Breaking Down VEON Ltd. (VEON) Financial Health: Key Insights for Investors

You are looking at VEON Ltd. and wondering if their pivot to a digital operator model is actually paying off, especially with the geopolitical noise still in the background; honestly, the third-quarter 2025 numbers show a clear answer. The company isn't just surviving-it's accelerating, with Q3 total revenue hitting USD 1,115 million, a solid 7.5% year-over-year increase, but the real story is the margin expansion. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged 19.7% to USD 524 million, pushing the EBITDA margin to a strong 47.0%. That jump is driven by their digital strategy, where direct digital revenues exploded 63.1% year-over-year to represent 17.8% of total revenue. Plus, management is confident enough to raise the full-year 2025 local-currency EBITDA growth outlook to 16% to 18%, and they've authorized a USD 100 million buyback program, which is a clear signal of financial strength and a focus on shareholder returns, even as net debt (excluding leases) sits at a manageable USD 1,729 million.

Revenue Analysis

You're looking at VEON Ltd. (VEON) and wondering where the money is actually coming from, which is the right question for a global operator navigating complex frontier markets. The direct takeaway from the 2025 fiscal data is clear: the company is successfully executing a pivot, moving from a traditional telecom model to a digital operator, and that shift is driving significant top-line growth, especially in local currency terms.

For the third quarter of 2025 (Q3 2025), VEON Ltd. reported total revenue of USD 1,115 million. This represents a solid year-over-year (YoY) growth of 7.5% in reported USD terms. Here's the quick math: while the USD figure is strong, the real operational momentum is in the local currency (LCY) growth, which the company expects to be between 13% to 15% for the full year 2025. That foreign exchange (FX) difference is a constant headwind in these markets, but the underlying business is defintely expanding.

The revenue story is now split into three primary streams-traditional connectivity, direct digital services, and financial services-with the digital side becoming the key growth engine. The core business remains resilient telecom and infrastructure, but the accelerating growth in the digital segment is what's changing the profile of the company. In Q3 2025, the breakdown shows a clear trend:

• Direct Digital Revenue (DDR) hit USD 198 million.
• DDR's contribution to Group revenue reached 17.8%.
• Financial services revenues grew 32.6% to $107.5 million.

The significant change in revenue streams is the acceleration of Direct Digital Revenue (DDR), which includes services like mobile financial applications and entertainment platforms. This segment surged by 63.1% year-over-year in Q3 2025. This massive growth rate-four times the overall revenue growth-shows the strategic focus is paying off. It's not just a telecom company anymore; it's a digital ecosystem player. You can find more detail on the company's overall health in Breaking Down VEON Ltd. (VEON) Financial Health: Key Insights for Investors.

To be fair, the majority of revenue still comes from the traditional connectivity and infrastructure business, but the digital segments are rapidly closing the gap. This pivot is critical because digital services generally carry higher margins and are less susceptible to the pure price competition of the voice and data market. The full-year 2025 outlook reflects this trend, with total USD revenue growth expected between 7% to 8% YoY.

Here is a snapshot of the segment contribution and growth from the Q3 2025 results:

What this estimate hides is the potential impact of new strategic partnerships, like the non-exclusive global framework agreement with Starlink, which could unlock new, high-growth revenue streams in Direct to Cell connectivity in 2026 and beyond. So, the current numbers are strong, but the forward-looking opportunity is even more tied to this digital and infrastructure evolution.

Profitability Metrics

You're looking for a clear picture of VEON Ltd. (VEON)'s earning power, and the 2025 numbers tell an interesting story of strong operational control battling significant non-operating headwinds. The direct takeaway is that VEON's core business is highly efficient, evidenced by a Q3 2025 EBITDA margin of 47.0%, which is well above the global telecom average. But that high efficiency doesn't fully translate to the bottom line yet, due to factors like foreign exchange and one-time items.

