FPT - 21% YoY NPAT-MI growth; Global IT trails expectations

1. Q1 2025 results:

- Revenue: VND16.1tn (USD629.7mn; +14% YoY; 21% of our full-year forecast).

- NPAT-MI: VND2,174bn (USD85.3mn; +21% YoY; 22% of our full-year forecast).

- We see potential downside risks to our 2025F forecasts as the technology segment (global IT & domestic IT) tracked behind our expectations, while telecom and education, investments & others were in line with our expectations, pending a more comprehensive review.

2. Segmental performance in Q1 2025:

* Global IT: Revenue +17% YoY; PBT +25% YoY.

- Growth was mainly driven by digital transformation (DX) services, which grew 21% YoY and contributed 44% of total global IT revenue.

- Japan remained the top-performing market with 30% YoY revenue growth. In contrast, revenue growth in the US and EU markets slowed to 8% and 25% YoY, respectively, reflecting cautious IT spending by businesses amid ongoing economic and geopolitical uncertainties. Revenue from the APAC region also slowed to only 5% YoY.

- Signed revenue (the value of new global IT contracts) grew 17% YoY to VND11.5tn (USD451mn).

- The segment trailed our expectations due to slower-than-anticipated growth in the US, APAC, and EU markets (while Japan’s market was in line with our forecasts).

* Domestic IT: Revenue +8% YoY; PBT -40% YoY.

- Revenue from the Made-by-FPT product ecosystem rose 18% YoY.

- We see potential downside risks to our domestic IT forecasts, driven by (1) weaker-than-expected Q1 2025 domestic IT revenue, and (2) the delayed commencement of the AI Factory, with management now guiding for revenue recognition to begin in Q2 2025.

* Telecom: Revenue +14% YoY; PBT +17% YoY.

- Telecom services delivered 15% YoY growth, in which broadband revenue grew 16% YoY and non-broadband revenue grew 14% YoY.

- The segment’s PBT margin improved 0.5 ppts to 21.1%, driven by improved broadband profitability and cost optimization initiatives.

- Overall performance was in line with expectations.

* Education, investments & others: Revenue +6% YoY; PBT +16% YoY.

- These results tracked in line with our expectations.

FPT’s Q1 2025 results

VND bn	Q1 2024	Q1 2025	YoY	Q1 2025/ Vietcap’s 2025F
Revenue	14,093	16,058	14%	21%
Technology	8,472	9,769	15%	19%
- Global IT	6,999	8,186	17%	21%
- Domestic IT	1,472	1,583	8%	15%
Telecom	4,012	4,582	14%	23%
- Telecom services	3,885	4,465	15%	23%
- Online advertising	127	117	-8%	15%
Education, investments & others	1,609	1,707	6%	26%
PBT	2,534	3,025	19%	22%
Technology	1,155	1,416	23%	20%
- Global IT	1,115	1,391	25%	22%
- Domestic IT	41	24	-40%	3%
Telecom	826	967	17%	23%
- Telecom services	805	943	17%	23%
- Online advertising	20	23	15%	12%
Education, investments & others	553	642	16%	27%
NPAT-MI	1,798	2,174	21%	22%

Source: FPT, Vietcap