Telefônica Brasil (VIVT3) Q1 2025 earnings summary

Executive summary

• Net operating revenue for Q1 2025 rose 6.2% year-over-year to R$14.4 billion, driven by strong growth in postpaid mobile (+7.7% YoY) and fiber (+12.9% YoY), with net income up 18.1% to R$1.1 billion.

• EBITDA increased 8.1% year-over-year to R$5.7 billion, with margin improving to 39.6%.

• Strategic focus on digital services, convergence, and customer migration to higher-value plans, with new businesses and digital revenues growing 18.6% and B2B digital up 25.5% YoY.

• Shareholder remuneration YTD reached R$2.6 billion, with a commitment to distribute at least 100% of net income through 2026.

• Continued ESG leadership, recognized in global sustainability indices and for diversity initiatives.

Financial highlights

• Mobile service revenue grew 6.5% YoY, with postpaid revenue up 10.3% and FTTH revenue up 10.6%; total revenues reached R$14.4 billion.

• Operating cash flow grew 12.7% YoY to R$3.8 billion, representing 27% of total revenues.

• EBITDA margin improved to 39.6% (+0.7 p.p. YoY); EBITDA AL margin at 30.4%.

• Free cash flow declined 10.7% YoY to R$2.1 billion due to regulatory payment timing.

• Net cash position (ex-leases) was R$2.7 billion; net debt (incl. leases) at R$12.1 billion (0.5x LTM EBITDA).

Outlook and guidance

• Confident in sustaining strong financial performance and meeting guidance, with at least 100% of net income to be distributed in 2025 and 2026.

• Capital reduction of R$2 billion effective in 2025, with payment scheduled for July.

• Migration from fixed voice concession to authorization expected to unlock R$4.5 billion in asset sales and recurring cost savings by 2028.