Operational Efficiency: Gross and Operating Margins

In the telecommunications world, especially for a digital operator like VEON, the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin is the clearest measure of operational efficiency and cost management. It shows how well the company manages its core service delivery costs. Here's the quick math on VEON's Q3 2025 performance:

• Gross Profit Margin: The gross profit margin (Revenue minus Cost of Goods Sold) is not explicitly detailed in the summary Q3 2025 reports, but the strength of the EBITDA margin suggests a very high gross margin. For a services-heavy company, this initial margin is usually very high.
• Operating Profit Margin (EBITDA Margin): VEON reported Q3 2025 EBITDA of $524 million on $1,115 million in revenue, resulting in a margin of 47.0%. This reflects excellent cost discipline and scale efficiencies.
• Operating Profit Margin (EBIT Margin): The trailing twelve months (TTM) Operating Margin (EBIT) stood at 37.94% [cite: 13, from previous step], which accounts for depreciation and amortization (D&A), a major non-cash expense for an asset-heavy telecom.

This 47.0% EBITDA margin is defintely a bright spot. For context, the average EBITDA margin for large, global telecommunications operators has generally stabilized in the 34% to 38% range in early 2024. VEON's higher margin shows their strategy of focusing on frontier markets and accelerating digital services is working to keep core operating costs low relative to revenue. You can read more about their strategy here: Mission Statement, Vision, & Core Values of VEON Ltd. (VEON).

Net Profit Margin: The Bottom-Line Reality

The net profit margin-what's left after all expenses, including interest and taxes-shows the impact of VEON's capital structure and non-operating factors. This is where the complexity of operating in frontier markets becomes clear.

For the nine months ended September 30, 2025, VEON reported a consolidated Net Income of $563 million on $3,228 million in sales, giving a healthy Net Profit Margin of 17.44%. However, the third quarter alone showed a Net Loss of $131 million. Why the swing? Non-operating factors like foreign exchange losses and the timing of one-off gains (such as the gain on the sale of Deodar in Pakistan, which boosted earlier 2025 results) are the main culprits. The full-year 2025 forecast for Net Margin is still strong at an estimated 16.62% [cite: 8, from previous step], which suggests the Q3 loss is a temporary blip against a profitable year.

Here is a summary of the key profitability ratios based on the latest 2025 data:

The Digital Pivot and Cost Management

The trend in profitability is clearly upward in local currency terms. VEON is guiding for full-year 2025 local currency EBITDA growth of 16% to 18%, which is an impressive acceleration from previous forecasts. This growth is directly tied to operational efficiency, specifically the massive surge in direct digital revenues, which grew 63.1% year-over-year in Q3 2025 and now represent 17.8% of total revenue.

This pivot is the core of their cost management strategy. Digital services typically have a lower marginal cost of delivery than traditional telecom services, improving the overall margin mix. This allows VEON to keep its high EBITDA margin even while operating in high-inflation environments. The risk, of course, is that the high Net Loss in Q3 shows how vulnerable the final profit is to currency volatility and non-core events. Still, the underlying business is exceptionally profitable.

Next Step: You should model the impact of a 10% currency devaluation on the full-year $563 million 9M Net Income to stress-test the reported profitability.

Debt vs. Equity Structure

You need to know how VEON Ltd. (VEON) fuels its ambitious digital operator strategy, and the short answer is: it leans heavily on debt. The company's financial structure, typical of capital-intensive telecommunications firms, shows a significant reliance on debt financing, but recent strategic moves are aimed at rebalancing this. For instance, as of June 30, 2025, VEON's total borrowings stood at $2,919 million, a clear indicator of its reliance on creditors to fund operations and expansion.

Leverage: A High Debt-to-Equity Ratio

The core metric to watch here is the Debt-to-Equity (D/E) ratio, which tells you how much debt the company uses versus shareholder equity. For VEON Ltd., this ratio is high. As of June 30, 2025, the D/E ratio was approximately 3.762. This means for every dollar of equity, the company has about $3.76 in debt. To put this in perspective, the average D/E for the Wireless Telecommunication Services industry in 2025 is closer to 1.289. VEON's ratio is defintely elevated, but it has been on a downward trend, reducing from over 900% (or 9.035) in recent years to the current level, which is a positive sign of deleveraging. The high ratio reflects the capital-intensive nature of building and maintaining telecom infrastructure in its operating markets.

• Total Borrowings (June 30, 2025): $2,919 million
• Net Debt (Q3 2025, excluding leases): $1,729 million
• Debt-to-Equity Ratio (June 30, 2025): 3.762

Recent Debt and Credit Activity

The company is actively managing its debt profile, which is crucial for its frontier market operations. In 2025, VEON Ltd. has been busy in the capital markets. In July 2025, it successfully completed a private placement of $200 million in senior unsecured notes due in 2029, carrying an annual interest rate of 9.000%. This shows continued access to global capital markets for strategic funding. Plus, in March 2025, the company secured a 24-month, $210 million senior unsecured term loan from a consortium of international lenders. S&P Global Ratings affirmed VEON's credit rating at 'BB-' with a stable outlook in May 2025, reflecting manageable adjusted leverage and a stable financial policy.

