Telco-to-tech provider Converge ICT Solutions Inc. is slashing its revenue and spending targets for the year, as profits plunged in the first half on the back of inflationary pressures.

Based on a regulatory disclosure, Converge is recalibrating its revenue target this year to a growth range of four to six percent, from an initial estimate of eight to 10 percent.

The company is adjusting its expectations downward, in line with the softer growth trajectory of its revenues, particularly in the residential segment.

While revenues went up by three percent to ₱22.46 billion from ₱21.78 billion a year ago, demand for residential services was relatively flat, with one-percent growth to ₱18.52 billion.

Even after expanding its subscriber base to 3.09 million by the first quarter, the total number of subscribers remained largely at the same level by the end of June, as inflationary pressures in the second quarter dampened demand.

This is in contrast to enterprise customers, which powered a 15-percent increase in revenues to ₱3.93 billion in the first half from ₱3.41 billion a year ago.

Despite revenues going up, net income in the first six months fell by eight percent to ₱5.49 billion from ₱5.95 billion last year, as expenses soared by nine percent to ₱7.99 billion.

Converge’s earnings before interest, taxes, depreciation and amortization (EBITDA) reached ₱13.27 billion, leading to a consolidated margin of 59.1 percent.

The company expects EBITDA margins for the year to be between 58 and 59 percent.

“While persistent inflationary pressures since the second quarter of 2026 present near-term macroeconomic headwinds, Converge remains operationally resilient,” the company said.

In line with this, Converge is lowering its capital expenditures (capex) for the year to ₱17 billion to ₱20 billion, from its initial projection of ₱18 billion to ₱23 billion.

The company’s capex for the first half stood at ₱5.7 billion, more than double the ₱2.6 billion recorded last year.

Converge is spending more this year as it looks to significantly deepen its presence in the Visayas and Mindanao, with the buildup of around 900,000 fiber ports.