20-F: Kyivstar Group Navigates War, Boosts Digital Revenue, Lists on Nasdaq

Kyivstar Group Ltd. reports significant revenue growth and strategic acquisitions in 2025, alongside a Nasdaq listing, despite ongoing war impacts and a one-time listing expense that reduced net profit.

Summary

• Kyivstar Group Ltd. reported revenue of US$1,157 million for the year ended December 31, 2025, a 25.9% increase from US$919 million in 2024.
• Profit for the period decreased to US$124 million in 2025 from US$283 million in 2024, primarily due to a US$162 million listing expense.
• Adjusted EBITDA increased by 25.0% to US$649 million in 2025 from US$515 million in 2024, maintaining an Adjusted EBITDA margin of 56%.
• The company successfully listed its Common Shares and Warrants on the Nasdaq Global Select Market on August 15, 2025, becoming the first Ukrainian company on a U.S. stock exchange.
• Strategic acquisitions in 2025 included a 97% stake in Uklon, a ride-hailing and delivery platform, for US$158 million, and 100% of SUNVIN 11 LLC, a solar power plant, for US$8.24 million.
• Kyivstar increased its ownership stake in Helsi, a digital healthcare platform, from 69.99% to 97.99% for US$10 million.
• Significant bond debt was repaid, including US$472 million of April 2025 Bonds and US$100 million of June 2025 Bonds.
• The company launched Starlink Direct-to-Cell satellite connectivity in Ukraine and initiated its first local 5G pilot in Lviv.
• Mobile customer base decreased to 22.4 million in 2025 from 23.0 million in 2024, while Mobile ARPU increased to US$3.58 from US$3.00.
• Total digital monthly active users (MAU) grew to 15.0 million in 2025 from 10.6 million in 2024.
• The ongoing war in Ukraine continues to impact operations, with approximately 5% of the combined telecommunication network damaged or destroyed (82% restored) and 5% remaining non-functional in Russian-occupied territories.
• War-related operational costs amounted to approximately US$34 million in 2025, a decrease from US$49 million in 2024.
• Kyivstar received a US$10 million insurance payout in October 2025 for war-related property damage and business interruption losses incurred in 2022.
• Independent auditors included a going concern emphasis paragraph in their opinion due to the material uncertainties related to the ongoing war in Ukraine.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed but overall resilient performance. While the significant listing expense impacted net profit, strong operational growth in revenue, EBITDA, ARPU, and digital MAUs, coupled with strategic acquisitions and debt repayment, demonstrates resilience despite the challenging war-time environment and ongoing risks.

Positives

• Reported a substantial 25.9% increase in revenue to US$1,157 million in 2025.
• Achieved strong Adjusted EBITDA growth of 25.0% to US$649 million in 2025, maintaining a healthy 56% margin.
• Successfully completed its Nasdaq listing on August 15, 2025, providing enhanced access to international capital markets and increased visibility.
• Expanded its digital ecosystem and energy resilience through strategic acquisitions of Uklon (ride-hailing), SUNVIN 11 LLC (solar power), and an increased stake in Helsi (digital healthcare).
• Repaid significant bond debt, including US$472 million of April 2025 Bonds and US$100 million of June 2025 Bonds, strengthening its financial position.
• Demonstrated innovation by launching Starlink Direct-to-Cell satellite connectivity and a 5G pilot in Lviv, enhancing network resilience and future service offerings.
• Experienced an increase in Mobile ARPU to US$3.58 and significant growth in Total Digital MAUs to 15.0 million, indicating successful multiplay strategy and digital adoption.
• Reduced war-related operational costs to US$34 million in 2025 from US$49 million in 2024.
• Received a US$10 million insurance compensation for war-related damage incurred in 2022.
• A Ukrainian court ruled to unfreeze VEON's corporate rights in JSC Kyivstar and other Ukrainian subsidiaries, mitigating a previous governance concern.

