Financial Performance - For the three-month period ended September 30, 2025, the net operating revenue for the company was R$14,227,820, an increase from R$13,568,717 in the same period of 2024, representing a growth of 4.9%[17] - The gross profit for the nine-month period ended September 30, 2025, was R$19,290,494, compared to R$17,994,454 in 2024, reflecting an increase of 7.2%[17] - The net income for the period was R$1,888,359 for the three-month period ended September 30, 2025, up from R$1,667,444 in 2024, indicating a growth of 13.3%[17] - The company’s total operating income for the nine-month period ended September 30, 2025, was R$6,930,663, compared to R$6,206,315 in 2024, reflecting an increase of 11.7%[17] - Net income for the three-month period ended September 30, 2025, was R$1,888,359, compared to R$1,667,444 for the same period in 2024, representing an increase of 13.2%[20] - For the nine-month period ended September 30, 2025, net income reached R$4,291,025, up from R$3,784,905 in 2024, reflecting a growth of 13.4%[20] - Comprehensive income for the three-month period ended September 30, 2025, was R$1,979,011, compared to R$1,670,942 in 2024, indicating an increase of 18.4%[20] Assets and Liabilities - As of September 30, 2025, Telefônica Brasil S.A. reported total assets of R$ 122.08 billion, a slight decrease from R$ 123.41 billion as of December 31, 2024[15] - The company's current assets increased to R$ 22.64 billion from R$ 21.42 billion, representing a growth of approximately 5.7%[15] - Non-current assets decreased to R$ 99.44 billion from R$ 101.99 billion, a decline of about 2.5%[15] - Total liabilities as of September 30, 2025, were R$53,640,552, slightly down from R$53,679,809 at the end of 2024[16] - The company's total equity decreased to R$68,438,152 as of September 30, 2025, from R$69,729,582 at the end of 2024[16] - Current liabilities decreased to R$22,871,638 as of September 30, 2025, from R$23,429,881 at the end of 2024, a reduction of 2.4%[16] Cash Flow and Financial Management - Cash and cash equivalents stood at R$ 6.38 billion, up from R$ 6.27 billion, indicating a growth of about 1.8%[15] - The management has emphasized the importance of cash flow management, with cash flows for the nine-month period being a critical focus area[11] - Net cash generated by operating activities reached R$15,507,989, a slight increase from R$15,269,932 in the prior year[22] Regulatory and Market Environment - The company faces risks from regulatory changes that may affect interconnection fees, which are a significant part of its revenue[54] - ANATEL's new General Regulation on Consumer Rights will come into effect on September 1, 2025, replacing the previous regulation[55][56] - The dual VAT model established by the tax reform will replace several existing taxes, with a transition period from 2026 to 2032[109] Acquisitions and Investments - Terra Networks acquired Samauma Brands Electronics Trade, Import and Export Ltda. for up to R$66,451, with R$58,696 allocated to net assets acquired[59] - The acquisition of Samauma resulted in a preliminary fair value of net assets acquired amounting to R$4,562, with goodwill generated at R$54,134[68] - The merger of IoTCo Brazil into CloudCo Brazil was completed on July 1, 2025, aimed at reducing operational costs and leveraging internal synergies[77] - The acquisition of FiBrasil for R$850,000 will increase the Company's stake to 75.01%, enhancing its presence in the fiber optic network sector[82] Taxation and Legal Matters - The Company is contesting tax assessments totaling R$39,502,275 as of September 30, 2025, primarily related to goodwill amortization deductions[151] - The effective combined rate of Income Tax and Social Contribution on Net Income is expected to exceed the 15% minimum stipulated by the new OECD Pillar II rules, effective January 2025[153] - The total possible risk of loss for tax contingencies is R$42,048,569 as of September 30, 2025, compared to R$40,850,071 on December 31, 2024[191] Personnel and Social Charges - The company reported an increase in personnel, social charges, and benefits to R$4,823,646, up from R$4,617,839 in the previous year[21] - Social charges and benefits increased to R$806,525 thousand in Q3 2025 from R$563,773 thousand in Q4 2024, representing a 42.9% increase[178] Property, Plant, and Equipment (PP&E) - As of September 30, 2025, the total property, plant, and equipment (PP&E) for Telefônica Brasil S.A. is R$44,715,943, a decrease from R$46,796,018 on December 31, 2024, representing a decline of approximately 4.5%[167] - The company added R$6,327,883 in new PP&E during the nine-month period ending September 30, 2025, compared to R$7,271,393 in the same period of 2024, indicating a decrease of about 12.9%[167] - The cost of PP&E as of September 30, 2025, is R$189,220,367, up from R$184,954,868 on December 31, 2024, marking an increase of about 2.3%[167] Earnings and Shareholder Returns - The company reported basic and diluted earnings per common share of R$0.58782 for the three-month period ended September 30, 2025, compared to R$0.50851 in 2024, a rise of 15.6%[17] - The return of capital to shareholders amounted to R$1,500,000 on January 24, 2024, and R$2,000,000 on December 18, 2024[19]

