América Móvil(AMX) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The fourth quarter revenue rose 3.4% in Mexican peso terms to MXN 245 billion, and was up 6.2% at constant exchange rates, with service revenue expanding 5.3% [6][7] - EBITDA increased by 4.2% in Mexican peso terms to MXN 95 billion, and was up 6.9% at constant exchange rates [7] - Net profit for the quarter was MXN 19 billion, which was four times larger than the previous year, equivalent to MXN 0.32 per share or $0.35 per ADR [8][9] - Free cash flow for the year 2025 reached MXN 82 billion, representing a nearly 40% year-on-year increase [9] Business Line Data and Key Metrics Changes - The company added 2.5 million wireless subscribers in the quarter, with 2.8 million postpaid net gains and 298,000 prepaid losses, ending December with 331 million wireless subscribers [4][6] - Postpaid base grew by 8.4% year-on-year, with Brazil leading in postpaid net adds at 644,000 subscribers [5][6] - Fixed line segment connected 5,240 broadband accesses, with broadband revenue growth in Mexico rising from 2% to 4% [5][8] Market Data and Key Metrics Changes - The dollar depreciated against most currencies in the region, with a 2.3% decline against the Mexican peso [4] - The company experienced strong mobile service revenue growth of 6.2%, supported by postpaid revenue that was up 7.6% [7][8] Company Strategy and Development Direction - The company aims to maintain a capital expenditure target of around 14%-15% of revenues, approximately $6.8 billion to $7 billion for 2026 [14][17] - Management indicated a focus on reducing debt and preparing for potential consolidation opportunities in the region, particularly in light of changing competitive dynamics [41][66] Management's Comments on Operating Environment and Future Outlook - Management noted the uncertainty in the U.S. economic activity due to the government shutdown and its impact on employment and economic indicators [3] - The competitive landscape in Latin America is expected to consolidate, which could benefit the company as it prepares for potential opportunities [70][74] Other Important Information - The company disconnected 79,000 voice lines in the quarter, while its access lines exceeded 4.1 million at the end of December [5][6] - Comprehensive financing costs were roughly half those of the previous year, contributing to improved net profit [8] Q&A Session Summary Question: CapEx outlook for 2026 - Management targets CapEx to be around 14%-15% of revenues, approximately $6.8 billion to $7 billion [14][17] Question: Pre-tax non-operating expenses - Management acknowledged the increase in non-operating expenses and suggested further details could be provided later [21][25] Question: Competitive environment in Chile - Management explained their decision not to pursue the Telefónica deal due to regulatory complexities and indicated they remain competitive in Chile [31][32] Question: Capital allocation strategy - Management emphasized the importance of reducing debt while also considering shareholder returns through buybacks and dividends [41][66] Question: Impact of FX on results - Management discussed the complexities of managing multiple currencies and the importance of constant exchange rates for financial reporting [56][58] Question: Regulatory environment and consolidation in Latin America - Management expressed optimism about future consolidation in the market, particularly in mobile and fixed services [70][74] Question: Number portability trends in Brazil - Management attributed strong number portability trends to both NuCel and overall growth in revenues and subscriber quality [78][81] Question: Sustainability of broadband growth in Mexico - Management indicated confidence in sustaining broadband growth due to successful promotions and high customer satisfaction [86][87]