Telefônica Brasil (VIVT3) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 2024 performance with revenue and EBITDA growth outpacing inflation, driven by mobile and fiber segments, and record customer base GPS levels.

• Mobile postpaid accesses rose 7.2% year-over-year to 64 million; total mobile accesses reached 100.9 million.

• FTTH homes connected increased 12.7% year-over-year to 6.5 million, with 27.3 million homes passed (+10.7%).

• Net income for H1 2024 reached R$2.1 billion, up 8.2% year-over-year.

• Continued focus on convergence, digital services, and ESG initiatives, including advancing Net Zero target to 2035.

Financial highlights

• Total revenues increased 7.4% year-over-year, mainly from mobile service revenues up 8.8% and FTTH revenue up 17.1%.

• EBITDA grew 7.3% year-over-year; margin stable at 39.9%, and excluding non-recurring items, margin expanded to 40.8%.

• Net income expanded 8.2% year-over-year in H1, reaching over R$2 billion.

• Free cash flow for H1 2024 reached R$5.5 billion, over 20% of total revenues.

• Capex for H1 2024 was R$4.2 billion, 17.1% of sales, focused on 4.5G, 5G, and fiber expansion.

Outlook and guidance

• Expect continued growth in mobile and fiber, with ongoing migration from prepaid to postpaid and expansion of digital services.

• CapEx intensity expected to remain on a decreasing trend, supporting sustainable growth.

• Committed to distributing at least 100% of net income to shareholders from 2024 to 2026 through dividends, IoC, capital reductions, and buybacks.

• Continued investment in 5G and FTTH to maintain network leadership and expand digital services.