Financial Data and Key Metrics Changes - Total revenues increased by 6.5% year over year, reaching R$14.9 billion, driven by mobile service revenues growing by 5.5% and fixed services by 9.6% [5][6] - EBITDA grew by 9% year over year, with a margin expansion to 43.4% [6][20] - Net income rose by 13.4% to R$4.3 billion, while free cash flow approached R$7 billion, with a margin of 15.6% [6][20] Business Line Data and Key Metrics Changes - Mobile postpaid segment grew by 7.3% year over year, now accounting for 68% of the total mobile customer base, which reached approximately 103 million connections [5][6] - Fiber business connected 7.6 million homes, a 12.7% increase year over year, with a total footprint covering 30.5 million homes [5][10] - New businesses accounted for 11.7% of total revenues over the last 12 months, up 2 percentage points year over year [7][12] Market Data and Key Metrics Changes - B2C revenues reached R$44.1 billion, up 5% year over year, with new businesses growing by 15.3% [11][12] - B2B revenues reached R$13.2 billion, up 15% year over year, driven by digital B2B growth of 34.2% [13] Company Strategy and Development Direction - The company focuses on diversifying and modernizing its revenue base to ensure sustainable growth in a competitive market [7][12] - Vivo aims to enhance its digital services and connectivity offerings, positioning itself as a comprehensive digital platform [12][40] - The company is committed to returning R$5.7 billion to shareholders by the end of September, reaffirming its focus on sustainable value creation [6][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the mobile service evolution despite a competitive environment, highlighting strong trends in postpaid growth and customer retention [24][48] - The company anticipates capturing cost efficiencies and synergies from the migration of concession-related assets, with benefits expected to ramp up by 2028 [39][59] Other Important Information - Vivo launched the Futuro Vivo Forest initiative aimed at environmental sustainability, which includes planting nearly 900,000 trees [15][16] - The company received multiple awards for its corporate governance and sustainability efforts, reflecting its commitment to shared values [16] Q&A Session Summary Question: Mobile services revenues deceleration - Management noted a 5.5% year-over-year growth in mobile service revenues, with postpaid growing 8% and prepaid declining by 7.6%, indicating a positive trend in prepaid [24][25] Question: Leasing efficiencies - Management discussed ongoing negotiations with tower companies to improve leasing costs, with expectations for positive trends in the coming years [28][59] Question: Prepaid trends and M&A appetite - Management highlighted a positive trend in prepaid services, driven by customer engagement and upselling, while expressing a cautious approach to M&A in the ISP space [34][37] Question: Competitive landscape in fiber business - Management acknowledged a competitive environment but emphasized strong performance in fiber revenue and customer acquisition, with a focus on convergence strategies [50][52] Question: CapEx evolution - Management indicated that CapEx is expected to continue its declining trend relative to revenues, even with the integration of FibraZio [52][54]

Financial Performance Highlights - Total mobile accesses reached 102.9 million, a 1.4% year-over-year increase[7] - Mobile service revenue increased by 5.5% year-over-year[7] - Fixed revenue grew by 6.5% year-over-year[7] - EBITDA reached R$11.2 billion, a 12.4% year-over-year increase, with a margin of 43.4%[7] - Operating Cash Flow (OpCF) amounted to R$6.9 billion, up 13.4% year-over-year, with a margin of 25.5%[7] - Free Cash Flow (FCF) reached R$4.3 billion[7] - Shareholder remuneration totaled R$5.7 billion as of September 2025[7] Revenue Growth Drivers - Postpaid mobile revenue increased by 7.0% year-over-year[13] - FTTH revenue increased by 10.6% year-over-year[10] - New businesses revenues increased by 22.8% year-over-year[10] Operational Improvements - FTTH accesses increased by 12.7% year-over-year to 7.6 million[7, 17] - Vivo repurchased 48.4 million shares, representing 1.5% of its current capital stock[47] B2B Segment Growth - Total B2B revenues increased by 25.0%[26] - Digital B2B revenues increased by 34.2%[26]

Core Insights - Telefônica Brasil reported a solid performance in Q3 2025, with significant increases in net operating revenue, EBITDA, and net income, indicating consistent growth across various segments [1][4][8]. Financial Performance - Net Operating Revenue reached R$14,949 million, a 6.5% increase year-over-year (YoY) [2]. - EBITDA grew by 9.0% YoY to R$6,486 million, with an EBITDA margin of 43.4%, up 1.0 percentage point (p.p.) YoY [2][6]. - Net Income for the quarter was R$1,888 million, reflecting a 13.3% YoY increase [2][8]. - Earnings per Share (EPS) increased by 15.6% YoY to R$0.59 [2]. Revenue Breakdown - Mobile Services revenue was R$9,715 million, up 5.5% YoY, driven by a strong postpaid customer base growth of 7.3% YoY [2][4]. - Fixed Revenues increased by 9.6% YoY, with FTTH growing by 10.6% YoY and Corporate Data, ICT, and Digital Services rising by 22.8% YoY [2][5]. Capital Expenditure and Investments - CAPEX for the quarter totaled R$2,603 million, a 4.3% YoY increase, representing 17.4% of revenues [2][7]. - Investments focused on enhancing the 5G network, which is now available in 683 cities, covering 66.7% of the Brazilian population [7]. Cash Flow and Shareholder Returns - Operating Cash Flow reached R$3,883 million, up 12.4% YoY, with a margin of 26.0% [2][8]. - The total remuneration paid to shareholders was R$5,676 million, with a commitment to distribute at least 100% of net income for fiscal years 2024 to 2026 [9].

Core Insights - The article emphasizes the importance of identifying undercovered stocks, particularly in Brazil and Latin America, while also occasionally addressing global large-cap stocks [1]. Group 1: Company Focus - The analyst holds a beneficial long position in the shares of VIV, indicating confidence in the company's future performance [2]. - The analysis is based on personal opinions and does not involve compensation from any company mentioned, ensuring an unbiased perspective [2]. Group 2: Industry Context - The research highlights the potential for investment opportunities in less popular stocks, suggesting that these may offer better returns compared to widely followed equities [1].

