RESULTS 2Q25 Telefônica Brasil S.A. Investor Relations July 28th, 2025 | VIVT | V | | --- | --- | | | 115 | | B3 LISTED | N | ***Este documento está clasificado como USO INTERNO por TELEFÓNICA. ***This document is classified as INTERNAL USE by TELEFÓNICA. This presentation may contain forward -looking statements concerning prospects and objectives regarding the capture of synergies, growth of the subscriber base, a breakdown of the various services to be offered and their respective results Our actual resul ...

Core Insights - Orange Group reported solid first-half results for 2025, with an EBITDAaL growth of 3.8% and an increase in organic cash flow by 7.7%, prompting an upgrade of the EBITDAaL growth target for the year [2][3][6] Financial Performance - Revenues for the first half of 2025 reached €19,853 million, a slight increase of 0.3% compared to the previous year [2][58] - EBITDAaL for the first half was €5,675 million, reflecting a growth of 3.8% [2][58] - Consolidated net income excluding the GEPP provision was €1,167 million, while including the provision, the net income was -€105 million [9][10] - eCAPEX for the first half was €3,023 million, up 4.1% year-on-year [11][58] - Free cash flow from telecom activities was €1,086 million, down 13.5% year-on-year due to license payment phasing [13][58] Regional Performance - France's revenues decreased by 2.2% to €8,569 million, with retail services stable [16][27] - Africa & Middle East segment saw a revenue increase of 12.8% to €4,140 million, marking the tenth consecutive half of double-digit growth [16][31] - European revenues remained stable at €3,495 million, with retail services growing by 1.2% [16][36] Operational Highlights - The mobile customer base reached 261.6 million globally, with a 6.4% increase, while fixed broadband accesses grew by 4.4% [7][36] - Orange maintained its leadership in mobile network quality in France for the 14th consecutive time [29] - The launch of a new division in Orange Business dedicated to defense and security aims to capitalize on opportunities in the sovereignty sector [5][42] Strategic Initiatives - Orange's sustainability efforts included issuing a €750 million sustainable bond and exceeding its 2025 target for reducing greenhouse gas emissions by 41% [19][20] - The company is focused on digital inclusion, having provided free digital training to 2.9 million beneficiaries since 2021 [21] Future Outlook - The full-year guidance for EBITDAaL growth has been raised to above 3% [6][17] - The company aims to achieve organic cash flow from telecom activities of at least €3.6 billion by the end of 2025 [17]

Core Viewpoint - Telefônica Brasil reported strong operating performance in 2Q25, leading to significant growth in revenue, EBITDA, and net income [1]. Financial Performance - Net Operating Revenue reached R$14,645 million, a 7.1% increase from R$13,679 million in 2Q24 [2]. - EBITDA grew by 8.8% YoY to R$5,933 million, with an EBITDA margin of 40.5%, up 0.6 percentage points from the previous year [4][6]. - Net Income attributed to Telefônica Brasil was R$1,344 million, reflecting a 10.0% increase compared to R$1,222 million in 2Q24 [6]. Revenue Breakdown - Mobile Services revenue increased by 7.3% YoY to R$9,555 million, driven by a 10.6% growth in postpaid services and a 5.1% increase in mobile ARPU, reaching R$31.1 [2][3]. - Fixed revenue rose by 8.0% YoY, supported by FTTH growth of 10.4% and Corporate Data, ICT, and Digital Services revenue growth of 20.7% [4]. Subscriber Growth - Total subscribers increased by 1.3% YoY, reaching 116,190 thousand, with postpaid customer base growing by 7.0% YoY to 68.5 million accesses [2][3]. Capital Expenditure - Capex for 2Q25 totaled R$2,439 million, a 4.2% increase YoY, representing 16.7% of revenues, reflecting a decrease in Capex intensity [5]. Cash Flow and Shareholder Returns - Operating Cash Flow was R$3,494 million, up 12.2% YoY, with a margin of 23.9% [6]. - The total remuneration paid to shareholders reached R$5,233 million, with commitments to distribute at least 100% of net income for fiscal years 2024 to 2026 [7].

