Telefonica Brasil S.A., - ADR (Representing Ord) Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
Is Telefonica Brasil S.A., - ADR (Representing Ord) a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $18.65b | Revenue (TTM) = $11.90b
Market Cap = $18.65b | Estimated Revenue = $12.59b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $20.80b | Revenue (TTM) = $11.90b
Enterprise Value = $20.80b | Forward Revenue = $12.59b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Telefonica Brasil S.A., - ADR (Representing Ord) Stock Analysis
Analyst Opinions
19 Analysts have issued a Telefonica Brasil S.A., - ADR (Representing Ord) forecast:
Analyst Opinions
19 Analysts have issued a Telefonica Brasil S.A., - ADR (Representing Ord) forecast:
Telefonica Brasil S.A., - ADR (Representing Ord) Events
Past Events
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JUL
28
Q2 2026 Earnings Call
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Telefonica Brasil S.A., - ADR (Representing Ord) — Q2 2026 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen. Welcome to Vivo's Second Quarter 2026 earnings call. This conference is being recorded, and the replay will be available at the company's website at ri.telefonica.com.br.
The presentation will also be available for download. This call is also available in Portuguese.
[Operator Instructions] [Foreign Languge] We would like to inform that all attendees will only be listening the conference during the presentation and then we will start the question-and-answer section when further instructions will be provided.
Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Vivo's Executive Board and the current information available to the company.
These statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur.
Investors should be aware of events related to the macroeconomic scenario the industry and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements.
Present at this conference, we have Mr. Christian Gebara, CEO of the company; Mr. Rodrigo Manati, CFO and Investor Relations Officer; and Mr. Jan Pedro Soares Carnero, IR Director. Now I will turn the conference over to Mr. Jon Pedro Soares Carnero, Investor Relations Director of Vivo. Mr. Carnero, you may begin your conference.
Good morning, everyone, and welcome to Vivo's Second Quarter 2021 Earnings Call. Today, our CEO, Kristian Shibata, will present Vivo's ongoing execution in connectivity and new businesses as well as share our key ESG highlights for the quarter. then Rodrigo Mondi, our CFO, will give you more color on cost evolution, cash generation, profitability and shareholder distribution going forward.
With that, let me turn the call over to Christian.
Thank you, Juan. Good morning, everyone, and thank you for joining us today. Building on the positive performance from the beginning of the year, Vivo delivered another quarter of solid execution, combining healthy operational and financial trends. These numbers demonstrate the strength of our business model, the quality of our customer base and the consistency of our strategy with fine dynamic environment.
Customer engagement remains at the center of our growth story. In mobile, we kept adding customers with postpaid access at $73.2 million, up 6.9% year-over-year. In fiber, Homes Connected reached $8.2 million, advancing 11.3% year-over-year, while our footprint expanded to 32 million home passed.
These accomplishments reflect our sustained commercial momentum supported by the attractiveness of our value proposition and customer recognition of the quality and differentiation we deliver.
Financially, total revenue increased above inflation once again, up 7.6% year-over-year. Our bio service revenues advanced 6.6%, while fixed revenues grew 6%, highlighting the improvement of fiber and the positive contribution of our B2B operations.
Profitability continues to outpace revenue growth. EBITDA advanced 10.9% year-over-year with a margin of 41.8%. In the first half of the year, operating cash flow totaled BRL 8.2 billion, while net income rose 17.9% to BRL 2.8 billion.
Free cash flow generation reached BRL 4.9 billion underscoring the strength of our cash generation capabilities.
Our operational excellence and financial discipline, support attractive shareholder returns. Year-to-date, we declared BRL 2.2 billion in interest on capital to be paid by [indiscernible] 2027 or before, represent an evolution of 34.5% versus the same period last year and remain fully committed to our shareholder remuneration guidance for this year.
On Slide 4, the benefits of our diversified ecosystem are becoming clearly evident, supporting growth across connectivity, digital services and the sale of handsets and electronics. Total revenues increased 7.6% year-over-year in the quarter, reflecting balanced contributions across our top line.
Mobile service revenues advanced 6.6% while FTTH revenues delivered an even stronger performance of 10.7%. Another highlight was the handsets and Electronics segment that showed 27.8% year-over-year, marking its highest annual evolution in years.
This performance reflects the success of our commercial initiatives and the growing relevance of Vivo as a destination for customer technology products.
As our ecosystem expands the quality and predictability of revenues keep improving. Recurring revenues attained 84.8% of service revenues, extending a positive trend that has consistently strengthened over recent quarters.
This evolution further reinforces the resilience of our business model and the sustainability of our trajectory. Turning to Slide 5, our mobile operation stands out through its ability to combine customer growth, monetization and retention.
Total mobile base increased 2.6% year-over-year as postpaid access rose 7.3%, reaching 52.4 million customers, while machine to machine and tango grew 6.1%, reinforcing our leadership across multiple mobile segments. Commercial activity remain solid with postpaid and additions, rising 14.1% year-over-year. This performance confirms Vivo's competitiveness and the attractiveness of our offers.
At the same time, we remain focused on successfully executing our more-for-more strategy. Mobile ARPU reached a new high of 32.5 with postpaid churn at stable levels of only 1%.
Notably, even after recent price adjustments, customer loyalty remained unchanged, reflecting our superior network and service excellence. The evolution of 5G is an important part of the story.
Today, nearly 1/3 of our mobile base, excluding machine to machine and Dungo uses every day as usage continues to ramp up, we are further enhancing customer experience while creating new opportunities to deepen engagement and support future revenue expansion.
Overall, these results underscore the resilience and monetization potential of our mobile platform. The combination of postpaid expansion, record ARPU, resilient churn levels and growing 5G adoption demonstrate how Vivo is creating a solid foundation for ongoing profitable growth.
On Slide 6, we illustrate how scale, quality and convergence underpin Vivo's ability to raise the bar in the fiber market.
We closed the quarter with 8.2 million fiber access, an increase of 11.3% year-over-year.
Once again, convergence was the key driver of this performance. Vivo Total reached 3.8 million customers, up 29.4% compared to last year and further increasing its relevance within our fiber base. This reinforces a trend that we have seen for several quarters. Customers increased linked demand integrated solutions that unite connectivity, convenience and superior experience.
Beyond growth, our customer base profile remains a clear differentiator. Fiber churn declined to just 1.4%, reaching historically low levels, reflecting the depth of our customer relationships as well as the trust in the services we deliver.
This high level of loyalty supports the long-term sustainability of our fiber business and contributes to stronger lifetime value generation.
Commercial momentum also remained healthy throughout the period. FTTH net additions reached 213,000 access, 6% higher than a year ago.
At the same time, we have continued to expand our footprint with both speed and discipline. Homes passed reached $32 million, while take-up improved to 25.6%.
This pattern of network expansion and rising penetration confirms that we are successfully converting infrastructure investments into profitable customer growth. Moving to Slide 7. We continue to see the benefits of our strategy to expand beyond connectivity and build a distinguished ecosystem capable of serving a broader range of customer needs.
This approach is translating into consistent growth and stronger monetization. On a last 12-month basis, B2C revenues reached BRL 4.6 billion, advancing 6.8% year-over-year. This performance reflects both the resilience of our Connectivity business business and accelerating contribution of new business revenues that expanded 33.6% versus last year.
The sustainability of this growth is reflected in customer monetization. B2C revenue per RGU reached 68.5 per month, continuing the upward trend observed over the past several quarters as customers adopt more products and services within the Vivo platform.
We strengthened engagement and deepen the relationship with our more than 56 million clients. New business endures as 1 of the most dynamic components of our portfolio.
Consumer electronics revenues increased 6.8%, Health and Wellness advanced 58.2%. Vidro music OTTs grew 25.7% and Financial Services expanded 12.8%.
Together, these businesses now represent 3.4% of total revenues. Innovation also remains an important differentiator. During the quarter, we reinforced Vivo's position as a leading digital hub by introducing exclusive benefits related to Gemini AI and Google Cloud storage for eligible customers.
In addition, we expanded the attractiveness of our offers through partnerships such as YouTube Premium, providing customers with a richer digital experience and further increasing the relevance of our plans. Through tailored offerings, digital innovation and growing portfolio of services will strengthen customer lifetime value and create new revenues for future expansion.
Turning to Slide 8. Our B2B business continues to demonstrate the strength of Vivo's strategy to involve from a connectivity provider into a trusted technology partner for enterprise accord across multiple industries. B2B revenues reached BRL 13.9 billion on a last 12-month basis, up 9.2% year-over-year.
Digital B2B remained the main growth vector advancing 14.9%, while connectivity revenues rose 5.8%. Looking at the portfolio, cloud services continue to lead the performance with 20.9% growth.
Digital solutions increased 20.2%. Cybersecurity advanced 10%, and IoT and messaging grew 1% year-over-year. What stands out is not only the performance itself but also the breadth of our capabilities.
Today, enterprises seek partners capable of delivering tailored end-to-end solutions rather than isolated products. This trend continues to expand Vivo's opportunities across both private and public sectors.
A good example of this approach is our recent partnership with EcoRodovias to expand mobile coverage along 400 kilometers of highways in goat and Minesense benefiting approximately 1.4 million people beyond enhancing connectivity, projects like this highlight Vivo's ability to develop customized initiatives that create value for customers and society.
On Slide 9, we highlight the continued advancement of our ESG agenda for initiatives that generate measurable impact and recognition from leading institutions.
On the environmental front, we continue to expand programs that combine education awareness and circular economy principles. Through the third edition of ore aligned with Vivo's volunteer Day, we promoted environmental education and electronic waste collection across 33 schools, benefiting approximately 32,000 students, teachers and community members.
As a result, the volume of materials collected increased 28% year-over-year, demonstrating growing engagement with responsible consumption and recycling practices.
We also achieved important milestones in waste management and environmental stewership through our certified recycling steel who 100% of our packaging is now recyclable across all Brazilian states, exceeding our original target by 66 percentage points.
In parallel, the Floresta Four Vivo progressed with the planting of its first seedlings in the engagement of local communities, reinforcing our commitment to regeneration and biodiversity preservation.
From a governance perspective, Vivo was awarded the protease and achieved the maximum score in FutuRussell's ESG assessment.
These achievements were complemented by several recognitions, including being named the best ESG company in the sector by semi for the third consecutive year and ranking first in likening top companies in Sao Paulo.
We also surpassed our 2025 gender and ratio diversity targets under the UN Global Compact Brazil's Ambition 2030 initiative.
With that, I would like to hand over to Rodrigo, who will walk you through our financial results. Thank you.
Thank you, Christian, and good morning, everyone. Turning to Slide 10. Our results continue to demonstrate the scalability of our business model as disciplined cost management and evolving business mix translated into double-digit EBITDA expansion and further margin improvement.
Total costs increased 5.3% year-over-year. This was mainly driven by higher costs of services and goods sold rising 10.2% as a result of the performance in handset sales, digital solutions and new business revenues.
These costs remain closely linked to commercial activity and ongoing diversification of our revenue mix.
At the same time, operating expenses remained under control, rising only 3.2%. Commercial and Infrastructure rose 5.7% year-over-year, supported by business growth and ongoing investments in customer experience and network quality.
Personnel expenses grew below inflation at 3.2% year-over-year, highlighting our efforts to drive productivity and efficiency across the organization.
Bad debt showed a behavior consistent with our disciplined credit practices and the resilient quality of our customer base, remaining flat year-over-year in nominal terms and reversing as a percentage of gross revenue.
We are also on track in our migration from concession to authorization plan, generating BRL 202 million in proceeds from copper sales in the quarter.
Going forward, we expect to further advance in the value capture through these initiatives. As a result, EBITDA grew double digit for the first time in 11 quarters at 10.9% year-over-year and margins expanded by 1.3 percentage points to 41.8%, this illustrates our ability to capture growth while preserving cost discipline and operational productivity.
On Slide 11, we stay focused on investing for future growth while sustaining efficiency and financial discipline. As we capture opportunities across mobile, fiber and digital series, we are steadily enhancing the infrastructure and capabilities that underpin our long-term competitiveness.
CapEx totaled BRL 2.6 billion in the quarter, equivalent to 16.4% of revenues, slightly below the previous year.
These investments were mainly focused on supporting growing fiber and expansion of 5G coverage, now presenting 978 cities.
This represents an increase of 325 cities compared to the same period last year, reaching more than 73% of the Brazilian population.
As a result of our investment strategy, we are enhancing our returns and cash generation profile. In the first half of 2026, operating cash flow before leases reached BRL 8.2 billion, growing 11.3% year-over-year and exceeding the pace of CapEx expansion.
This reflects our ability to combine network expansion with operational excellence, translate top line growth and higher profitability into stronger cash flow.
Moving to next slide, we present the progress in profitability, cash flow and balance sheet management. Net income for the first half of the year was BRL 2.8 billion, up 17.9%, delivering the strongest first half year-over-year evolution in 3 years.
This result reflects the consistent execution discussed throughout the presentation, supported by revenue growth above inflation, margin expansion and a greater contribution from more valuable revenue streams across our portfolio.
Free cash flow has followed a positive trajectory since third quarter '25, reflecting our consistent ability to convert operating performance into cash. While the quarterly results can be affected by temporary effects that distorted year-over-year comparability, the underlying trend remains sound.
This is evidenced by the BRL 4.9 billion of free cash flow generated in the first half of 2026, reinforcing the robustness of our cash generation profile and the strength of our balance sheet.
As in prior years, cash generation remains subject to same quarter phasing effects with the overall growth trend remaining unchanged.
Net debt-to-EBITDA was stable at just 0.4x, while our net cash position remained at robust levels, providing significant financial flexibility and supporting future opportunities.
By combining organic growth, ongoing business transformation, strong cash generation and prudent financial management, we are creating a firm foundation for long-term value while maintaining one of the strongest balance sheet in the sector.
On Slide 13, shareholder remuneration remains one of the main pillars of our capital allocation framework. We have already disbursed BRL 7 billion to shareholders as part of our remuneration guidance for 2026, an increase of 32% compared to the same period of '25.
Additionally, we still have a share buyback program of up to BRL 1 billion in place until Febrary '27. Can Fortis track record, the total amount declared since the beginning of the year, it stands at BRL 2.2 billion to be paid by early '27. This represents a growth of 34.5% compared to the previous year.
Looking ahead, we remain committed to distributing at least 100% of our 2026 net income, reflecting our confidence in business fundamentals, a strong cash flow profile and continued focus on value creation for shareholders. Thank you. We are now ready to move to the Q&A session.
We are going to start the questions-and-answer section for investors and analysts. [Operator Instructions] Our first question comes from Mr. Luis has from Chip. Please, Louis, your microphone is already abled.
2. Question Answer
Hello, guys. Christian. Rodrigo, Hydro -- congrats on the results. And thank you for the opportunity of making questions.
I have 2 questions here. The first one, what is your perspective on the current competitive landscape on mobile, in which segments has competition has been most intense. And the second one is about prepaid. In this quarter, prepaid posted positive sequential net adds.
How does that reflect a change in your commercial approach versus a change in competition? Should we treat this as a structural inflection or acquire specific effect.
Louis, that's Christian. Okay. Thank you for your comments and your question. The competitive environment, I think, remains similar to the previous quarter.
No, it's balanced, but in some markets and some segments a little bit more aggressive.
I think Vivo strategy stands on upselling data, digital services and totalization of customers, as I have been saying with a very disciplined monetization.
And the results of this quarter once again proved that we've been successful, especially in the postpaid segment, because we've been upselling first from prepaid to hybrid but also hybrid to postpaid. And overall, we have positive portability and churn remained very controlled in the same level of in the second quarter of '26. And the pricing strategy, we've been adjusting front book prices for pure Perspecta for hybrid.
