Telecom Argentina (NYSE:TEO) Q4 2025 Earnings call March 11, 2026 11:00 AM ET Company ParticipantsFederico Pra - Interim CFOLuis Rial Ubago - Head of Investor RelationsLuis Rial UbagoGood morning. On behalf of Telecom Argentina, I would like to thank everybody for participating in this conference call. The participants of today's conference call are Roberto Nóbile, Chief Executive Officer, Federico Pra, Interim Chief Financial Officer, and myself, Luis Rial Ubago, Head of Investor Relations. The purpose of ...

Financial Data and Key Metrics Changes - Telecom's consolidated revenues totaled over $5.7 billion, up 53% year-over-year in constant Argentine pesos, primarily driven by the incorporation of TMA results [5] - Consolidated EBITDA margin reached over 30.3%, an increase of over 200 basis points compared to the same period in 2024, with a comparable EBITDA margin of 33.7% excluding TMA contributions [6][21] - Consolidated CapEx amounted to approximately $1.0 billion, an 88% increase in pesos versus fiscal year 2024, focusing on the expansion of fixed and mobile access networks [7][29] - Net debt to estimated pro forma EBITDA leverage ratio improved to around 1.7x in fiscal year 2025, reflecting a solid credit profile [8][34] Business Line Data and Key Metrics Changes - Service revenues reached over $5.4 billion, increasing 55% year-over-year in real terms, with mobile, broadband, and Pay TV service revenues growing at a weighted average growth rate of 7% [11][12] - Mobile subscriber bases of Telecom and TMA reached 19.9 million and 19.1 million accesses respectively, consolidating market leadership [10] - Broadband subscriber base increased by 3.2% year-over-year, reaching 4.2 million accesses, driven by higher FTTH adoption [14] - Pay TV subscriptions grew for the second consecutive year, with Personal Flow's unique customers increasing by over 490,000 or 33% compared to the previous year [16] Market Data and Key Metrics Changes - In Paraguay, revenues grew almost 7% year-over-year in U.S. dollars, with EBITDA increasing 12% year-over-year, reaching $115 million [18] - In Uruguay, the broadband market is developing, with potential for growth as customer additions began at the end of 2024 [19] Company Strategy and Development Direction - The company continues to prioritize the expansion of its 5G and FTTH networks, achieving record levels of deployment during the year [40] - A joint venture with Banco Macro was created to accelerate the growth of Personal Pay and expand its product offerings [20] - TMA is executing an efficiency plan to align its EBITDA margin with Telecom's margin, focusing on cost optimization and operational improvements [25] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the business model and the effectiveness of cost efficiency initiatives, with a strong improvement in EBITDA margin [40] - The company remains focused on sustaining long-term growth while maintaining sound financial management and a solid cash position [41][42] Other Important Information - The company was recognized with multiple awards for its financial strategy and execution, including the Southern Cone Deal of the Year for the acquisition of TMA [9][37] - Free cash flow reached over $0.6 billion in fiscal year 2025, with a cash position exceeding $0.5 billion at year-end [41] Q&A Session All Questions and Answers Question: What are the expectations for subscriber growth in the broadband segment? - The company noted a continued recovery in broadband demand dynamics, supported by FTTH expansion and improved customer acquisition strategies [40] Question: How is the integration of TMA progressing? - The integration is on track, with TMA showing significant improvements in profitability and operational efficiency, aligning its EBITDA margin closer to Telecom's [25] Question: What are the company's plans for future investments? - Future investments will focus on enhancing network quality and expanding digital financial services, with a strong emphasis on 5G and FTTH deployment [40]

