. Management expects continued growth in digital services, successful integration of recent acquisitions like Uklon, and a decline in consumer inflation in Ukraine during 2025-2026, supporting overall economic recovery and the company's expansion.

Management Comments

• Kaan Terzioglu, CEO of VEON Group, stated, "Kyivstar Group's listing on Nasdaq will be a landmark development, bringing a Ukrainian company with a market-leading position in telecommunications and digital services to the world's premiere listing venue for technology companies. With today's filing, we continue to advance towards this historic moment, which we believe presents U.S. and global investors with a compelling opportunity to invest in Ukraine and become a stakeholder in its economic growth and resilience through a robust Ukrainian company."
• Betsy Cohen, Chairman and CEO of Cohen Circle, commented, "We are very excited about completing this transaction and supporting Kyivstar Group's listing on Nasdaq. Kyivstar Group has tremendous growth potential and continues to deliver strong operational and financial performance, reflecting the resilience of both the company and the country. As we mark today's public filing, we look forward to completing the process which will make Kyivstar Group's success story more directly accessible to U.S. and global investors."
• Oleksandr Komarov, CEO of Kyivstar Group, remarked, "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 Ukraine's 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 operates as Ukraine's leading digital operator, holding dominant market positions in both mobile and fixed broadband services. Its strategic expansion into digital services like ride-hailing (Uklon) and digital health (Helsi) aligns with a broader industry trend of telecom operators diversifying into adjacent digital ecosystems to enhance customer engagement and drive new revenue streams. The anticipated Nasdaq listing positions Kyivstar as a unique investment vehicle for exposure to the Ukrainian economy, which is showing signs of stabilization despite ongoing conflict, differentiating it from other regional or global telecom players.

Comparison to Industry Standards

• Kyivstar's monthly Average Revenue Per User (ARPU) of USD 3.2 in Q1 2025 is significantly lower than the average of USD 10.7 for Central and Eastern European countries, indicating substantial potential for ARPU growth as the Ukrainian economy recovers and digital services expand.
• The proposed transaction valuation of 3.7x Enterprise Value (EV) / Last Twelve Months (LTM) Adjusted EBITDA (Q1 2025) for Kyivstar is at a considerable discount compared to the median EV/EBITDA multiples of global peers (7.1x) and EMEA/APAC single country peers with leading market positions (6.5x).
• Kyivstar's Adjusted EBITDA margin of 57% for LTM Q1 2025 is competitive, aligning with or exceeding many of its European and emerging market peers, demonstrating strong operational efficiency despite challenging conditions.

Corporate Governance

Legal Proceedings

• The document mentions the risk of 'any legal proceedings that may be instituted against Cohen Circle, Kyivstar or VEON, any of its subsidiaries or others following the announcement of the Business Combination', but does not detail any current specific proceedings.

Stakeholder Impact

• Shareholders: The Nasdaq listing offers a unique investment opportunity in Ukraine's economic growth and resilience, with potential for significant returns given the discounted valuation relative to peers.
• Employees: Kyivstar has a highly experienced and well-motivated team, with 95% of employees in Ukraine and high engagement rates (86% in 2024), indicating a stable and supported workforce.
• Customers: Continued investment in network quality, expansion of digital services (e.g., Uklon, Helsi), and customer appreciation programs (post-cyberattack) aim to enhance service offerings and customer loyalty.
• Ukraine (Society/Economy): Kyivstar is positioned as a national champion, a major social sponsor, and a top-rated employer. VEON and Kyivstar's commitment to invest USD 1 billion in Ukraine (2023-2027) supports infrastructure development and economic recovery.
• Creditors: The company maintains a strong balance sheet with $489 million in cash and no external debt, indicating low credit risk.

Next Steps

• Cohen Circle's shareholders to approve the business combination.
• SEC to deem effective the Registration Statement on Form F-4.
• Kyivstar Group to meet Nasdaq listing standards upon closing of the business combination.
• Admission of Kyivstar Group for trading on Nasdaq under ticker symbols KYIV and KYIVW.
• Closing of the business combination, expected during the third quarter of 2025.
• Continued investment of USD 1 billion in Ukraine by VEON and Kyivstar Group from 2023-2027.
• Successful integration of Uklon and continued growth in digital services.

Key Dates

Recommendation

Keywords

Kyivstar, VEON, Nasdaq listing, SEC filing, Business Combination, Cohen Circle Acquisition Corp. I, Ukraine investment, Digital operator, Telecommunications, Q1 2025 results, Financial performance, Adjusted EBITDA, Revenue growth, Uklon acquisition, Helsi investment, Multiplay customers, Digital services, Risk factors, Emerging markets, SPAC, Form F-4, Mobile operator, Fixed broadband, Digital TV, E-Health, Big Data, AdTech, Ride-hailing, Delivery platform