Now we did that in March as you know. And also, we did a back book pricing for our customer base also in April for more than 75% of the hybrid and almost 80% of the pure postpaid. So we'll be keeping our strategy with great results and net adds being positive, as I said, and the postpaid growth of 7.9%, although the competition is there and we are very attentive specifically in some markets where we have more players competing and also in some segments.
Regarding prepaid, prepaid remains -- you asked me the most competitive one. I believe prepaid remains very competitive. Actually, I think, could be more rational capitalizing the fact that connectivity services are essential, and they are quite cheap the price that we have in prepaid compared to most countries.
So we have also initiatives like as 0 rating strategy for WhatsApp and et cetera, that makes it may be more difficult in the future to migrate to hybrid since most of the offers have like BRL 30 per month as prepaid.
So we've been able to capture customers as you could see the net adds that they are positive. That's good to keep prepaid growing. We have a slightly negative evolution better than other quarters.
And as you know, prepaid revenues represent just 30% of the total mobile service revenues for Vivo. But we need to be capturing prepaid customers to be able to, in the future, migrate them to the hybrid.
So I think that's more or less what you think is there a big change in the strategy, having a net adds, I think as part of our commercial activity.
But again, I think the price difference is still very high between prepaid and the entry point of hybrids.
Our next question comes from Mr. Marcelo Santos by JPMorgan. Please, Marcelo, the floor is now yours.
Thank you for allowing me to make questions. The first question is, I want to double-click on the mobile competition and mobile plans. Like we saw an emergence of light plants like Vivolight in the range of BRL 30, BR35 per month and competitors are also doing something similar.
What is the risk of cannibalization of the higher-priced hybrid plants. I just wanted to get your comments on this new development. It looks like a new category of plant is emerging with a lower price than what we were seeing before.
So just wanted to hear you the pros and the calls and why -- like your view wide I want to see how you see the benefits of this plan? And the second question, maybe more to Rodrigo. What are the main initiatives you have ongoing to secure savings on the lease line? I know you have a lot of things going on. So I just wanted you to provide an update on how that's going?
Marcelo, thank you for your question. That's Christian here. The light plants, they are very segmented, okay? These plans represent like a simpler customer proposition and traditional postpaid offerings like we provide a streamlined onboarding journey with very like characteristics similar to the digital subscription services.
And what they allow us is to address customer segment that may not qualify for traditional hybrid plants because, first, they have like, as I said, less onboard in friction and lower bad debt exposure because they are on credit cards.
So what we are like targeting here is prepaid customers that we would not migrate to hybrid because of credit scoring, for instance.
And we could do that through the credit card payment. I hear, as you said, we have 30 per month, but that's for annual subscription.
So we guarantee 12 months with no bad debt risk or we have the monthly one that is 45 per month that's comparable to some below-the-line hybrid offers that we see in the market.
Again, we don't get the risk of the bad debt and 1 is cheaper, we guarantee the annual contribution of the customer. That's compared to what we have today in the market the prepaid, as I said before, that its average offer among players is BRL 30 per month, 15 days or 30 for 30 days.
So again, we believe we're pursuing a more for more strategy again, because we guarantee recurrency from our prepaid customers that we don't have it guaranteed and also we reduce or eliminate any bad debt exposure or risk. Yes, have I answered you have.
Marcelo, thanks for your question. let's say, first, leasing. It's important to remember there is a lot of phase in leasing payments.
But if you look in a 12-month base, our leases are increasing only 1.8% year-over-year, which means we are on track in our goal to remain or keep leasing payments growing below mobile service revenue.
We try to share that the initiatives in some pillars here. One of them is to negotiate the contract with the tower cost.
The other one is to find some efficiencies in terms of usage and technology regarding the tower force. And the third one is more total. We try to find some kind of new company that could be useful for us to increase the tenant ratio for each dollar use.
And as you know, in Brazil, we have average like 1.40 per tower. In the U.S., it's more than 2. So we see some room to increase this rate.
And then that's the overall of our initiatives.
Our next question comes from Mr. Gustavo Miele from Goldman Sachs. Gustavo, the floor is now yours.
Christian Rodrigo like to ask 2 questions. The first one would be regarding profitability. We see that this is the third quarter in a row that device sales appears to be a positive highlight for the company, but one question that we usually receive from investors is the impact that this could have on company's margin.
So my question would be whether this makes sense if this should be dilutive for margins going forward? And if there's any lever that we should think about for the remainder of the year that could offset this impact of mix on margins until the end of 2026.
This would be my first question. The second one is more straightforward. We note that there is apparently a nonrecurring event on the financial results, which is finding show revenue of BRL 56 million related to a tax nasty program.
Just want to make sure whether this is purely nonrecurring or maybe if we should think about this repeating and the results of the second half of this year.
So Gustavo, that question. Yes, it's nonrecurring. So as it was stated, it's a nonrecurring effect. Going to the EBITDA. Yes, I think it's important to see the evolution of our EBITDA. We've been growing EBITDA in 10.9% even when we exclude any other effect that you may consider here copper sale or whatever, the evolution is very strong.
I think the strategy of selling devices and electronics in general. It's a very successful strategy apart from the numbers of -- that it brings to revenues or EBITDA, it also allow us to bring more customers to our stores.
We have 1,700 stores that's ready to attract people. And once they are there, far from buying these products, we are also able to sell services and when we talk about electronics, it's important to realize that it's not only smartphone and more.
We are also selling accessories and other products that we have much better margin than in smartphones. So when I sell Smart full attached to the case to the charger and whatever, I have different margins when I compare the smartphone one and with the other ones.
So EBITDA has a very strong evolution. Margins have a strong evolution, but more important than that, what I think we showed here is that the EBITDA minus CapEx evolution as an absolute number, has a very strong positive evolution and in margins over revenues also presenting strong evolution.
So that comes as part of our strategy to have more smartphones and electronics again, driving customers to stores, online and offline and also contributing to the sale of more services and more electronics with better margin than smartphones.
Our next question comes from Mr. Rogerio Araujo from Bank of America.
Christian Rodrigo and 2 questions on our side. One is a follow-up on the mobile market. We heard on our competitor's call that Vivo was aggressive on discounts in the second Q.
Could you please clarify what may have driven that perception? And also what should expect going forward in terms of discounting? And my second question is on churn ratio.
Could you walk through the main drivers for lower churn versus competition? Is it purely the postpaid mix and conversions? Or are there other factors and how do you see this lower churn translating into tangible benefits going forward?
I think the tangible benefits are the strong evolution of our revenues along many, many consecutive quarters.
I think that's the best answer. Why we believe that our churn represents the preference that customers have for Vivo and the loyalty they have for Vivo.
Now I think here, Roger, it's a combination of factors. I really don't know to whom I'm answering and some -- what the comment was, but I don't think we have aggressive -- more aggressive offers in the market.
What we do have is the ability to offer the best convergent offer in the market.
In a single plan that is Vivo total we can offer all the services, and that is driving preference and also driving loyalty.
If you look at the evolution that we have in Vivo Total 1 year ago, we had 30% less customers.
So now we have 3.8 out of the 8.2%. Additionally, to the Vivo Total, we have convergence with different plants.
That is another 1.5%. So Vivo has been able to drive convergence in a way that, at the moment, is unreplicable. That is driving the general evolution of revenues, both in mobile and in fixed is also driving down the churn level in both mobile and in fixed, also giving us room to sell more digital services as well.
If you consider what is representing digital services in B2C B2B added together is more than 12%. If I add to that to the previous question about smartphone and electronics is another 7%.
So 19% of our revenues are coming from services or products that are not 100% telecom.
That is what is driving the preference for Vivo, the ability to do in 1 single shop one-stop shopping strategy. You can have everything from technology addressed by a company that is also recognized by superior customer experience, both with the best network in mobile and fixed, but also for the best customer service.
So I think that's the answer. So that's what's going to keep us going and growing in the future quarters.
Our next question comes from Mr. Leonardo Olmos from UBS. Leonardo, you may now speak.
Hi, everyone. Good morning. Can you hear me well? Yes? All right. So Christian, you gave an interview discuss the probable acceleration of asset sales in the second half. There is also some tailwinds, negative -- sorry, headwinds, negative effects on net income this quarter. .
So my question is, should we expect an acceleration on net income in the second half of 2026. And as a consequence, an acceleration of dividends.
I'm not giving additional guidance. But what we -- I'm going to explain, let your question, what is copper and real estate and why I'm positive about the increase on the number that we see there.
And also, I think only before I start that, I think there was also -- I think in the past, we said that depreciation would be higher these 2 quarters because of the legacy technology that we are depreciating.
So we are ending up the depreciating process right now. So also, it gives also a positive upside for the third and in the fourth quarter regarding net income.
For copper and real estate, if you see we said that we would sell BRL 3 billion in copper -- up to now, 2025 and 2026. We reached more or less 443 million, okay? So it's still missing 2.5%.
If I look to real estate, we already sold EUR 206 million, so is still missing, if you continue the 1.5 is still missing a lot for the total number.
So the 2 together is more or less EUR 650 million total sale.
And we said that it would be 4.5%. So it's still missing 3.850 to reach our number. So going forward and if you look at the trend of the copper, it was BRL 86 million in the first quarter. It's already 200 million in the [ 0.5% ] in the second quarter and the trend is to go up in the third and the fourth quarter.
In real estate, we didn't sell anything this quarter and the previous one but we organized ourselves to start selling more in the next quarter. And I think that was part of the thing that was in the interview.
We selected 47 properties that are valued around BRL 600 million.
We put them for sale. Now we have to wait to see. We started to have some offers but we want to sell that in the better price and the best price for the company.
So that's what I said that I see the opportunity of starting selling some of them in the third and the fourth quarter. And of course, if that comes along, it has a direct impact on the net income for the quarter.
Yes. This is very promising. Thank you very much. Have a good day. .
Our next question comes from Mr. On Canmore from HSBC. Paliou may now speak.
So my first question is on an extension to the previous question asked by the analysts.
You have this light plants that you have introduced, have you till late seen any cannibalization of your own control base that are shifted downwards towards the light plan.
And the second question is regarding the prepaid churn. This quarter, it seemed that you had a very low prepaid churn compared to others. So I wanted to understand if there is some factor there.
As I said, any, it's not cannibalizing hybrid. It's a different value proposition. It's targeted to a different type of customer. It is more addressed to prepaid customers that cannot have the hybrid plan in the standard way due to different ways -- different reasons, sorry, may be credit scoring that we see that one of the most attractive one.
The credit corporate attrition in Brazil has gone up in the last years. So there are customers with the ability to get a credit score for a bank that maybe doesn't get from us. So they now have an opportunity to have an annual plan of a monthly plan where we don't have the bad debt risk and we can offer a very attractive offer.
The hybrid will be differentiated by the other characteristics, specifically the one that I can build the customer, the customer don't need to -- the customer doesn't need to use his or her credit in the credit card.
So prepaid churn is not something that we follow very closely because no prepaid is driven by other metrics. More importantly, is to attract and to keep a very healthy customer base with high recurrence. That's what we aim in the prepaid.
And that's basically the way we measure this segment.
Okay. And did you see any change in the recurrence from the customer in the prepaid segment?
It's going very well. I think we are -- as I said, the evolution of the revenues are slightly negative, but it's better than previous quarter. So I think we've been working closely to increase this recurrency.
And once it becomes very recurrent, there's always a very attractive way for us to migrate these customers to hybrid. And now we have also a second option to migrate these customers to light where I can get a guaranteed annual fee.
If you prefer the offer that is annual plan as more or less the same logic that customers are used to have when they subscribe digital plans.
Okay. Yes. Yes. Thanks, everyone. Thanks, David. Thanks .
Thank you. Thank you. .
Our next question comes from Mrs. Maria Clarin from Taze from Itau. Ms. You may now speak.
I have 2 questions from my side. So the first 1 on fiber and the second 1 on tactics. .
So first, on fiber, how should we think about the next phase of growth for the -- should we expect acceleration of organic growth ahead or M&A could be an important piece of growth in the next years. If you could provide an update about the competitive environment in fiber, it would be really helpful. And the second question, when it comes to CapEx, it came slightly above our expectations.
So I was wondering if this is somehow related to accelerating investment in fiber. Could you please elaborate on that, please?
Matla, thank you for the question. Yes, we've been growing fiber in a very healthy way, as you said. I think we're increasing the number of home passed and we're also increasing the number of net adds.
I think that's the strongest by far, evolution of the fiber business in the Brazilian market. We've been doing that organically. Actually, we also bought what we had, the other partners that we had in Brazil.
And now we control 100% -- almost 100% of the infrastructure that we have today to provide fiber.
We are growing on average between 2 and 2.5 million home pass per year. And we grew net adds almost 900,000 customers last year all the strategy is also driven by convergence. So we are also deploying network where we have our customers, especially postpaid to be able to address it with Vivo total.
Going forward, we see a market that is much larger than the footprint that we have today. We could do that, continue to grow it organically or access M&A opportunities where we could find someone with no overlay or with a limited overlay with our network with the technical conditions of the network and the ones that we expect to have because we have like a high-quality network and high-quality equipment and customers' premise and at the right pricing.
So we are very attentive to see if we find the right target -- if we don't, we will continue to build it ourselves.
So I don't have many more to share only that our strategy has been very successful because net adds and the turn level also, I think, are a great reflect of the preference that customers have for the servers that we provide.
So we continue that because we see fiber as a value creation opportunity because of our unique assets. Now the brand, the channel, the customer service, the digital ecosystem and our ability today to offer the best plan of convergence in the market in a single plan.
Regarding CapEx. No, the CapEx is like there is also the seasonality of the intensity of this quarter doesn't reflect what we envision for the year. I think as we said last year, we've been working for CapEx optimization in the ratio CapEx over revenues.
So we continue with this positive trend and because CapEx as seasonality is not also because we see revenues growing in a very positive way in all lines.
And in some lines are also not driven by CapEx. So that gives us a lot of room to continue with the trend of gradual improvement in CapEx intensity in an annual base.
Our last question comes from Mr. Daniel Federle from Bradesco BBI. Please, Mr. You may now speak.
Hello. Good morning, everyone. Congratulations for delivering a very solid mobile service revenue growth, I mean intensify competition. My first question is that I would like to hear from you. If it's possible for Vivo to remain immune while competitors are like delivering much lower growth.
The industry seems to be suffering. So if it's possible to Vivo to remain a part of this industry trends? And the second question, one of the main concerns from investors has been that the front book price has not been increased so far.
It seems that someone needs to make the first move given that Viva is outperforming competitors, do you see room for Vivo to be the first mover, increasing front book prices in the control plan.
Thank you for the question. Like we've been always like analyzing opportunities because there is inflation. So we need to have it to consider it. I think -- going to your first question, I think our ability to grow is the ability also to raise price when it's needed because we have inflation and we need to address it.
Our cost is addressed by inflation. So we need also our revenues to be addressed by inflation. I think we've been very brave to do it.
And as I said, we did that in the front and in our customer base. I think also our ability to continue to grow revenues is driven by convergence convergence, not only fixed and the mobile, but also convergence, they all services to the same customer. We've been very obsessed about selling more digital service, selling more insurance, selling more other products, as I said, electronic products to our customers, and I think that is paying off to be the right strategy to keep revenues growing even when we are the leader or even when we have the largest amount of revenues.
So I think that's the answer to your first question. The second question, as I said before, I think there is maybe some segments that are not being addressed by inflation that it should prepaid for me is -- and if prepays is not addressed with a price correction driven by inflation, it's difficult to migrate to an entry plan that is much higher than the prepaid average monthly fee.
