Telefonica Brasil SA ((VIV)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Telefonica Brasil SA’s recent earnings call painted a picture of robust growth and strategic focus, despite some challenges. The sentiment was largely positive, driven by strong performance in key areas such as postpaid mobile, fiber expansion, and B2B segments. However, concerns were raised regarding weaker mobile net additions and rising personnel and financial expenses.
Strong Postpaid Growth in Mobile Segment
The earnings call revealed a significant 7% year-over-year growth in the postpaid mobile segment, which now constitutes 67% of Telefonica Brasil’s total mobile customer base. This growth underscores the company’s strategic emphasis on high-value customer segments and its ability to capture market share in a competitive landscape.
Expansion in Fiber Connected Homes
Telefonica Brasil reported a 12.6% increase in fiber-connected homes, reaching 7.4 million accesses. This expansion highlights the company’s ongoing investment in infrastructure to meet the rising demand for high-speed internet services, positioning itself as a leader in the fiber broadband market.
Revenue and EBITDA Growth
The company achieved a 7.1% increase in total revenue, with EBITDA growing by 8.8% year-over-year, resulting in a margin of 40.5%. These figures reflect effective cost management and operational efficiency, contributing to the company’s solid financial performance.
Operating Cash Flow Increase
Operating cash flow for the first half of 2025 reached BRL 7.3 billion, marking a 12.5% increase compared to the previous year. This growth in cash flow indicates strong operational health and provides the company with the flexibility to invest in future growth initiatives.
B2B Revenue Surge
The B2B segment experienced a remarkable 13.3% revenue growth, with digital B2B services soaring by 31.3%. This surge highlights Telefonica Brasil’s successful penetration into the business market and its ability to leverage digital solutions to drive revenue.
ESG Achievements
Telefonica Brasil’s commitment to sustainability was recognized as it was named Company of the Year in Exame magazine’s ESG Awards. This accolade underscores the company’s leadership in environmental, social, and governance initiatives, enhancing its reputation and appeal to socially conscious investors.
Slower Mobile Customer Net Adds
Despite the positive growth metrics, the company faced challenges with weaker mobile customer net additions compared to historical performance. This prompted discussions on strategies to enhance customer acquisition and retention in the mobile segment.
High Personnel Expenses
Personnel expenses rose by 8.8%, attributed to annual wage adjustments and increased headcount in digital and IT areas. This increase reflects the company’s investment in human resources to support its digital transformation and growth ambitions.
Financial Expenses Impacting Net Income
Net income fell slightly below consensus expectations, impacted by financial expenses and some seasonality effects. This highlights the need for careful financial management to mitigate the impact of external factors on profitability.
Forward-Looking Guidance
Telefonica Brasil’s forward-looking guidance for the second quarter of 2025 indicates continued strong financial and operational performance. The company expects sustained growth in its postpaid mobile and fiber segments, with total revenue projected to rise by 7.2% year-over-year. The focus remains on high-value offerings, with postpaid and FTTH revenues expected to grow significantly. The B2B segment is anticipated to maintain its robust growth trajectory, driven by digital services. Additionally, the company’s ESG initiatives are expected to further enhance its reputation and market position.
In conclusion, Telefonica Brasil SA’s earnings call reflects a positive outlook with strong growth in key segments, despite some challenges. The company’s strategic focus on high-value offerings and digital transformation positions it well for future success. Investors and stakeholders can take confidence in the company’s robust performance and commitment to sustainability.