Core Insights - Millicom International Cellular S.A. (TIGO) is expected to report fourth-quarter 2025 results on February 26, with revenue estimates at $1.56 billion, reflecting a 9% increase year over year, and earnings estimates at $1.05 per share, indicating a 425% year-over-year growth [1][2]. Financial Performance - TIGO's earnings have missed the Zacks Consensus Estimate in three of the last four quarters, with an average negative surprise of 23.21% [2]. - Over the past year, TIGO's shares have increased by 146.1%, outperforming the Zacks Wireless-Non-US industry's growth of 60.1% [2]. Business Segments and Growth Drivers - TIGO is likely to benefit from strong commercial execution in both consumer and business segments [4]. - The mobile business has seen a 5.5% year-over-year increase in mobile service revenues, driven by ARPU expansion in the prepaid category and migration from prepaid to postpaid [5]. - B2B digital services, including cloud, cybersecurity, and SD-WAN, have expanded approximately 35% year over year, contributing to an overall digital revenue growth of 10% [6]. Market Position and Acquisitions - TIGO's recent acquisitions, including a 67.5% controlling stake in Telefonica's Colombia Telecomunicaciones S.A. E.S.P. and operations in Chile, are expected to drive growth [8]. - The acquisitions of Telefonica's businesses in Uruguay and Ecuador are projected to add approximately $736 million in annual revenues and $254 million in adjusted EBITDA, enhancing TIGO's presence in Latin America [9]. Strategic Outlook - TIGO aims for a leverage target of below 2.5x and a 2025 equity free cash flow target of approximately $750 million, despite facing currency headwinds in Bolivia and challenges in Costa Rica [10][11]. - The company is also progressing on the EPM privatization process and the Coltel acquisition, with both expected to close in the first quarter of 2026 [10].

Financial Data and Key Metrics Changes - In Q3 2025, service revenue totaled $1.34 billion, reflecting a year-over-year decline of 0.5%, primarily due to a $74 million negative impact from IAS 21 application in Bolivia [12][14] - Adjusted EBITDA reached a record $695 million, with an all-time high margin of 48.9%, representing a year-over-year increase of 23.8% [13][17] - Equity-free cash flow rose by 18.1% year-over-year, totaling $638 million for the first nine months of 2025 [14][19] Business Line Data and Key Metrics Changes - Mobile service revenue grew 5.5% year-over-year, driven by ARPU expansion in prepaid and a 14% increase in postpaid customers [4][12] - Home business service revenue was flat year-over-year, a significant improvement from a nearly 5% decline a year ago, with 60,000 new customers added [5][12] - B2B service revenue reached $231 million, up 5.3% year-over-year, with digital services growing by 10% [5][12] Market Data and Key Metrics Changes - Colombia's service revenue expanded 6.5% year-over-year to $364 million, with postpaid customers increasing by 12% [15][17] - Guatemala's local currency service revenue grew 3.6% year-over-year, reaching $366 million, driven by mobile strategy and customer base management [15][17] - In Panama, service revenue remained flat at $170 million, with a 15% increase in postpaid customers [15][17] Company Strategy and Development Direction - The company completed acquisitions in Uruguay and Ecuador, enhancing its regional footprint and earnings quality [8][9] - The focus remains on maintaining leverage below 2.5x while integrating new acquisitions and pursuing operational efficiencies [3][22] - The company aims to deliver continued top-line growth and sustainable margin expansion, despite challenges from currency devaluation and legal settlements [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $750 million equity-free cash flow target for 2025, despite external challenges [2][23] - The company remains optimistic about the ongoing integration of Ecuador and Uruguay, expecting to unlock meaningful synergies [8][9] - Management highlighted the importance of maintaining operational focus and efficiency in light of regulatory challenges in Costa Rica [10][26] Other Important Information - The company recorded a $118 million provision related to an ongoing DOJ investigation, reflecting expected financial impacts [11][12] - The sale of tower companies in El Salvador and Honduras was completed for approximately $975 million, marking a successful conclusion to the infrastructure monetization plan [9][22] Q&A Session Summary Question: What is the leverage impact of the Ecuador and Uruguay transactions? - Current leverage is 2.09, expected to normalize to around 2.3 after accounting for the acquisitions [24] Question: Will the burden of spectrum renewal payments fall on Millicom? - The license renewal payment of approximately $115 million was paid by Telefónica, but there will be additional 5G auction costs expected in 2026 [25] Question: What is the future course of action in Costa Rica if the appeal is rejected? - The company plans to refocus on its operational model and invest in infrastructure while appealing the regulatory decision [26][28] Question: What is the outlook for CapEx in 2026? - The company expects to maintain CapEx around $700 million, focusing on demand-driven investments [29][30] Question: How is the competitive environment evolving in Guatemala? - The company is actively managing competition through targeted strategies and investments, resulting in stable performance [45][46]