But we are analyzing the market as a whole. And we'll be bringing news as we brought the 1 now that you just have found out the light. That is also a great way to get recurrency guarantee low bad debt.
And also we're going to come up with different ways also to address this in the prepaid and the entry level of the hybrid plan.
Okay. Just confirm the prepaid prices, they need to increase before increasing [indiscernible].
I'm not just 1saying that. I'm saying that I'm analyzing the old segments. And I'm also analyzing the prepaid as well. I'm not saying that 1 has to be before the other one. Said that it's part of the strategy.
The question-and-answer section is over. We would like to hand the floor back to Mr. Christian Gebara for the company's final remarks.
So thank you all for being with us again. I think we restate all our messages, but I believe this quarter proved more than ever on our ability to drive revenues up, our ability to keep growing also our ability to monetize all our assets from the migration from a concession to an authorization that is still in the beginning of the journey and more importantly, our ability to drive cash flow generation.
We are very driven by the EBITDA minus CapEx minus leases, and I think we've been able to prove that in all these different lines, the company has been able to drive up, at the same time, being very attractive for customers net adds in a very solid churn in a very downward trend in our services and products and also being able to differentiate our revenue mix.
So going forward, we continue to do that and of course, keeping shareholder remuneration at the top of our agenda. Thank you so much. And if you have additional questions, please reach us Okay. Thank you.
VIVO conference is now closed. We thank you for your participation, and wish you a very nice day.
Telefonica Brasil S.A., - ADR (Representing Ord) — Q2 2026 Earnings Call
Telefonica Brasil S.A., - ADR (Representing Ord) — Q1 2026 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen. Welcome to Vivo's First Quarter 2026 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at ri.telefonica.com.br. The presentation will also be available for download. This call is also available in Portuguese. To access you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that select mute original audio. [Foreign Language].
[Operator Instructions]. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Vivo's Executive Board and the current information available to the company.
These statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry and other factors that could cause results to differ materially from those expressed in their respective forward-looking statements.
Present at this conference, we have Mr. Christian Gebara, CEO of the company; Mr. Rodrigo Monari, CFO and Investor Relations Officer; and Mr. João Pedro Soares Carneiro, IR Director. Now I will turn the conference over to Mr. João Pedro Soares Carneiro, Investor Relations Director of Vivo. Mr. Carneiro, you may begin your conference.
Good morning, everyone, and welcome to Vivo's First Quarter 2026 Earnings Call. Today, our CEO, Christian Gebara, will begin by presenting Vivo's execution in connectivity and digital services as well as highlight our key ESG accomplishments for the quarter. Then Rodrigo Monari, our CFO, will comment on our controlled cost evolution, free cash flow generation, profitability and shareholder distribution in the period.
With that, let me turn the call over to Christian.
Thank you, João. Good morning, everyone, and thank you for joining us today. Vivo began 2026 at a strong pace. Once again, we delivered growth above inflation across our core metrics, supported by customer base expansion, resilient revenue performance and continued margin improvement.
On the operational side, postpaid remains a key driver of value creation. Our postpaid base grew 6.9% year-over-year, reaching 72.1 million access, representing 69.5% of our mobile base. This execution reflects a healthy combination of net adds, disciplined pricing and focus on customer experience.
Fiber also remains an essential growth vector. We reached 8 million homes connected, advancing 11.5% year-over-year with our footprint expanding to 31.5 million homes passed. Beyond scale, fiber strength convergence deepens customer relationship, reduces churn and supports a stronger revenue profile. Regarding our financial results, total revenue grew 7.4% when compared to the previous year. Mobile service revenues delivered a 6.6% increase, while fixed revenues grew 5.1%, underscoring the sustained contribution from fiber and our B2B portfolio.
In terms of profitability, EBITDA rose 8.9% year-over-year, lifting margins to 40.2%. Operating cash flow reached BRL 4.2 billion, an 8.5% improvement, while net income expanded 19.2% to BRL 1.3 billion. Free cash flow generation totaled BRL 2.2 billion during the quarter. Our efficient operations allow us to remain fully committed to shareholder returns. So far, we have allocated BRL 7 billion for distribution in 2026, reaffirming our confidence in meeting our guidance for the year.
Moving to Slide 4. We highlight the ongoing transformation of our revenue mix as it continues to drive positive impact on our top line. In the first quarter, total revenues grew 7.4% year-over-year, led by a well-balanced contribution from both mobile and fixed services as well as the growing relevance of our new business. Postpaid revenues rose 7.8% year-over-year, demonstrating the strength of our value proposition, balanced pricing and enhanced customers.
FTTH revenues also improved, advancing 9.3%, driven by sustained demand for high-quality connectivity and convergence. It's also worth highlighting the strong performance of our handsets and electronics line that grew 26.6% year-over-year, fueled by a more competitive portfolio and a new go-to-market strategy that enhanced the availability of in-store devices, accessories and electronics in general.
Our new business continue to play a central role in our strategy. They now represent 12.1% of total revenues, an increase of 1.8 percentage points versus first quarter '25 with meaningful contributions from both B2C and B2B solutions. This progress emphasize our long-term vision of revenue diversification, scaling of digital services and consolidation of our ecosystem. As a result of our commercial momentum, postpaid and fiber revenues now account for over 74% of service revenues, highlighting a structurally stronger and more resilient revenue mix as we begin 2026.
On Slide 5, we show how our solid mobile operation once again driven by Vivo's differentiated network and superior customer experience. By the end of this quarter -- of the first quarter, our total mobile base reached 103.7 million access, representing year-over-year improvement of 1.3%.
Postpaid, excluding machine-to-machine and dongles, remains a key growth engine, expanding 7.2% to 51.6 million access, while machine-to-machine and dongles also delivered a healthy increase of 6.4%. Commercial performance was particularly strong this quarter with postpaid net additions accelerating 22.7% compared to last year, further underlining Vivo's leadership in this segment.
Importantly, this evolution comes with value. Postpaid churn remained well controlled at 1.0%, confirm the depth of our customer relationships and loyalty. At the same time, mobile ARPU reached a record level, up 5.7% year-over-year as customers continue to migrate to higher value plans and consume more data.
In prepaid, while access growth is still negative, revenue is gradually improving with the year-over-year decline narrowing to minus 1% this quarter. This is the result of ongoing efforts to stabilize the base, enhance monetization and prioritize customer recurrence.
Overall, these results showcase the resilience and quality of our mobile platform, combining continuous postpaid expansion, record ARPU, low churn and consistent recovery of prepaid revenues. This gives us confidence in our strategy and support sustainable growth throughout the year. With that, let's move to fiber.
Turning to Slide 6. We further highlight the strength of our fiber business and growing role of convergence as a key differentiator for Vivo. Fiber access demonstrates continuous momentum, maintaining double-digit year-over-year increase and reaching 8 million connections. This performance clearly reflects customer preference for high-quality connectivity and integrated solutions with Vivo Total once again standing out. Growth is progressively driven by convergence.
Vivo Total Access expanded 32.6% year-over-year, reaching 3.6 million customers and now represents 44.7% of our FTTH base, an expansion of more than 20 percentage points in just 2 years. This confirms the attractiveness of our convergent proposition and its ability to capture even more customers. Our fiber footprint also expanded with homes passed reaching 31.5 million, up 6.2% year-over-year, while the take-up rate improved to 25.4%. This combination is strength our conviction in achieving network penetration above 30% over time as we continue to translate fiber expansion into customer base growth.
Moving to Slide 7, we give more color on the acceleration of our B2C business, supported by stronger totalization of our customers' needs and growing relevance of service beyond connectivity. On a last 12-month basis, total B2C revenues reached BRL 45.7 billion, growing 5.9% year-over-year. This performance shows the resilience of our core connectivity as well as a strong acceleration in new business that expanded 31.5% and now account for 3.2% of total revenues.
Monetization trends remain very solid. B2C revenue per RGU increased to BRL 67.2, underlining the effectiveness of our strategy to deepen customer engagement, drive cross-selling and extract greater lifetime value from our existing base. Looking specifically at new business, we continue to see robust and well-balanced growth across our main verticals. Video and music OTTs remained the largest contributor, growing 24.8% year-over-year.
Consumer electronics delivered another strong results with revenues up 56%, supported by higher demand during the period. Health and wellness continued to stand out as one of our fastest-growing categories with revenues up nearly 68%, supported by the strong scaling of Vale Saúde that now exceeds 500,000 subscribers, up 13% year-over-year. This highlights our ambition to scale services that are adjacent of our connectivity solution.
In parallel, we maintained the expansion of our financial services capabilities. Through Vivo Pay, we launched our proprietary installment plan, broadening access to credit and enabling a more seamless purchasing experience for handsets and electronics, while further supporting monetization and customer retention.
Altogether, these developments emphasize Vivo's evolution into a broader digital platform, while connectivity remains our core foundation and increasingly diversified ecosystems of services in -- is enhancing customers' lifetime value, expanding opportunity and positioning us for sustainable growth over the long term.
On Slide 8, we provide an update on the development of our B2B business and how the ongoing shift in our revenue mix toward digital solutions continues to gain traction. B2B revenues reached BRL 13.7 billion, growing 11.8% year-over-year, once again delivering a remarkable performance. Digital B2B remains the main growth lever, advancing 23.8% and reaching BRL 5.4 billion over the last 12 months, while B2B connectivity also posted robust growth of 5.2%, demonstrating the solidity of our enterprise services.
Within digital B2B, performance remains well balanced across the portfolio. Cloud services expanded 29% year-over-year, supported by rising demand for scalable infrastructure and hybrid environments. IoT and messaging advanced 17.3%, while digital solutions grew 21.1%, driven by broader adoption of customized enterprise offer -- data protection. In this context, B2B is gaining relevance within Vivo's overall revenue mix, reinforcing the segment's role as a key growth pillar is evidenced by accelerating demand from companies undergoing digital transformation across multiple industries.
A clear example of this strategic positioning is our partnership with São Martinho in the agribusiness sector. This initiative illustrates Vivo's leadership in enabling data-driven, sustainable and competitive operations tailored to customers' needs. More broadly, partnerships like the underline how our role is evolving beyond connectivity, positioning Vivo as a trusted digital partner for enterprise customers.
Turning to Slide 9, we show how ESG remains a core pillar of Vivo's strategy with consistent progress across people, environment and governance, translating into tangible outcomes for our stakeholders. Vivo continues to be recognized by major global benchmarks. We lead B3 Corporate Sustainability Index across all sectors for the third time, are still the only Brazilian telco included in the Dow Jones Best-in-class World Index and for the sixth consecutive year, we were recognized by CDP for Supplier climate engagement.
On the people front, we continue to expand initiatives focused on employee well-being, including Hospital Púrpura that offers structured care journeys and has seen growing adoption since its launch. Today, the platform is available to more than 80,000 people, including employees and their relatives.
In addition, Vivo was named the winner of ANATEL's 2026 Accessibility ranking, reinforcing our position as a leader in digital inclusion. From a governance standpoint, following the appointment of a new Board member in April, women now accounts for 42% of our Board of Directors, marking another important milestone as we continue to foster diversity across all levels of the company.
On the environmental agenda, we strengthened our external commitment by joining additional initiatives of the UN Global Compact in Brazil, underscoring the credibility and consistency of our ESG road map.
With that, I will hand over to Rodrigo, who will walk you through the financial results. Thank you.
Thank you, Christian, and good morning, everyone. Moving to Slide 10. We provide more color on the evolution of our cost structure and how improvements in cost mix turned into EBITDA growth in the first quarter.
Total costs reached slightly over BRL 9 billion, reflecting strong commercial momentum alongside continued control across our cost base. Looking at the composition, cost of services and goods sold increased 12% with higher volumes in handset and accessory sales as well as the expansion of new business revenues. This cost line is fully linked to revenue-generating activities and our ongoing business mix transformation.
On the other hand, operating costs grew 3.9% year-over-year. Commercial and infrastructure, our largest cost component rose below inflation for the period, maintaining the trend for the fifth consecutive quarter. At the same time, we continue to assess opportunities to deploy AI across our operations, further enhancing the consumer journey and supporting gains in efficiency. Despite the progress already achieved, we remain focused on moderating the evolution of this line.
During the quarter, copper revenues showed a slight deceleration, reflecting a tactical decision to pause sales in March. Sales resumed in late April, keeping us on track to deliver the planned BRL 4.5 billion in concession-related assets by the end of '28. With regards to bad debt, the overall trend remained stable, representing 2% of gross revenue. This favorable cost mix resulted in a high single-digit year-over-year EBITDA growth with the margin expanding to above 40% in the quarter.
On Slide 11, we present the progress of our operating cash flow in the first quarter. CapEx totaled BRL 2 billion, reflecting continued investment in our network, consistent with our strategic priorities. This represents capital intensity in line with first quarter '25 and below the previous year's average as we continue optimizing CapEx allocation.
Operating cash flow before leases totaled BRL 4 billion that resulted in a 10% year-over-year increase in operating cash flow after leases, amounting to BRL 3 billion. This performance demonstrates our ability to convert EBITDA into cash through a combination of efficiency initiatives in both owned and leased assets. So this translated into further margin expansion, both before and after leases, confirming the healthiness of our cash profile.
Turning to Slide 12. We highlight how our financial management discipline results in a higher profitability. Net income in the first quarter had the highest yearly growth in over 2 years, confirming our operational execution diligence and reflecting the sustained evolution across our core business. Free cash flow was up around 4% year-over-year with the quarterly comparison influenced by timing effects.
Looking ahead, we remain confident in our capacity to deliver a strong performance year by end. Our net cash position advanced materially, up 65% year-over-year. Our net debt over EBITDA also improved, now reaching only 0.4x in the last 12 months, underlying the ongoing strengthening of our balance sheet. Overall, was another robust cash generation quarter, keeping Vivo in a very strong position to invest with responsibility while maintaining attractive returns.
Finally, on Slide 13, we would like to highlight that shareholder remuneration remains a priority of our strategy as we reiterated our guidance for the year. As of today, BRL 7 billion has already been confirmed to be distributed during the year. This amount includes the interest on capital declared in '25 and paying in April this year as well as the capital reduction scheduled for payments in July '26.
In addition, we have declared BRL 890 million year-to-date to be paid by April '27. Also, in February '26, our Board approved a new share buyback program of up to BRL 1 billion to be executed through February '27. This initiative is fully aligned with our efficient capital allocation strategy and our focus on long-term value creation for shareholders.
To conclude, we reaffirm our commitment to distribute at least 100% of the net income generated in 2026, supported by our strong cash generation and conservative leverage profile. Thank you. We are now ready to move to the Q&A session.
[Operator Instructions] Our first question comes from Luis Chagas with XP.
2. Question Answer
So from my side, I have 2 questions. So the first one regards broadband. Vivo is executing very well with Vivo Total and is gaining clients consistently, while the market is somewhat mature. So the question here is, how do you see competition in the broadband segment? And if you see any room to increase prices in fiber? And over the next 3 years, what's your goal in terms of Vivo Total's penetration in your FTTH base?
And the second question is about prepaid, which is virtually stable year-over-year, while the front book prices have been stable for some time. Do you see any room to increase prices in prepaid?
So Luis, this is Christian. Okay, many questions. I'm going to go for the ones that I remember the last one. So we increased around 25% of our customer base price in the back book of fiber in January. So we are following the right timing to do this increase. We also had Vivo Total price increase in April, okay?
So we are following the annual price evolution that we normally have. And our focus is strongly in Vivo Total. And then I will give you more detail about your first question before I'm going to go to prepaid that you asked also. Yes, prepaid. Yes, we do believe there is room for price increase. We are moving now more to the monthly tariff. We are not giving WhatsApp. That's also a way to monetize. And our revenues, if you compare to the first quarter of '25, decreased 1%. That is a much lower pace than it used to decrease before.
