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

Financial Performance - Vivo's total revenues in Q4 2025 increased by 7.1%, with mobile service revenue growing by 7% and fixed services by 5.4% [7][8] - EBITDA rose by 8.1% year-over-year, with a significant 17.7% increase when excluding concession migration effects, resulting in an EBITDA margin of 42.9% [7][21] - Net income for 2025 reached BRL 7.2 billion, reflecting a double-digit growth, while free cash flow increased by 11.4% to BRL 9.2 billion [7][23] 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 [6][9] - Fiber connections grew to 7.8 million, with a footprint extending to 31 million homes, and a take-up ratio of 25.2% [11][12] - New business revenues surged by 27% over the last 12 months, now accounting for 12.1% of total revenues, driven by B2C and B2B solutions [9][15] Market Performance - Vivo's mobile base reached 103 million accesses, with a 0.7% year-over-year increase, and 5G customers grew to 23.1 million, improving the 5G take-up ratio to 27.8% [10][66] - B2B revenues amounted to BRL 13.5 billion, up 13.7% year-over-year, with digital B2B solutions growing by 29.5% [15][16] - The fiber market remains competitive, with Vivo increasing its market share from 18.8% to 19.3% in 2025 [77] Company Strategy and Industry Competition - Vivo is focused on enhancing its digital platform, integrating connectivity with a diversified ecosystem of services [15][17] - The company aims to optimize CapEx while maintaining leadership in infrastructure deployment, particularly in 5G and fiber [38][39] - Vivo sees potential for consolidation in the fiber market due to fragmentation, indicating a willingness to explore M&A opportunities [77][78] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth, driven by effective customer retention strategies and the expansion of digital services [10][66] - The company anticipates stable net income growth for 2026, supported by reduced depreciation and amortization costs [31][32] - Vivo's commitment to sustainability and ESG initiatives remains a cornerstone of its strategy, with recognition in global rankings [17][18] Other Important Information - Vivo distributed BRL 6.4 billion to shareholders in 2025, achieving a payout ratio of 103.4% [24][25] - The company has 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 balance between buybacks, interest on capital, and capital reduction, emphasizing a commitment to distribute at least 100% of net income [29][30] Question: CapEx outlook for 2026 and competitive environment - Management highlighted ongoing CapEx optimization and planned price increases across various segments to enhance revenue [36][40] Question: Lease expenses reduction - Management explained the reduction in lease expenses due to ongoing renegotiations and a positive trend in lease costs [50][53] Question: Prepaid ARPU trends - Management noted improvements in prepaid ARPU driven by customer engagement strategies and migration to hybrid plans [56][58] Question: Mobile market share and B2B growth - Management confirmed stable mobile market share and strong growth in B2B revenues, particularly in digital services [66][68]