Negatives

• Profit for the period significantly decreased to US$124 million in 2025 from US$283 million in 2024, primarily due to a one-time US$162 million listing expense.
• The mobile customer base declined from 23.0 million in 2024 to 22.4 million in 2025, attributed to migration, territory loss, and technical subscriber base clean-up.
• The ongoing war in Ukraine continues to cause disruptions, physical damage to infrastructure, and operational challenges, with 5% of the network remaining non-functional in occupied territories.
• Independent auditors included a going concern emphasis paragraph in their report due to the material uncertainties related to the ongoing war in Ukraine.
• War risk insurance is no longer available for operations in Ukraine since 2023, increasing exposure to future war-related damages.
• Restrictions on upstreaming dividends from Ukraine persist due to martial law and capital controls, limiting cash transfers to the parent company.
• The company is exposed to foreign currency exchange loss and volatility, particularly with the Ukrainian Hryvnia, which can impact reported financial results.
• Increased electricity tariffs (19.5% in 2025) continue to place upward pressure on operating costs.
• There is a risk of nationalization or confiscation of operations and assets due to Ukrainian martial law restrictions and perceived affiliations of the majority shareholder's ultimate beneficial owners.
• The cyberattack in December 2023 resulted in a US$46 million revenue impact in 2024 (and US$23 million in 2023) due to customer appreciation programs.
• A criminal investigation related to historical tax and financial reporting of Uklon's carved-out entities is ongoing, with Uklon's CEO named in the investigation.
• A complaint from Lifecell LLC regarding advertising claims is pending a final decision from the Antimonopoly Committee of Ukraine, potentially leading to fines.

Risks

• Disruptions to business, financial conditions, and results of operation due to the ongoing war in Ukraine, including increased operating costs and damage to network infrastructure and assets.
• Risk of nationalization or confiscation of operations and assets due to Ukrainian martial law restrictions and certain majority shareholder's ultimate beneficial owners.
• Reputational harm due to the ongoing war in Ukraine and perceived affiliations with sanctioned individuals (LetterOne shareholders).
• Challenges in conducting business with international financial institutions, rating agencies, auditors, and equipment suppliers due to sanctions and self-imposed sanctions.
• Changes in customer demand due to migration and population shifts caused by the war.
• Decline in revenue from international mobile termination rates due to EU policies regulating roaming charges for Ukrainians.
• The international economic environment, inflationary pressures, geopolitical developments (e.g., Middle East conflict), and unexpected global events could cause business decline.
• Highly competitive markets, making it difficult to expand or retain customers, especially in digital businesses.
• Concentration of business in Ukraine, a frontier market subject to greater risks (political/economic instability, regulatory uncertainty, social unrest, conflict).
• Inability to keep pace with technological changes and evolving industry standards (e.g., 5G deployment, AI adoption).
• High acquisition and deployment costs of 5G may adversely affect service quality and increase operating expenses.
• The telecommunications industry is highly capital intensive, requiring substantial and ongoing expenditures, which may be difficult to fund.
• Inability to successfully implement strategic initiatives, including acquisitions and divestitures, may prevent expected growth and benefits.
• Core growth strategies of expanding digital offerings and investing in 4G connectivity may not be successful.
• Exposure to foreign currency exchange loss, fluctuation, and translation risks, particularly with the Ukrainian Hryvnia.
• Cyberattacks and systems/network disruptions, data protection issues, data breaches, or the perception of such attacks/failures.
• Recognition of substantial impairment charges due to differences between actual and forecasted performance or adverse market developments.
• Equipment and systems are subject to disruption and failure from natural disasters, military conflicts, power outages, human error, or intentional wrongdoings.
• Strategic partnerships and relationships carry inherent business risks, including disagreements, lack of control over partners, and market-specific risks.
• Inability to retain or motivate key personnel, hire qualified personnel, or implement strategic goals/corporate culture through personnel, exacerbated by mobilization efforts.
• Adoption of new accounting standards and regulatory reviews could affect reported results and financial position.
• Dependence on VEON for certain services, assets (UTC infrastructure), and potential funding, creating potential conflicts of interest.
• VEON's ability to exert significant influence in matters requiring a shareholder vote, potentially delaying or preventing a change in control.
• Inability to raise additional capital or only at significantly increased costs.
• Indebtedness and debt service obligations could decrease cash flow and adversely affect financial condition.
• Highly regulated telecommunications industry and uncertain judicial/regulatory environment, leading to unanticipated outcomes, fines, or operational restrictions.
• Violations of and changes to applicable sanctions and embargo laws, including export control restrictions, may harm business.
• New or proposed changes to laws or new interpretations of existing laws may harm business (e.g., SIM verification, data localization).
• Exposure to tax claims and repeated tax audits, with unpredictable outcomes.
• Changes in tax treaties, laws, rules, or interpretations, including Pillar Two legislation, could harm business.
• Changes in regulatory requirements in banking and other financial systems and currency control requirements restrict activities.
• Inability to detect and prevent fraud or other misconduct by employees, partners, or third parties.
• Exposure to anti-corruption laws (FCPA, Ukrainian laws).
• Collection and processing of sensitive personal data subject to evolving data privacy laws and heightened regulatory obligations.
• Involvement in legal disputes and litigation with regulators, competitors, and third parties.
• Telecommunications licenses granted for specific periods may be suspended, revoked, or not renewed.
• Inability to procure timely permissions and registrations for base stations.
• Work stoppages and other labor matters, including mobilization, may adversely impact business.
• No expectation of dividends for the foreseeable future.
• Principal asset is interest in JSC Kyivstar, dependence on its distributions.
• Increased costs and obligations as a public company.
• Market price of Common Shares may be volatile or decline regardless of operating performance.
• Sales, or perception of sales, of Common Shares by VEON could adversely affect market price.
• Market for Common Shares may not develop, affecting liquidity and price.
• Issuance of additional Common Shares or other debt/equity securities could dilute ownership and affect price.
• "Controlled company" status under Nasdaq rules allows exemptions from certain governance requirements.
• "Emerging growth company" status allows reduced reporting requirements, potentially making shares less attractive.
• Management has limited experience operating as a standalone public company.
• Failure to maintain effective internal controls and compliance.
• Potential for classification as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes.

