Telefônica Brasil S.A. (VIVT3.SA) Q1 2026 Earnings Call Transcript
Telefônica Brasil S.A., together with its subsidiaries, operates as a mobile telecommunications company in Brazil. Its fixed line voice services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband internet access through 3G, 4G, 4.5G, and 5G, as well as value-added, prepaid plans with data sharing features, family plans, voice mail, caller identification, voice minutes in unlimited bundles to mobile and fixed-line phones, and digital services and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through IPTV technologies; network services, such as rental of facilities and other services; wholesale services, including interconnection services to users of other network providers; and digital services that include entertainment, cloud, and security and financial services. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices and accessories, such as smartphones, broadband USB modems, and other devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, distribution and digital channel, manufacturing, services, financial institutions, government, etc. It markets and sells its solutions through own stores, dealers, retail and distribution channels, door-to-door sales, and outbound tele sales. The company was formerly known as Telecomunicações de São Paulo S.A. - TELESP and changed its name to Telefônica Brasil S.A. in October 2011. Telefônica Brasil S.A. was incorporated in 1998 and is headquartered in São Paulo, Brazil.
Vivo delivered strong 2025 results with raised mobile/fiber momentum, robust cash generation, and a disciplined, shareholder-focused 2026 capital-allocation plan including buybacks and higher distributions.
⭐ Key Highlights
✔Positive Signals
- EBITDA growth 17.7% ex-concession migration YoY in Q4
- Free cash flow up 11.4% to BRL 9.2 billion in 2025
- Net income BRL 6.2 billion in 2025 with margin discipline
- Distributions at least 100% of net income maintained for 2026
- New buyback program up to BRL 1 billion through Feb 2027
✖Negative Signals
- Competitive intensity in mobile and fiber markets remains a risk to pricing and churn
- CapEx will continue to be necessary to sustain 5G and fiber growth, pressuring near-term margins
- Reliance on macroeconomic conditions and interest-rate environment (Selic) for cash-cost dynamics
- Uncertainty around consolidation/M&A timing and execution in fiber
- Potential variability in tower lease renegotiations and related cash flow
📊Financial Results
- Q4 EBITDA rose 8.1% YoY; EBITDA margin 42.9% (42.3% excluding concession migration effects).
- Full-year EBITDA margin improved to 42.9%, with operating cash flow before leases up 13.4% YoY to BRL 15.6 billion; after leases, OCF rose 17.3% to BRL 10.1 billion.
- Net income for 2025: BRL 6.2 billion, up 11.2% YoY; free cash flow BRL 9.2 billion, up 11.4%.
- CapEx for 2025: BRL 9.3 billion; CapEx/revenue ratio declined to 15.6%.
- Net debt/EBITDA at 0.5x; IFRS16-adjusted net debt BRL 13.1 billion.
🔮Future Guidance
- Distribute at least 100% of net income in 2026; BRL 7 billion total distributions planned, including BRL 4 billion capital reduction in July and BRL 3 billion interest on capital in April 2026, plus additional interest to be paid before April 2027.
- New share buyback program up to BRL 1 billion to run through February 2027.
- CapEx optimization to maintain CapEx over revenues in the low-to-mid teens; ongoing 5G deployment and fiber expansion will continue to require investments.
- Management expects continued double-digit EBITDA growth with potential tailwinds from depreciation amortization relief post-July 2026 and potential benefits from lower interest costs as Selic rates trend lower.
💡Interesting Insights
- AI initiatives are being piloted to optimize processes, including copilot support for call center and store agents, with results expected starting May 2026.
Detailed Analysis
AI-generated summary of Telefônica Brasil S.A. earnings call transcript.
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