America Movil Signals Strong Momentum and Discipline

America Movil Sab De Cv Class L ((MX:AMXB)) has held its Q1 earnings call. Read on for the main highlights of the call.

America Movil Sab De Cv Class L delivered a broadly upbeat earnings call, emphasizing solid subscriber momentum, resilient service revenues and one of its strongest EBITDA margins on record at 40%. Management acknowledged FX volatility, regulatory hurdles and working-capital pressures, but argued that robust cash generation and disciplined capital allocation leave the group well positioned despite these headwinds.

Subscriber and Broadband Growth

Postpaid subscribers and broadband connections continued to climb, underscoring the company’s ability to deepen relationships with higher-value customers. The postpaid base grew 8.8% year over year and broadband accesses rose 6.0%, supported by accelerating postpaid momentum and ongoing fiber build-out in key markets.

Revenue Expansion in Reported and Constant FX Terms

Revenue growth showed a clear divergence between reported and constant-currency figures, reflecting peso strength and volatility across markets. Reported first-quarter revenue increased 2.1% year over year to MXN 237 billion, while at constant exchange rates sales expanded a healthier 6.1% on the back of rising service and equipment revenues.

Resilient Mobile Service Revenue

Mobile service revenue remained a key growth engine, reflecting improved consumer spending and successful commercial execution. Overall mobile service revenue grew 6.4% year over year, with postpaid up 7.3% and prepaid up 5.0%, driven particularly by ongoing momentum in Mexico and Colombia.

Strength in Equipment and Other Revenue

Handset and device sales provided an additional boost, as customers continued upgrading to higher-end hardware. Equipment revenue increased 7.4% on a reported basis and 11.3% at constant FX, while other revenue more than doubled, helped by proceeds from a favorable legal ruling in Chile.

EBITDA and Margin Performance

Profitability metrics were a standout, with the company again demonstrating strong cost discipline and operating leverage. Reported EBITDA rose 3.8% year over year in Mexican pesos and about 8.0% at constant FX, while the consolidated EBITDA margin reached 40%, among the highest levels America Movil has delivered.

Profitability and Financing Tailwinds

Bottom-line results benefited from both higher operating profit and lower financing costs, helping amplify earnings growth. Operating profit rose 12% year over year to MXN 50.5 billion, while comprehensive financing costs fell nearly 10%, lifting net income 25% to MXN 23.4 billion, or MXN 0.39 per share.

Balance Sheet Discipline and Cash Deployment

Management continued to stress balance-sheet prudence even as it invests heavily in networks and returns capital to shareholders. Net debt stood at MXN 437 billion, or 1.41 times EBITDA after leases, and strong cash flow funded MXN 21.6 billion of CapEx, MXN 1.4 billion in share buybacks and MXN 1.5 billion in labor obligations, while still trimming net debt by MXN 1 billion.

CapEx Plans and Strategic Optionality

The company outlined a sizable but steady investment program while keeping powder dry for potential deals and shareholder returns. Management expects around $7 billion of CapEx in 2026, subject to FX, and signaled openness to M&A and further buybacks as leverage trends toward roughly 1.3 times net debt to EBITDA, supported by a buyback fund raised to MXN 21,000 million.

Fiber Penetration and Upselling Strategy

America Movil is leaning on its extensive fiber footprint to sharpen its competitive edge and raise customer value. Fiber now reaches about 93% of its broadband base, and the company has upgraded speeds by roughly one-third on some tiers, using bundled offers to upsell residential and small business clients.

Operational Momentum Across Regions

Regional performance remained broadly positive, highlighting the benefits of scale and convergent offerings. Management pointed to strong commercial execution in Brazil, Colombia, Peru, Central America and Eastern Europe, where investments in 5G and fixed–mobile convergence are fueling both revenue and EBITDA growth.

Impact of FX Volatility and Peso Strength

Currency swings, particularly the sharp appreciation of the Mexican peso, distorted headline figures and complicated cross-period comparisons. Management emphasized the need to look at constant-currency trends, noting that underlying growth in service and equipment revenue is stronger than reported numbers suggest when translated into pesos.

Argentina’s Infrastructure Constraints

In Argentina, the company faces operational challenges that are slowing its fixed-line and fiber rollout in the key Buenos Aires market. Difficulty accessing telephone posts and underground infrastructure is constraining deployment, creating a tougher competitive environment where a large rival could capture additional share.

Working Capital and Inventory Build

Higher handset inventories and financing tied to a leasing model have pushed up working capital, temporarily absorbing more cash. Management linked the increase to caution about supply availability and rising device prices, suggesting these factors may normalize over time but are currently a drag on free cash generation.

Regulatory Subscriber Cleanup in Mexico

Domestic regulatory changes are prompting a cleanup of customer records that could cloud near-term subscriber metrics. A new line-registration initiative is leading to disconnections of inactive lines and may depress reported activations through early July, though management views this as a temporary effect that should improve the quality of the base.

Market Consolidation and Competitive Uncertainty

Competitive dynamics remain in flux, with recent market moves raising questions about future pricing and share battles. Management flagged Telefonica’s asset sale in Mexico and other consolidations as potential sources of uncertainty, noting that new owners may pursue more aggressive strategies in key markets.

Debt Levels and Leverage Targets

While leverage remains moderate, management acknowledged that it sits slightly above the desired level, influencing capital-return decisions. Financial debt increased modestly to MXN 527 billion and net debt to EBITDA is 1.41 times, which management aims to reduce toward about 1.3 times before meaningfully accelerating share repurchases.

Forward-Looking Guidance and Capital Framework

Looking ahead, America Movil plans to maintain a steady annual CapEx run-rate near $7 billion while prioritizing a balanced use of cash between deleveraging, buybacks and selective M&A. The company intends to keep net debt to EBITDA around 1.3 times, leverage its expanded buyback authorization and sustain strong operating performance, with no immediate intention to raise prices in Brazil, signaling a focus on volume growth and customer retention.

America Movil’s latest earnings call painted a picture of a telecom giant balancing growth investments with prudent financial management, even amid FX volatility and regulatory noise. For investors, the combination of robust subscriber trends, expanding margins and a clear capital-allocation framework suggests the company is executing well, though currency moves and competitive shifts remain key variables to watch.