Company Overview - Telefônica Brasil, known as Vivo, is a solid and profitable company in the Brazilian market with strong leadership in postpay, fiber optics, and digital solutions [1] - The company boasts above-average operating margins, low debt levels, and a generous dividend policy, positioning it well for future growth [1] Investment Potential - The focus on value companies with solid long-term potential indicates a favorable outlook for Telefônica Brasil as an investment opportunity [1]

Core Insights - Belpointe PREP, LLC has announced that its mixed-use development project, VIV, in St. Petersburg, Florida, is approximately 85% complete and is expected to begin leasing later this year [1][3] Group 1: Project Overview - VIV is strategically located in downtown St. Petersburg and aims to become a landmark destination with residential units, modern amenities, and vibrant retail spaces [2][5] - The project is designed to meet the growing demand for high-quality living options in St. Petersburg, providing a unique opportunity for residents and businesses [2][5] Group 2: Company Commitment - The CEO of Belpointe OZ expressed excitement about the project's progress and emphasized the company's commitment to delivering exceptional developments in high-growth markets [3] - The project is part of Belpointe OZ's strategy to create long-term value for investors [3] Group 3: Company Profile - Belpointe OZ is a publicly traded qualified opportunity fund listed on NYSE American under the symbol "OZ" and has over 2,500 units in its development pipeline across four cities, with a total project cost exceeding $1.3 billion [6] - The company has filed registration statements with the SEC for the offer and sale of up to $1.5 billion of Class A units [7]

Interim Financial Statements [Individual and Consolidated Interim Balance Sheets](index=10&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20INTERIM%20BALANCE%20SHEETS) As of March 31, 2025, consolidated total assets increased to BRL **126.61 billion**, liabilities grew to BRL **58.46 billion**, and equity decreased to BRL **68.14 billion**, primarily due to a BRL **2.0 billion** capital reduction Consolidated Balance Sheet Summary (in thousands of BRL) | Account | 03.31.2025 | 12.31.2024 | | :--- | :--- | :--- | | **Total Current Assets** | 25,797,480 | 22,814,327 | | **Total Non-current Assets** | 100,807,585 | 102,126,346 | | **TOTAL ASSETS** | **126,605,065** | **124,940,673** | | **Total Current Liabilities** | 26,757,842 | 24,257,939 | | **Total Non-current Liabilities** | 31,702,897 | 30,883,239 | | **TOTAL LIABILITIES** | **58,460,739** | **55,141,178** | | **Total Equity** | **68,144,326** | **69,799,495** | | **TOTAL LIABILITIES AND EQUITY** | **126,605,065** | **124,940,673** | - The company's equity decreased from BRL **69.73 billion** at year-end 2024 to BRL **68.08 billion** at the end of Q1 2025, mainly due to a BRL **2.0 billion** capital reduction executed during the quarter[15](index=15&type=chunk)[17](index=17&type=chunk) [Individual and Consolidated Statements of Income](index=12&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For Q1 2025, consolidated net operating revenue increased 6.2% to BRL **14.39 billion**, with net income attributable to controlling shareholders rising to BRL **1.06 billion** and basic EPS to BRL **0.65** Consolidated Statement of Income Summary (in thousands of BRL) | Account | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net operating revenue | 14,390,273 | 13,545,635 | +6.2% | | Gross profit | 6,354,391 | 6,027,143 | +5.4% | | Operating income | 1,984,968 | 1,910,488 | +3.9% | | Net income for the period | 1,056,270 | 896,109 | +17.9% | | Net income (Controlling shareholders) | 1,058,212 | 895,631 | +18.1% | | Basic and diluted EPS (R$) | 0.65 | 0.54 | +20.4% | [Individual and Consolidated Statements of Changes in Equity](index=13&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) Q1 2025 equity changes include a BRL **2.0 billion** capital reduction, BRL **1.06 billion** net income appropriation, BRL **326.5 million** share repurchases, and BRL **380 million** interim interest on equity declaration - A capital reduction of BRL **2.0 billion** was executed in Q1 2025[17](index=17&type=chunk) - The company repurchased BRL **326.5 million** worth of common shares for its treasury in Q1 2025[17](index=17&type=chunk) - Interim interest on equity declared in the period amounted to BRL **380 million**[17](index=17&type=chunk) [Individual and Consolidated Statements of Comprehensive Income](index=14&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) Consolidated comprehensive income for Q1 2025 was BRL **1.051 billion**, slightly below net