Chunghwa Telecom's Q3 2025 Financial Performance: Assessing Revenue Stability and Profit Growth in a Shifting Telecom Landscape

In the ever-evolving telecom sector, Chunghwa Telecom (CHT) has demonstrated a mixed but strategically resilient performance in Q3 2025. The company's total revenue rose to NT$56.73 billion, reflecting a 4.8% year-over-year increase, according to the Q3 earnings report, driven by robust growth in its Enterprise Business Group (EBG) and stable consumer segments. However, challenges in its international operations and a cautiously optimistic 2025 guidance underscore the need for a nuanced evaluation of its revenue stability and profit growth potential.

Revenue Stability: A Tale of Two Segments

Chunghwa's EBG emerged as a standout performer, with ICT revenue surging 37% year-over-year, per the quarterly earnings, propelling overall EBG revenue to NT$18.98 billion-a 12.4% increase. This growth was fueled by high-margin services such as cloud computing, AIoT, and 5G private networks, aligning with global trends toward digital transformation noted in the 2025 guidance. Meanwhile, the mobile segment maintained its dominance, with post-paid average revenue per user (ARPU) holding steady at NT$556, according to the company guidance, while fixed broadband revenue grew 1.8% to NT$11.59 billion, supported by a 1.9% ARPU increase reported in the MarketBeat earnings.

However, the International Business Group faced headwinds, with revenue declining 16.8% to NT$2.20 billion, per the un-audited report. This contraction, attributed to reduced demand for international fixed voice and softening roaming services in the Q3 earnings report, highlights vulnerabilities in a segment that historically contributed to diversification. While the domestic segments provide a stable foundation, the international drag raises questions about geographic risk exposure.

Profit Growth: EBITDA Strength vs. EPS Caution

Chunghwa's EBITDA for Q3 2025 increased by 3.5% to NT$22.58 billion, maintaining a healthy margin of 39.8%, according to the quarterly earnings. This resilience underscores the company's operational efficiency and pricing power in core markets. Yet, the 2025 guidance projects a net earnings per share (EPS) range of NT$4.62–NT$4.82, as outlined in the PR Newswire release, a marginal decline or minimal growth compared to the prior year's NT$4.80 noted in MarketScreener. This suggests that while top-line growth is stable, profit margins may face pressure from rising capital expenditures and operating costs.

The company's 2025 guidance anticipates a NT$4.31–NT$4.38 billion increase in operating expenses, driven by infrastructure investments and talent development as described in the company guidance. These costs are tied to strategic initiatives such as expanding AI data centers, deploying 5G networks, and enhancing ESG practices, per Yahoo Finance coverage. While these investments are critical for long-term competitiveness, they may temporarily constrain net income growth.

Strategic Pillars: Balancing Innovation and Resilience

Chunghwa's 2025 strategy centers on three pillars: Sustainable Future, Smart Empowerment, and Digital Resilience. The company plans to allocate NT$32.36 billion to property, plant, and equipment, according to MarketScreener, with a focus on AI infrastructure, submarine cable construction, and 5G expansion as outlined in the company guidance. These moves position Chunghwa to capitalize on the AI-driven digital economy and address emerging demand for network resilience.

However, the success of these initiatives hinges on execution. For instance, the International Business Group's decline could persist if global demand for telecom services remains subdued. Conversely, the EBG's momentum in ICT services offers a counterbalance, particularly as enterprises prioritize cloud and AIoT solutions, as noted in the Q3 earnings report.

Conclusion: A Prudent Outlook for Long-Term Investors

Chunghwa Telecom's Q3 2025 results highlight a company navigating a dual challenge: sustaining revenue stability in core markets while investing aggressively in future growth. The EBG's 37% ICT revenue growth reported in the quarterly earnings and stable consumer segments provide a solid foundation, but the international segment's struggles and EPS guidance signal caution. For investors, the key lies in assessing whether the company's strategic investments in AI, 5G, and ESG will offset short-term margin pressures and unlock long-term value.

Historical data from earnings events further contextualizes this dynamic. A backtest analysis of CHT's earnings releases from 2022 to 2025 reveals a pattern of underperformance: while short-term reactions (first 10 trading days) appear neutral, the stock begins to underperform significantly around day 19, with a 30-day cumulative excess return of -3.3% and a win-rate dropping below 40% after the second week. This suggests that a simple buy-and-hold strategy may face challenges in the post-earnings period, reinforcing the need for patience and alignment with the company's long-term strategic vision.