So if you look back, for instance, in the first quarter of '25, we were declining more than 11%. Now it's only 1%. This is a combination of more customers and our ability to keep them engaged with Vivo and selling better plans, in this case, longer plans that can also increase their ARPU.
Your first questions were related to fiber. Yes, fiber it's very competitive, as you described. Our strategy, it is to have more and more Vivo Total customers. For you to have an idea in the first quarter of '24 of our total fiber customers, just 24% of our Vivo Total. Now it's closer to 45%. Apart from that, we have another 20% that are converted to not Vivo Total.
Yes, our strategy is to keeping Vivo Total because churn is much lower of fiber customers when they are in this convergent plan. And apart from Vivo Total, we are also upselling more digital services as the one that I described, think successfully, the video ones, there are more than 4.4 million customers already with that.
So once we sell more service to the same customer, that's why also we highlighted the revenue per customer because we do believe it's a very relevant metric to understand the recurrency and how healthy our revenues are because they come from the ability to have more loyal customers spending more money with Vivo, increasing their lifetime value.
Regarding fiber as well, the market is very fragmented. But in the first quarter, #1 player is Vivo, and we get -- we got 200,000 net adds. The second player, minus 80%. Our market share is 19.2%. 1 year ago was 18.4% -- so that gives us a very like clearness that we are following the right strategy, and that's the one that we're going to continue to follow, expanding more network, penetrating more network and selling more convergences and plus digital services.
Our next question comes from Leonardo Olmos with UBS.
So I want to discuss a little bit margin. So if you look at commercial infrastructure, positive surprise, but bad debt was a negative one. And so I just wanted to check on if you're growing so much B2B and a few of revenues that have lower margin, but they are positive in terms of free cash flow.
So the overall discussion I have is, if you have a margin contraction, that impacts net income, but the free cash flow is positive. But dividend is linked to net income. You see I'm going -- if you have lower net income and lower dividends, how can we see in dividends, the increase you are delivering free cash flow? I'm not sure I was clear, but just one question I have. So how can you see increase in dividends proportionate to the free cash flow increase you are delivering?
Leo, thank you for your question. I will try to answer if I understood them correctly, but our net income is increasing 19.2% and we already have a commitment of distributing BRL 7 billion this year that is way above what we distributed last year. So I don't see a concern about shareholder remuneration. And apart from that, as you know, we already declared another tranche of interest on capital and also a new program for share buyback.
Going to your question about cost that I don't know it's the one that you are also elaborating. You are right. We had a very positive result in commercial and infrastructure. We had, as I said, increase in everything that is related and linked to revenue expansion. Our -- and talking about B2B, we have an increased commercial activity in digital B2B solutions because we're doing very strongly in these lines in all of them, cyber, cloud and et cetera.
And of course, there are some cost of services linked to that. Apart, I think from the B2B digital service and also there is part of that, that is B2C. When I sell more OTT, video OTTs, I'm also contributing to more cost of services sold. But I think goods sold is also an important driver of this quarter, but our revenues grew 26.6%.
So again, costs linked to revenues. Going to other one that is the provision of bad debt. We are very clear. Our B2C bad debt has not changed. We have more or less the same level. Actually, I would say that if I exclude one single B2B customer, my bad debt would go to 1.88%. My average bad debt over revenues last year was 1.92%.
So that's not a story about B2B not performing. I'm talking about one single B2B customer that didn't perform last year. So we're giving you full transparency in the bad debt line. All the rest, B2C and all the rest in B2B is 100% under control. So that's more or less the explanation that I had about cost. And about -- I don't know, if you have anything else about free cash flow that I can try to respond.
Yes. No, no. Actually, you answered more than I asked for. So thank you. I think those are all positive news and the net income increase, like you said, 19% goes to dividends. So...
I will add something else that you didn't ask me, but I got the opportunity about costs. Last quarter, by the end of last quarter, the quarter that we are talking about, there was -- we had to technically stop the sale of copper. There was for a moment, a change in the tax over copper sale. We extracted the copper, but we didn't sell. Fortunately, that tax change was reverted.
So now we are able to continue in the increasing pace of selling copper, as we said before, because some people may say, "Oh, you sold more copper in the fourth quarter than you sold in the first quarter." That's correct. I extracted a larger amount, but I didn't sell because I had a tax impact that I was not expecting that fortunately was reverted. And here, we prioritize the return to our shareholders. So that's why we're going to see a better movement of copper sales this quarter, this second one.
Our next question comes from Marcelo Santos with JPMorgan.
I wanted to go a bit back on Luis's question regarding the -- actually, your answer to his question regarding the back book price. Could you please remind us when did you increase last year and like what time for each product? And so far, what you did this year? I just wanted to recap here year-over-year to understand the calendar effect. And the second question is regarding CapEx. Could you provide us with considerations regarding the CapEx outlook for this year?
Marcelo, in the hybrid last year, we had price increase in back book, okay, April and August. And now we are doing April again around 76% of our hybrid customer base. The remaining -- we're expecting to do that in August, but it's to be confirmed.
Postpaid last year, April, remaining August, this year, again, around 80% in April, remaining probably in August. Fiber, it was more distributed along January and June. And again, we started fiber also in January and again, probably June, the rest. Vivo Total last year, April, this year, April, 100%. Is that clear?
You gave some percentages for this year. Would it be something we are willing to open for last year? Like you said 75% you're going to do this April on hybrid. How much was -- you gave...
76% was in hybrid, 79% was in postpaid.
Okay. Super clear.
Okay. Second question, CapEx, no? Yes, CapEx...
Marcelo thanks for your question. First, we would like to highlight that our CapEx intensity remain in line with first quarter '25 and below the average of full year '25. As we are committed to deploying resources with discipline, most of the CapEx is focused on the mobile network enhancement along with fiber expansion and customer connections. To sustain our leadership in our position, okay? At this point, there are no structural differences in composition or CapEx strategy for this year.
I want to highlight here, if you look to operating cash flow, EBITDA minus CapEx, we came from a margin in the first quarter of '24, 23.6%, went to 25% and now we are in 26.2%. That is 100% aligned with our strategy of optimizing CapEx, but also having the ability to increase in new businesses, keeping EBITDA absolute evolution in a very strong positive way. So now our operating cash flow over revenues is 26.2%...
Just a quick follow-up there. I mean the first line, Rodrigo, you said is CapEx intensity remains in line with what happened. But for the year, in the past, you used to say that CapEx intensity should gradually go down like 2026. That was my understanding of previous calls. Is this something you're still committed to see capital intensity percentage of revenue?
No, that -- we always said that the annual CapEx intensity. Yes, it's always difficult to be discussing quarter-over-quarter. So over the year, we are committed to improve CapEx intensity, and that's what we're going to do in 2026.
Our next question comes from Rogério Araújo with Bank of America.
I have a couple here. First on the asset sales from the concession migration, you reiterated the expected amount by '28. But how can we think about the level expected in the remaining quarters of 2026? So you resumed sales in end of April. Should we expect something linear throughout '28? And also on the remuneration to shareholders regardless of the net profit, you committed with BRL 7 billion.
Just a follow-up here. Is this at least BRL 7 billion? Or is this -- so the absolute number, BRL 7 billion. This is first one. And the second on leases, your main peer have been engaging in negotiations with the tower companies in Brazil, and this has been leading to reductions in lease payments. We haven't seen the same at Vivo. Is there room for similar negotiations? And how should we expect it to play out regarding magnitude and timing?
Rogério, this is Christian. Yes, as I said before, we stopped for a while the sales, but resumed the sales of copper. Yes, you can expect increase in the number that we're going to present for copper sales along the year quarter-over-quarter. That's your first question. The second question was about...
At least...
Its' actually, at least BRL 7 billion. That's our confidence that we're going to reach is, again, the guidance is at least 100% of net income. Since we have already declared and paid and we will be paying the other tranche in July of BRL 7 billion, it means that it's at least BRL 7 billion for the year.
Perfect. And regarding lease negotiations with tower cos?
Yes. We don't need like to give what we are negotiating with them. But of course, we are negotiating with all of them. Our value related to leases, it's like there's always like some phasing related to the numbers that we presented, but it's very well controlled.
I think our goal is always to keep lease payments growing below mobile service revenues. We do that through coordinated efforts to reduce the unit cost, and that's the negotiation that we have with the tower. We also need to increase coverage. You understand that we need to keep it like we are the #1 company with 40% of the postpaid market. So we cannot stop that.
So if you look back at 2024, the amount we paid in the first quarter was broadly in line with the levels paid in the final quarters of 2024. So more than a year later, our lease disbursements remain very stable. So here, our challenge is to continue to grow it below the growth of revenues that we have in mobile. We of course, are negotiated with tower companies, but we will not let Vivo not being the leader in coverage. So that's why we're also investing in more coverage because Brazil needs it. So that's our target, and we are comp -- we are complying with all of this since the first time that we talked about this.
Okay. So just a follow-up here. Do you -- so if you are not increasing the coverage, would it be dropping significantly?
It's going to be dropping, of course, because Brazil has many things. There's not only negotiation. There is colocation. We have a very low level of colocation in Brazil. It's around 1.4, while what we see in Europe is above 2. So if I stop my network as it is today, Rogério, I would be negotiating to increase colocation with all the tower companies that I have.
And of course, you would see it dropping. But as we need to drop it, at the same time, I need to expand coverage. So it's very difficult to get the right number every single quarter. But the trend going back to 2004, as I just mentioned, is extremely positive. And in the meantime, we are keeping our leadership in postpaid of 40%. We're #1 in 5G. So that's our strategy to keep the differentiating Vivo as the best network of the country, at the same time, keeping controlled our lease expenditure.
And it's also important, I just said before when I was talking about the operating cash flow over revenues. I think it's also good to see coming back to your question, operating cash flow after leases. I had 14.5% of margin in the first quarter of '24 I went to 15.8% of margin of operating cash flow after leases in 2025.
And now I'm presenting 17.1% of operating cash flow after leases over revenues. So I do believe that we are in the right track.
Our next question comes from Leonardo Cintra with Itaú BBA.
I have 2 here. The first one about equipment sales, which was a positive surprise compared to our numbers. Can we expect this level going forward? And if you could elaborate a little bit more on the dynamics of cellphone sales, it would be very helpful.
And the second one about AI initiatives. Could you comment a little bit more on the revenue opportunities from B2B leveraged by these AI initiatives? And also regarding costs, how are you -- how are the AI initiatives progressing? And what are you expecting in terms of margin improvement, particularly in terms of call centers and sales commissions dilution?
Leonardo, thank you for the questions. AI is in the beginning. So of course, we are exploring revenue opportunities. Imagine that Vivo has already a large number of customers that are buying cloud from us and our AI is very connected to cloud. So we're going to leverage all the relationships and all these customer base that we already have and all partnerships that we have with the largest cloud providers of the world to exploit opportunities in AI.
I cannot share you a number right now. But of course, even when you talk about the big deals that we had with SABESP, for instance, with São Martinho, they all have a piece of AI that will be implemented because there's a lot of data being captured. There's a lot of automation being captured, and they will be driven by machine learning and AI for sure. So we cannot give you the number right now, but we are very, very positive about the opportunity of growing it even further.
The impact in our OpEx, of course, it will be seen. Just to give you one initiative that is in call center. We're going to launch in 1 month the beginning of our call center AI agent project. As I think I mentioned the last quarter, we're going to have a concierge handling all the calls, and then we're going to have 3 agents focused on billing in plans and the other one in technical support.
Our aim here is to retain in the next quarters, over 60% of the calls using these agents. So there is a vast number of opportunities that we're going to capture with AI. Going to electronics. That was a great quarter for smartphones. But also I want to highlight what is not smartphone that is consumer electronics and that grew 56%. This is our ability -- and then I'm talking about 12 months, the growth of the consumer electronics, and that's our ability to sell more of other things rather than smartphones that are tablets, gaming devices, televisions, accessories to smartphones.
We bought 2Go, we have [ Avi ]. So we have many things that are expanding our portfolio. We now are expanding our portfolio to all our stores, not only the own ones, but also the resellers. And that we see in a very positive way our ability to [ even ] more from this footprint of being a retailer of technological products.
In smartphones, we're also growing part. Of course, it still represents a lot of our total revenues. If you talk about BRL 1.1 billion, that is billion that we have for the quarter. The other consumer electronics that I told you is around 15% of this number, and the rest is smartphones. So both are growing. So that's why we are keeping 26.6%. We don't give guidance, but we are having a very strong commercial start for the second quarter. So I don't see why we will change the trend.
Our next question comes from Phani Kanumuri with HSBC.
The first one is on -- are you seeing any impact from higher oil prices on your operations, whether it's on the cost or on the customer behavior? And the second question is regarding your -- the second question is regarding your ability to maintain the cost below revenue growth. You have been doing a good job. Is there a concern that these could grow above revenues in the future?
Thank you, Phani. No, no concern. We're going to keep the excellent trend in our cost evolution. As I explained, splitting what is linked to revenue and what is operational. And no concern. Regarding oil, no impact, no direct impact. So very positive for us at the moment, the macro is not impacting our business. And as I said, bad debt either. So we are in shape.
Next question from Daniel Fedelli with Bradesco BBI.
In the first one, I'd like to hear your thoughts regarding the competitive landscape. If it's getting better, getting worse, if it's stable? And specifically on the front book increases in the control plan, I understand that the entry plan is one of the most important ones in the portfolio. And last year, Vivo increased prices in February. And this year, so far, I think there were no increases.
And the second question is more like a follow-up because you mentioned that like back book prices, 75% were increased -- 76% was increased in April. And the remaining by the end of the year to be confirmed. Just to understand if to be confirmed, it means that our risks to not increase prices for the remaining of the existing clients.
Daniel. No, to be confirmed is the date. I'm not going to increase 76%, I'm not increase the remaining 24%. I just need to get to the right month of the increase. I said that it was in August. So it should be confirmed, is it going to be in August or it going to be in the end of July or in the beginning of September. I don't want to be precise about the exact date. But of course, if we increase 76%, I'm going to increase the remaining 24%.
As competition, very competitive market, but we were standing out, strong net adds, low churn, ability to sell more services, differentiating our value proposition. So we're going to keep doing that. And that's the way that we decided to do to defend our positioning, offering more services to our customer base and try to attract more customers because we have a better value proposition that adds the best infrastructure with the largest portfolio of services.
Regarding the control, the hybrid one, in some of the plans, we had some increase in the front. And in the other ones like the entry one, we're still considering. But again, we have the highest price if you consider what we offer with this price. So again, we believe that we have the right portfolio for the moment. But again, we're going to always be attentive, if there is the opportunity to move up one single plan in our control.
The question-and-answer section is over. We would like to hand the floor back to Mr. Christian Gebara for the company's final remarks.
So thank you, everyone. I understand that we are very clear in all the questions. But of course, if you have additional questions, we are all at your disposal to answer all of them. Again, we reaffirm our commitment of shareholder remuneration and growth of the revenue and EBITDA above inflation and optimizing CapEx allocation. Thank you so much.
Vivo's conference is now closed. We thank you for your participation, and wish you a nice day.
Telefonica Brasil S.A., - ADR (Representing Ord) — Q4 2025 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen, and welcome to Vivo's Fourth Quarter and Full Year 2025 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at ri.telefonica.com.br. The presentation will also be available for download. This call is also available in Portuguese.
[Operator Instructions] [Foreign Language] I would like to inform you that all attendees will only be listening to the conference during the presentation, and then we will start the Q&A session when further instructions will be provided.
Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections, and goals are the beliefs and assumptions of Vivo's Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events, and therefore, depends on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry and other factors that could cause actual results to differ materially from those expressed in the respective forward-looking statements.
Present at this conference, we have Mr. Christian Gebara, CEO of the company; Mr. David Melcon, CFO and Investor Relations Officer; and Mr. Jo o Pedro Soares Carneiro, IR Director.
Now I'll turn the conference over to Mr. Jo o Pedro Soares Carneiro, Investor Relations Director of Vivo. Mr. Carneiro, you may begin your conference.
Good morning, everyone, and welcome to Vivo's Fourth Quarter and Full Year 2025 Earnings Call. Today, our CEO, Christian Gebara, will start by commenting on Vivo's performance and connectivity and digital services as well as present our main ESG accomplishments for the year. Then David Melcon, our CFO, will walk us through Vivo's controlled cost and CapEx evolution, free cash flow generation, profitability and shareholder distribution during 2025.
With that, let me turn the call over to Christian.
Thank you, Jo o. Good morning, everyone, and thank you for joining us today. I'm pleased to share that Vivo's 2025 performance was remarkable. We grew above inflation in all key lines, driven by solid commercial momentum and our continuous focus on offering the best customer experience in Brazil. Starting with mobile, the postpaid segment was a major highlight. Accesses expanded 6.5% year-over-year, reaching 70.8 million customers, now representing 69% of our mobile base. In fiber, we closed 2025 with 7.8 million homes connected and a footprint that extended to 31 million homes. This advance coupled with our commitment to quality and customer satisfaction reinforced our leadership in the fiber market and allowed us to accelerate fiber mobile convergence.
Turning to our financial performance. Total revenues in the fourth quarter rose 7.1%, supported by balanced growth in both mobile and fixed services. Mobile service revenue progressed 7%, while fixed services improved 5.4%, reflecting the sustained contribution of fiber and corporate solutions. EBITDA grew 8.1% versus fourth quarter 2024. Excluding the effects of the concession migration from both years, EBITDA advanced 17.7% year-over-year, reflecting the success of our day-to-day execution.
Operating cash flow also showed solid expansion, up 13.4% compared to 2024, representing 26.1% of our revenues. Net income grew at a double-digit rate in 2025, totaling BRL 7.2 billion for the year, while free cash flow increased by 11.4% to BRL 9.2 billion. These strong results enabled us to fulfill our promise of paying shareholders at least 100% of our annual net income. In 2025, we paid out BRL 6.4 billion, reaching a payout ratio of 103.4%.
Next, on Slide 4, we illustrate how the transformation of our top line continues to advance, driven by diversified revenue mix and the rising contribution of our new businesses. Total revenues in the quarter reached BRL 15.6 billion, supported mostly by postpaid and FTTH that grew 9% and 9.8%, respectively. Notably, this quarter delivered the strongest growth in our handsets and electronics line in 3 years, up nearly 14% year-over-year, fueled by a broader portfolio, seasonal offers and a robust demand for electronics.
Our new businesses also presented another standout year. Revenues increased 27% over the last 12 months and now account for 12.1% of total revenues, an expansion of 1.9 percentage points compared to the previous year. Both B2C and B2B solutions contributed meaningfully to this evolution, reflecting the success of our strategy to diversify our portfolio and scale digital services.
Moving to the next slide. We continue to see the solid momentum of our mobile businesses boosted by Vivo's differentiated network quality and customer experience. By the end of 2025, our mobile base reached 103 million accesses, a year-over-year increase of 0.7%. Postpaid, including M2M and Dongles, remain the main growth engine, expanding 6.9% and surpassing 50 million customers for the first time.
Adoption of 5G is accelerating rapidly. Our 5G customer base rose to 23.1 million users across 716 cities in Brazil. This pushed our 5G take-up ratio to 27.8%, an improvement of 8.6 percentage points in 1 year. This reflects not only the strength of our network, but also the value customers perceive in transitioning to newer technologies.
Postpaid churn continued stable at 1%, while ARPU grew 5.8% year-over-year. Together, these indicators highlight the effectiveness of our retention initiatives as customers adopt higher value plans and demand more data.
Overall, these results reinforced the strength of our mobile platform, a combination of superior network quality, disciplined commercial execution and a customer-centric approach that drives continued sustainable growth.
On Slide 6, we dive deeper into the strength of our convergent proposition and how it's setting a new benchmark for quality and retention. As our fiber footprint expands, so does our capacity to attract new customers. Over the last year, we passed an additional 1.9 million homes, bringing the total to 31 million, while our take-up ratio improved to 25.2%. FTTH accesses maintained double-digit growth, increasing 12% year-over-year and reaching 7.8 million connections. This performance is once again propelled by Vivo Total, our flagship offer that combines the best mobile and fiber, which expanded 41% compared to last year in terms of subscribers.
Today, 62.7% of our entire FTTH base is already converted to postpaid, out of which 43% through Vivo Total, reinforcing customers' clear preference for integrated solutions while also demonstrating the significant upside that we still have to further scale our convergent offer and improve customer loyalty across both postpaid and fiber services. In fact, fiber churn remains on a downward trend, reaching 1.4%, the lowest level in our history. This sustained improvement reflects both the quality of our network and the stickiness of Vivo Total's value proposition.
Heading to Slide 7, we show how the evolution of our B2C segment is supported by the growing relevance of services that go beyond connectivity and positively impact our customers' lifetime value. In 2025, total B2C revenues reached BRL 44.8 billion, up 5% year-over-year. This performance reflects not only the solid resilience of our connectivity services, but also the strong momentum of our new businesses that grew 20.7% and now accounts for 3.3% of total revenues. We also saw consistent improvement in revenue per RGU that hit BRL 65.8. This increase is supported by our ongoing efforts to expand customer engagement, drive cross-selling and extract higher value from our existing base.
Looking specifically at new businesses, we continue to see solid performance across all lines. Video and music OTTs remains the largest contributor, advancing 18.1% year-over-year. consumer electronics delivered another standout result, growing 36%, while the health and wellness category posted remarkable momentum with revenues rising close to 70% in the year. We are also strengthening the foundation for future expansion. Through Vivo Ventures, we approved an additional BRL 150 million for new investments with a particular focus on AI-driven initiatives, bringing the total investment capacity to BRL 470 million. And through our partnership with Perplexity, we are offering customers complementary 1-year subscription to Perplexity Pro, reinforcing our commitment to delivering differentiated digital experiences. All these developments underscore how Vivo was evolving into a broader digital platform where connectivity remains at the core but is increasingly complemented by diversified ecosystem of services designed to enhance our value proposition and improve monetization.
Turning to next slide. We'll provide more details on Vivo's B2B strategy and how the ongoing shift in our revenue mix is quickly gaining traction. In 2025, B2B revenues amounted to BRL 13.5 billion, up 13.7% when compared to 2024. Digital B2B was once again the main growth engine, advancing 29.5% and now representing 8.8% of Vivo's revenues. Connectivity also maintained a healthy performance, rising 5.4% in the same period.
Within digital B2B, all products continue to expand at a strong pace. Cloud revenues soared 37.8% followed by IoT and messaging at 25.9%. Digital Solutions at 22% and cybersecurity at 8.4% year-over-year. B2B continues to gain relevance within our revenue mix, increasing its shares by 140 basis points year-over-year. This strong performance in 2025 marked the segment's fastest annual expansion in recent years and reflects the accelerating demand from companies undergoing digital transformation.
Altogether, these results underpin Vivo's strategic goal as the trusted partner for companies seeking to modernize their operation, scale cloud and IoT adoption and strengthen their digital capabilities.
On Slide 9, we reinforce our sustainability remains a cornerstone of Vivo strategy, supported by solid advances across environmental, social and governance dimensions, which is validated by our strong performance in global rankings.
According to Merco's corporate reputation ranking, Vivo placed in the top 10 companies across all sectors and achieved the best position among telcos. We also achieved the fifth best performance in the sector worldwide in S&P Global's Corporate Sustainability Assessment and earned a place on the CDP A-list for the sixth consecutive year. Additionally, we were recognized by Corporate Knights as the most sustainable company in Latin America on the list of the world's 100 most sustainable companies.
On the environmental front, we participated in COP 30 as a supporter for the first Planetary Science division, an initiative that brought together leading scientists to advance discussions on climate resilience and the future of life on the planet. Regarding Funda o Telef nica Vivo, which reached over 2 million beneficiaries with BRL 47 million invested in initiatives focused on education, employability and digital inclusion.
In governance, we expanded the scope of our Information Security Management certification under ISO 27001, strengthening the protection of data and systems that support our operation. I invite you to check out our 2025 ESG Highlights, which compile the year's key indicators and achievements and outline the strategic priority for our ESG agenda.
Now David will give you more color on our financial performance for the quarter ending. Thank you.
Thank you, Christian, and good morning, everyone. On Slide 10, we provide an update on the evolution of our cost structure and highlight the strong EBITDA performance in the quarter.
On the left side, you will see that total costs reached BRL 8.9 billion in the quarter. When excluding the effect from the concession migration, OpEx was flat with a year-over-year evolution of 0.4%. This reflects a balanced combination of commercial momentum and disciplined operational management. Cost of services and goods sold rose 9.7%, mainly driven by the higher contribution of B2B digital solutions, continued demand for music and video over the top as well as the share of handsets and electronics.
Operating costs grew 4.4% year-over-year, led by a 6.4% evolution in personnel expenses, reflecting annual salary increase and a higher headcount in strategic areas such as digital tech. Meanwhile, our largest cost line, commercial and infrastructure declined by 2.6% due mainly to some onetime infrastructure expenses registered in the same quarter last year. The results in both years were positively impacted by the effects related to the migration of our fixed voice concession to the authorization model.
In the fourth quarter last year, we recognized a reversal of provision for contingencies totaling BRL 386 million. In addition to asset sales amounting to BRL 206 million. In the fourth quarter this year, we recorded BRL 96 million in copper sales and BRL 6 million in real estate sales, adding up to BRL 102 million. Excluding all these effects in both periods, our EBITDA grew 17.7% year-over-year with a margin expansion of 380 basis points, reaching 42.3%, while reported EBITDA was up 8.1% with a margin of 42.9%.
Moving to Slide 11, we present the evolution of our operating cash flow for the year. CapEx amounted to BRL 9.3 billion, a modest 1.1% raise year-over-year, while our CapEx to revenues ratio reduced to 15.6%. This reflects lower capital intensity and the continued prioritization of investment with the highest return. As a result, operating cash flow before leases reached BRL 15.6 billion, an increase of 13.4% compared to last year. After leases, operating cash flow rose 17.3%, totaling BRL 10.1 billion with margins expanding to 17%. This strong performance demonstrates our enhanced ability to convert EBITDA into cash, supported by disciplined CapEx allocation and softer lease cost evolution. Going forward, we remain focused on further optimizing our tower-related expenses and improving contract efficiency. The trajectory of our operating cash flow margins underscore the strength of our return profile.
On Slide 12, we highlight how our disciplined financial management continues to translate into profitability and strong cash generation. Net income for 2025 reached BRL 6.2 billion, an 11.2% increase versus the previous year. This growth was well balanced throughout the year, reinforcing the consistency of our execution and resilience of our business model. Our net cash flow position also improved, ending the year at BRL 2.3 billion compared with BRL 1.4 billion in 2024. When considering IFRS 16, net debt stands at BRL 13.1 billion, equivalent to just 0.5x EBITDA, underlying the continued strength of our balance sheet.
Free cash flow rose 11.4% to BRL 9.2 billion in 2025. This performance reflects both our disciplined CapEx allocation and the healthy fundamentals of our operations. As a result, our free cash flow yield reached 8.6% and free cash flow over revenues came in at a solid 15.4%. These results reaffirm our ability to improve profitability and cash generation while maintaining a very comfortable leverage profile.
Lastly, on Slide 13, we highlight our continued commitment to shareholders' remuneration. In 2025, we distributed BRL 6.4 billion to shareholders, an increase of 9.1% compared to the previous year, driven by higher share buybacks and capital reduction. Notably, we once again delivered on our guidance for the period this time with a payout of 103.4% of our net income.
Looking ahead to 2026, we have already announced the distribution of BRL 7 billion, including the BRL 4 billion from capital reduction to be paid in July, and the interest on capital of BRL 3 billion declared in 2025 to be paid in April this year. We also declared an additional interest on capital in February this year that will be paid before April 2027. Moreover, our Board of Directors approved a new share buyback program of up to BRL 1 billion to be executed until February 2027.
To conclude, we reaffirm our commitment to distributing at least 100% of net income in 2026, maintaining a clear and disciplined capital allocation strategy focused on value creation for shareholders.
Thank you. And now, we can move to the Q&A.
[Operator Instructions] Our first question comes from Leonardo Olmos from UBS.
2. Question Answer
Congrats on the results. My question will be all centered on distributions, a little bit long, but all center on distributions. So if you could first discuss the drivers for the mix in 2026 between buybacks, interest on capital and capital reduction, which -- what makes you pick more of one than another? For example, we noticed a small reduction, potential reduction buybacks, but a huge increase in capital reduction. Could that mean you are thinking about continuing on the path of increasing potentially leverage, changing the capital structure? And still on that topic, and the last part of my question, if you could discuss net income drivers for 2026. As we noted an increase in copper sales, maybe there's upside for consensus estimates. And since you guide dividends on the back of net income, we want to know that.
Leonardo, thank you for the question. So the first one, we have a commitment for the last 2 years to distribute at least 100% of our net income. So this is something that we have done in the last 2 years, '24 and '25. And we always try to combine between the -- what you mentioned, capital reductions, interest on capital, also dividends and share buyback. If you look at our capital structure, we have more than BRL 60 billion capital. So we obtained 3 years ago authorization from ANATEL to distribute up to BRL 5 billion. This is something we have already done. We have already distributed BRL 3.5 billion. Now we don't need any more approval -- preapproval from ANATEL. So that's why now we have also approved that will be paid in this year for another BRL 4 billion. And the plan for 2026 is to combine and to continue.
Today, we have also approved a share buyback program of BRL 1 billion that will give us flexibility to continue taking advantage of interest on capital. This is a situation unique in Brazil, together with also a capital reduction to maximize the value of shareholders. So for next year, we're expecting, of course, to deliver more than 100% of our net income.
So regarding capital structure, it's something that we are always exploring potential opportunities. The leverage that we have today in Brazil is very linked to the high interest ratio that we have here in Brazil. And we expect that in the next future, the Selic will reduce. Today, it's at 15%. The market is expecting this to reduce in the next few years. So we could explore opportunities also to generate value and to maximize this opportunity.
So I think this is -- this will have a very strong cash flow generation and net income for next year, which was also your second question. We are seeing a very stable. We have been growing almost every quarter, double digit. For the next year, we'll continue growing in EBITDA. We will also benefit from the reduction of the depreciation and amortization. Starting from the second quarter, we have included also on the financial statement. After July 2026, we will fully depreciate some of the legacy assets that we have in our balance sheet. And this will represent an improvement of BRL 300 million of profit before taxes, just coming out of this, plus potential benefit from interest reduction. So we are positive about the evolution of net income. Next year, we will bring additional shareholder remuneration.
Our next question comes from Marcelo Santos from JPMorgan.
I want to ask questions about two key topics. The first one is CapEx. So maybe, David, could you please discuss what are the puts and takes for the CapEx outlook in 2026? And the second question will be about competitive environment, how you're seeing it, especially on mobile? And what is the outlook for passing price increases this year?
Marcelo, I will take the questions. Christian here. So CapEx, we're not giving guidance. But as we said, now been stating in every call, we are working on CapEx optimization, when you consider CapEx over revenues. So as you could see, we came from 16.4% to 15.6% this year. That's a combination of all the work we are doing to be more effective in the deployment of our infrastructure. Added to that, our ability to sell more services with no CapEx. So we already reached more than 12% of revenues coming off services that now require CapEx. So that's why we have this strong evolution in operating cash flow.