Future Outlook

Kyivstar Group expects its future results to continue to be impacted by the ongoing war in Ukraine, including foreign currency volatility, infrastructure damage, customer loss, sanctions, and export controls. The company aims to deepen its mobile market leadership, expand digital services, maintain its paying subscriber base while growing multiplay users and ARPU, and serve as a key international investor in Ukraine's digital ecosystem restoration. Capital expenditures are expected to remain elevated in the near term due to strategic initiatives, with a continued focus on 4G Everywhere and network modernization, alongside the rollout of 5G pilots. The company anticipates the share of data and digital revenue to continue rising and will balance its digital growth ambition with prudent downside scenarios given regulatory constraints, energy cost inflation, and security risks. Kyivstar expects to remain subject to continued cyberattacks and does not anticipate paying dividends in the foreseeable future.

Management Comments

• Management believes the likelihood of material adverse impact on the Group's results of operations, financial position, liquidity, or capital resources from tax contingencies is remote.
• Management believes that credit risk is appropriately reflected in impairment allowances recognized against assets.
• Management expects the actions taken or to be taken will mitigate the risk associated with the identified events and conditions that may cast significant doubt on the Company's ability to continue as a going concern, but acknowledges that a material uncertainty remains due to the uncertainty and exogenous nature of the ongoing war and potential sanctions.
• Management believes it is not practicable to estimate the actual costs that would have been incurred had the Group been a standalone company during the periods presented prior to the SPAC Merger.

Industry Context

StockSavvy.ai notes that the telecommunications industry is characterized by rapid technological evolution, intense competition, and significant capital expenditure requirements, especially for network upgrades like 4G/5G. Kyivstar Group's expansion into digital services (ride-hailing, e-health, digital TV) aligns with a broader industry trend of telecom operators diversifying beyond core connectivity to capture more of the digital economy and increase ARPU through 'multiplay' strategies. The focus on energy resilience and solar power acquisition reflects a growing industry trend towards sustainable operations and mitigating rising energy costs, particularly critical in conflict zones. The entry into the single roaming area with the EU for Ukraine is a significant regulatory development that will impact international mobile termination rates and roaming revenue for all operators in the region. The development of a national LLM in Ukraine highlights the increasing importance of AI and localized digital solutions in emerging markets.

