Telefonica Brasil S.A.(VIV) - 2025 Q2 - Quarterly Report

FORM 6-K Filing Information 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 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] - The company's Commission File Number is 001-14475[2] Independent Auditor's Review Report 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 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] - 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] - Management is responsible for preparing the financial statements in accordance with CPC 21 and IAS 34[7] Scope of Review 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] - The scope of a review is significantly less than an audit, and therefore, an audit opinion is not expressed[8] 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] Other Matters 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] - These statements were prepared in accordance with CPC 09 and deemed properly prepared and consistent with the interim financial statements[10] Quarterly Information This section outlines the table of contents for the individual parent company and consolidated interim financial statements 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] Individual and Consolidated Interim Balance Sheets This section presents the company's consolidated assets, liabilities, and equity, highlighting key changes over the period 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 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 This section details the company's consolidated net income, revenue, and expenses for the reporting period Consolidated Income Statement Highlights 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 This section outlines the movements in the company's consolidated equity, including capital reductions and share repurchases Equity Movements 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 This section presents the company's consolidated comprehensive income, including net income and other comprehensive income components Comprehensive Income Performance 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 This section details the company's consolidated value added, showing revenue, inputs, and distribution of value Value Added Performance 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 This section summarizes the company's consolidated cash flows from operating, investing, and financing activities Cash Flow Performance 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 This section provides detailed explanatory notes to the individual and consolidated quarterly financial statements 1. Operations 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 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] - 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] - 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] 1.b. Operations 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] - ANATEL approved the extension of the Company's 2,100 MHz radio frequency authorizations until April 2038[35] - 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][39] - The Brazilian telecommunications regulatory framework is continuously evolving, with potential impacts from asymmetric competition measures, interconnection fees, and consumer rights regulations[41][42][50][51] 1.c. Corporate Events in 2025 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] - The acquisition aims to strengthen the Company's presence in the smartphone accessories market, complementing its OVVI brand with Samauma's i2GO brand[56] 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] 1.d. Reform of Taxes on Consumption 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] - 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][72] - A transition period from 2026 to 2032 will see both old and new tax systems coexist[72] - The reform had no effect on the individual and consolidated quarterly information for the period ended June 30, 2025[73] 2. Basis of Preparation and Presentation of Individual and Consolidated Quarterly Financial Information 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 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] - The Company also considered guidelines from Technical Guidance OCPC 07[75] 2.b. Basis of Preparation and Presentation 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] - Assets and liabilities are classified as current if expected to be realized/settled within 12 months or the operating cycle[77][78] - Statements of Cash Flows use the indirect method, and the Statement of Added Value (DVA) is presented as supplementary information[79][80] 2.c. Functional and Reporting Currency 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] - 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] - Gains/losses from cumulative translation adjustments are recognized in comprehensive income; other conversion gains/losses are in the income statement[84] 2.d. Basis of Consolidation 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] - Investments in jointly controlled companies are maintained under the equity method in consolidated statements[85] - The acquisition of Samauma by Terra Networks is a new development affecting consolidation[86] 2.e. Segment Reporting 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] - This conclusion is based on all decisions being made on consolidated reports and a unified mission to provide quality telecommunications services[87] 2.f. Significant Accounting Practices 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] - The Company did not early adopt new accounting statements or interpretations[89] 2.g. Significant Accounting Judgments, Estimates and Assumptions 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] - No significant changes in estimates and judgments were made compared to December 31, 2024[91] 3. Cash and Cash Equivalents 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] - The average remuneration for short-term investments was 99.12% of the CDI on June 30, 2025 (99.7% on December 31, 2024)[92] 4. Financial Investments 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] 5. Trade Accounts Receivable 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] 6. Inventories 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] - Additions and reversals of the provision for inventory losses and obsolescence are included in Cost of goods sold[100] 7. Prepaid Expenses 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] - 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] 8. Income and Social Contribution Taxes 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 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 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] 8.c. Deferred Taxes 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) |