CHUNGHWA TELECOM CO LTD CHT

Chunghwa Telecom delivered an outperforming third quarter of 2025, with revenue, operating income, net income, and EPS all exceeding the upper end of forecasts. Q3 revenue reached TWD 57.92 billion, marking the highest third quarter revenue level in nine years, driven by robust core business and ICT services. ICT revenue alone set a new Q3 record, the highest since 2021. Strategically, the company's cybersecurity subsidiary, Chunghwa Telecom Security, successfully completed its public listing in September, with International Integrated Systems slated for an upcoming IPO. Additionally, InventAI, a new subsidiary focused on monetizing AI innovation, was launched in October.

The company's AI capabilities received significant recognition, with its first self-developed Vision-Language Model technology securing first place in the transportation category at the Global AI City Challenge, co-organized by NVIDIA. This award acknowledged the technology's superior accuracy and predictive capabilities in complex traffic scenarios. In Taiwan, Chunghwa Telecom holds the largest portfolio of AI-related patents in the industry, positioning it strongly for future AI development. These achievements underscore the company's commitment to maintaining its competitive advantages in technology.

Chunghwa Telecom further strengthened its leadership in Taiwan's mobile market during Q3 FY25. Mobile revenue market share climbed to a new high of 40.8%, and subscriber share among peers rose to 39.4%, representing a 1.6 percentage point year-over-year increase, primarily driven by continued growth in postpaid subscribers. The company also maintained its industry-leading position in 5G, with a 38.8% subscriber market share. 5G penetration among smartphone users increased to 44.7%, contributing to a robust 40% average monthly fee uplift from 5G migration. Mobile service revenue grew 3.3% year-over-year, and postpaid ARPU increased 1.8% year-over-year.

The fixed broadband business also demonstrated strong performance, with revenue growing 3.2% year-over-year. This growth was fueled by continued high-speed migration, with subscribers choosing speeds of 300 Mbps and above increasing by approximately 14% year-over-year, and 1 Gbps and above achieving multiple-fold expansion. This migration contributed to a 3% year-over-year rise in fixed broadband ARPU, an increase of TWD 23 per month. The company's multi-play packages, integrating mobile, fixed broadband, and WiFi services, achieved an impressive 22% year-over-year growth, marking 15 consecutive quarters of expansion.

Group ICT revenue saw a 14% year-over-year increase in Q3, with recurring ICT revenue growing 19%, supported by public cloud and government supply contracts. IDC, cloud, and cybersecurity services were key growth drivers, posting year-over-year increases of 34%, 24%, and 19% respectively, driven by strong demand from financial and government sectors. Big Data services surged 130% year-over-year due to the National Taxation System project. New project wins include the largest-ever network infrastructure project from a leading life insurance company and a landmark smart grid management platform for Taipower. The company also secured a project with Taiwan Railway for a smart real-time fleet management solution leveraging digital twin and 5G technologies.

Chunghwa Telecom's international subsidiaries delivered strong results, with the U.S. subsidiary achieving 70% year-over-year revenue growth, primarily from AIDC construction projects for Taiwan-based high-tech companies in Texas. The company is expanding its role in the global AI supply chain, anticipating additional related projects in Japan. Proprietary solutions were introduced globally, including cybersecurity services from CHT Security to Southeast Asia and Japan, and a Smart Poles solution in Thailand. Leveraging 5G private network and ICT capabilities, the company generated smart city revenue from Paraguay and Eswatini. The SJC2 submarine cable commenced operation, contributing revenue, with the Apricot cable expected to follow in Q4.

The company demonstrated its commitment to ESG practices by issuing a TWD 3.5 billion sustainability bond in Q3 to promote biodiversity, EV initiatives, and other environmental projects. This reflects its integration of ecological conservation, decarbonization, and green finance. Financially, total assets decreased 4% due to cash utilization for debt maturity, and total obligations decreased 10% from debt repayment and partial refinancing with the sustainability bond. The net debt-to-EBITDA ratio stood at an exceptionally low 4.5%, highlighting a highly deleveraged position and capacity for sustained investment.