Balancing Debt and Equity for Growth

VEON Ltd. uses a mix of debt and equity, but the strategy is currently focused on using debt to fund high-impact, long-term capital expenditure while concurrently using strategic transactions to manage its net debt. The debt is primarily used for network modernization and expansion, like the $1 billion partnership to rebuild Ukraine's telecom infrastructure. The equity side is being optimized through actions like the operational separation of JazzCash and the successful listing of the Kyivstar Group on Nasdaq in Q3 2025, which can generate cash inflows and potentially reduce the overall net debt figure. This is a smart way to get capital for growth while keeping your debt load from becoming unmanageable. You can learn more about the investors interested in this strategy by Exploring VEON Ltd. (VEON) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You're looking for a clear signal on whether VEON Ltd. (VEON) can meet its near-term obligations, and the short answer is: they are managing a tight liquidity position, but strong operational cash flow is providing a cushion. The key ratios, which are your first line of defense in a liquidity check, sit below the 1.0 mark, but the company's cash generation is a powerful counter-trend.

For the third quarter of 2025, VEON's Current Ratio and Quick Ratio both registered at 0.87. Here's the quick math: a ratio below 1.0 means that current liabilities (debts due within a year) are greater than current assets (assets expected to be converted to cash within a year). This suggests a structural reliance on either strong cash flow from operations or accessing external financing to cover short-term debt, which is common for capital-intensive telecom operators.

Still, the company's total liquidity position as of September 30, 2025, was substantial, maintaining $1.7 billion in total cash, cash equivalents, and deposits. This is a defintely important buffer against the low ratio figures.

Working Capital and Cash Flow Trends

The working capital trend for VEON Ltd. is showing a positive shift in its ability to manage the day-to-day cash cycle. Net cash flows from operating activities saw a significant increase in the first half of 2025, which management attributes partly to a positive movement in working capital changes. This means they are getting better at collecting receivables and managing payables, even with the structural liquidity constraint.

The cash flow statement for the six-month period ended June 30, 2025, paints a clearer picture of this internal strength:

• Operating Cash Flow (CFO): Net cash from operating activities rose to $569 million, up from $470 million in the same period in 2024. This is the core engine, and it's accelerating.
• Investing Cash Flow (CFI): Cash used in investing activities decreased to ($318 million), a lower outflow compared to ($546 million) in the prior year period. This reflects a more disciplined approach to capital expenditures (CapEx) or a shift in investment timing.
• Financing Cash Flow (CFF): Cash used in financing activities was ($667 million), which primarily reflects debt repayments and other financing movements.

This strong operating cash flow is what allows VEON Ltd. to operate with a Quick Ratio below 1.0 without immediate panic. The Latest Twelve Months (LTM) Equity Free Cash Flow (FCF) was a healthy $584 million as of Q3 2025, which is the cash left over after paying for CapEx and is available to service debt or return to shareholders.

Liquidity Concerns and Strengths

The primary liquidity concern is the low current and quick ratios, which signal a short-term vulnerability if operating cash flow were to suddenly dry up. However, the operational momentum and strategic actions are strong counter-strengths. The Group reduced its net debt (excluding lease liabilities) to $1,729 million and lowered its leverage ratio (Net debt to LTM EBITDA) to 1.13x as of Q3 2025. This reduction in leverage is a huge positive for solvency.

Here is a summary of the key liquidity metrics for a quick comparison:

The takeaway for you is that while the static balance sheet ratios are a red flag, the dynamic cash flow metrics show the company is generating enough cash to cover its short-term needs and is actively deleveraging. You should monitor the Mission Statement, Vision, & Core Values of VEON Ltd. (VEON) to ensure their strategic focus continues to support this cash-generative digital operator model.

Next Step: Portfolio Manager: Model a sensitivity analysis on the $569 million operating cash flow, testing a 10% and 20% drop to see how quickly the cash buffer is depleted.