As we stated here now, we are increasing 13.4% year-over-year. And even when you consider operating cash flow after leases, this growth is even higher, 17.3%. So we will continue to deploy 5G. As I said, we are following our customers and the penetration of 5G is going up. So we are deploying 5G where our customers are. We've been deploying fiber and penetrating more our network. So we also saw the take-up ratio going up in the fiber business. So that's a good sign. Of course, it involves CapEx, but we are also saving in other lines.
So the idea is this one, to continue to improve infrastructure keeping our leadership, but being better in the ratio CapEx over revenues.
Going to competition. Can I go to the second one, Marcelo?
That's very clear. Thank you, Christian.
So competition. Here, we have different strategy for the different segments. We've been very strong in prepaid. Now it's still slightly negative, but when you compare what we had in last quarter, revenues this quarter is higher than the previous one. And also when you compare the year-over-year evolution, we also have a better performance this quarter than we had in previous ones. We are increasing price according to the type of segments. So we are planning March for postpaid and hybrid.
For front book, we are expecting customer base price increase in April for both hybrid and postpaid. FTTH, we had a price increase in January. We have planned a new one for June. And Vivo Total, we are planning 100% customer base price increase in April. So following the inflation ratio, giving more data and more services and also playing convergence. So that's our strategy, and that's why we are positive about the evolution of our revenues going forward.
Okay. So the back book is on April, right, for postpaid and hybrid? Is that correct? Just to be sure.
Yes. Part of it is in April, the majority, and the rest is in August.
Our next question comes from Rogério Araújo from Bank of America.
Congrats on the results. I have a couple here. The first one, there was a reduction in the lease expenses. If you could please provide some details on why and also expected trend. This is the first one.
Please ask the two questions, Rogério. And then we'll answer both of them. What's the second one, please? Rogério, please ask the second question. I don't know if he is still in the line, so I don't know if we'll answer the question or we wait for him to come back.
He shows on the line. Rogério, can you please repeat the second question?
Okay. So we're going to answer only the first question, okay?
Okay. So Rogério, thank you for the question. The evolution of the lease depreciation and interest accrual remained consistent with previous periods. Even in both quarter and even the full year, EBITDA after leases has grown even more than EBITDA before leases. And regarding the payments, some volatility persists due to the ongoing renegotiation with the towers company that we do every quarter. And that's why you mentioned the principal and interest payments that we have this quarter amounted to BRL 1.2 billion, which is lower than the previous year, but also lower than the previous quarter that shows we are very optimistic about the potential trend of this line.
To give you more light here, the current tenancy ratio that we have in Brazil is 1.4 that we discussed last quarter, which is significantly lower than other comparable countries. So we see a big opportunity to reduce the unitary costs of every tower to share more the towers and to fund the new deployment that we need to do here in Brazil to accelerate our revenues in 5G and also our coverage. So optimistic about the trend that we have started seeing this quarter. But even though we will need to continue renegotiating those contracts and this will be driving the potential acceleration of the reductions.
I would add, the operating cash flow after leases, no, margin. We went from 14.6% in 2023 to 15.5% in 2024 to 17% in 2025 -- sorry '24, 15.5% in '24, 17% in '25, aligned with what David just said. Also, we are going to capture the growth of our infrastructure. We're going to renegotiate our contracts, and we're going to still generate operating cash flow after leases that has a strong margin, as you could see the evolution over the last 3 or 4 years. I don't know if Rogério to have the second question?
Yes, sorry. My line actually was dropped here on, actually. You couldn't hear me on my second one. It's about the prepaid ARPU. It has reverted a negative trend versus the first 9 months of the year, also in line with our main peer in Brazil. So if you could please clarify what do you think were the main drivers for that and what you expect in the upcoming quarters?
Listen, Rogério. Prepaid has been performing better quarter-over-quarter. Of course, that's also our ability to motivate customers to top up and also to consume the money that they have in the balance. So it's part of our strategic behavior of the company, also being very able to motivate customers to higher average tickets and also the ability for us to monetize the tickets they have top up.
On the other hand, we continue very strong in migrating prepaid to hybrid. So it's even quarter-over-quarter that there is a positive evolution. And so we are extremely pleased with the mobile service revenue evolution, 7% over the last quarter, growing 9% in postpaid. That's a combination of bringing new customers, but also migrating pre to hybrid or postpaid. And also the prepaid absolute number of revenues that went from the fourth quarter -- from the third quarter of '25 of 1.364 to 1.394. So -- and churn in the postpaid also in the lowest level. So that's the result of a very well segmented and thoughtful strategy for different segments that we have here in the company.
Okay. I may have a follow-up. If you could expect the prepaid ARPU to keep increasing year-over-year in upcoming quarters, if you have any color on that?
Rogério, what we expect is revenue to continue to grow the way it's growing. We don't expect -- we're not giving guidance per ARPU per segment.
Our next question comes from Phani Kanumuri from HSBC.
The first question is on the total net adds and the market share in mobile. If we exclude Dongles and M2M, your number of subscribers has been coming down. Any reason for that? And your market share is down like 1 percentage point from last year. So what is -- I mean, what is driving this trend?
The second thing is that if you look at your B2B strategy, it has been growing really well. What are the further steps to maintain this growth in Brazil? And how is the penetration coming in the SME segment?
I don't see mobile market share changing. That's very stable. There are some corrections, maybe in prepaid. Some companies disconnect like later than we do. So we are very confident about our performance in market share, and actually in our performance in revenue growth. And also, we had -- we measure our good performance in ability to increase net adds and fourth quarter 2025 was a record number, 930,000. That's a combination of bringing in more customers, but also reducing postpaid churn from 1.3% in the fourth quarter of 2021 to the 1% that we'll be keeping at this level for the last 4 years. So that's important for us. And mobile ARPU is also going up if you compare it to what we had in the fourth quarter and what we had in the fourth quarter 2025, sorry '24 and '25, there was an improvement of 5.8%. So we are not following like a small variation in market share. Important thing is to keep attracting customers, retaining customers and growing revenues.
Regarding B2B, that's a very strong quarter, as I said. We had in the year B2B as, I don't know if you're more interested in the digital service, at BRL 5.3 billion revenues, it's a 29.5% year-over-year increase. It's already know what's digital service, 8.8% of the total revenues from Vivo and is 39.1% of the B2B revenues of Vivo. So it's getting very fundamental for our strategy going forward. Penetration is growing in all segments. SMEs is where we have more challenges to penetrate more the digital services. But at the same time, we are growing a lot connectivity in the segment. We have a variety of products being offered to this segment coming from location like renting -- rental of notebooks up to cyber solutions. So that's part of our strategy. We're growing in all segments with more acceleration in the top. But at the same time, the volume that we have in the SMEs, we are very, very, very happy with the results that we are having also in these segments with a combination of connectivity plus digital services, I described it before.
Okay, yes. So maybe on the connectivity part, right? So you've grown like 5% year-on-year. So what is driving the growth in the connectivity part? The digital solutions was more understandable, but what is driving this growth in the connectivity part?
SMEs, but also in advanced data solutions for top to corporate customers, now, to going up in the pyramid. We also have other connectivity solutions up to very dedicated links. So we've been growing in all lines. Now I think we gave some color. Fiber, of course, it's B2C, B2B. But when we said that we are growing 9.8%, that also includes our great performance in SMEs. And when we grow 10.2% of Data, ICT, digital services, it's also including corporate data solutions. So it's in both.
Our next question comes from Maria Clara Infantozzi from Ita BBA.
I have two questions here. The first one, can you please provide us an update on how you perceive the competitive environment in the fiber industry and also refresh us how you see any potential M&A in these industries?
And the second one, could you please share your thoughts on how you see profitability expansion going forward? Are there any specific areas of the business in which you see some potential for further efficiencies? And how should we balance future efficiencies with the expansion of B2B?
Sorry, the second question is related to cost in B2B or cost in general?
Costs in general and how you balance this with the B2B expansion as it has a lower margin?
Okay. B2B doesn't have a lower margin, but we can address this. Let's go to the first one. So Maria Clara, the market is still very fragmented. If you see the performance of the fiber business in Vivo, we went from 18.8% market share at the end of 2024 to 19.3% market share in the end of 2025. So 0.5% increase in market share. Our net adds for the whole year was 834,000 customers. If you look other competitors, some of the leading ones had very strong negative net adds for the year.
So it's still a very competitive environment with too much fragmentation in our opinion. If you compare, for instance, we are the leading company in fiber in Brazil. We have 19.3%. When I see the leading company in Spain has 34% of market share. When I see the leading player in France has like 39%. If I go to Japan, the leading company has 57%. So I think there is room for consolidation. I don't see any rational reason to have so many players competing in same geographies.
So we have 31 million home passed. We aim to have more. We see addressable 60 million, but we don't see ourselves reaching this number, but we could reach something more closer to 45 million. We could do that building ourselves or we do have consolidating. Consolidating is still a question mark. We have to find the right target with the right pricing, we have the right network not overlapping too much with ours with the good quality. But I see that clearly, we require more consolidation in this market because it's not -- doesn't seem to be sustainable for most of the players who presented negative net adds over the last year.
Regarding costs, I think we've been showing a good, very good number in cost of operations. The evolution was 4.4%. That includes all the personnel growth that we had, like because we want to be more digital in some areas. We want to expand our penetration in some commercial areas. So even increasing 6.4% in personnel, we were able to just increase 4.4% in the cost of operations because we are bringing more efficiency in different areas, especially in our customer care that the app and other initiatives that we are deploying now. Even using AI is helping us to reduce other commercial and customer care costs. So the combination of both that presented this 4.4% that is below, very well below what we presented in revenue growth.
In the cost of service and cost of goods sold, both of them are very related to our sale of services. Most of this, like I can give examples of video OTTs that I said before, or goods sold that is related to everything that we've been performing so well that also presented our strong growth in this quarter in handsets and consumer electronics in general. Going forward, we're going to still focus in digitalization. And now with AI, we are very positive of bringing great results in cost efficiency.
Sorry, in B2B, you stated. Now B2B, depending on the product, we have very, very positive margins. As I showed, we are growing 5.4% in connectivity. Connectivity B2B represented in the year, BRL 8.2 billion. That has a very good and positive margin. And digital B2B, it depends. We have also gone through markets in some of the services. When we say -- when we sell cloud, yes, the margin is not that high. But when I have managed services over cloud, the margin is much, much better. And the same I can tell about cyber and even IoT. So also very confident on our ability to grow. And all these services, some of them even having lower margin, they are very positive operating cash flow since they don't require CapEx. So again, we should look at the bottom of the results where operating cash flow and free cash flow, operating cash flow after leases or free cash flow, we presented a very strong positive trend.
Our next question comes from Daniel Federle from Bradesco BBI.
Congrats on the strong results. I just want to hear your thoughts on how important it is for a telco to have a convergence operation at the moment in Brazil. We see, Vivo focusing on the Vivo Total. It seems to be a big success. So how important is this for the whole strategy?
And second, if you could just provide a little bit more information about your expectation for AI as a source of savings for costs in the upcoming years.
Daniel, thank you for your initial comments. I cannot answer for all the other operators because I think we have different strategies. I can answer about convergence for Vivo. Convergence has always been our focus. And if you look at the numbers that we have today, we have 7.8 million FTTH customers, 62.7% are convergent. Out of the 7.8% in Vivo Total, we have 43.2%. So there is still this number between the 43% and the 62% that are convergent but are not in Vivo Total, and we are working to drive them to Vivo Total. Why? Because I think when you are Vivo Total, I think switching cost for customers is even high -- higher sorry, and we also have the ability to have a closer relationship with these customers and monetize even better, selling also the digital service.
When you see the number that we presented of the new ventures in B2C, you see our ability to cross-sell not only mobile and fixed, but also the ability to sell video OTTs, to sell health services and also to sell smartphones plus consumer electronics, only to give you some examples.
Our churn ratio is also proving that is the right decision. FTTH churn is 1.4%. If I look years ago, it was 1.6%, 1.8%. When I compare the churn rate of fiber customers that are in Vivo Total, it's 1 percentage point lower to those that are independent fiber customers. So for us, it makes a lot of sense.
And also even having record addition of new customers in mobile, our churn is also in the lowest level of 1%. So our strategy continue to be the one who can have the customer with more services with people. That's why we'll also be presenting this number that we call services for RGU. So we get a customer, and we try to add all the revenues that we have in B2C, divided by the number of customers of RGU, and we see also a positive trend there. That's convergence, but it's also added to that the ability to sell the new businesses. So that's the strategy that Vivo is following. So I cannot answer for others, but I think for us, that's the right one and the one that we are going to still continue to put all our efforts.
And then wanted to complement the Vivo Total, 84% of the sales that we have of fiber in our stores get out of store with 84% in Vivo Total. So it makes a lot of sense. And gross ARPU of Vivo Total in the fourth quarter was BRL 230. So that's also a great measure to follow. And the average in Vivo Total, we have one fiber connection and 1.7 postpaid connection. That also makes sense to see it that way. So it's proving the customer wants to be loyal to Vivo in all the access.
AI, we are in the -- we used to have very well deployed AI here before the Gen AI. So WhatsApp was already driven by AI Vivo and was one of very important channel. We had 4 million customers interacting with us per month in WhatsApp using AI. Now with Gen AI, I think the possibilities are even higher. We are using that to optimize internal processes. For instance, when we need to go to a B2B public visitation, there was like this deep complexity to understand what was required by the operator in some of these auctions. We now have AI to understand it much closer to what we have here as inventory, and then we have a response that is much faster and our ability to participate in many more visitation than we used to do before.
We're also using AI as copilot to all our call center agents and store agents. And now we are piloting AI agents to answer directly to customers. So that's a very important project that we're going to start having the first results in May this year that we are doing with partners. And also, we are doing many other things in network optimization. So it's a variety of actions that we are taking here to implement AI as core for our business. And again, answering to the second -- the first question that I had before, I think from Maria Clara, in efficiency, we also believe AI will bring a lot of efficiency for us as well.
Our next question comes from Gustavo Farias from UBS.
The first one, maybe a double-click on the previous question about M&A. So we've been exploring M&A in fiber, in most of our recent notes. And Vita obviously stands out particularly now without Oi as a shareholder. So my question is, would you consider a large M&A to strengthen your fiber footprint?
And the second question, we've seen stronger portability figures for Claro in the fourth quarter, mostly impacting TIM and likely related to new sales. So my question is, how are you perceiving this competition driver in mobile? And if this, by anyhow, changes your commercial strategy?
Gustavo, thanks for the question. No, it doesn't change our strategy. We have competition, and it's a very competitive marketing -- market, sorry. And I cannot point out a specific player and the evolution of portability due to this player. Now I think that's the market that we face. I think there is a lot of variation of portability month-over-month. What is important that we keep growing net adds, and we keep ARPU going up because also getting more customers with ARPU decreasing is not the strategy that we are following.
So if you look, we had 4.4% increase in postpaid net adds if I compare the year-over-year quarter. And also, we have a 5.8% ARPU evolution if I compare again the year-over-year ARPU, keeping churn level at 1%. So we're not going to get into this war if someone is trying to put the service in a lower value or try to use our service to acquire other services in different sectors. No, we shouldn't get to that because we are here, preserving the quality and the experience that we offer to our customers.
So a positive evolution of net adds, positive evolution of ARPU and extremely positive evolution of our churn. And again, we're going to face competition of different types. And that's normal. It's a very competitive market, and telecommunications has always been very competitive in Brazil.
