1Q25 Results: In line, More Good News Coming

Strong 1Q25 performance thanks to FTTH; more to come in 2H25. In 1Q25, WIFI booked impressive revenue of IDR 231.6bn (+38.7% QoQ; +65.7% YoY), driven by telecommunications solid performance, which jumped +29.5% QoQ and +107.8% YoY. The telco revenue surge was backed by successful rollout of Fiber-to-the-Home (FTTH) services, with packages of up to 200 Mbps for just IDR 100K/month, allowing for 250K subscribers in 1Q25. In addition, advertising segment posted +53.8% QoQ and +30.7% YoY growth. On the cost front, EBITDA margin improved to 77.9% (4Q24: 70.6%; 1Q24: 71.1%), supported by higher contribution from telco segment at 57.1% (1Q24: 45.6%) helped by the newly launched B2C business. On its bottom line, WIFI’s 1Q25 net profit reached IDR 82.6bn (+4.4% QoQ; +181.0% YoY), or accounting for 15.1% of our FY25 estimate. This is in line with our projection as we expect earnings acceleration in 2H25 helped by subscriber base expansion peaking.

Rights issue & strategic partnership to support long-term growth. WIFI plans to raise IDR 5.9tn (~USD 353mn) through its June IDR 5.8tn rights issue to be allocated towards development support for 4mn added homepasses in Java, further cementing WIFI’s fiber infrastructure. Additionally, in Apr-25, Nippon Telegraph and Telephone East (NTT East), part of Japan’s largest telecommunications group, entered a strategic investment and partnership with WEAVE (WIFI’s Subs). NTT will acquire 49% stake in WEAVE through a combination of IDR 1tn in cash (~USD 60 mn) and IDR 3tn in non-cash contributions (~USD 179mn), including knowledge transfer and other intangible assets. The investment will deliver long-term strategic benefits, enhancing scalability, operational efficiency, and customer retention. This will enable subscriber base of up to 5mn and raise 2025F sales by IDR 3.2tn (+386% vs. FY24) and EPS by IDR 179bn (+82% vs. FY24).

Our revised higher subs result in undilutive EPS growth post rights. Following our recent 53% upgrade in topline, driven by higher 2025F subscriber estimate of 3.5mn (prev: ~2 mn), we still experience 6% EPS growth after taking into account WIFI’s upcoming rights issue and NTT’s strategic investment which will sizably raise minority interest portion. Concurrently, we expect improved financial flexibility ahead from potential bond issuance and NTT’s capital injection. This will cause WIFI’s significant subscriber base expansion in 2H. In the near term, WIFI also plans to participate in 5G Fixed Wireless Access auction, expected to accelerate last-mile connectivity and complement the ongoing FTTH rollout.

BUY with IDR 5,200 TP on robust earnings growth. Following this result release, we retain BUY on WIFI with IDR 5,200 TP, implying 2026F EV/EBITDA of 6.7x, 36% discount to the sector. We are positive on WIFI’s outlook, cemented by improved financial flexibility to support expansions. Furthermore, the large, untapped fixed broadband (FBB) market among low-income households presents significant growth opportunity, which should drive robust earnings performance going forward. Key risks: roll out delays causing lower-than-expected customer acquisition.