Kyivstar 3Q26 Earnings: Digital Portfolio Could Be Reaching Critical Mass, Driving Higher Multiplay Adoption

Kyivstar Group Ltd. (Nasdaq: KYIV) owns JSC Kyivstar, Ukraine's largest mobile operator, with 21.7m mobile and 1.3m fixed-broadband customers at 30 September 2026. Around the network it has built digital services: Uklon ride-hailing and delivery, Tabletki online pharmacy booking, Helsi digital health, the Kyivstar TV streaming service, and enterprise cloud, data and AI services. VEON is the controlling shareholder.

Kyivstar's multiplay base has grown in steps, and two of them line up with a new service joining the group. Multiplay customers were 6.1m in both 4Q24 and 1Q25. They rose to 6.5m in 2Q25, the quarter Kyivstar closed the Uklon acquisition, then to 7.3m in 4Q25 and 8.1m in 1Q26, the quarter Tabletki was consolidated. The count has stayed at 8.1m in 2Q26 and 3Q26.

The share of one-month-active mobile customers who are multiplay rose to 40.3% from 31.7% a year earlier. It has stayed roughly flat for the last three quarters, but we believe it should rise again because of the digital services portfolio Kyivstar now offers.

We expect the count to resume rising, because the reasons to bundle widened again in 3Q26. Kyivstar launched two new superpower bundles, one with a discount on Uklon rides and one with YouTube Premium Lite. About 12m active mobile customers, 60% of the base, are not yet multiplay, while Uklon has 5.4m users, Tabletki 6.6m and Helsi 5.2m.

The payoff from superpower bundles that lift multiplay adoption would be substantial. In 3Q26, multiplay ARPU rose 11.5% to US$5.9, against US$4.0 for the average mobile customer. Management estimates multiplay churn at about 0.4x and lifetime value at about 4x the mobile average, using ARPU, the EBITDA margin and the monthly churn rate. Multiplay revenue rose 37.6% to US$143m in 3Q26 and is now 55.6% of consumer revenue. As a rough illustration only, at the current ARPU gap each additional 1m multiplay customers would be worth about US$23m of annual revenue, before any effect on churn.

Ukraine's airspace has been closed to commercial airlines since February 2022, which puts intercity and cross-border travel on roads and rail. Kyivstar's own release describes the Kyiv-Warsaw route as essential in a country closed to commercial air traffic. That is the gap Uklon fills, first inside cities and now between them.

Uklon revenue rose 35.5% YoY to US$33.5m and EBITDA rose 11.7% to US$10.2m. Rides grew 1.5% to 42.8m and deliveries 26.9% to 1.5m. In the quarter Uklon entered four more Ukrainian cities, taking it to 31, and five cities in Uzbekistan's Fergana Valley. It closed the purchase of scooter operator e-Wings, active in 11 cities, and launched Uklon Travel Bus with routes from Kyiv to Warsaw and from Odesa to Chisinau.

Uklon's EBITDA margin fell to 30.4% from 36.8% while it opened nine cities and added scooters and buses. We see the 3Q26 Uklon superpower as the more important change for the group. A discount on rides, priced into the mobile plan, gives a frequent Uklon rider a concrete reason to keep a Kyivstar SIM and use the digital services that make a customer multiplay.

Tabletki lets customers search for a medicine, compare prices, check stock and reserve it at more than 14,500 Ukrainian pharmacies. It handled 44.9m orders in 3Q26 with gross merchandise value of UAH17.8bn (US$397m). Kyivstar records only its commission and fees, so revenue was US$8.1m and EBITDA US$6.1m, a 75% margin.

Helsi runs appointment booking, prescriptions and health records inside Ukraine's national eHealth system. Its users made more than 2.3m appointments in the quarter with over 46,000 doctors at more than 1,700 clinics. Paying premium subscribers reached 136,000, against 33,000 a year earlier and 109,000 in 2Q26, helped by the Helsi superpower bundle sold with Kyivstar mobile plans. Revenue rose 36.5% to US$2.5m.

Tabletki's main draw is practical: customers can see which pharmacy has a medicine in stock and compare prices before they go, and the service was popular well before the latest escalation. The war adds to that need. Air-raid alerts can shut pharmacies and clinics for hours and make every trip a risk, so checking stock before leaving home or seeing a doctor by video saves journeys. Kyivstar is linking the two platforms into one patient journey covering consultations, lab tests, telemedicine and prescription orders. Repeat monthly use of that kind is what turns a Tabletki or Helsi user into a multiplay customer.

Kyivstar reported 3Q26 revenue of US$349m, up 17.5% YoY and 3% QoQ, and up 26.5% in hryvnia. Telecom and infrastructure revenue grew 8.4% to US$273m. Digital revenue grew 68.9% to US$75.9m, or 21.7% of revenue. Excluding Tabletki, digital revenue grew 62.5% in hryvnia.

Mobile revenue rose 6.3% to US$254m. Mobile ARPU grew 8.6% to US$4.0 on a mobile SIM base 3.4% smaller, which on its own accounts for about 4.9% growth. Kyivstar says many of the SIMs that dropped out were secondary and little used. Data use per customer rose 20.0% to 15.5GB a month and 4G penetration reached 71.5%. Kyivstar also moved more than 1m customers off 3G and switched it off, freeing spectrum that raised 4G capacity by 25%.