Going to the question of -- can I go to the other one, M&A?
Yes, of course.
Yes. M&A is what I said, again, Oi's still has a stake at Vita. They are in the process, but they still have a stake. I think the market is very fragmented, as I said before, I think there is room for consolidation. But in our case, it's not the size. None of the players is large enough not to allow us to integrate because, as I said, they have 19.3%. The next one has 8.2%. And I think adding the second, the third, we're still going to be below what we see as market leader in markets like Spain, France, Korea or Japan.
It's more of the quality of this network, the quality of the customer base, the overlap with our network and the price. We have the ability to deploy network. And as I said before, much more of the CapEx is related to connecting the customer than passing the fiber. But we don't want to be passing fiber where we see so many players. So that's why we are open for analyzing targets.
So far, we haven't been able to get to an agreement or getting to the real interest in any of the targets that we see in the market. So let's wait, Gustavo, but the trend seems positive for consolidation.
The question-and-answer session is over. I would like to hand the floor back to Mr. Christian Gebara for the company final remarks. Please, Mr. Christian, the floor is yours.
Okay. Thank you, everyone, for participating, and for so many questions. As I stated in the beginning, we're extremely pleased to share such a strong set of results in all dimensions of our company. And again, we are always here at disposal to answer any additional questions that you may have. Thank you so much for your participation.
Vivo's conference is now closed. We thank you for your participation, and wish you a very good day.
Telefonica Brasil S.A., - ADR (Representing Ord) — Q4 2025 Earnings Call
Telefonica Brasil S.A., - ADR (Representing Ord) — Q3 2025 Earnings Call
1. Management Discussion
Good morning, ladies and gentlemen, and welcome to Vivo's Third Quarter 2025 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at ri.telefonica.com.br. The presentation will also be available for download. This call is also available in Portuguese. [Operator Instructions] [Foreign Language] [Operator Instructions].
Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Vivo's Executive Board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore, depends on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements.
Present at this conference, we have Mr. Christian Gebara, CEO of the company; Mr. David Melcon, CFO and Investor Relations Officer; and Mr. João Pedro Soares Carneiro, IR Director.
Now I'll turn the conference over to Mr. João Pedro Soares Carneiro, Investor Relations Director of Vivo. Please, Mr. Carneiro, you may begin your conference.
Good morning, everyone, and welcome to Vivo's Third Quarter 2025 Earnings Call. Christian Gebara, our CEO, will start us off by commenting on Vivo's connectivity and digital services performance as well as present our main ESG highlights for the period. Then David Melcon, our CFO, will give more details on cost and CapEx management, free cash flow generation, profitability for the period as well as an update on shareholder remuneration for 2025.
With that, let me turn the call over to Christian.
Thank you, João. Good morning, everyone, and thank you for joining us today. I'm pleased to announce that Vivo delivered another set of strong results, presenting real growth across all key lines fueled by a powerful commercial performance and our relentless focus on customer experience. In mobile, our postpaid segment continues to lead the way with access growing 7.3% year-over-year. Postpaid now accounts for 68% of our total mobile customer base, which has reached approximately 103 million connections. On the fiber front, we have 7.6 million homes connected, an impressive 12.7% increase year-over-year, and our footprint covers 30.5 million homes nationwide.
Total revenues rose by 6.5%, driven by consistent results in both mobile and fixed services. Mobile service revenues grew 5.5%, while fixed services saw a 9.6% increase. This balanced growth highlights the strength of our diversified portfolio and our ability to meet demand across multiple segments. EBITDA grew 9% year-over-year with our margin expanding to 43.4%. This reflects our continued focus on operational efficiency and disciplined cost management.
As a result, operating cash flow reached BRL 11.2 billion in the first 9 months of the year, up 12.4% compared to the same period last year. Net income rose 13.4%, totaling BRL 4.3 billion, while free cash flow approached BRL 7 billion with a margin of 15.6%. These strong financial results enable us to return BRL 5.7 billion to shareholders by the end of September, reaffirming our commitment to sustainable value creation.
Moving to Slide 4. We show how our top line continues to grow at a strong pace, driven by an increasingly robust and diversified revenue mix. In the quarter, total revenues reached BRL 14.9 billion, once again led by the solid performance of our postpaid and FTTH segments that grew 8% and 10.6%, respectively. These 2 pillars clearly demonstrate how high-quality convergent services can boost monetization.
Our new businesses also continue to gain traction, now accounting for 11.7% of our total revenues over the last 12 months, an increase of 2 percentage points year-over-year. This evolution underscores the success of our strategy to diversify and modernize our revenue base, ensuring sustainable growth in a highly dynamic and competitive market.
Now on Slide 5, we highlight the key drivers behind our continuous ramp in mobile. In the third quarter, we recorded our highest ever postpaid net additions, surpassing 1 million net access machine-to-machine and dongles. These outstanding results reflect the success of our value-driven strategy and reinforces our leadership in the mobile market. Postpaid access grew 7% year-over-year, reaching nearly 50 million customers, while 5G adoption continues to accelerate with more than 21 million customers now benefiting from our award-winning technology. In fact, in September, Vivo's 5G network was recognized by Opensignal as the fastest in the world for the second consecutive year.
Customer retention remains a top priority. Postpaid churn ex machine-to-machine and dongles reached just 0.98%, a testament to the loyalty of our high-value customer base, though we still see room for further improvement. ARPU rose 3.9% year-over-year, reaching a record high of BRL 31.5, supported by upselling and growing demand for data. These results demonstrate the effectiveness of our customer-centric approach, our ability to innovate and the strength of our mobile platform as a key growth engine.
On Slide 6, we explored the continued capabilities of our fiber business and its convergence with mobile. FTTH access once again posted double-digit year-over-year growth, continuing the strong momentum we've seen in recent quarters. This performance is largely driven by our flagship convergent offer, Vivo Total that saw an impressive 52.7% increase year-over-year. Notably, Vivo's convergent base already nears 62% of all fiber access. This reinforces the market's clear shift toward bundled solutions.
Our fiber footprint also continued to expand. In the last 12 months, we passed over 2.2 million new homes, reaching a total of 30.5 million. The take-up ratio improved to 24.9%, reflecting stronger demand and better conversion. Churn continues to trend downwards, marking the fifth consecutive quarter year-over-year improvement. For Vivo Total specifically, churn is 50% lower than our already below market fiber churn, highlighting the stickiness and value of the offer.
Today, nearly 85% of FTTH sales in our stores are done through Vivo Total. This not only boosts lifetime value, but also drives higher user expenditure with gross ARPU reaching BRL 230 per month for Vivo Total subscribers. On this plan, we have reached 1.7 mobile postpaid lines per fiber connection, a clear demonstration of how convergence supports both lower churn and sustained ARPU growth for mobile and fiber.
Turning to Slide 7, we dive into how our B2C segment is evolving with focus on how new businesses are driving incremental value and enhancing customer monetization. Over the last 12 months, total B2C revenues reached BRL 44.1 billion, up 5% year-over-year. This growth is supported by both our core connectivity services and the expanding contribution of new businesses that grew 15.3% and now represent 3.1% of total revenues. Revenue per RGU continues its upward trajectory, reaching BRL 64.6 per month. This reflects our success in deepening customer engagement and expanding share of wallet.
Looking at the breakdown of new businesses, we see strong performance across key verticals. Our video and music OTTs remain a major growth driver, with revenues up 19.9% year-over-year. Meanwhile, our -- one of our health and wellness initiative, Vale Saúde Sempre now has around 450,000 subscriptions, up 27% versus last year, with plans starting at just BRL 17.90 per month.
In financial services, Vivo Seguros continues to scale rapidly, already counting with 600,000 insured devices, a growth of 42% year-over-year. Today, over 40% of our smartphones sold in Vivo stores are bundled with insurance, underscoring the relevance of this offer. These performances emphasize our strategy of positioning Vivo as a comprehensive digital platform, where connectivity is just the starting point for a broader ecosystem of services tailored to our customers' evolving demand.
Heading to Slide 8, we highlight how our B2B segment is increasingly being driven by expansion of digital services. Over the past 12 months, B2B revenues reached BRL 13.2 billion, up 15% year-over-year. This performance was led by digital B2B that grew an impressive 34.2% and now accounts for 8.6% of our total revenues. Connectivity also continued to grow steadily, rising 5.6% in the same period.
A major milestone this quarter was the signing of the largest IoT deal in the world with Sabesp. This partnership includes installation of approximately 4.4 million smart water meters in the cities of São Paulo, São José dos Campos by 2029. Vivo will also provide the platform to monitor and process the data generated by these devices, reinforcing our leadership in large-scale digital infrastructure. This combination of robust revenue growth and strategic partnerships positions Vivo as a key enabler of digital transformation across multiple industries.
With regards to ESG, on the next slide, we reinforce Vivo leadership now with both new commitment to biodiversity and long-term environmental stewardship. This quarter, we launched the Futuro Vivo Forest, a 30-year initiative dedicated to regenerating the Amazon. This project will preserve 800 hectares of native forest by planting nearly 900,000 trees in the states of Maranhão and Pará, bringing back the local fauna in the region. Beyond its environmental impact, the initiative also brings benefits to the local communities aligning sustainability with social inclusion. The announcement was made during the Encontro Futuro Vivo, an event that brought together acknowledged leaders to reflect on the future life of our planet. It marks a new chapter in our ESG journey focused on long-term regeneration and climate resilience.
In governance, Vivo continues to stand out. We ranked first place across all sectors in B3's Corporate Sustainability Index, ISE B3, and received recognition for excellence in Corporate Social Responsibility under the ISO 26000 standard. We were also honored with several awards this quarter. Vivo's Compliance Program was named Program of the Year at the Leaders League Compliance Summit, and we were recognized as the top company in TMT category in Exame Magazine’s Melhores e Maiores ranking.
Finally, we are proud to be ranked sixth among the best companies to work for in Brazil by Great Place to Work and to be the only Brazilian company and the only one in our industry featured on Fortune's Change the World list. These achievements reflect our ongoing commitment to creating shared values for society, the environment and our stakeholders.
With that, I will hand the floor to David, who will walk you through our financial performance for the period. Thank you.
Thank you, Christian, and good morning, everyone. Starting with Slide 10, we take a closer look at the evolution of our cost structure and provide an update on the sale of concession-related assets. On the left-hand side, you will see that total cost reached BRL 8.5 billion in the quarter, up 4.6% year-over-year, growing below inflation for the period. This performance highlights our ability to strike the right balance between commercial intensity, operational efficiency and ongoing digitalization efforts.
Cost of services and goods sold rose 9%, driven by the increase in service costs. This was due to the accelerated growth of digital solutions, particularly in the B2B segment. On the other hand, the cost of goods sold declined by 5%, benefiting from an improved margin profile in the sale of handsets and accessories. Operating costs grew just 2.6% year-over-year. Personnel expenses increased 3.2%, mainly due to the salary adjustments, which we partially offset with a more efficient management of our benefit programs.
Our largest cost line, commercial and infrastructure rose slightly above 4% with higher commercial activity being mitigated by gains from digitalization. This quarter was marked by the acceleration of the sale of assets related to the fixed voice concession, resulting in a net gain of BRL 232 million, up from BRL 95 million in the same period last year. These gains include BRL 199 million from real estate and BRL 34 million from copper. We reaffirm our confidence in delivering BRL 4.5 billion in asset sales over the coming years. As a result, EBITDA grew 9% year-over-year, reaching BRL 6.5 billion with a 100 basis point expansion in margin to 43.4%.
Moving to Slide 11, we highlight our operating cash flow performance. CapEx totaled BRL 6.9 billion in the first 9 months this year, up 3% year-over-year. Important, our CapEx to revenues ratio declined 60 basis points to 15.7%, reflecting our ongoing focus on efficiency and prioritization of high-return investments. As a result, operating cash flow before leases reached BRL 11.2 billion, a 12.4% increase compared to the same period last year. After leases, operating cash flow rose 15.2%, totaling BRL 7.2 billion with a 16.4% margin. This performance underscore the strength of our result profile and the effectiveness of our investment strategy.
Looking ahead, we see significant potential to further optimize leasing costs. On average, there are 1.4 operators using the same towers as us. But in similar mature markets, this number exceeds 2 operators per tower. This opens opportunities for contract renegotiation and increased infrastructure sharing that will further enhance our ability to generate cash.
On Slide 12, we present how our resilient operating performance continues to support profitability and cash generation. Net income for the first 9 months this year reached BRL 4.3 billion, up 13.4% year-over-year. This growth was consistent across all quarters this year, where we have been growing double digit, reflecting our solid execution and financial management. Our net cash position strengthened further, reaching BRL 3 billion at the end of September, a significant increase of BRL 1.7 billion a year earlier. Including IFRS 16 effects, our net debt stands at BRL 11.1 billion with a leverage ratio of just 0.5x EBITDA over the last 12 months, underscoring how robust our financial structure is.
Free cash flow generation remains healthy, totaling BRL 6.9 billion in the period. While this represents a slight year-over-year decline due to some phasing effects, the third quarter already shows a 5.5% increase, signaling a positive trend. These results reinforce our ability to consistently generate value even in a recovering macroeconomic scenario.
Moving to the last slide of the presentation, we reaffirm our commitment to shareholders' return. From January to October this year, we have already distributed BRL 5.7 billion to shareholders through a combination of interest on capital, capital reduction and share buybacks. In addition, we declared another BRL 2.7 billion in interest on capital to be paid before April 2026, further supporting our guidance to distribute at least 100% of net income for both 2025 and '26. Since the beginning of the year, we repurchased 48.4 million shares, equivalent to 1.5% of our current capital stock. Our buyback program of up to BRL 1.75 billion to be repurchased until February next year remains active and aligned with our capital allocation strategy.
It's also worth noting that our share continues to gain market relevance, now ranking as the 34th most liquid share in the Brazilian Stock Exchange, an improvement of 11 positions year-over-year. These actions reflect our strong commitment to value creation and consistent shareholders' remuneration.
Thank you. And now we can move to the Q&A.
[Operator Instructions] Our first question comes from Luis Chagas from XP.
2. Question Answer
Congrats on the robust results again. So my question regards mobile services revenues. So we saw a slight deceleration in MSR in this quarter. So how do you see the competitive environment in mobile did affect your performance in this quarter?
Thank you, Luis. Christian, okay, I will answer your question. And we grew 5.5% year-over-year. It's good also to split the mobile postpaid service revenue, we grew 8% and the prepaid minus 7.6%. Starting with the prepaid. The prepaid it's a better performance than we had last quarter that's signaling a positive trend. And even when you compare the quarter-over-quarter growth, there is a positive growth. So we are bringing up revenues in prepaid, while we keep migrating prepaid to postpaid.
In postpaid, our growth was 8%. It's also a very strong growth considering the amount of revenues coming from postpaid. Out of our total mobile, we are talking about BRL 8.3 billion coming from the postpaid segment. And we had also the best net add performance of the last quarters. Now if you look back to the third quarter of '24 and we follow every single quarter, it's the first time that we surpassed 1 million postpaid net adds. So that's a strong performance. And the churn, if we keep it in the 1% level. If we exclude machine-to-machine and dongles, it's below 1%. At the same time, we've been able to increase ARPU in that around 4% when you compare year-over-year.
So that's a positive result. Of course, there is always small seasonality impact of price increase. If you look back in August '24, we increased price for 40% of our hybrid customer base. And this August '25, we increased for the same segment, the hybrid, we just increased for 25% of the customer base. So going forward, although it's a competitive market, we have positive trends of mobile service evolution in the next quarters. I don't know, Luis, if there's anything else that you want me to address.
Our next question comes from Gustavo Farias from UBS.