Comparison to Industry Standards

• Kyivstar leads the Ukrainian mobile market by number of subscribers (over 22.4 million as of September 30, 2025), indicating a strong competitive position within its primary market.
• The average mobile ARPU in Ukraine (US$3.58 in 2025) is noted as 'relatively low' compared to Central and Eastern European nations, suggesting significant upside potential if economic conditions improve.
• The Ukrainian fixed-line telecommunications services market is fragmented, with over 1,800 providers; Kyivstar holds a 13.8% market share with approximately 1.2 million fixed broadband customers as of September 30, 2025, positioning it among the top three providers alongside Ukrtelecom and DVL.
• The company's 4G/LTE population coverage of 96.2% in Ukraine as of December 31, 2025, demonstrates a high level of network penetration, comparable to leading operators in more developed markets.
• Blended electricity tariff increases (19.5% in 2025, 27.3% in 2024, 28.1% in 2023) are noted as being 'in line with Eastern European levels,' indicating that Kyivstar faces similar energy cost pressures as regional peers.

Management Changes

Corporate Governance

Legal Proceedings

• Ukraine Tax Authority claim of approximately US$33.9 million from 2016 against JSC Kyivstar for alleged additional taxes and penalties from 2009-2014, related to a contractual relationship with Private Enterprise Wholesale Company Elbrus. The case is pending in the court of first instance, awaiting the outcome of a criminal case against the ex-CEO of Elbrus.
• Blocking of Voting Rights of VEON in JSC Kyivstar: In April 2024, the Ukrainian custodian of VEON's shares in JSC Kyivstar marked all 100% of these shares as non-voting due to a freezing order (now lifted) and sanctions. On November 29, 2024, a court ruled to unfreeze 47.85% of VEON's corporate rights in JSC Kyivstar and 100% in other Ukrainian subsidiaries. The issue is ongoing as of December 31, 2025, with VEON working to remove remaining restrictions.
• Uklon criminal investigation: In November 2025, the Group became aware of a criminal investigation by Ukrainian law enforcement relating to the accuracy of historical tax and financial reporting of Carved Out Entities historically associated with Uklon prior to its acquisition. Uklon's CEO has been named in the investigation in his capacity as former chief executive officer of the Carved Out Entities. The Group and Uklon are not currently named in this investigation, which is at a preliminary stage, making its scope, duration, and potential implications uncertain.
• Lifecell LLC complaint with the Antimonopoly Committee of Ukraine (AMCU) in February 2019, alleging misleading advertising by JSC Kyivstar regarding 'No. 1 mobile Internet speed.' The AMCU issued preliminary findings in December 2025, proposing a fine, with a final decision pending as of December 31, 2025.

Related Party Transactions

• D&O Indemnification Agreements: The company has entered into separate indemnification agreements with its directors and senior managers.
• Seller Loan Note: Kyivstar Group issued a promissory note for US$178 million to VEON Amsterdam B.V. on August 13, 2025, as partial consideration for the sale of Kyivstar Holdings B.V. shares. The note bears 10% annual interest and matures on August 12, 2026, with US$57 million outstanding as of December 31, 2025.
• Registration Rights Agreement: Entered into on August 14, 2025, with Cohen Circle Sponsor I, LLC, Cohen Circle Advisors I, LLC, and VEON Amsterdam B.V. to register for resale Common Shares held by these parties.
• Ukraine Tower Company (UTC) Agreements: JSC Kyivstar predominantly uses the network infrastructure of UTC, a wholly-owned VEON subsidiary. JSC Kyivstar provides shared services to UTC and leases IT equipment, vehicles, and office facilities. Fees paid to UTC amounted to US$72.6 million in 2025 (US$60.7 million in 2024). A Framework Sale and Purchase Agreement for equipment sales to UTC is also in place.
• General Services Agreement: JSC Kyivstar and VEON have a service agreement (extended to December 31, 2028) for general support services. US$0.6 million was paid in 2025 (US$2.6 million in 2024). New service agreements between VEON and Kyivstar Group subsidiaries, effective January 1, 2025, for various support services, had no payments in 2025.
• Service Agreement on Personnel Provision (Secondment): JSC Kyivstar entered an agreement with VEON Amsterdam B.V. on December 16, 2025 (retroactive to January 1, 2025), for seconded personnel, including the President and CFO. No payments were made in 2025.
• Agency and Services Agreement: JSC Kyivstar and VEON Wholesale Services B.V. had an agreement for international roaming and telecommunications services, terminated March 31, 2024. US$4.4 million was paid in 2024.
• Agreement with Impact Investments LLC: VEON entered an agreement with Impact Investments LLC on June 7, 2024, for strategic support and board advisory services to VEON and JSC Kyivstar. Michael R. Pompeo, a Kyivstar Group Director, is Executive Chairman of Impact Investments. US$1.6 million was recharged to Kyivstar Group in 2025 (US$3.9 million in 2024).
• Agreement with Delta Strategy & Ventures LLC: JSC Kyivstar has a services agreement with Delta Strategy & Ventures LLC for Dmytro Shymkiv's (Kyivstar Group Director) guidance. US$100,300 was paid in 2025 (US$136,500 in 2024).
• Indemnification agreement with respect to VEON Group's legacy bonds: An indemnity agreement is in place between Kyivstar Holdings and VEON Amsterdam B.V. for potential future payments to eligible old noteholders.