Core Insights - Belpointe PREP, LLC has officially begun leasing at VIV, a mixed-use development in St. Petersburg, FL, with move-ins starting in November 2025 [1][3] - VIV has received Temporary Certificates of Occupancy for all units, indicating readiness for residents [1][3] - The development features 269 units with premium amenities and ground-floor retail, positioned in a rapidly growing urban area [2][5] Company Overview - Belpointe OZ is a publicly traded qualified opportunity fund listed on NYSE American under the symbol "OZ" [6] - The company has over 2,500 units in its development pipeline across four cities, with a total project cost exceeding $1.3 billion [6] - Belpointe OZ is currently offering up to $750 million of Class A units for investment [7] Development Details - VIV is managed by Bozzuto Group, known for its award-winning property management services [2] - The development is strategically located in downtown St. Petersburg, providing residents with access to dining, cultural attractions, and parks [3][5] - The project aims to create a community-focused environment with modern living spaces and retail options [5]

[FORM 6-K Filing Information](index=1&type=section&id=FORM%206-K) This section provides details on Telefônica Brasil S.A.'s Form 6-K filing as a foreign private issuer for August 2025, including its SEC registration number [Report Details](index=1&type=section&id=REPORT%20OF%20FOREIGN%20PRIVATE%20ISSUER%20PURSUANT%20TO%20RULE%2013a-16%20OR%2015d-16%20UNDER%20THE%20SECURITIES%20EXCHANGE%20ACT%20OF%201934) This section identifies the filing as a Form 6-K report by Telefônica Brasil S.A., a foreign private issuer, for the month of August 2025, indicating its registration with the SEC under Commission File Number 001-14475 - Telefônica Brasil S.A. filed a Form 6-K report as a foreign private issuer for August **2025**[2](index=2&type=chunk) - The company's Commission File Number is **001-14475**[2](index=2&type=chunk) [Independent Auditor's Review Report](index=6&type=section&id=Report%20on%20review%20of%20individual%20parent%20company%20and%20consolidated%20interim%20financial%20statements) This report presents the independent auditor's review of Telefônica Brasil S.A.'s interim financial statements, confirming fair presentation in accordance with accounting standards [Introduction](index=6&type=section&id=Introduction) PricewaterhouseCoopers Auditores Independentes Ltda. reviewed Telefônica Brasil S.A.'s individual parent company and consolidated interim financial statements for the periods ended June 30, 2025, and December 31, 2024. Management is responsible for preparing these statements in accordance with CPC 21 and IAS 34 - PricewaterhouseCoopers reviewed the interim financial statements of Telefônica Brasil S.A. and its subsidiaries[6](index=6&type=chunk) - The review covered balance sheets, statements of income, other comprehensive income, changes in equity, and cash flows for periods ending June **30**, **2025**, and December **31**, **2024**[6](index=6&type=chunk) - Management is responsible for preparing the financial statements in accordance with CPC **21** and IAS **34**[7](index=7&type=chunk) [Scope of Review](index=6&type=section&id=Scope%20of%20review) The review was conducted according to Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 and ISRE 2410). It involved inquiries and analytical procedures, which are substantially less in scope than an audit, thus not providing audit-level assurance - The review adhered to Brazilian (NBC TR **2410**) and International (ISRE **2410**) Standards on Reviews of Interim Financial Information[8](index=8&type=chunk) - The scope of a review is significantly less than an audit, and therefore, an audit opinion is not expressed[8](index=8&type=chunk) [Conclusion](index=6&type=section&id=Conclusion) Based on the review, nothing came to the auditor's attention suggesting that the individual parent company and consolidated interim financial statements do not fairly present, in all material respects, the financial position as of June 30, 2025, and financial performance and cash flows for the periods then ended, in accordance with CPC 21 and IAS 34 - The auditor found no material misstatements in the interim financial statements, which are presented fairly in accordance with CPC **21** and IAS **34**[9](index=9&type=chunk) [Other Matters](index=7&type=section&id=Other%20matters) The interim financial statements include individual parent company and consolidated statements of value added for the six-month period ended March 31, 2025, presented as supplementary information under IAS 34 and prepared in accordance with CPC 09. The auditor concluded these statements were properly prepared and consistent with the interim financial statements - Statements of value added for the six-month period ended March **31**, **2025**, are included as supplementary information under IAS **34**[10](index=10&type=chunk) - These statements were prepared in accordance with CPC **09** and deemed properly prepared and consistent with the interim financial statements[10](index=10&type=chunk) [Quarterly Information](index=8&type=section&id=QUARTERLY%20INFORMATION) This section outlines the table of contents for the individual parent company and consolidated interim financial statements [Contents](index=8&type=section&id=Contents) This section provides a table of contents for the individual parent company and consolidated interim financial statements, including balance sheets, statements of income, changes in equity, comprehensive income, added value, cash flows, and detailed explanatory notes - The table of contents lists key financial statements and extensive explanatory notes[12](index=12&type=chunk) [Individual and Consolidated Interim Balance Sheets](index=9&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20INTERIM%20BALANCE%20SHEETS) This section presents the company's consolidated assets, liabilities, and equity, highlighting key changes over the period [Assets](index=9&type=section&id=Assets) Telefônica Brasil S.A. reported an increase