income of BRL **1.056 billion** due to a BRL **5.3 million** net other comprehensive loss from derivatives and currency adjustments Consolidated Comprehensive Income (in thousands of BRL) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income for the period | 1,056,270 | 896,109 | | Other comprehensive income (loss) | (5,290) | 2,250 | | **Comprehensive income for the period** | **1,050,980** | **898,359** | [Individual and Consolidated Statements of Cash Flows](index=16&type=section&id=INDIVIDUAL%20AND%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q1 2025, net cash from operating activities was BRL **5.09 billion**, investing activities used BRL **2.38 billion**, and financing activities used BRL **1.21 billion**, resulting in a BRL **1.49 billion** net increase in cash and cash equivalents Consolidated Statement of Cash Flows Summary (in thousands of BRL) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash generated by operating activities | 5,090,843 | 4,925,206 | | Net cash used in investing activities | (2,383,618) | (1,909,384) | | Net cash used in financing activities | (1,213,209) | (618,349) | | **Increase in cash and cash equivalents** | **1,494,016** | **2,397,473** | - Significant cash outflows in financing activities included BRL **869.7 million** for debt and lease payments, and BRL **326.5 million** for treasury share repurchases[20](index=20&type=chunk) Notes to the Individual and Consolidated Quarterly Information [1. Operations](index=17&type=section&id=1.%20OPERATIONS) Telefônica Brasil provides diverse telecommunication services across Brazil, facing evolving ANATEL regulations, recent acquisitions like Samauma, and a significant migration from fixed-line concession to authorization regime - On March 21, 2025, Terra Networks acquired Samauma Brands for up to BRL **80 million**, strengthening the company's smartphone accessories market presence[53](index=53&type=chunk)[56](index=56&type=chunk) - The company finalized its STFC concession migration to an authorization regime with ANATEL on April 11, 2025, involving BRL **4.5 billion** in NPV investment commitments[37](index=37&type=chunk)[38](index=38&type=chunk) - Significant regulatory risks from ANATEL include potential changes to competition rules, interconnection fees, consumer rights, and spectrum licensing, which could adversely affect business and financial results[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - The company is adapting to Tax Reform (EC No. 132) introducing a dual VAT model (CBS and IBS) and a Selective Tax (IS), with the full impact pending further legislation[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) [2. Basis of Preparation and Presentation](index=24&type=section&id=2.%20BASIS%20OF%20PREPARATION%20AND%20PRESENTATION%20OF%20INDIVIDUAL%20AND%20CONSOLIDATED%20QUARTERLY%20FINANCIAL%20INFORMATION) The quarterly financial information for Q1 2025 was prepared under Brazilian CPC 21 and International IAS 34 standards, presented in Brazilian Reais, and consistent with 2024 annual accounting policies - The financial statements comply with both Brazilian (CPC 21) and International (IAS 34) interim reporting standards[74](index=74&type=chunk) - The accounting policies applied are consistent with those from the annual financial statements for the year ended December 31, 2024[89](index=89&type=chunk) - The company operates as a single operating segment: providing telecommunications services[88](index=88&type=chunk) [19. Provision and Contingencies](index=45&type=section&id=19.%20PROVISION%20AND%20CONTINGENCIES) As of March 31, 2025, consolidated provisions for probable losses totaled BRL **7.04 billion**, while contingent liabilities with possible risk amounted to BRL **45.99 billion**, primarily from tax disputes Consolidated Provisions for Probable Losses (in thousands of BRL) | Nature | 03.31.2025 | 12.31.2024 | | :--- | :--- | :--- | | Tax | 2,089,043 | 2,022,987 | | Regulatory | 984,726 | 1,151,095 | | Civil | 1,408,496 | 1,411,141 | | Labor | 1,005,763 | 935,541 | | Other | 1,550,120 | 1,619,121 | | **Total** | **7,038,148** | **7,139,785** | Consolidated Contingencies with Possible Risk of Loss (in thousands of BRL) | Nature | 03.31.2025 | 12.31.2024 | | :--- | :--- | :--- | | Tax | 41,549,347 | 40,850,071 | | Regulatory | 2,894,724 | 3,066,637 | | Civil | 1,962,944 | 2,000,926 | | Labor | 1,312,421 | 1,346,257 | | **Total** | **47,719,436** | **47,263,891** | - In December 2024, the company finalized a regulatory amnesty program in February 2025, settling pending federal obligations at approximately a **55%** discount[164](index=164&type=chunk)[165](index=165&type=chunk) [20. Loans, Financing, Debentures, and Leases](index=54&type=section&id=20.