Indonesia’s telecommunications powerhouse, XLSmart Telecom Sejahtera (EXCL), has navigated the first half of 2026 with remarkable operational strength, as revealed in its latest financial disclosure and subsequent earnings call on Wednesday, August 12. Despite reporting a net loss, the company’s normalized net profit demonstrated an impressive fourfold surge, signaling a powerful underlying performance and strategic pivot that could redefine its market trajectory.
Unpacking EXCL’s Robust 1H26 Performance: Beyond the Bottom Line
Investors often look beyond the surface, and EXCL’s 1H26 results provide a compelling narrative of resilience and strategic execution. While the statutory net loss for 2Q26 stood at Rp277 billion, improving significantly from a Rp1.6 trillion loss in 2Q25, the true operational picture emerged from its normalized figures.
Normalized Net Profit Soars: A Clearer View of Profitability
The real beacon of EXCL’s financial health is its normalized net profit, which stripped away the noise of non-recurring integration costs, accelerated depreciation post-merger, and asset impairment. For 2Q26, this metric hit approximately Rp1.3 trillion, a substantial leap from Rp305 billion in 2Q25. Consequently, EXCL’s 1H26 normalized net profit catapulted to Rp2.7 trillion, a staggering fourfold increase compared to Rp693 billion in 1H25. This explosive growth underscores the company’s underlying operational efficiency and effective post-merger synergy realization.
Adding to this positive momentum, EXCL’s operational performance was bolstered by a strong increase in EBITDA. In 2Q26, EBITDA climbed to approximately Rp5.5 trillion, marking a solid 24% year-on-year (YoY) and 3% quarter-on-quarter (QoQ) growth. This pushed 1H26 EBITDA to roughly Rp11 trillion, a 25% YoY increase, with a stable EBITDA margin hovering at 45.7%. These figures paint a picture of a company with its operational engine firing on all cylinders.
ARPU Resilience: Quality Over Quantity in Subscriber Base
EXCL’s post-merger revenue growth is another testament to its strategic foresight. Total revenue for 2Q26 reached approximately Rp12.2 trillion, up 16% YoY and 3% QoQ. This propelled 1H26 revenue to Rp24 trillion, representing a robust 26% YoY increase and already accounting for 52% of the consensus 2026 full-year estimates.
A critical driver behind this revenue expansion was the average revenue per user (ARPU). While 2Q26 ARPU saw a slight 0.8% QoQ dip to Rp46,900, management at the earnings call attributed this minor fluctuation to seasonal adjustments in customer purchasing power post-Lebaran festivities. More importantly, ARPU demonstrated a significant 32% YoY increase, showcasing EXCL’s enhanced pricing power and value proposition.
Simultaneously, the company’s subscriber base is undergoing a strategic recalibration. After several quarters of decline post-merger in 2Q25, aimed at improving customer base quality, the number of subscribers in 2Q26 stabilized at 69.4 million, showing 0% QoQ change. This stabilization, coupled with strong ARPU growth, indicates a deliberate shift towards a more profitable and engaged user base.
Integration Headwinds Receding: A Path to Unfettered Growth
The drag of integration costs and accelerated depreciation, inherent to any large-scale merger, continued to impact EXCL’s reported net loss in 2Q26. However, signs of these headwinds waning are increasingly evident. Quarter-on-quarter, integration costs plummeted to Rp39 billion, a drastic reduction from the average of approximately Rp500 billion over the preceding three quarters. Similarly, accelerated depreciation expenses eased to Rp1.6 trillion, down from an average of about Rp2 trillion in the prior three quarters.
Management anticipates total accelerated depreciation for 2026 to be in the range of Rp4.5-5 trillion, with Rp3.7 trillion already booked in 1H26. This forward guidance suggests that a significant portion of these non-recurring charges is behind EXCL, paving the way for clearer earnings visibility and potentially stronger reported net profits in the coming periods. It is like a ship shedding barnacles, allowing it to cut through the water with greater speed and efficiency.
Investor Outlook: EXCL Poised for a Stronger Second Half
XLSmart Telecom Sejahtera’s 1H26 financial performance paints a compelling picture of a company effectively managing post-merger complexities while capitalizing on operational strengths. The significant surge in normalized net profit and robust EBITDA growth underscore its underlying profitability. As integration costs diminish and the subscriber base stabilizes with improving ARPU, EXCL appears strategically positioned to unlock greater shareholder value. Investors should watch for the continued unwinding of merger-related expenses and sustained ARPU expansion as key indicators of its ongoing success in Indonesia’s dynamic telecom market. The stage is set for a potentially strong second half of 2026.