in total consolidated assets to R$126,475,682 thousand as of June 30, 2025, from R$124,940,673 thousand at December 31, 2024. This was primarily driven by a significant rise in current assets, particularly cash and cash equivalents and prepaid expenses Consolidated Assets (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :----------------------- | :--------- | :--------- | :----- | :--------- | | **Total Assets** | 126,475,682 | 124,940,673 | 1,535,009 | 1.23% | | Current assets | 26,337,387 | 22,814,327 | 3,523,060 | 15.44% | | Non-current assets | 100,138,295 | 102,126,346 | (1,988,051) | -1.95% | | Cash and cash equivalents | 9,454,104 | 6,691,098 | 2,763,006 | 41.29% | | Prepaid expenses | 3,032,751 | 1,868,954 | 1,163,797 | 62.27% | [Liabilities and Equity](index=10&type=section&id=LIABILITIES%20AND%20EQUITY) Consolidated total liabilities increased to R$58,336,263 thousand as of June 30, 2025, from R$55,141,178 thousand at December 31, 2024, mainly due to higher current liabilities, including a significant increase in 'Return of capital to shareholders' and 'Other liabilities'. Total equity saw a slight decrease Consolidated Liabilities and Equity (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :-------------------------------- | :--------- | :--------- | :----- | :--------- | | **Total Liabilities** | 58,336,263 | 55,141,178 | 3,195,085 | 5.79% | | Current liabilities | 26,804,159 | 24,257,939 | 2,546,220 | 10.50% | | Non-current liabilities | 31,532,104 | 30,883,239 | 648,865 | 2.10% | | Return of capital to shareholders | 2,014,599 | 38,721 | 1,975,878 | 5103.00% | | Other liabilities (Current) | 1,431,693 | 678,263 | 753,430 | 111.08% | | **Total Equity** | 68,139,419 | 69,799,495 | (1,659,076) | -2.38% | [Individual and Consolidated Statements of Income](index=11&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) This section details the company's consolidated net income, revenue, and expenses for the reporting period [Consolidated Income Statement Highlights](index=11&type=section&id=Consolidated%20Income%20Statement%20Highlights) Telefônica Brasil S.A. reported a consolidated net income of R$2,395,075 thousand for the six-month period ended June 30, 2025, an increase of 12.57% compared to R$2,127,618 thousand in the same period of 2024. This growth was supported by a 6.65% increase in net operating revenue, despite a significant rise in financial expenses Consolidated Income Statement Highlights (in thousands of Reais) | Metric | 06.30.2025 (6-month) | 06.30.2024 (6-month) | Change | Change (%) | | :-------------------------- | :------------------- | :------------------- | :----- | :--------- | | Net operating revenue | 29,035,365 | 27,224,571 | 1,810,794 | 6.65% | | Gross profit | 12,973,106 | 12,098,060 | 875,046 | 7.23% | | Operating income | 4,229,523 | 3,951,696 | 277,827 | 7.03% | | Financial income (expense), net | (1,258,303) | (1,038,287) | (220,016) | 21.19% | | Profit before taxes | 2,971,220 | 2,913,409 | 57,811 | 1.98% | | Income and social contribution taxes | (576,145) | (785,791) | 209,646 | -26.68% | | Net income for the period | 2,395,075 | 2,127,618 | 267,457 | 12.57% | Basic and Diluted Earnings Per Common Share (R$) | Period | 06.30.2025 (6-month) | 06.30.2024 (6-month) | Change | | :----- | :------------------- | :------------------- | :----- | | EPS | 0.74130 | 0.64101 | 0.10029 | [Individual and Consolidated Statements of Changes in Equity](index=12&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) This section outlines the movements in the company's consolidated equity, including capital reductions and share repurchases [Equity Movements](index=12&type=section&id=Equity%20Movements) The consolidated equity decreased from R$69,799,495 thousand at December 31, 2024, to R$68,139,419 thousand at June 30, 2025. Key movements included a R$2,000,000 thousand reduction of share capital, R$728,897 thousand for share repurchases, and R$1,320,000 thousand in interim interest on equity distribution, partially offset by R$2,395,075 thousand in net income for the period Consolidated Equity Changes (in thousands of Reais) | Item | 12.31.2024 Balance | 06.30.2025 Balance | Change | | :--------------------------------------- | :----------------- | :----------------- | :----- | | Total Consolidated Equity | 69,799,495 | 68,139,419 | (1,660,076) | | Capital | 62,071,416 | 60,071,416 | (2,000,000) | | Repurchase of common shares for treasury | (199,999) | (928,896) | (728,897) | | Net income for the period | — | 2,395,075 | 2,395,075 | | Interim interest on equity distribution | — | (1,320,000) | (1,320,000) | [Individual and Consolidated Statements of Comprehensive Income](index=13&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) This section presents the company's consolidated comprehensive income, including net income and other comprehensive income components [Comprehensive Income Performance](index=13&type=section&id=Comprehensive%20Income%20Performance) Consolidated comprehensive income for the six-month period ended June 30, 2025, was R$2,392,702 thousand, a notable increase from R$2,141,606 thousand in the prior year. This was primarily driven by the net income for the period, despite negative other net comprehensive income Consolidated Comprehensive Income (in thousands of Reais) | Metric | 06.30.2025 (6-month) | 06.30.2024 (6-month) | Change | Change (%) | | :---------------------------------------------------------------- | :------------------- | :------------------- | :----- | :--------- | | Net income for the period | 2,395,075 | 2,127,618 | 267,457 | 12.57% | | Other net comprehensive income that may be reclassified to income | (2,374) | 13,993 | (16,367) | -116.97% | | Other net comprehensive income that cannot be reclassified to income | 1 | (5) | 6 | -120.00% | | Comprehensive income for the period – net of taxes | 2,392,702 | 2,141,606 | 251,096 | 11.72% | [Individual and Consolidated Statements of Added Value](index=14&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20ADDITIONAL%20VALUE) This section details the company's