%20LOANS%2C%20FINANCING%2C%20DEBENTURES%2C%20LEASES%20AND%20OTHER%20CREDITORS) As of March 31, 2025, consolidated debt and lease liabilities slightly decreased to BRL **20.56 billion**, primarily comprising lease liabilities and debentures, with new Q1 2025 liabilities from acquisitions and tax programs Consolidated Debt and Lease Summary (in thousands of BRL) | Category | 03.31.2025 | 12.31.2024 | | :--- | :--- | :--- | | Leases | 14,864,936 | 15,246,606 | | Debentures (7th issue) | 3,600,772 | 3,695,214 | | Loans and financing | 2,093,682 | 1,804,710 | | **Total** | **20,559,390** | **20,746,530** | - The company's 7th issue of debentures are Sustainability-linked and complied with all covenants as of March 31, 2025[185](index=185&type=chunk)[187](index=187&type=chunk) - New Q1 2025 financing events include BRL **58.3 million** from Samauma acquisition, BRL **52.4 million** for a Minas Gerais ICMS tax program, and BRL **176.6 million** for the federal Desenrola Program[189](index=189&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [23. Equity](index=58&type=section&id=23.%20EQUITY) Q1 2025 equity management included a BRL **2.0 billion** capital reduction, a new BRL **1.75 billion** share buyback program with BRL **326.5 million** repurchased, a reverse stock split followed by a split, and BRL **380 million** in interim interest on equity declared - A BRL **2.0 billion** capital reduction became effective in February 2025, with a BRL **1.233 per share** payment scheduled for July 15, 2025[203](index=203&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) - A new share buyback program for up to BRL **1.75 billion** was approved on February 25, 2025, with **6.64 million** common shares repurchased for BRL **326.5 million** in Q1 2025[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk) - The company completed a reverse stock split (**40-for-1**) followed by a split (**1-for-80**) on April 15, 2025, to increase share liquidity[208](index=208&type=chunk)[211](index=211&type=chunk) Interim Interest on Equity Declared for 2025 (in thousands of BRL) | Approval Date | Gross Amount | Net Value | Payment Limit | | :--- | :--- | :--- | :--- | | 13.02.2025 | 180,000 | 153,000 | 30.04.2026 | | 13.03.2025 | 200,000 | 170,000 | 30.04.2026 | | **Total** | **380,000** | **323,000** | | [24. Net Operating Revenue](index=65&type=section&id=24.%20NET%20OPERATING%20REVENUE) In Q1 2025, consolidated net operating revenue reached BRL **14.39 billion**, primarily driven by service revenue growth to BRL **13.38 billion** and increased sale of goods revenue to BRL **1.01 billion** Consolidated Net Operating Revenue Breakdown (in thousands of BRL) | Revenue Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Services | 13,378,802 | 12,594,113 | | Sale of goods | 1,011,471 | 951,522 | | **Total Net Operating Revenue** | **14,390,273** | **13,545,635** | - No single customer accounted for more than **10%** of the company's operating revenue in Q1 2025 or Q1 2024[236](index=236&type=chunk) [28. Balances and Transactions with Related Parties](index=67&type=section&id=28.%20BALANCES%20AND%20TRANSACTIONS%20WITH%20RELATED%20PARTIES) The company conducts arm's length transactions with Telefónica Group related parties, with key balances including BRL **48.1 million** in receivables and BRL **564.7 million** in payables, and BRL **25.2 million** in Q1 2025 key management compensation - Major related party transactions involve services with Telefónica Group companies, including Telefónica Global Solutions, FiBrasil, and Telefónica S.A[242](index=242&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) Key Management Compensation (Consolidated, in thousands of BRL) | Period | Total Compensation | | :--- | :--- | | Q1 2025 | 25,166 | | Q1 2024 | 19,352 | [31. Financial Instruments and Risk and Capital Management](index=74&type=section&id=31.%20FINANCIAL%20INSTRUMENTS%20AND%20RISK%20AND%20CAPITAL%20MANAGEMENT) The company manages market risks using non-speculative derivatives like swaps, with a BRL **914.4 million** notional value as of March 31, 2025, while its capital management focuses on credit rating and capital allocation, alongside liquidity and credit risk controls - The company uses derivative instruments, primarily swaps, to hedge against inflation (IPCA) and foreign exchange risks (USD, EUR) on its liabilities[258](index=258&type=chunk)[266](index=266&type=chunk) - A sensitivity analysis indicates a **50%** adverse change in risk variables would result in a net negative impact of BRL **17.2 million** on the derivative portfolio's fair value[273](index=273&type=chunk) - The company's capital management focuses on maintaining a strong credit rating and maximizing shareholder value through dividends and share buybacks[286](index=286&type=chunk)[287](index=287&type=chunk) - Credit risk from accounts receivable is managed through strict customer base control, credit scoring, and service cut-offs for overdue invoices[298](index=298&type=chunk)[299](index=299&type=chunk) [35. Subsequent Events](index=87&type=section&id=35.