Stakeholder Impact

• Shareholders: The Nasdaq listing offers a unique investment opportunity in Ukraine's recovery, but no dividends are expected in the foreseeable future, and share price volatility remains a risk. VEON's majority ownership limits the influence of other shareholders, and potential future capital raises could dilute ownership.
• Employees: The company prioritizes the safety and well-being of its employees in Ukraine, providing emergency support, flexible work arrangements, and psychological support programs. However, there is a risk of mobilization impacting key personnel and potential work stoppages.
• Customers: Customers have been impacted by the war, including migration and service disruptions. Initiatives like 'Roam Like at Home' and Starlink Direct-to-Cell satellite connectivity aim to retain customers and improve service resilience. The 2023 cyberattack led to a 'customer appreciation' program.
• Suppliers/Partners: The company faces challenges in transacting with international partners due to sanctions and perceived affiliations, and its dependence on third parties for critical services and equipment poses operational risks.
• Creditors: The company has repaid significant bond debt, but liquidity risks persist due to the war and capital controls. An indemnity from VEON for legacy bonds provides some protection.
• Ukrainian Government/Economy: Kyivstar Group aims to be a key international investor in Ukraine's digital ecosystem restoration, with a joint US$1 billion investment intention with VEON. However, the company operates under martial law, faces nationalization risks, and is subject to an evolving regulatory environment.

Next Steps

• Expand Starlink Direct-to-Cell satellite technology to voice and mobile broadband services in 2026.
• Further rollouts of 5G pilot services expected in 2026 for cities including Borodianka, Kharkiv, Kyiv, and Odesa.
• Continue to focus on the '4G Everywhere' strategy and network modernization.
• Actively participate in upcoming spectrum auctions (if any).
• Finalize fair value assessments for Uklon and SUNVIN 11 LLC acquisitions within the measurement period (ending April 2, 2026).
• Complete the accounting treatment for the acquisition of ISP Shtorm LLC and Tabletki.ua.
• Continue to develop Ukraine's first national large language model (LLM) trained on Ukrainian-language data.
• Continue to work with local custodian to remove any remaining restrictions on corporate rights in Ukrainian subsidiaries.
• Continue to review and update risk management policies to enhance resilience against volatility from the war.
• Continue to monitor developments in applicable sanctions to ensure compliance and evaluate potential impact.
• Engage with authorities in Ukraine to address concerns about ownership and management.
• Continue to improve the experience exchange mechanism to share best practices in cybersecurity and track operational alarms.
• Continue to upgrade existing dieseland petrol-powered units with more energy-efficient, hybrid, and renewable energy-powered network equipment.
• Continue to work on reducing the carbon footprint of offices.
• Negotiations on a collective agreement with the Trade Union Committee are expected to continue after the end of the state of war.

Key Dates

Recommendation

The company demonstrates strong operational resilience and strategic growth in digital services and network modernization despite the severe challenges posed by the ongoing war in Ukraine. The Nasdaq listing is a positive for long-term capital access. However, the significant one-time listing expense impacted net profit, and the inherent risks of operating in a war-torn frontier market, including subscriber migration, infrastructure damage, regulatory uncertainties, and the auditor's going concern emphasis, warrant caution. The stock is a 'hold' as the long-term potential is balanced by substantial geopolitical and operational risks.

Keywords

Telecommunications, Digital Services, Ukraine, Nasdaq, Financial Results, Acquisitions, Uklon, Helsi, Starlink, 5G, War Impact, Cybersecurity, Capital Expenditure, ARPU, Mobile Customers, Digital MAU, Corporate Governance, Risk Management, VEON, Capital Raise, Debt Repayment, Bermuda, Financial Reporting, IFRS