consolidated value added, showing revenue, inputs, and distribution of value [Value Added Performance](index=14&type=section&id=Value%20Added%20Performance) Consolidated total undistributed value added increased by **7.24%** to **R$15,255,243 thousand** for the six-month period ended June **30**, **2025**, compared to the same period in **2024**. This growth was primarily driven by higher revenue from sales of goods and services, despite increased inputs acquired from third parties Consolidated Statements of Added Value (in thousands of Reais) | Metric | 06.30.2025 (6-month) | 06.30.2024 (6-month) | Change | Change (%) | | :-------------------------------- | :------------------- | :------------------- | :----- | :--------- | | Revenue | 34,761,649 | 32,629,810 | 2,131,839 | 6.53% | | Inputs acquired from third parties | (13,063,729) | (12,297,122) | (766,607) | 6.23% | | Gross value added | 21,697,920 | 20,332,688 | 1,365,232 | 6.71% | | Total undistributed value added | 15,255,243 | 14,225,269 | 1,029,974 | 7.24% | | Equity remuneration | 2,395,075 | 2,127,618 | 267,457 | 12.57% | [Individual and Consolidated Statements of Cash Flows](index=15&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section summarizes the company's consolidated cash flows from operating, investing, and financing activities [Cash Flow Performance](index=15&type=section&id=Cash%20Flow%20Performance) Telefônica Brasil S.A. generated **R$10,963,371 thousand** in net cash from operating activities for the six-month period ended June **30**, **2025**, a **3.0%** increase from the prior year. However, net cash used in investing and financing activities increased, leading to a slight decrease in the overall increase in cash and cash equivalents Consolidated Cash Flow Summary (in thousands of Reais) | Metric | 06.30.2025 (6-month) | 06.30.2024 (6-month) | Change | Change (%) | | :------------------------------------ | :------------------- | :------------------- | :----- | :--------- | | Net cash generated by operating activities | 10,963,371 | 10,646,264 | 317,107 | 2.98% | | Net cash used in investing activities | (4,532,646) | (4,061,683) | (470,963) | 11.60% | | Net cash used in financing activities | (3,667,719) | (3,587,892) | (79,827) | 2.22% | | Increase in cash and cash equivalents | 2,763,006 | 2,996,689 | (233,683) | -7.80% | | Cash and cash equivalents at end of the period | 9,454,104 | 7,354,965 | 2,099,139 | 28.54% | [Notes to the Individual and Consolidated Quarterly Information](index=16&type=section&id=NOTES%20TO%20THE%20INDIVIDUAL%20AND%20CONSOLIDATED%20QUARTERLY%20INFORMATION) This section provides detailed explanatory notes to the individual and consolidated quarterly financial statements [1. Operations](index=16&type=section&id=1.%20OPERATIONS) This section outlines Telefônica Brasil S.A.'s core business as a telecommunications service provider, its regulatory environment, significant corporate events in 2025 including the acquisition of Samauma, and the potential impacts of Brazil's tax reform on consumption [1.a. Background Information](index=16&type=section&id=1.a.%20Background%20information) Telefônica Brasil S.A. is a publicly-held corporation providing telecommunications and value-added services in Brazil, part of the Telefónica Group. Its shares are traded on B3 and its ADSs on the NYSE - Telefônica Brasil S.A. provides telecommunications services, value-added services, and integrated solutions in Brazil[22](index=22&type=chunk) - The company is a member of the Telefónica Group, based in Spain, which held a **76.30%** direct and indirect interest as of June **30**, **2025**[23](index=23&type=chunk) - Its shares are traded on B3 S.A. – Brasil, Bolsa e Balcão, and its American Depositary Shares (ADSs) are traded on the New York Stock Exchange (NYSE)[24](index=24&type=chunk) [1.b. Operations](index=16&type=section&id=1.b.%20Operations) The Company offers various telecommunication services across Brazil, regulated by ANATEL. Key developments include the extension of 2,100 MHz radio frequency authorizations until 2038 and the migration of STFC concession to an authorization regime, involving R$4.5 billion in investments. The company faces ongoing regulatory risks, including changes to competition measures, interconnection fees, and consumer rights, with new regulations expected in late 2025 - The Company provides Fixed Switched Telephony Service (STFC), Multimedia Communication Service (SCM), Personal Mobile Service (SMP), Conditioned Access Service (SEAC), Private Limited Service (SLP), and Global Mobile Satellite Service (SMGS)[25](index=25&type=chunk) - ANATEL approved the extension of the Company's **2,100 MHz** radio frequency authorizations until April **2038**[35](index=35&type=chunk) - The Company migrated from a STFC concession regime to an authorization regime, involving **R$4.5 billion** in investments and termination of related administrative and judicial proceedings[38](index=38&type=chunk)[39](index=39&type=chunk) - The Brazilian telecommunications regulatory framework is continuously evolving, with potential impacts from asymmetric competition measures, interconnection fees, and consumer rights regulations[41](index=41&type=chunk)[42](index=42&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [1.c. Corporate Events in 2025](index=20&type=section&id=1.c.%20Corporate%20events%20in%202025) In March 2025, Terra Networks, a subsidiary, acquired Samauma Brands Electronics Trade, Import and Export Ltda. for up to R$80,000 thousand. This acquisition strengthens the Company's presence in smartphone accessories, integrating the 'i2GO' brand with its 'OVVI' brand. The preliminary Purchase Price Allocation (PPA) recognized a brand fair value of R$4,222 thousand and goodwill of R$59,597 thousand - Terra Networks acquired Samauma Brands Electronics Trade, Import and Export Ltda. for up to **R$80,000 thousand** on March **21**, **2025**[54](index=54&type=chunk) - The acquisition aims to strengthen the Company's presence in the smartphone accessories market, complementing its OVVI brand with Samauma's i2GO brand[56](index=56&type=chunk) Samauma Acquisition Financials (in thousands of Reais) | Item | Amount | | :-------------------------------- | :----- | | Total considered (purchase price) | 70,654 | | Fair value of net assets acquired | 11,057 | | Goodwill generated | 59,597 | | Fair value of i2GO brand | 4,222 | | Fair value of non-compete agreement | 9,346 | - From acquisition to June **30**, **2025**, Samauma contributed **R$15,112 thousand** in net operating revenue and a loss of **R$1,140 thousand** to the Company's results[69](index=69&type=chunk) [1.d. Reform of Taxes on Consumption](index=22&type=section&id=1.d.