Valuation Analysis

Is VEON Ltd. (VEON) overvalued or undervalued? Based on the latest fiscal year data, the market is pricing VEON Ltd. as significantly undervalued compared to its historical and peer averages, suggesting a strong upside for investors who can tolerate its geopolitical and emerging market risks.

To be fair, the company's valuation ratios look compellingly low, especially when you consider their growth in digital services. Here's the quick math on where VEON Ltd. stands as of November 2025, using the most recent trailing twelve months (TTM) data.

• Trailing Price-to-Earnings (P/E) Ratio: 6.05
• Price-to-Book (P/B) Ratio: 2.07
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: 4.66

A P/E ratio of 6.05 is defintely cheap, signaling the market is deeply skeptical of the sustainability of their earnings, which is common for companies operating in emerging and politically volatile markets. For context, the EV/EBITDA of 4.66x is notably below the industry median for telecommunications, which often sits closer to the 6.6x to 8.5x range. This divergence suggests a deep discount, but it also reflects the higher risk premium investors demand for VEON Ltd.'s operational footprint.

The stock price trend over the last 12 months shows a positive, albeit volatile, trajectory. The stock closed around $40.10 at the end of December 2024 and has climbed to approximately $52.89 by mid-November 2025. That's a solid rally, but it still leaves a lot of room for growth if you believe the analysts.

Speaking of analysts, Wall Street is leaning bullish, but with a wide range of conviction. The consensus rating is a Strong Buy, with an average 12-month price target of around $76.00. This target implies an upside of nearly 70% from the recent trading price of $44.77. What this estimate hides, however, is the geopolitical risk that is impossible to quantify in a simple model. You need to read Mission Statement, Vision, & Core Values of VEON Ltd. (VEON) to understand their long-term strategy in these challenging regions.

On the income side, don't look to VEON Ltd. for quarterly cash flow. The company's focus on deleveraging and reinvesting in its digital transformation means it is not currently paying a dividend. The dividend yield for the trailing twelve months ending in June 2025 was 0.00%, and the payout ratio was also 0.00. This is a growth-focused investment, not an income play. If you need a dividend, look elsewhere. If you're betting on digital service expansion in places like Pakistan and Ukraine, this valuation is compelling.

Your action here is clear: if you are comfortable with the inherent risk, the low valuation multiples and high analyst price targets suggest VEON Ltd. is currently a value opportunity. Finance: Review the latest Q3 2025 earnings report released on November 10, 2025, for any changes to the full-year guidance.

Risk Factors

You're looking at VEON Ltd. (VEON) and seeing a strong digital pivot, but the reality is that its operating environment introduces a level of risk that you simply can't ignore. The company's financial health is tightly linked to geopolitical stability and currency swings, so you need to map those exposures to their balance sheet impact right now.

The biggest external risk is the inherent volatility of the 10 frontier markets where VEON operates-places like Ukraine, Uzbekistan, and Pakistan. This is a double-edged sword: high growth potential, but high risk. Geopolitical shocks can immediately impact both operations and the local currency value of their earnings, creating a significant foreign currency exchange rate risk.

Here's the quick math on recent operational and financial headwinds:

• Divestment Charge: The sale of the Kyrgyzstan operations resulted in a non-cash charge of between $150 million and $200 million in the third quarter of 2025.
• Profitability Dip: Despite strong revenue growth, the company reported a net loss of $131 million in Q3 2025, a sharp reversal from the net income of $209 million a year prior.
• Leverage: While improving, the debt-to-equity ratio sits at 2.57 as of the third quarter of 2025, which is elevated and makes the company more sensitive to external macro pressures.

The core financial risk remains high leverage coupled with those external macro pressures, especially since VEON Ltd. (VEON) depends on its subsidiaries' ability to upstream dividends, which can be restricted by exchange controls in volatile regions.

Mitigation and Strategic Shifts

To be fair, VEON is defintely not sitting still, and its management is actively trying to de-risk the structure and improve liquidity. They've adopted a multi-layered risk management framework, including investments in satellite infrastructure and cybersecurity to ensure network continuity during crises. That's a smart move in their operating regions.

On the financial side, they are managing their debt maturity profile and capital structure aggressively. They completed a $100 million share buyback program in Q2 2025 and issued a $200 million private bond to enhance liquidity. Plus, as of June 30, 2025, 56% of the Group's total debt was fixed rate debt, which hedges against sudden interest rate spikes.

