For companies in telecoms, maturity is usually easy to spot. Growth slows, capital spending eases, management learns the language of “harvest”, and investors are offered the consolations of yield. Converge, the Philippine broadband operator, is not there yet. Its 2025 annual report instead depicts a business that is doing many things right—growing revenues, adding customers, keeping margins sturdy, and paying down debt—while still behaving less like a cash-yielding utility and more like a builder of digital infrastructure.
That distinction matters. In 2025 Converge generated record consolidated revenues of ₱44.8bn, up 10.2% from the previous year, while EBITDA rose 10.0% to ₱27.0bn and net income climbed 9.6% to ₱11.9bn; EBITDA margin remained a lofty 60.4%, and management highlighted an industry-leading 17.7% return on invested capital. Those are not the numbers of a company losing operational discipline. They are the numbers of one that appears to be executing well.
The operating engine remains the home. Residential revenues reached ₱37.3bn, accounting for roughly 83% of the total, while enterprise revenues rose to ₱7.4bn, growing faster at just over 20%. Residential subscriber numbers rose to 2,984,212 by the end of 2025, up from 2,563,458 a year earlier. This is classic scale-building: more households connected, more ports filled, more share won in a country where fixed broadband penetration remains relatively low.
Yet growth has not come without trade-offs. The annual report notes that residential blended ARPU fell to ₱1,085 in 2025 from ₱1,165 in 2024, as Converge pushed deeper into the mass market through cheaper offers such as BIDA Fiber and Surf2Sawa. That is strategically intelligible. It widens the addressable market and deepens network utilisation. But it also reveals what sort of company Converge still is: one prepared to accept some yield dilution today in exchange for a broader customer base tomorrow.
To its credit, the company has so far managed this balancing act with unusual poise. The separate audited financial statements show revenues rising to ₱44.7bn from ₱40.6bn, while gross profit improved to ₱28.8bn and operating profit to ₱17.7bn. Net income in the stand-alone accounts reached ₱12.24bn, up from ₱10.64bn, and finance costs fell to ₱1.54bn from ₱1.92bn as borrowings declined. In other words, Converge has not bought growth at the expense of the income statement; it has, for now, managed to do both.
Nor is the enterprise segment mere decoration. Converge’s report makes clear that management sees enterprise, wholesale, cloud, and international connectivity as the next layers of its story. In 2025 the firm highlighted new products for MSMEs and large enterprises, deeper wholesale ambitions through Singapore, a partnership with Starlink for satellite broadband resale, and the commercial logic of its investments in subsea cables and data centres. Its two newer data centres in Angeles City and Caloocan City add 15MW of capacity, while its cable investments—such as Bifrost and SEA-H2X—are meant to tie the domestic network to the wider region.
This is not the capex profile of a company in harvest mode. The separate statements show ₱12.1bn spent on property, plant and equipment in 2025, plus ₱917m on intangible assets, while the notes disclose ₱13.24bn of capital commitments still outstanding at year-end. Property, plant and equipment on the stand-alone balance sheet rose to ₱72.7bn, and right-of-use assets also increased. Converge is still laying cable, building capacity, upgrading network nodes and expanding the physical base on which future earnings are meant to rest.
The balance sheet, in fact, tells the more interesting story. On the one hand, leverage improved. Total borrowings in the separate accounts fell to ₱24.0bn from ₱29.5bn, while total liabilities declined and equity rose to ₱65.0bn from ₱56.3bn thanks to retained earnings. The company remained compliant with its debt covenants, and the annual report says gross debt-to-equity and net debt-to-equity stayed comfortably within required levels. This is what prudence looks like in a capital-intensive business.
On the other hand, liquidity tightened. Stand-alone cash and cash equivalents fell to ₱6.06bn from ₱7.51bn, while short-term placements dropped much more sharply to ₱2.06bn from ₱8.53bn. Current assets fell to ₱18.9bn, below current liabilities of ₱24.5bn. None of this suggests distress—the company still generated strong operating cash flow and had unused credit lines—but it does suggest that Converge is using cash the way a builder does: as fuel, not as ornament.
Operating cash flow, to be fair, remained formidable. Net cash from operating activities in the separate statements reached ₱23.0bn in 2025, up from ₱21.8bn the year before. But almost as soon as cash arrived, it was spoken for. Investing outflows amounted to ₱13.2bn, reflecting capex, investments in subsidiaries, and other long-dated uses. Financing outflows reached ₱11.2bn, driven by debt repayments, dividends, lease payments and treasury share purchases. It is a familiar pattern in infrastructure-heavy growth businesses: handsome operating cash generation, followed by equally energetic cash deployment.
One item in the stand-alone accounts deserves particular attention. Amounts due from related parties swelled to ₱7.9bn in 2025 from ₱662m a year earlier, driven largely by a non-interest-bearing loan to a subsidiary and balances arising from asset sales and reimbursements within the group. Investment in subsidiaries also jumped to ₱4.27bn from ₱1.36bn. This may be strategically sensible if Converge is building a broader digital-infrastructure ecosystem. But from the perspective of investors looking for simple, distributable cash, it is another reminder that the company still thinks like a platform expanding its perimeter rather than a mature operator merely milking installed assets.
And yet Converge has begun to nod toward the habits of adulthood. In 2024 its board adopted a dividend policy targeting payouts of around 25–30% of net income. It declared a ₱0.43 per share regular cash dividend in March 2025 and then a ₱0.49 per share dividend in March 2026, sourced from 2025 earnings. It also bought back 25.2m shares in August and September 2025 for ₱373m. These are not trivial gestures. They tell investors that management understands the appeal of yield and capital returns.
But the hierarchy of priorities is still clear. Converge’s report is full of the language of network reach, redundancy, enterprise solutions, subsea cables, cloud capacity, service quality and operational transformation. It touts more than 890,000 kilometres of fibre infrastructure, a broad national footprint, and continued expansion into underserved markets and adjacent enterprise services. The company is trying to become more than an internet provider. It is trying to become a national digital backbone.
That makes Converge an intriguing sort of listed company. It has enough operational maturity to show discipline—healthy margins, falling finance costs, improving leverage, and the beginnings of a dividend framework. But it retains the instincts of a grower: it is still laying the groundwork for future businesses, still absorbing capital, still widening the corporate map. Investors searching for a simple yield stock may therefore be looking at the wrong name. Converge, as its 2025 annual report makes plain, remains better understood as a growth infrastructure platform—one that is executing well, certainly, but one that still believes the network is not finished.
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Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.
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