America Movil Earnings Call Highlights Growth And Margins

America Movil S.a.b. De C.v. ((AMX)) has held its Q1 earnings call. Read on for the main highlights of the call.

America Movil’s latest earnings call struck an overall upbeat tone, with management highlighting resilient growth once currency swings are stripped out, expanding margins and sharply higher earnings. Executives acknowledged FX volatility, working-capital pressure and some regulatory and competitive uncertainties, but consistently framed these as manageable headwinds against a backdrop of disciplined investment and capital returns.

Revenue Growth Underpins Solid Quarter

America Movil reported first-quarter revenue of MXN 237 billion, an increase of 2.1% in reported peso terms that was dampened by currency moves. At constant exchange rates, revenue rose a healthier 6.1% year over year, driven by 4.6% growth in service revenue and an 11.3% jump in equipment sales.

EBITDA Strength and Margin Expansion

Profitability was a clear highlight, with EBITDA up 3.8% in pesos and nearly 8% at constant FX, and adjusted EBITDA growing 7.0% when excluding a one-off legal impact in Chile. Management stressed that the consolidated EBITDA margin reached about 40%, one of the highest levels the company has posted and a key indicator of operating discipline.

Mobile and Broadband Subscriber Momentum

Growth in higher-value customers continued, as the postpaid mobile base expanded 8.8% year on year and broadband accesses climbed 6%. Mobile service revenue increased 6.4%, supported by postpaid revenue growth of 7.3% and prepaid revenue up 5%, underscoring demand resilience across segments.

Profitability and Bottom-Line Gains

Operating profit reached MXN 50.5 billion, up 12% from a year earlier, reflecting both revenue growth and improved efficiency. Net income surged 25% to MXN 23.4 billion, which the company said equates to MXN 0.39 per share and $0.44 per ADR, signaling solid value creation for investors.

Leverage, Cash Flow and Capital Deployment

Financial debt stood at MXN 527 billion and net debt at MXN 437 billion, equivalent to 1.41 times EBITDA after leases, slightly above the company’s leverage goal. Strong cash generation in the quarter funded MXN 21.6 billion of CapEx and MXN 1.4 billion in share buybacks while still allowing a reduction of net debt by MXN 1 billion, indicating room to balance growth investment with shareholder returns.

CapEx Plans and Strategic Investment Focus

Management reiterated its plan to invest roughly $7 billion in CapEx for 2026, subject to foreign-exchange fluctuations, maintaining a heavy focus on Latin America and Eastern Europe. Spending will be directed toward digitalization initiatives, 5G deployment and fiber build-out, reinforcing the group’s push into higher-speed connectivity and convergent offerings.

Equipment Sales and Inventory Positioning

Equipment revenue increased 7.4% in peso terms and 11.3% at constant FX, supported by strong demand and handset financing schemes. The company deliberately raised inventory levels to secure device availability amid rising prices, accepting a temporary working-capital drag in order to sustain equipment sales and customer acquisition.

Commercial and Regional Performance Highlights

Regionally, Brazil showed momentum, helped by the NuCel partnership and number-portability gains, while Colombia and Peru delivered improving broadband and postpaid trends. In Eastern Europe, the company continued its fixed-mobile convergence push, and management pointed to recent deals, including the Azteca network in Colombia and Desktop, as evidence of an active M&A strategy.

FX Volatility and Distorted Reported Metrics

Executives cautioned that sharp currency moves, especially the Mexican peso’s appreciation of around 16% against the dollar and other currencies, distorted reported results. This FX backdrop reduced peso-denominated revenue growth to 2.1% from 6.1% at constant rates and is likely to complicate year-on-year comparisons in the near term.

Operational Constraints in Argentina

In Argentina, the company faces deployment hurdles in Buenos Aires, where it has struggled to secure access to telephone posts and carry out underground works. These constraints are limiting fiber rollout in the metropolitan area and raising competitive concerns as a rival expands its market share following the sale of Telefonica’s local assets.

Working Capital and Handset Financing Impact

Working capital increased during the quarter as America Movil built up inventory and expanded handset leasing and financing programs to support equipment growth. While this strategy ties up more cash in the short run, management argued it underpins sales momentum and customer loyalty, suggesting cash conversion may improve once inventory normalizes.

Regulatory Subscriber Cleanup in Mexico

In Mexico, new line-registration rules could lead to a clean-up of inactive mobile lines ahead of a key deadline, potentially lowering reported subscriber figures. Management stressed that this process mainly affects low-usage or dormant lines, meaning revenue and average revenue per user may be less impacted than headline subscriber counts.

Macro, Geopolitical and Market Risks

The company noted that investors remain wary of macroeconomic risks, including potential slowdowns, inflation pressure and war-related FX swings that could weigh on demand and reported results. While these factors lie largely outside management’s control, they remain key variables for earnings translation and valuation across America Movil’s diverse markets.

Debt Movement and Leverage Target

Despite modest growth in financial debt of MXN 2.5 billion during the quarter, net leverage remains above the roughly 1.3 times EBITDA level that management ultimately targets. Executives indicated that deleveraging will stay a priority and will be carefully weighed against other uses of cash such as buybacks and selective acquisitions.

Competitive Uncertainty After Telefonica Sale in Mexico

The sale of Telefonica’s Mexican assets has introduced uncertainty around future competition, as the strategy of the new owners is still unclear. Management said it does not yet know whether those assets will be aggressively invested in or run more lightly, for example via virtual operator models, leaving some execution risk in the Mexican market landscape.

Guidance and Capital Allocation Outlook

Looking ahead, America Movil reaffirmed its roughly $7 billion CapEx plan for 2026 and its intention to bring net debt to EBITDA closer to 1.3 times over time. The company emphasized a balanced capital-allocation framework that blends ongoing deleveraging with opportunistic M&A in Latin America and Eastern Europe and a reinforced share-buyback program, which now totals MXN 21 billion, while signaling a stable pricing stance in key markets such as Brazil.

America Movil’s earnings call painted a picture of a telecom giant leaning into growth while keeping a close eye on balance-sheet strength and shareholder returns. Despite FX noise, regulatory cleanups and regional operational challenges, the company delivered stronger margins and earnings, set out clear investment priorities and reaffirmed its commitment to disciplined leverage, leaving investors with a cautiously optimistic outlook.