%20SUBSEQUENT%20EVENTS) Subsequent events include the April 1, 2025, declaration of BRL **240 million** in gross interest on equity, the April 11, 2025, signing of the ANATEL Single Authorization Term, and joining a Rio Grande do Sul tax amnesty program on April 15, 2025 - On April 1, 2025, the Board declared BRL **240 million** in gross interest on equity, payable by April 30, 2026[320](index=320&type=chunk) - The company signed the Single Authorization Term with ANATEL on April 11, 2025, concluding its STFC concession migration to a private authorization regime[323](index=323&type=chunk) - On April 15, 2025, the company joined a Rio Grande do Sul tax amnesty program to settle BRL **163.5 million** in ICMS debts for a reduced BRL **73.6 million**, payable in installments[324](index=324&type=chunk)[325](index=325&type=chunk)

Technical Analysis - Telefonica Brasil S.A. (VIV) has reached a key level of support, with its 50-day simple moving average crossing above its 200-day simple moving average, indicating a "golden cross" [1] - A golden cross is a bullish technical chart pattern that suggests a potential breakout, characterized by a short-term moving average surpassing a long-term moving average [2] Stock Performance - VIV shares have increased by 10.3% over the past four weeks, indicating positive momentum [3] - The company currently holds a 3 (Hold) rating on the Zacks Rank, suggesting potential for further gains [3] Earnings Outlook - There has been a positive shift in earnings estimates for VIV, with one revision higher and no downward revisions in the past two months, leading to an increase in the Zacks Consensus Estimate [3][4] - The combination of positive earnings outlook and technical indicators positions VIV as a stock to watch for potential gains in the near future [4]

Core Insights - Telefônica Brasil reported strong operating performance in 1Q25, leading to significant growth in EBITDA and net income [2][4][6] Financial Performance - Net Operating Revenue reached R$14,390 million, a 6.2% increase YoY, driven by mobile services and fiber revenues [2][3] - EBITDA grew by 8.1% YoY to R$5,704 million, with an EBITDA margin of 39.6%, up 0.7 percentage points from the previous year [2][4] - Net Income attributed to Telefônica Brasil was R$1,058 million, reflecting an 18.1% increase YoY [2][6] - Earnings per Share (EPS) increased by 20.3% YoY to R$0.65 [2] Revenue Breakdown - Mobile Services revenue increased by 6.5% YoY to R$9,272 million, supported by a 10.3% growth in postpaid revenue [2][3] - FTTH revenue grew by 10.6% YoY to R$1,899 million, with the FTTH network reaching 29.6 million homes passed [2][4] - Corporate Data, ICT, and Digital Services revenue rose by 15.8% YoY to R$1,312 million [2][4] Cost and Cash Flow - Total Costs increased by 5.1% YoY to R$8,687 million [2] - Operating Cash Flow totaled R$3,835 million, a 12.7% increase YoY, with an OpCF margin of 26.7% [2][5] Capital Expenditure - CAPEX for 1Q25 was R$1,869 million, a slight decrease of 0.3% YoY, representing 13.0% of revenues [2][5] - Investments focused on enhancing the 5G network, which is now available in 519 cities, covering 62% of the Brazilian population [5] Shareholder Returns - The total remuneration paid to shareholders reached R$2,576 million by the end of April 2025, with a commitment to distribute at least 100% of net income for fiscal years 2024 to 2026 [6][7]

Core Points - Telefônica Brasil S.A. filed its annual report on Form 20-F for the fiscal year ended December 31, 2024, with the U.S. Securities and Exchange Commission on February 27, 2025 [1] - The 2024 Annual Report is accessible on both the SEC's website and the Company's website [1] - Shareholders can request a hard copy of the complete audited financial statements free of charge [1]