%20Reform%20of%20taxes%20on%20consumption) Constitutional Amendment No. 132, enacted in December 2023, and Complementary Law No. 214/2025, establish a tax reform on consumption, introducing a dual VAT model (CBS and IBS) and a Selective Tax (IS). A transition period from 2026 to 2032 is planned, but the full impact is pending further legislation. The reform had no effect on the interim financial statements for the period ended June 30, 2025 - Brazil enacted Constitutional Amendment No. **132** and Complementary Law No. **214/2025**, establishing a tax reform on consumption[70](index=70&type=chunk) - The reform introduces a dual VAT model (CBS and IBS) replacing PIS, COFINS, ICMS, and ISS, and a Selective Tax (IS) not applicable to telecommunications services[71](index=71&type=chunk)[72](index=72&type=chunk) - A transition period from **2026** to **2032** will see both old and new tax systems coexist[72](index=72&type=chunk) - The reform had no effect on the individual and consolidated quarterly information for the period ended June **30**, **2025**[73](index=73&type=chunk) [2. Basis of Preparation and Presentation of Individual and Consolidated Quarterly Financial Information](index=23&type=section&id=2.%20BASIS%20OF%20PREPARATION%20AND%20PRESENTATION%20OF%20INDIVIDUAL%20AND%20CONSOLIDATED%20QUARTERLY%20FINANCIAL%20INFORMATION) This section details the accounting standards and principles used for preparing the interim financial statements, including compliance with CPC 21 and IAS 34, the historical cost convention, and the classification of assets and liabilities. It also clarifies the functional currency, consolidation basis, and segment reporting approach [2.a. Statement of Compliance](index=23&type=section&id=2.a.%20Statement%20of%20compliance) The interim financial statements comply with CPC 21 and IAS 34, IFRS Accounting Standards, and CVM deliberations, consistent with OCPC 07 guidelines - Interim financial statements are prepared in accordance with CPC **21**, IAS **34**, IFRS Accounting Standards, and CVM deliberations[74](index=74&type=chunk) - The Company also considered guidelines from Technical Guidance OCPC **07**[75](index=75&type=chunk) [2.b. Basis of Preparation and Presentation](index=23&type=section&id=2.b.%20Basis%20of%20preparation%20and%20presentation) The financial statements are prepared under the historical cost convention, assuming operational continuity. Assets and liabilities are classified as current or non-current based on realization/settlement within 12 months or the operating cycle. Cash flows are presented using the indirect method, and the Statement of Added Value (DVA) is included as supplementary information - Financial statements are prepared under the historical cost convention, assuming operational continuity[76](index=76&type=chunk) - Assets and liabilities are classified as current if expected to be realized/settled within **12** months or the operating cycle[77](index=77&type=chunk)[78](index=78&type=chunk) - Statements of Cash Flows use the indirect method, and the Statement of Added Value (DVA) is presented as supplementary information[79](index=79&type=chunk)[80](index=80&type=chunk) [2.c. Functional and Reporting Currency](index=24&type=section&id=2.c.%20Functional%20and%20reporting%20currency) The financial statements are presented in thousands of Brazilian Reais (R$), which is the Company's functional and presentation currency. Foreign currency transactions are converted using specific exchange rates for assets, liabilities, equity, expenses, and revenues, with gains and losses recognized in comprehensive income or income statement - The functional and presentation currency is the Brazilian Real (**R$**)[82](index=82&type=chunk) - Foreign currency transactions are converted using closing exchange rates for assets/liabilities, average rates for expenses/revenues, and transaction date rates for capital/reserves[83](index=83&type=chunk) - Gains/losses from cumulative translation adjustments are recognized in comprehensive income; other conversion gains/losses are in the income statement[84](index=84&type=chunk) [2.d. Basis of Consolidation](index=24&type=section&id=2.d.%20Basis%20of%20consolidation) Equity interests in subsidiaries are valued using the equity method in individual parent company information and fully eliminated in consolidated information. Investments in jointly controlled companies are maintained under the equity method in consolidated statements. The acquisition of Samauma by Terra Networks is a new development - Equity interests in subsidiaries are valued using the equity method in individual statements and fully eliminated in consolidated statements[85](index=85&type=chunk) - Investments in jointly controlled companies are maintained under the equity method in consolidated statements[85](index=85&type=chunk) - The acquisition of Samauma by Terra Networks is a new development affecting consolidation[86](index=86&type=chunk) [2.e. Segment Reporting](index=24&type=section&id=2.e.%20Segment%20reporting) Management concluded that the Company and its subsidiaries operate in a single operating segment, providing telecommunications services, as all strategic, financial, and operational decisions are made on a consolidated basis - The Company and its subsidiaries operate in a single operating segment: providing telecommunications services[87](index=87&type=chunk) - This conclusion is based on all decisions being made on consolidated reports and a unified mission to provide quality telecommunications services[87](index=87&type=chunk) [2.f. Significant Accounting Practices](index=24&type=section&id=2.f.