Net profit was US$99m and diluted EPS US$0.36, against a loss of US$89m in 3Q25, when a US$162m non-cash listing charge was booked. 3Q26 profit includes a US$14.6m non-cash gain on warrants. Kyivstar TV revenue more than quadrupled to US$14.1m, mostly because it moved to gross revenue recognition in September 2025, so its growth rate overstates the change in the business.

Group EBITDA margin fell 3.6pp YoY to 54.0%, and most of the decline came from the telecom business. The telecom and infrastructure margin fell 3.1pp to 57.7%, which management attributed to higher energy costs. The digital margin rose 1.3pp to 40.7%.

Holding both segment margins at 3Q25 levels, the 3Q26 revenue mix alone would give a 56.2% group margin. Mix therefore explains about 1.4pp of the decline and lower segment margins about 2.2pp, almost all from telecom. Within digital, Tabletki earned a 75% margin and Uklon 30%, so the platform mix sets where the digital margin settles.

Kyivstar's solar plants now produce revenue, US$6m in the quarter, but have not offset higher grid tariffs. The FY26 EBITDA guide implies 4Q26 EBITDA of US$164-177m against US$189m in 3Q26. We read the gap as room for winter energy costs, when grid outages raise generator use, and it could prove conservative if tariffs hold.

Capex excluding licenses and right-of-use assets fell 25.6% to US$66m, or 19.0% of revenue, and LTM capex intensity fell to 24.0% from 29.0%. Free cash flow after leases and licenses was US$83m, against US$34m a year earlier, and nine-month free cash flow rose 56.8% to US$274m.

The unchanged 21-24% capex guide implies US$92-132m of 4Q26 capex on our FY26E revenue, above the US$66m spent in 3Q26. Cash rose to US$436m from US$364m at 30 June, and net liquidity excluding leases rose to US$352m. The US$41m initial payment for GigaCloud, the cloud provider Kyivstar agreed to buy in October, falls in 4Q26.

We raised FY26E revenue to US$1,350m from US$1,342m, because the 3Q26 run-rate points to the top of the new range, and trimmed FY26E EBITDA to US$725m from US$731m, the top of the EBITDA range. Nine-month revenue of US$1,011m is 74.9% of our forecast and EBITDA of US$549m is 75.7%. Our numbers imply 4Q26 revenue of US$339m, 6% above 4Q25 and 3% below 3Q26, and 4Q26 EBITDA of US$176m against US$189m in 3Q26. A weaker hryvnia than UAH44.5 is the main risk to the USD figures.

We lowered FY26E net profit to US$335m from US$357m and EPS to US$1.45 from US$1.54. D&A is running at about US$258m a year, against the US$229m we had assumed, and interest on lease liabilities rises as new tower and site leases are added. FY26E year-end cash falls to US$418m from US$583m once the nine-month acquisition outflows and the GigaCloud payment are included. For FY27E we forecast revenue growth of 14%, including GigaCloud, and EPS of US$1.67, down from US$1.98.

Management raised FY26 USD revenue growth to 15-17% and EBITDA growth to 10-12%, with hryvnia ranges of 22-24% and 18-20%. Capex intensity stays at 21-24%. It is the third increase in the revenue range this year. Our FY26E EBITDA of US$725m sits at the top of the new range, at 11.9% growth.

At US$13.06, Kyivstar trades at 9.0x our FY26E EPS of US$1.45 and 4.2x our FY26E EBITDA. On FMP consensus the shares trade at 9.0x forward earnings and 4.6x forward EV/EBITDA, against emerging-market telecom peer medians of 10.3x and 4.6x. Forward EV/Sales is 2.3x against a 1.7x median.

The EV/Sales premium reflects faster growth: revenue rose 17.5% in 3Q26, and nine-month revenue 20.9%. We think the multiplay data supports a higher multiple over time. A multiplay customer pays 1.5x the average and leaves less often, so each step in multiplay share raises the value of the customer base, not only its revenue.

We think investors should own Kyivstar because each new service gives customers a reason to use more of the others, which should keep pulling them into multiplay. Our forecasts have revenue rising from US$1,350m in FY26E to US$1,739m in FY28E, and EPS from US$1.45 to US$2.01, about 18% a year. Profit grows faster than revenue because multiplay raises ARPU and lowers churn at the same time. Yet the shares trade at 9.0x FY26E EPS, below the 10.3x peer median, so the market is not paying for that growth.

Our US$20.30 target price is unchanged and we keep our Structural Long rating. The target corresponds to 14.0x our lower FY26E EPS and 6.6x FY26E EV/EBITDA, and is 55% above the current price.

The multiplay count has held at 8.1m for three quarters. If the Uklon and Helsi bundles do not lift it, multiplay revenue growth would depend on ARPU alone, and the step pattern we describe would have stalled.

The mobile SIM base fell 3.4% YoY to 21.7m, though Kyivstar says many of the SIMs lost were secondary and little used. ARPU growth of 8.6% more than covered it, and only has to stay above about 3.5% for mobile revenue to keep rising. A slowdown in pricing would matter more than the smaller SIM base.

The war remains the largest external risk. Network damage, energy disruption, staff safety, currency weakness and regulation can all hit service and USD results. Kyivstar has funded more than 10,500 generators and 265,000 batteries, and its solar plants and satellite service reduce disruption, but they cannot remove the exposure.

Three items complicate comparisons: Kyivstar TV's move to gross revenue recognition, Tabletki's consolidation from February 2026, and non-cash warrant gains and losses in profit. Platform KPIs, EBITDA and cash flow give the cleaner read.