Financial Performance - Net cash provided by operations was R$19.9 billion in 2024, compared to R$18.8 billion in 2023 and R$18.9 billion in 2022 [702]. - The company distributed dividends and interest on shareholders' equity of R$3.1 billion in 2024, down from R$3.4 billion in 2023 and R$5.1 billion in 2022 [701]. - Total long-term debt, including loans, financing, leases, and debentures, is R$12,728.5 million as of December 31, 2024 [693]. - Total contractual obligations as of December 31, 2024, amount to R$21,573.3 million, with R$6,480.0 million due in less than 1 year [690]. Capital Expenditures and Investments - Capital expenditures for the year ended December 31, 2024, totaled R$9.2 billion, primarily for network expansion [698]. - Investments in research and development for 2024 were R$25.8 million, a decrease from R$57.9 million in 2023 [713]. - The company expects to meet 2025 capital requirements primarily from cash generated from operations [702]. Brand and Market Position - The "Vivo" brand was valued at R$3 billion in 2024, ranking tenth among the most valuable brands in Brazil [716]. Strategic Focus and Innovation - The company is focusing on expanding its product offerings in health care, fintech, and connected home services [712]. - Vivo plans to invest in digital services and innovative value propositions across various sectors, including education, healthcare, and smart homes, to enhance customer relationships and increase revenue per user [720]. - In the B2B segment, digitization efforts are prioritized, driving demand for connectivity services and creating opportunities in Cloud, Cybersecurity, IoT, and Big Data, with Vivo launching the Open Gateway initiative [721]. - Customer experience differentiation will be enhanced through generative AI, with Vivo committed to providing engaging experiences via the Vivo App [722]. - Vivo aims to become a Net Zero company by 2035, five years ahead of schedule, aligning with the United Nations' Sustainable Development Goals and fostering innovation in a diverse environment [724]. - The company's strategic pillars focus on Growth, Profitability, and Sustainability, guided by Telefonica Group's key drivers to advance digitalization [725]. Market Trends - The demand for ultra-broadband connectivity is expected to increase, particularly driven by fiber in small cities, amidst a more mature fiber market leading to increased competitiveness and potential consolidation [718]. - Brazil's main operators have launched 5G in all state capitals and major cities, achieving 5G coverage for half of Brazil's population, with Vivo focusing on expanding its 5G coverage and ensuring 4G and 4.5G availability [719]. Accounting Estimates - Critical accounting estimates are reviewed annually, impacting the financial statements based on management's judgment and expectations of future events [726]. - Significant estimates and judgments in financial statement preparation include trade accounts receivable, income taxes, and intangible assets [727].

[Form 6-K: Report of Foreign Private Issuer](index=1&type=section&id=Form%206-K) This Form 6-K details a recalculation of the capital reduction payout by Telefônica Brasil S.A [Notice to the Market: Recalculation of Capital Reduction Payout](index=2&type=section&id=NOTICE%20TO%20THE%20MARKET) Telefônica Brasil S.A. announced a recalculated per-share payout for its BRL 2.0 billion capital reduction, adjusted due to its Share Buyback Program - The adjustment in the per-share payout for the capital reduction is a direct consequence of the company acquiring its own shares through its Share Buyback Program[5](index=5&type=chunk) Recalculated Per-Share Payout | Description | Previous Amount (BRL) | New Amount (BRL) | | :--- | :--- | :--- | | **Amount per Share** | 1.22651176012 | **1.23337023478** | Capital Reduction Key Details | Detail | Information | | :--- | :--- | | **Total Reduction Amount** | BRL 2.0 billion | | **Record Date** | February 27, 2025 | | **Payment Date** | July 15, 2025 | - Following the record date of February 27, 2025, the company's shares will be traded ex-reimbursement rights[5](index=5&type=chunk)

Financial Data and Key Metrics Changes - Total revenues increased by 7.7% in Q4 2024, with mobile revenues growing by 7% and fixed revenues growing by 8%, marking the best performance for the fixed segment [11][12] - EBITDA increased by 7.8% year-over-year, maintaining a high EBITDA margin of 42.5% [30][32] - Net income for 2024 reached BRL 5.5 billion, a growth of 10.3% compared to the previous year, resulting in earnings per share of BRL 3.38, up 11% [32][34] - Operating cash flow grew by 11% year-over-year, reaching BRL 13.7 billion, representing almost 25% of total revenues [12][31] Business Line Data and Key Metrics Changes - The mobile segment accounted for 65% of total revenues, with postpaid revenues growing by 9.1% in Q4, representing 84% of total mobile service revenues [13][15] - Fixed revenues grew by 8%, driven by a 12.4% increase in FTTH and a 21.1% expansion in data, ICT, and digital services [13][19] - B2B revenue growth was 8.5% year-over-year, with digital B2B solutions expanding over 20% [23] Market Data and Key Metrics Changes - The number of homes