%20Significant%20accounting%20practices) The accounting policies adopted for the quarter ended June 30, 2025, are consistent with those used for the year ended December 31, 2024. The Company did not early adopt any new accounting statements or interpretations - Accounting policies are consistent with those used for the year ended December **31**, **2024**[88](index=88&type=chunk) - The Company did not early adopt new accounting statements or interpretations[89](index=89&type=chunk) [2.g. Significant Accounting Judgments, Estimates and Assumptions](index=25&type=section&id=2.g.%20Significant%20accounting%20judgments%20estimates%20and%20assumptions) The preparation of interim financial statements requires critical accounting estimates and judgments, which are reviewed annually. No significant changes were made to these estimates and judgments compared to those presented in the financial statements for the year ended December 31, 2024 - Preparation of financial statements involves critical accounting estimates and judgments, reviewed annually[90](index=90&type=chunk) - No significant changes in estimates and judgments were made compared to December **31**, **2024**[91](index=91&type=chunk) [3. Cash and Cash Equivalents](index=25&type=section&id=3.%20CASH%20AND%20CASH%20EQUIVALENTS) Consolidated cash and cash equivalents significantly increased to R$9,454,104 thousand as of June 30, 2025, from R$6,691,098 thousand at December 31, 2024. This growth was primarily in highly liquid short-term investments, mainly Bank Deposit Certificates (CDB) and Repurchase Agreements linked to the CDI rate Consolidated Cash and Cash Equivalents (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :-------------------- | :--------- | :--------- | :----- | :--------- | | Short-term investments | 9,400,098 | 6,542,862 | 2,857,236 | 43.67% | | Cash and banks | 54,006 | 148,236 | (94,230) | -63.57% | | **Total** | 9,454,104 | 6,691,098 | 2,763,006 | 41.29% | - Short-term investments primarily consist of highly liquid Bank Deposit Certificates (CDB) and Repurchase Agreements linked to the Interbank Deposit Certificate (CDI) rate, with original maturities up to three months[92](index=92&type=chunk) - The average remuneration for short-term investments was **99.12%** of the CDI on June **30**, **2025** (**99.7%** on December **31**, **2024**)[92](index=92&type=chunk) [4. Financial Investments](index=25&type=section&id=4.%20FINANCIAL%20INVESTMENTS) Consolidated non-current financial investments, primarily held as guarantees for lawsuits, decreased slightly to R$35,674 thousand as of June 30, 2025, from R$42,619 thousand at December 31, 2024 Consolidated Financial Investments (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :-------------------------- | :--------- | :--------- | :----- | :--------- | | Guarantee for legal proceedings | 35,674 | 42,619 | (6,945) | -16.29% | | **Total non-current** | 35,674 | 42,619 | (6,945) | -16.29% | - Financial investments are held as guarantees for lawsuits[93](index=93&type=chunk) [5. Trade Accounts Receivable](index=26&type=section&id=5.%20TRADE%20ACCOUNTS%20RECEIVABLE) Consolidated net trade accounts receivable decreased to R$9,524,355 thousand as of June 30, 2025, from R$9,841,741 thousand at December 31, 2024. This was mainly due to a reduction in gross accounts receivable and an increase in write-offs, despite a supplement to estimated losses Consolidated Trade Accounts Receivable (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :-------------------------- | :--------- | :--------- | :----- | :--------- | | Gross accounts receivable | 11,769,558 | 12,056,992 | (287,434) | -2.38% | | Allowance for expected losses | (2,245,203) | (2,215,251) | (29,952) | 1.35% | | **Net accounts receivable** | 9,524,355 | 9,841,741 | (317,386) | -3.22% | | Current | 9,306,170 | 9,471,592 | (165,422) | -1.75% | | Non-current | 218,185 | 370,149 | (151,964) | -41.05% | Changes in Consolidated Allowance for Expected Losses (in thousands of Reais) | Item | 06.30.2025 | 12.31.2024 | | :------------------------------------ | :--------- | :--------- | | Balance on December 31, 2023 | (2,437,845) | (2,437,845) | | Supplement to estimated losses, net of reversal | (787,144) | (740,576) | | Write-off | 757,700 | 1,105,485 | | Business combination - Samauma | (508) | — | | **Balance on June 30, 2025** | (2,245,203) | (2,215,251) | - Non-current accounts receivable include installments from resale of goods (B2B), Vivo Tech products, and Vivo Money FIDC credits[96](index=96&type=chunk) [6. Inventories](index=27&type=section&id=6.%20INVENTORIES) Consolidated net inventories decreased to R$991,821 thousand as of June 30, 2025, from R$1,097,238 thousand at December 31, 2024. This reduction was primarily in materials for resale, despite an increase in estimated losses from impairment or obsolescence Consolidated Inventories (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :------------------------------------ | :--------- | :--------- | :----- | :--------- | | Gross inventories | 1,128,466 | 1,196,836 | (68,370) | -5.71% | | Estimated losses from impairment or obsolescence | (136,645) | (99,598) | (37,047) | 37.20% | | **Net inventories** | 991,821 | 1,097,238 | (105,417) | -9.61% | | Materials for resale | 1,081,496 | 1,137,262 | (55,766) | -4.90% | - Inventories include mobile phones, SIM cards (chips), and IT equipment in stock[99](index=99&type=chunk) - Additions and reversals of the provision for inventory losses and obsolescence are included in Cost of goods sold[100](index=100&type=chunk) [7. Prepaid Expenses](index=27&type=section&id=7.