TIM (TIMS3) Q2 2024 earnings summary

Executive summary

• Achieved strong financial and operational results in 2Q24, with revenue, EBITDA, and net income all growing year-over-year, driven by mobile, postpaid, and fiber segments.

• 5G coverage expanded to 353 cities, with the company leading market share gains and 205% YoY growth in 5G user base.

• Continued focus on digitalization, AI initiatives, and innovation, with recognized ESG leadership and multiple awards for diversity and accessibility.

• Strategic plan execution remains on track, but macroeconomic challenges are anticipated for low-income and prepaid segments in 2H24.

Financial highlights

• Normalized net revenue rose 7.5% YoY to R$6,303 million in 2Q24; service revenue up 7.2% YoY; mobile service revenue up 7.3% YoY.

• Normalized EBITDA increased 8.2% YoY to R$3,153 million, with margin reaching a record 50.0% in 2Q24.

• Normalized net income reached R$781 million, up 22.5% YoY, the highest ever for a second quarter.

• Operating free cash flow grew 79.2% YoY to R$948 million; operational cash flow margin expanded to 24.4%.

• Capex was R$925 million in 2Q24, stable YoY, with Capex/Net Revenue at 14.7%.

Outlook and guidance

• 2024 Capex guidance reaffirmed at R$4.4–4.6 billion, with continued investment in 5G and fiber expansion.

• Management confident in delivering on the strategic plan, emphasizing value creation and operational efficiency, but expects revenue growth to moderate in H2 due to tougher comps and prepaid-to-postpaid migration.