connected via fiber grew by 12.7% in Q4, totaling 7 million connections [10][17] - The mobile customer base grew by 3.3% year-over-year, reaching over 102 million accesses, with postpaid users increasing to over 66 million [15][20] Company Strategy and Development Direction - The company is focusing on enhancing its digital ecosystem, with new businesses representing over 10% of total revenues [14] - Vivo aims to maintain selective expansion of its fiber footprint while increasing penetration of connections over its network [19] - The company is transitioning from a fixed voice concession to an authorization model, which is expected to unlock significant operational efficiencies and cost savings [37][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future performance, highlighting strong customer retention and low churn rates [10][16] - The company is committed to maintaining a shareholder remuneration policy of at least 100% of net income for 2025 and 2026 [34][46] - Management noted that the migration from copper to fiber will significantly improve operational efficiency and profitability [39][100] Other Important Information - Vivo joined the Dow Jones Best-in-Class World Index, highlighting its commitment to sustainability [25] - The company achieved a record in its recycling program, collecting 37 tonnes, three times more than the previous year [25] Q&A Session Summary Question: Dividend perspective for 2025 - Management confirmed a commitment to a payout of at least 100% of net income for 2025 and 2026, with BRL 4.2 billion already committed for shareholder remuneration [46][48] Question: Mobile service revenue decrease - Management explained that while there was a strong growth of 7% in Q4, the comparison to a very strong Q3 may have skewed perceptions, and they remain optimistic about future growth [54][56] Question: Margin expectations amid rising inflation - Management indicated that despite cost pressures, they expect to maintain strong margins due to operational efficiencies and digitalization efforts [62][70] Question: Concession migration and asset sales - Management outlined a four-year plan for the concession migration, emphasizing the potential for significant operational savings and revenue growth from migrating customers to fiber [64][66] Question: B2B revenue growth sustainability - Management confirmed that the strong growth in B2B revenues is expected to continue, driven by a focus on digital services and cloud solutions [78][81] Question: Timeline for customer migration from copper - Management stated that they have a plan to accelerate the migration of customers from copper to fiber, with significant benefits expected within the first four years [85][87] Question: Impact of concession migration on free cash flow - Management indicated that benefits from the migration will be captured over the next four years, with a focus on maximizing free cash flow [133][134] Question: Use of cash beyond shareholder remuneration - Management confirmed that they are exploring acquisition opportunities while maintaining a low debt level [131][132]

Core Viewpoint - Telefônica Brasil reported strong operating performance in Q4 2024, leading to significant growth in net income and free cash flow generation [2][3][4]. Financial Performance - Net Operating Revenue reached R$14,581 million in Q4 2024, a 7.7% increase from R$13,535 million in Q4 2023 [2]. - Net Income for 2024 was R$5,548 million, reflecting a 10.3% year-over-year growth [6]. - Earnings per Share (EPS) increased to R$3.38, up 11.3% from R$3.03 in 2023 [2]. Revenue Breakdown - Mobile Services revenue grew by 7.0% YoY to R$9,201 million, driven by a 9.1% increase in postpaid revenue [2][3]. - Fixed revenue increased by 8.0% YoY, with FTTH revenue rising by 12.4% and Corporate Data, ICT, and Digital Services by 21.1% [4]. - Total Subscribers reached 116,050 thousand, a 2.7% increase from the previous year [2]. Cost and Profitability - Total Costs amounted to R$8,383 million, a 7.7% increase YoY [2]. - EBITDA for Q4 2024 was R$6,199 million, with a margin of 42.5%, unchanged from Q4 2023 [2][4]. - Free Cash Flow surged by 82.4% YoY to R$1,080 million [2]. Capital Expenditure and Investments - CAPEX for 2024 totaled R$9,166 million, a 2.3% increase YoY, representing 16.4% of revenues [5]. - Investments focused on enhancing the 5G network, which now covers 61.3% of the Brazilian population [5]. Shareholder Remuneration - The company distributed R$5,845 million to shareholders in 2024, a 22.1% increase from R$4,786 million in 2023, achieving a payout ratio of 105.3% [6][7]. - Telefônica Brasil commits to distributing at least 100% of net income for the fiscal years 2025 and 2026 [7].