Financing Overview - IDB Invest and Bladex are providing a financing package of up to $205 million to Telemóvil El Salvador, S.A. de C.V. (Tigo) for the expansion of its broadband network and mobile infrastructure [1][7] - The financing package includes a $150 million loan, with $75 million from each IDB Invest and Bladex, a $30 million Revolving Credit Facility (RCF), and a $25 million Digital Account Receivables Discount Facility, all aimed at enhancing Tigo's services [2] Project Objectives - The project aims to improve productivity, digital inclusion, and economic resilience by expanding and upgrading network infrastructure in response to expected surges in data traffic [3] - Enhanced broadband services are intended to unlock access to digital education, telehealth, and e-commerce opportunities for underserved populations [3] Company Profiles - IDB Invest is a multilateral development bank focused on promoting economic development in Latin America and the Caribbean through private sector financing, managing a portfolio of $21 billion [4] - Bladex, founded in 1979, promotes trade finance and economic integration in Latin America and the Caribbean, providing financial solutions to institutions and corporations in the region [5] - Tigo, a subsidiary of Millicom, has been a leader in El Salvador's digital evolution since 1992, offering high-speed internet, mobile services, and promoting financial inclusion through Tigo Money [6]

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Core Insights - Verizon reported better-than-expected Q2 earnings, leading to a rise in its stock price despite challenging macroeconomic conditions [1] Financial Performance - The company is taking steps to execute and drive efficiencies in its business operations [1]

Core Insights - The article discusses the contrasting dividend strategies of Alphabet and AT&T, highlighting the trade-off between high yield and growth potential in dividend-paying stocks [2][15]. Group 1: Alphabet - Alphabet initiated a dividend program last year and raised its payout by 5% to $0.21 per share, resulting in a yield of approximately 0.4% [4][5]. - Over the past five years, Alphabet's earnings per share have increased by 29.4% annually, with free cash flow reaching around $66.7 billion, of which less than 15% was used for dividends [5][11]. - Alphabet's strong market position in advertising and cloud computing, along with its dominance in the search engine and browser markets, positions it well for long-term growth [6][7]. Group 2: AT&T - AT&T's earnings per share have only increased by 15.8% over the past five years, partly due to the spinoff of media assets and loss of wireline connections [8][9]. - The company offers a high dividend yield of around 4%, which is about ten times that of Alphabet, but has not increased its dividend since a reduction in 2022 [10][11]. - AT&T's free cash flow was $19.6 billion over the past 12 months, more than double its dividend obligation, and is expected to remain sufficient despite a projected decline in wireline revenue [11][12]. Group 3: Investment Considerations - For long-term investors, Alphabet may provide better growth potential in dividend income, while AT&T may be more suitable for those closer to retirement seeking immediate income [15][16]. - If projected earnings growth rates continue, Alphabet's yield on cost could surpass AT&T's by 2035, making it a more attractive option for long-term investment [16].

