Telefonica Brasil S.A.(VIV) - 2025 Q4 - Earnings Call Transcript

Financial Performance and Key Metrics - Total revenues in Q4 2025 increased by 7.1%, with mobile service revenue growing by 7% and fixed services by 5.4% [6][7] - EBITDA grew by 8.1% year-over-year, with a margin of 42.9%, while excluding concession migration effects, EBITDA advanced by 17.7% [6][20] - Net income for 2025 reached BRL 7.2 billion, reflecting a double-digit growth, and free cash flow increased by 11.4% to BRL 9.2 billion [6][23] - The company paid out BRL 6.4 billion to shareholders in 2025, achieving a payout ratio of 103.4% [7][24] Business Line Performance - The postpaid mobile segment saw a 6.5% year-over-year increase, reaching 70.8 million customers, representing 69% of the mobile base [5][10] - Fiber connections reached 7.8 million, with a footprint extending to 31 million homes, and FTTH accesses grew by 12% year-over-year [11][12] - New businesses generated a 27% revenue increase, now accounting for 12.1% of total revenues, with significant contributions from B2C and B2B solutions [9][14] Market Performance - The mobile customer base reached 103 million, with a 0.7% year-over-year increase, and 5G customers grew to 23.1 million, improving the take-up ratio to 27.8% [10][11] - B2B revenues amounted to BRL 13.5 billion, up 13.7% year-over-year, with digital B2B growing by 29.5% [14][15] - The fiber market share increased from 18.8% to 19.3% year-over-year, with a net addition of 834,000 customers [77] Company Strategy and Industry Competition - The company focuses on convergence, with 62.7% of FTTH customers being convergent, and aims to drive more customers to the Vivo Total offering [86][89] - The competitive environment in the fiber market remains fragmented, with potential for consolidation to improve sustainability [78][79] - The company is committed to maintaining a disciplined capital allocation strategy while exploring opportunities for M&A to strengthen its fiber footprint [93][96] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about future net income growth, driven by stable EBITDA growth and reduced depreciation starting in mid-2026 [30][31] - The company is leveraging AI to enhance operational efficiency and customer engagement, with expectations for significant cost savings [90][91] - The management remains focused on optimizing CapEx and improving the ratio of CapEx to revenues while continuing to invest in infrastructure [36][37] Other Important Information - The company achieved recognition for its sustainability efforts, ranking among the top companies in various global assessments [16][17] - The board approved a new share buyback program of up to BRL 1 billion, to be executed until February 2027 [25] Q&A Session Summary Question: Distribution strategy for 2026 - Management discussed the mix between buybacks, interest on capital, and capital reduction, emphasizing a commitment to distribute at least 100% of net income [27][28] Question: CapEx outlook for 2026 - Management highlighted ongoing CapEx optimization efforts and the importance of maintaining a balance between infrastructure investment and revenue growth [35][36] Question: Competitive environment in mobile - Management noted a stable mobile market share and emphasized the importance of retaining customers and growing ARPU without engaging in price wars [94][95] Question: Lease expenses reduction - Management explained the reduction in lease expenses due to ongoing renegotiations and expressed optimism about future trends [50][54] Question: Growth in B2B segment - Management confirmed strong growth in B2B revenues and highlighted the importance of digital services in driving future growth [68][69]