Indosat Posts Strong 4Q25 Profit as ARPU Hits Post Merger High

JAKARTA, Investortrust.id — Indosat Ooredoo Hutchison or ISAT records net profit of Rp 1.9 trillion in the fourth quarter of 2025, up 86 percent year on year and 54 percent quarter on quarter, as improving pricing discipline and higher ARPU lift earnings momentum.

The result brings full year 2025 net profit to Rp 5.5 trillion, up 12 percent year on year and equivalent to 114 percent of 2025 consensus estimates, while EBITDA rises 1 percent with margins stable at 47 percent.

Management says the performance aligns with 2025 guidance, with EBITDA growth in the low single digit range and revenue growth outperforming the industry.

Operationally, operating profit in 2025 remains stable at around Rp 10.8 trillion, supported by modest revenue growth of 1 percent and a 10 percent decline in operating expenses, despite cost of revenue rising 4 percent.

Performance improves sharply in the fourth quarter as revenue jumps 9 percent year on year and quarter on quarter, driven by ARPU climbing to Rp 44,000, up 13.1 percent year on year and 10 percent quarter on quarter, the highest level since the 2022 merger.

Management attributes the ARPU increase to improving price competition, enhanced customer experience through new services, and AI powered hyper personalization initiatives, while the subscriber base edges down slightly by 1.1 percent year on year.

The combination of rising ARPU and relatively stable subscribers signals a healthier competitive environment, prompting management to express confidence that ARPU momentum can be sustained into 2026.

The multimedia, data communication, and internet segment posts strong fourth quarter growth, with revenue up 13 percent year on year and 15 percent quarter on quarter, driven by the launch of the GPU as a Service business in September 2025.

Management reports GPUaaS revenue of $20 million in the fourth quarter of 2025 and projects $50 million to $60 million in 2026 based on existing contracts.

Looking ahead, ISAT says it expects to receive $700 million in the second or third quarter of 2026 from the transfer of its fiber optic network to form FiberCo with Arsari Group and Northstar Group.

With a 45 percent stake, ISAT will not consolidate FiberCo earnings but will retain operational control, while management sees the transaction as opening new growth opportunities in fiber, particularly in the fiber to the home segment.

Valuation

ISAT trades at a forward valuation that remains attractive relative to its improving earnings trajectory, with consensus implying meaningful upside as revenue quality and capital efficiency continue to strengthen, data from Investing.com shows.

On 2026 forecasts, ISAT is valued at around 4.6 times EV to EBITDA and 13.5 times forward earnings, a discount to regional telecom peers despite clearer earnings visibility and balance sheet strength.

The company net debt to EBITDA ratio of about 0.5 times provides ample headroom for network investment and strategic initiatives without stressing leverage, supporting a re rating case as earnings normalize.

Analyst fair value estimates cluster in the Rp 3,000 to Rp 3,300 range, implying upside of roughly 35 to 50 percent from recent trading levels, driven by expectations of mid to high single digit EBITDA growth in 2026.

Forward earnings are increasingly underpinned by structurally higher ARPU, which management expects to continue rising as pricing discipline improves and AI driven personalization deepens customer monetization.

Beyond the core mobile business, incremental value is expected from the GPU as a Service operation, which is fully contracted and forecast to deliver tens of millions of dollars in annual revenue with attractive margins.

The planned FiberCo transaction is also seen as valuation supportive, unlocking capital while preserving operational control and creating optionality for longer term growth in fiber to the home services.

Taken together, the combination of improving cash generation, disciplined capital structure, and emerging digital infrastructure revenues positions ISAT for multiple expansion as execution risks diminish.