The strategic listing of Kyivstar Group Ltd. (Kyivstar Group) on the Nasdaq in Q3 2025 was a major de-risking event. This listing unlocked significant value, with VEON's 89.6% stake valued at $2.5 billion. This move provides a clear valuation anchor for a key asset and improves the overall capital structure.

For a deeper dive into the company's long-term vision that drives these strategic moves, you should review the Mission Statement, Vision, & Core Values of VEON Ltd. (VEON).

The company's focus on its Digital Operator (DO1440) strategy is a long-term hedge against pure telecom competition, but the operational risk remains: they must accelerate digital revenue growth-which was up 63.1% year-over-year to $198 million in Q3 2025-without eroding the overall margin profile. That's the tightrope walk for 2026.

The table below summarizes the key risks and the company's immediate actions, giving you a clear view of the trade-offs.

Your action item is to track the Q4 2025 earnings report for any change in the local currency EBITDA growth outlook, which was last raised to 16% to 18% for the full year. A miss there would signal that the macro risks are outpacing the digital pivot.

Growth Opportunities

The future growth for VEON Ltd. is defintely anchored in its aggressive pivot from a traditional telecom operator to a digital services powerhouse in high-growth frontier markets. The direct takeaway here is that management is confident enough to raise its full-year 2025 earnings guidance, projecting strong double-digit growth in local currency terms, which is a clear signal of operational momentum.

For the 2025 fiscal year, VEON Ltd. is now expecting local-currency revenue growth between 13% to 15% year-over-year, and a revised local-currency EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) growth of 16% to 18%, up from earlier guidance. What this estimate hides, however, is the impact of currency fluctuation: in US Dollar terms, the revenue growth is projected lower, at 7% to 8%, which is a real-world risk you need to factor in.

The key growth driver isn't just selling more minutes; it's selling more digital products. Direct digital revenue is the engine, surging 63.1% year-over-year in the third quarter of 2025 to hit $198 million, representing nearly a fifth of total group revenue. This is a land-and-expand strategy: get them on the network, then sell them high-margin digital services.

Product innovation is focused on what VEON Ltd. calls its 'AI1440' strategy, which embeds locally trained large-language-model (LLM) capabilities into its digital platforms. This isn't just tech buzz; it's about using augmented intelligence to drive inclusive AI innovation across their markets, like the deployment of the Kaz-LLM in Kazakhstan and the planned Ukrainian LLM by December 2025. They are building a moat with localized digital services.

Strategic moves are also unlocking value and expanding the market. The landmark listing of Kyivstar Group on the Nasdaq, completed in the third quarter of 2025, is a major value-realization initiative, with VEON Ltd.'s 89.6% stake valued at approximately $2.5 billion. Plus, the acquisition of Uklon, Ukraine's leading ride-hailing and delivery platform, for $158 million in March 2025, immediately boosted their digital services portfolio and expanded their market reach.

A major partnership is the non-exclusive global framework agreement signed with Starlink, making VEON Ltd. the first operator with a multi-country Direct-to-Cell satellite connectivity partnership. This is a smart move to extend coverage in remote areas, with initial messaging services expected to be operational in Ukraine by the fourth quarter of 2025.

VEON Ltd. maintains a strong competitive advantage in its core markets, which is crucial for a business model reliant on digital adoption. They are the number one telecoms brand in Ukraine (Kyivstar), Pakistan (Jazz), and Kazakhstan (Beeline). This market leadership gives them a massive, captive audience to cross-sell their digital financial services (JazzCash), entertainment, and healthcare offerings. They are also pursuing an 'asset-light' strategy, like the infrastructure pooling partnership with Engro Corp. in Pakistan, which reduces their capital expenditure (capex) intensity.

• Market leadership provides a huge customer base to upsell.
• Multiplay customers generate 3.7 times higher ARPU (Average Revenue Per User).
• Asset-light model frees up capital for digital investment.

Here's the quick math on multiplay: a customer using more than one service is worth nearly four times more than a voice-only user. That's why the digital push is so important. If you want a deeper dive into the risks and opportunities, you can recieve more analysis in Breaking Down VEON Ltd. (VEON) Financial Health: Key Insights for Investors.

Next step: Portfolio Manager: Model a scenario where VEON Ltd. achieves the high end of its LCY EBITDA guidance but the USD-LCY exchange rate worsens by 5% to assess the true impact on your US-denominated return by end of the year.