Financial Data and Key Metrics Changes - Telecom Argentina's consolidated revenues reached over $5.7 billion, a 53% year-over-year increase in constant Argentine pesos, primarily due to the incorporation of Telefónica Móviles Argentina (TMA) results [5] - The consolidated EBITDA margin improved to over 30.3%, an increase of over 200 basis points compared to the previous year, with a comparable EBITDA margin of 33.7% excluding TMA contributions [6][20] - Consolidated CapEx was approximately $1.0 billion, an 88% increase in pesos compared to fiscal year 2024, focusing on expanding fixed and mobile access networks [7] Business Line Data and Key Metrics Changes - Service revenues reached over $5.4 billion, a 55% year-over-year increase in real terms, incorporating TMA's contribution [11] - Excluding TMA, total service revenues grew by 4% year-over-year in real terms, with mobile, broadband, and Pay TV service revenues growing at a weighted average rate of 7% [12] - The mobile subscriber base for Telecom and TMA reached 19.9 million and 19.1 million accesses respectively, consolidating market leadership [10] Market Data and Key Metrics Changes - In Paraguay, revenues grew almost 7% year-over-year in US dollars, with EBITDA increasing by 12% to $115 million [17] - The broadband customer base in Paraguay reached 345,000, while Pay TV subscribers amounted to 110,000 [17] - Personal Pay onboarded nearly 1 million clients in Paraguay, reflecting strong market performance [17] Company Strategy and Development Direction - The company continues to prioritize the expansion of its fiber to the home (FTTH) network and 5G infrastructure, marking the largest FTTH rollout since the Telecom-Cablevisión merger [29] - A joint venture with Banco Macro was created to enhance Personal Pay's growth and product offerings, aiming to deepen customer engagement across connectivity and financial services [19] - TMA is executing an efficiency plan to align its EBITDA margin with Telecom's, focusing on cost optimization and operational improvements [24] Management's Comments on Operating Environment and Future Outlook - Management highlighted the recovery in service revenues and ARPU growth across all segments, reflecting disciplined pricing and improved commercial execution [39] - The company expressed confidence in its ability to sustain long-term growth through strategic investments in network quality and digital financial services [38] - Management noted that the acquisition of TMA did not negatively impact the leverage ratio, indicating a solid balance sheet and resilience to FX fluctuations [33] Other Important Information - The company recorded a consolidated net loss of approximately ARS 145 million in fiscal year 2025, compared to a net income of ARS 1.4 trillion in fiscal year 2024, primarily due to FX exchange losses [27][28] - Free cash flow reached over $0.6 billion, with a cash position exceeding $0.5 billion at year-end, providing financial flexibility [39] Q&A Session All Questions and Answers Question: What are the expectations for subscriber growth in the broadband segment? - The company noted a return to customer growth in broadband for the first year since 2021, supported by FTTH expansion and solid commercial performance [10] Question: How is the integration of TMA progressing? - Management indicated that TMA's efficiency plan is delivering meaningful improvements, with a significant recovery in EBITDA margin [24] Question: What is the outlook for the company's financial position? - The company emphasized its strong cash flow generation and improved debt maturity profile, positioning it well for sustained long-term growth [40]

Core Insights - Telecom Argentina S.A. reported a consolidated net loss of P$145,304 million for FY25, a significant decline from a net income of P$1,359,230 million in FY24, primarily due to higher exchange rate losses and depreciation of the Argentine peso [1][2][3] - Consolidated revenues for FY25 reached P$8,328,814 million, reflecting a 54.7% increase compared to FY24, driven by the inclusion of ten months of results from Telefónica Móviles Argentina (TMA) [1][2][3] - The company’s operating income before depreciation, amortization, and impairment increased by 64.8% to P$2,525,535 million, with an operating margin of 30.3% [1][2][3] Financial Performance - Service revenues totaled P$7,902,043 million in FY25, with mobile service revenues accounting for P$4,092,162 million, marking an 85.2% increase compared to FY24 [2][3] - The average revenue per user (ARPU) for mobile services increased by 15.8% in real terms, reaching P$9,081.9 [2][3] - Consolidated CAPEX for FY25 was P$1,485,577 million, representing a 98.3% increase from FY24, with a focus on expanding both fixed and mobile data services [1][2][3] Customer Base and Market Position - The total mobile customer base for Telecom (excluding TMA) decreased by 7.8% to 19.9 million, primarily due to disconnections of inactive prepaid lines [1][2][3] - TMA's mobile subscribers increased by 1.6% to 19.1 million, with a notable growth in postpaid customers [2][3] - The fixed broadband segment saw a 3.2% increase in accesses, totaling 4.2 million, while TV accesses increased by 1.4% to 3.3 million [1][2][3] Operational Highlights - The company’s operating costs, including depreciation and amortization, rose by 39.8% to P$7,878,767 million, with labor costs increasing significantly due to TMA's consolidation [4][5] - Telecom Argentina's headcount (excluding TMA) was reported at 18,690 employees as of December 31, 2025 [4][5] - The company was recognized for having the fastest 5G network in Argentina, enhancing its competitive position in service quality [2][3] Strategic Developments - A merger by absorption of TELEDIFUSORA SAN MIGUEL ARCANGEL S.A. (TSMA) was approved, effective January 1, 2026, consolidating operations under Telecom Argentina [5][6] - The company consolidated its commercial brands under the Personal brand, streamlining its market presence across various segments [5][6] - An agreement with Banco Macro S.A. was established to promote the growth of Micro Sistemas, enhancing the Personal Pay platform [5][6]