Core Viewpoint - AT&T has shown strong performance in the stock market but experienced a pullback after failing to raise guidance following its second quarter results, which investors had anticipated after Verizon's positive outlook [1][13]. Subscriber Growth - AT&T added 479,000 retail postpaid subscribers in the second quarter, including 401,000 retail postpaid phone additions, benefiting from Verizon's price hike [2]. - The company lost 34,000 prepaid subscribers, which is considered less significant compared to postpaid subscribers [2]. Revenue Performance - Overall mobility-segment revenue increased by 6.7% to $21.8 billion, with mobility service revenue rising by 3.5% to $16.9 billion and equipment sales surging by 18.8% to $5 billion [3]. - Broadband ARPU climbed by 7.5% to $71.16, while fiber ARPU rose by 6.2% to $73.26, contributing to total consumer broadband revenue growth of 5.8% to $3.5 billion [4]. Fiber Investment Strategy - AT&T plans to ramp up fiber investments to reach 4 million new locations per year, aiming to double its fiber locations to 60 million by 2030 [5]. - The investment will be supported by new tax provisions allowing immediate full depreciation of certain assets [6]. Wireline Segment Challenges - The business wireline segment saw a 9.3% revenue decrease to $4.3 billion, shifting from an operating profit of $102 million to a loss of $201 million [8]. - Adjusted EBITDA for this segment fell by 11.3% to $1.3 billion [9]. Financial Highlights - Total revenue rose by 3.5% to $30.8 billion, with adjusted EPS increasing by 5.8% to $0.54, surpassing Wall Street expectations [9]. - AT&T generated $9.8 billion in operating cash flow and $4.4 billion in free cash flow, maintaining a dividend payout of over $2 billion with a coverage ratio of 2.2 times [10]. Future Guidance - The company maintained its guidance, projecting mobility service revenue growth of 3% or better and adjusted EPS between $1.97 to $2.07, down from $2.26 in 2024 [11][12]. - Future capital expenditures are expected to be between $23 billion to $24 billion annually in 2026 and 2027, with projected free cash flow exceeding $18 billion in 2026 and $19 billion in 2027 [12]. Competitive Landscape - AT&T is aggressively competing with Verizon in subscriber additions by offering better deals and maintaining lower prices [13]. - The company aims to leverage tax benefits from the "One Big, Beautiful Bill" to enhance its fiber network, especially as Verizon expands its fiber network through the acquisition of Frontier Communications [14]. Valuation Comparison - Despite the stock's pullback, AT&T trades at a forward P/E of about 13.5 based on 2025 earnings estimates, compared to Verizon's forward P/E of 9 [15]. - The valuation gap and higher yield of Verizon (about 6%) suggest a preference for Verizon over AT&T, although both companies are seen as strong long-term investments [16].

Core Viewpoint - The article discusses the potential upside for Verizon (VZ) stock, particularly in the context of the Federal Reserve's decision to cut interest rates, which could positively impact the stock's performance [1]. Group 1: Company Analysis - The author previously suggested that Verizon stock had upside potential, especially if the Federal Reserve were to cut rates [1]. - The article indicates that the Federal Reserve did indeed cut rates later, which may have implications for Verizon's stock performance [1]. Group 2: Investment Strategy - The author emphasizes a long-term investment strategy focused on strategic buying opportunities, particularly in dividend and value stocks [1]. - This investment approach has led to a high rating on Tipranks.com and a significant following on Seeking Alpha, indicating a level of credibility and expertise in the investment community [1].

Core Viewpoint - Verizon Communications has shown improvement in its stock performance following solid second quarter results and positive guidance, with a year-to-date stock price increase of approximately 7% and a yield exceeding 6% [1] Financial Performance - Verizon's Q2 revenue increased by 5.2% to $34.5 billion, surpassing analyst expectations of $33.74 billion [6] - Wireless service revenue rose by 2.2% to $20.9 billion, while wireless equipment revenue surged by 25.2% to $6.3 billion [6] - Adjusted earnings per share (EPS) climbed 6% to $1.22, and adjusted EBITDA rose 4.1% to $12.8 billion [6] Subscriber Growth - The broadband business led growth, adding 293,000 net broadband subscribers, totaling 12.9 million, a year-over-year increase of over 12% [3] - The consumer wireless segment lost 51,000 postpaid subscribers but gained 50,000 prepaid subscribers [4] - Business service revenue increased by 1.6% to $3.6 billion, with 65,000 wireless retail postpaid net additions [5] Future Guidance - Verizon maintained its full-year 2025 wireless revenue growth forecast of 2% to 2.8% and increased the low end of its adjusted EPS growth forecast to 1% to 3% [7] - The company raised its operating cash flow outlook to between $37 billion and $39 billion, leading to a projected free cash flow of $19.5 billion to $20.5 billion [8][9] Dividend and Cash Flow - Verizon's dividend yield is approximately 6.4%, with a coverage ratio of 1.5x based on $8.8 billion in free cash flow generated in the first half of the year against $5.7 billion in dividends paid [10] - The company benefits from new tax legislation allowing for immediate 100% depreciation of certain assets, enhancing cash flow [11] Strategic Acquisitions - Verizon's acquisition of Frontier Communications is expected to significantly expand its fiber network, particularly in states like Florida, Texas, and California, enhancing its ability to bundle mobile and home internet services [14][15] Valuation - Verizon trades at a forward price-to-earnings (P/E) ratio of 9x based on 2025 earnings estimates, which is below AT&T's 13x multiple, indicating potential upside [16]