%20PREPAID%20EXPENSES) Consolidated total prepaid expenses significantly increased to R$5,330,573 thousand as of June 30, 2025, from R$3,954,155 thousand at December 31, 2024. This rise was primarily driven by higher incremental costs for customer contracts and the recognition of Fistel Fees Consolidated Prepaid Expenses (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :-------------------------------- | :--------- | :--------- | :----- | :--------- | | **Total** | 5,330,573 | 3,954,155 | 1,376,418 | 34.81% | | Current | 3,032,751 | 1,868,954 | 1,163,797 | 62.27% | | Non-current | 2,297,822 | 2,085,201 | 212,621 | 10.20% | | Incremental costs (customers' contracts) | 3,084,309 | 2,842,824 | 241,485 | 8.50% | | Fistel Fees (TFF, Condecine and EBC) | 691,637 | — | 691,637 | — | - Incremental costs for customer contracts are mostly sales commissions, deferred as income under IFRS **15** over the contract term (usually two to six years)[101](index=101&type=chunk) - Fistel Fees refer to Inspection and Operating, Contribution for the Development of the National Film Industry (Condecine), and Brazilian Communications Company (EBC) fees, to be fully amortized by the end of **2025**[102](index=102&type=chunk) [8. Income and Social Contribution Taxes](index=28&type=section&id=8.%20INCOME%20AND%20SOCIAL%20CONTRIBUTION%20TAXES) This section details the Company's income and social contribution taxes, including recoverable and payable amounts, deferred taxes, and reconciliation of statutory to effective tax rates. It also addresses uncertain tax treatments and the expected impact of new OECD Pillar II rules [8.a. Income and Social Contribution Taxes Recoverable](index=28&type=section&id=8.a.%20Income%20and%20Social%20Contribution%20taxes%20recoverable) Consolidated income and social contribution taxes recoverable decreased to R$537,333 thousand as of June 30, 2025, from R$852,694 thousand at December 31, 2024, reflecting a reduction in both income and social contribution tax recoverable amounts Consolidated Income and Social Contribution Taxes Recoverable (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :-------------------------- | :--------- | :--------- | :----- | :--------- | | Income taxes | 477,679 | 711,237 | (233,558) | -32.84% | | Social contribution taxes | 59,654 | 141,457 | (81,803) | -57.83% | | **Total** | 537,333 | 852,694 | (315,361) | -37.00% | [8.b. Income and Social Contribution Taxes Payable](index=28&type=section&id=8.b.%20Income%20and%20Social%20Contribution%20taxes%20payable) Consolidated income and social contribution taxes payable increased to R$297,315 thousand as of June 30, 2025, from R$225,253 thousand at December 31, 2024. This was primarily due to a significant rise in current income and social contribution taxes payable Consolidated Income and Social Contribution Taxes Payable (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | Change (%) | | :-------------------------- | :--------- | :--------- | :----- | :--------- | | Income taxes | 220,566 | 170,125 | 50,441 | 29.65% | | Social contribution taxes | 76,749 | 55,128 | 21,621 | 39.22% | | **Total** | 297,315 | 225,253 | 72,062 | 32.00% | | Current | 76,752 | 9,898 | 66,854 | 675.43% | | Non-current | 220,563 | 215,355 | 5,208 | 2.42% | - The balances include **R$221,761 thousand** (June **30**, **2025**) and **R$216,497 thousand** (December **31**, **2024**) of taxes provisioned per IFRIC **23**[104](index=104&type=chunk) [8.c. Deferred Taxes](index=28&type=section&id=8.c.%20Deferred%20taxes) Consolidated net deferred tax liabilities increased to R$3,952,193 thousand as of June 30, 2025, from R$3,857,462 thousand at December 31, 2024. This was influenced by movements in temporary differences, provisions for contingencies, and goodwill, with some deferred tax assets remaining unrecognized for subsidiaries Consolidated Deferred Tax Liabilities, Net (in thousands of Reais) | Category | 06.30.2025 | 12.31.2024 | Change | | :------------------------------------ | :--------- | :--------- | :----- | | Total deferred tax liabilities, non-current | (3,952,193) | (3,857,462) | (94,731) | | Deferred tax assets | 8,932,500 | 8,947,536 | (15,036) | | Deferred tax liabilities | (12,884,693) | (12,804,998) | (79,695) | | **Deferred tax liabilities, net** | (3,952,193) | (3,857,462) | (94,731) |

Core Viewpoint - The article emphasizes the importance of value investing and highlights Telefonica Brasil (VIV) as a strong value stock opportunity based on its financial metrics and Zacks Rank system [2][4][7] Company Analysis - Telefonica Brasil (VIV) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for investment [4] - The stock's Forward P/E ratio is 14.48, significantly lower than the industry average of 17.95, suggesting it may be undervalued [4] - VIV's PEG ratio stands at 0.66, compared to the industry's average of 1.15, indicating favorable growth expectations relative to its price [5] - The P/B ratio for VIV is 1.69, which is lower than the industry average of 2.46, further supporting the notion of undervaluation [6] - Overall, VIV's financial metrics suggest it is likely undervalued, making it an attractive investment option at this time [7]

Group 1 - The recommendation for Telefônica Brasil (NYSE: VIV) shares has been raised from hold to buy following the disclosure of its 2nd quarter results [1] - The article serves as a continuation of the initial coverage published on July 11, 2024, indicating ongoing analysis and updates on the company's performance [1] - The analyst has over 5 years of experience in equity analysis in Latin America, providing clients with in-depth research and insights for informed investment decisions [1]

Core Viewpoint - The analysis suggests maintaining positions in Telefônica Brasil due to its defensive profile, leadership in postpaid and fiber services, and attractive dividend policy [1] Company Analysis - Telefônica Brasil is recognized for its strong position in the postpaid market and fiber services, which are critical for its competitive advantage [1] - The company's dividend policy is highlighted as a significant factor for investors, indicating a commitment to returning value to shareholders [1] Investment Strategy - The investment approach focuses on value companies with solid long-term potential, which aligns with the characteristics of Telefônica Brasil [1]