So 2 on my end. The first one on leasing, if you could comment further on the leasing efficiencies you guys are pursuing on specific measures and possibly, if possible, the timing we should expect them to start to have further impact -- higher impact on the leasing payments? That was my first question.
And the second question, if you could give us an updated outlook for the sale of assets related to the concession migration? We saw most of it came from real estate. So how should we expect them to behave going forward in the next several quarters?
Gustavo, thank you for the question. So regarding the first one on leases. I mean, the evolution of lease depreciation and interest accruals, I mean, remain consistent compared with previous period. In fact, if you look to EBITDA after leases grew even more than EBITDA before leases not in the quarter, but also in the full year. So for the first 9 months, around 2 percentage points, even more, 0.2%.
I mean when we look about payments, there is always volatility across the quarters. But I think it's important to look to the number we have this quarter, which is around BRL 1.3 billion and this is consistent and is almost flattish compared to the fourth last quarters. So this is important because that shows positive trend resulting from the negotiation that we are having with the towers company. So for the coming years, it's difficult to talk about any precise quarters. But the information that we also show in this presentation has to do with the current tenancy ratio that in Brazil, we believe is quite low. We are talking about 1.4 tenancy ratio in Brazil. When we talk about other countries where they have the same number of carriers, we are talking about above 2 tenants per tower.
So this brings opportunity to negotiate not only in terms of unitary costs, but only -- also being more rational in terms of deployment strategy, but more importantly, increasing the infrastructure that we share with other operators. So all the deployment that we will do in the coming years will be -- our aim is to maximize the compensation with the unitary costs and sharing more. So we are expecting also positive trends coming for the next year in this line.
Can I go to the second one, Gustavo, if you have any other doubts about leases, David can follow on or otherwise, I go to the copper and real estate.
Yes. David was pretty clear.
So going to the second question, Gustavo. As we stated and now we restated, we -- from the migration, we will capture no benefits coming from the sale of copper, approximately BRL 3 billion positive cash effect, net of extraction costs from the sales of around 120,000 tons of copper and cable coating, okay? That was what we said and restate here again. And then additionally to that, BRL 1.5 billion proceeds from the sale of assets here, the real estate piece net of the mobilization costs, okay? So these are the 2 figures that we stated before.
And now for the third quarter, we started delivering that. So we recorded like BRL 232.4 million, and that's divided in sales of copper, BRL 33.7 million and real estate BRL 198.7 million. That compared this BRL 232.4 million compared to BRL 95 million that we had 1 year before in the third quarter of '24. That is also what we anticipated the benefits of the migration are starting now, but it will ramp up and accelerate in '26 and '27 with the project expected to be completed in 2028. So if you compare also what we had in the next -- in the last year, copper was around BRL 63 million and real estate was BRL 32 million, adding to BRL 95 million. Now we had BRL 34 million actually in copper and BRL 199 million in real estate. Copper seems to be like in a positive trend and will be in a trend because we have been able to sell more and more and real estate, it depends on the asset that we sell each quarter. So adding to the BRL 1.5 billion that I described before.
Christian, just a follow-up. So is it fair to think that the sale of real estate could be a little volatile based on what you commented, right?
You are right. Sorry, it depends on what we sell. And some quarters, we're going to see more and some quarters, we're going to see less. So this quarter was a good one to the total of BRL 1.5 billion, we are talking about around BRL 200 million, but we still have another BRL 1.3 billion.
Okay. And about the copper, it should follow a more volatile or more stable pace of sales.
I think it's more positive evolution, positive evolution. We are going up. Starting next quarter, we will be in January that we are going to -- because as you know, we have 1.2 million customers connected to the copper. So what we are doing now, we are replacing to new technology, in this case, fiber and liberating the copper and the extraction will start in full speed starting next quarter. So we're going to see a positive trend in copper and a more volatile in real estate, although out of the BRL 1.5 billion, we talked about BRL 200 million here now.
Our next question comes from Marcelo Santos from JPMorgan.
The first question, I wanted to go back to something that was asked first about the mobile, specifically on prepaid trends. I mean you mentioned that you had sequential growth, but actually, that's the second quarter of sequential growth in prepaid. So it looks like a different trend than we have been seeing despite you continue to migrate clients to postpaid. So can you talk a bit what's going on, on the prepaid? Is it something more like Vivo led some initiatives you're putting forward or the market is a bit better? Just want to know if you could throw us a bit some more color on the positive trends we are seeing in prepaid.
And the second question is regarding M&A in the ISP space. So I would like to better get a feeling of what's your appetite for inorganic moves, specifically on the ISP space.
Right, Marcelo, we see a positive trend in the prepaid. Here is each company works in a different way. What we see here is the customer base that we have recharging every month is going up. Also, our ability to offer more data to our customer base is impacting and also digital services is impacting in a slight ARPU increase. So although there is a very challenging landscape for prepaid more competitive and also our strong migration to hybrid that has a negative impact in the prepaid revenue results. We see, yes, a positive trend for prepaid as well. As much as we see also a very positive in the postpaid, as I said before, net adds are in record numbers. Churn is in lowest levels. So the combination of both give us optimistic trend for mobile service revenue for the future.
About ISPs, the specific question was how do we see -- can you repeat it, please?
I just wanted to get a sense of your appetite for inorganic moves in the ISP space, whatever you can talk about this.
Okay. Great question, Marcelo. Like we reached like almost 31 million home passed in fiber. The number of customers that we have are also growing. As you could see, net adds of Vivo has been in the highest level and compared to the other players in a very strong gap in a positive gap for us and churn is going down. Also, we highlighted our churn level at 1.46%. But when you go to the Vivo Total fiber churn level is low as 0.7%. as you follow the market, that is a record churn level for any player in our market.
So going forward, of course, we believe that considering the size of the Brazilian market that getting more homes passed is in our objectives. Brazil has 90 million homes, maybe 60 million are more addressable to a fiber deployment. And we have, at the moment, a little bit less than half of it. So we want to be in a more strong -- a stronger position in this market. So we could do that organically as we've been doing. We have CapEx for home pass in a very low level. We've been improving that, optimizing that. So we are talking about lower than BRL 200 per home pass. And we need to connect more over our own network.
So the first one, deploying more network, we're going to do by our own, although we find a network that follows some of our criteria, technical quality and also not so much overlap with our network and in the right pricing. So far, we haven't found any like this. There is some movement in the market. Some of these assets, we already assessed and analyzed. We couldn't get to an agreement due to maybe failing in one of these 3 criteria that I just described for you.
Also, we have the opportunity to penetrate more of our network. We have just acquired FiBrasil and still waiting for the antitrust final approval. Their take rate was around 16%, actually, our take rate over their network. But I do believe now having the full control of the network will allow us to improve this take rate closer to the one that we have in our own network that is around 25%. So it will be a combination of more network organically or if we find an asset that comply with the 3 criteria that I just described and more penetration in our own network. And this penetration will be following this very strong and positive trend that we have. As you could see, net adds are above 225,000 clients. That's the best result that we have this year, and we are in a positive trend because we are acquiring more customers and we are retaining more customers as churn level is in a very low historical situation.
Our next question comes from Lucca Brendim from Bank of America.
I also have 2 from my side. So the first one is regarding concessions, a follow-up on the previous question on the migration. Not only talking about the assets that were being sold, but also on the synergies and efficiencies that you mentioned we would be seeing in terms of cost savings. Have you already started to see anything now? And how is the time line for those to be captured and we start to see them in results?
And then the second one on B2B digital, it continues to perform really well. And do you guys think you should continue to see this pace of expansion? And what are the verticals within this segment that you think will be the drivers for the coming quarters?
So going to the first one, Lucca, yes, we're not giving numbers of this like saving related to cost efficiency. Of course, it will mostly impact our commercial and infrastructure line, but it will be captured gradually until 2028. We're not like showing like what's the number quarter-by-quarter. Here now, the focus is in trying to capture as quick as we can, what I just described before of the copper extraction and the sale of real estate that is required for that to migrate customers. We're going to do that as fast as we can, protecting the revenue, protecting the customers.
And again, when we do that, of course, we're going to be in the end, capturing a lot of other synergies of people that are dedicated to that and other indirect costs that we have to deal with this concession. For the moment, we're going to be more -- giving more clarity in the number that we gave to the market that is the BRL 4.5 billion.
Going to the second question about B2B. Yes, we are very positive about the evolution of the B2B digital services. As you described before, it has a very strong positive trend. If you look at the last 12 months revenues, it is a year-over-year growth of 34.2%. The areas that we see growth are the same. Cloud, important one. Here, we've been doing many things. We bought IPNET. So we're expanding our portfolio, trying to be much more diversified, going -- just not only having a very strong dependency in Microsoft, but adding Google, Oracle, among others. Also going up in the managed services. That's why these acquisitions, Vita and IPNET were essential because we could bring in some talent and certified professionals to help us in managed service, and we are looking to other assets.
Then there is IoT messaging. I think IoT, we gave the great example of Sabesp. We see that the beginning of a huge opportunity in IoT. That's in the water business, but we also see in the agribusiness, and we are closing many deals there. So we grew 25% year-over-year in this line as well. Cyber is the one that had a very strong growth, but the volume is still lower, maybe is where we're going to focus in the future as well as a group and as Vivo, we see great opportunity for cybersecurity. And then there are other solutions and IT product sales that we also see a positive trend.
So we do believe that the penetration of digital services in B2B through Vivo will grow. Today, on average, we have 15%. It's much higher in the top segments of our portfolio of clients, but we want to increase it much more in the SME segment. And we see huge opportunity to leverage our channel capability. We have 5,000 sales reps and of course, the brand and the combination of connectivity with digital services.
Our next question comes from Vitor Tomita from Goldman Sachs.
Two questions from my side. The first one is that you cited the competitive environment when discussing mobile in some prior answers. Could you give a bit more color or a bit of an update on how you are seeing the competitive situation in mobile going into Q4?
And my second question would be if you could give a bit more color on the topic also of sales and copper and real estate assets, but more from an operational standpoint in terms of communicating with copper users, as mentioned, moving them to fiber, mobilizing field teams to extract copper, negotiating real estate, et cetera. How has that execution side been going, whether there have been any surprises on that execution side relative to what you expected? Just so we can have a bit more of a qualitative view of how this is going?
Okay, Vitor, I will start with the second one. Okay, it's a good question. It's important to highlight that we've been doing that for a long time. It's not that we have started doing that. If you look at real estate, even during the concession period in the last years, we were able to get authorization from ANATEL and we sold important assets during the last years and that we needed to mobilize and take out everything related to the concession from the real estate, and we were able to do that.
So we sold Martiniano de Carvalho that was an important building for us. We sold others in important neighborhoods of São Paulo. So we had already established a real estate process to analyze and evaluate and demobilize all the assets that we wanted to sell, and we continue doing that now with much more flexibility because we don't need more authorization to do that.
Regarding the copper and the customer that you said, that's also a very good question. We did that in the past as well. It's not the first time that we do that. We were already very focused on replacing copper with fiber. But in the past, we needed to get full authorization of the customer. Now of course, we communicate, we explain the benefit of fiber. But in the end, if the customer doesn't want to, we have also the possibility to say that we are running out of any type of assistance to this technology that give us the right to replace it.
Mostly what we see in most cases is that customers want to have the migration. We put in place a very robust process. We have a dedicated team in a PMO focusing on doing that. And what we see here is not only we migrate customers, but we also can see opportunities to upsell. An example of a pure corporate client that we offer fiber to the voice and we can also offer broadband and ended up having a much better ARPU with these customers.
In other cases, copper plus fiber in a very low speed offering, we could also be able to offer upsell and also Vivo Total. So it's working pretty well. That's why it's giving us opportunity to sell important assets in important neighborhoods where we were like finishing, concluding the migration to fiber to all the customers that we have.
I think -- I don't know if I answered it. Otherwise, I go Vitor, to the first question.
Yes, that was clear.
Okay. Let's go to the first. Look, the market dynamics is, of course, competitive. It's not very different from what we saw in the previous quarters. We've been doing as we normally do, adjusting price based on the inflation and the period that we can do that, focusing a lot in customer experience to retain as much as we can, playing convergence in the best way, innovating in our offering. We just launched the Vivo Easy Lite that is based in credit card that has been a huge success. And we've been doing that in a very positive way, as you could see in the performance that we had in net adds. I think net adds is a great example of the trend going forward. For the first time, we surpassed 1 million customers in postpaid net adds and the postpaid churn is in a very low level. Now we're also able to increase ARPU.
So competition is there. We have different competition depending on the region, being able to respond to that, both in prepaid, hybrid and postpaid and also playing strongly the opportunity to sell more service to the same customer, adding not only the fiber to the mobile, but also the digital services. Now our success performance selling digital services, mainly entertainment for these customers is also given here. We are reaching 4 million customers, both mobile and in some cases, convergent, in other case, just fiber that we are able to sell digital service. This is only one example of one digital service, but we are also able to sell others. We expect this positive trend to continue, keeping the very competitive environment that we have.
Our next question comes from Maria Clara Infantozzi from Itaú BBA.
I have 2 questions here on my side. So the first one, can you please provide us an update how you perceive the competitive landscape in the fiber business? It caught our attention that ARPU continues to fall for the second quarter in a row this time.
And the second question would be related to CapEx. It also caught our attention the sequential increase this quarter. And with the integration of FiBrasil soon, how should we think about the CapEx evolution in the following quarters?
On the fiber, again, not to repeat myself, but it was a very strong quarter for us. We are talking about a revenue that's already BRL 2 billion with a growth of 10.6%. Net adds is also a record level. If you look back the last 5 quarters, that's the strongest one. And churn, if you look back many years, is the lowest one.
When you talk about specific ARPU, here, you need to put into account. First, we are deploying new areas because we're expanding our network. Sometimes we have promotional entry offers. But more importantly is that we are selling 85%, if you consider just one channel, our stores, fiber with mobile in Vivo Total. And then there is a change in the allocation of ARPU because we're selling 2 services or more to the same customers. And we also stated here that on average, a Vivo Total customer has fiber, but has 1.7 postpaid lines. Add to that, that we also sell a lot of OTT, video OTT. So more than just looking at a specific service ARPU, we should look at the customer ARPU or we should look at the line of the absolute number of the fiber that, again, is growing double digits and is reaching BRL 2 billion per quarter. So we are very happy with our performance.
As I stated before, we want to expand to more areas. We want to penetrate more our network. We want to sell more convergence to our fiber customers. And also, we launched new speeds, even 10 gigas as one of the last -- gigabytes one of the speed that we just commercially launched. So we also see opportunities to upsell in our customer base to 1 to 2 and up to 10. So the competitive scenario is hard. As you can see, we have thousands of customers, but I think we have assets and attributes that are very difficult to be replicated, and that's shown in our net adds that is well above the second player.
Sorry, regarding CapEx, we are keeping the low intensity that we have right now, CapEx over revenues, and I think this should be the metric to look forward.
So even with the acquisition of FiBrasil, we should think about a continuation of the declining CapEx over revenue stream, right?
Yes. The acquisition, if it's approved, it's going to be less than 2 months, and it brings EBITDA and brings a little bit of CapEx. Operating cash flow impact is almost 0. It is slightly positive. Impacting CapEx is much more than replaced or compensated by the positive impact in EBITDA. So you shouldn't be worried about the CapEx impact of FiBrasil.
Our next question comes from Mathieu Robilliard from Barclays.
I had 2 follow-up questions. One on the lease costs. which you are saying could be contained or decline. I was wondering if this is still due or linked to the acquisition of some of the Oi towers, and it was basically the prospects of continuing to rationalize your tower portfolio linked to that acquisition or it was something more structural?
The second question was about B2B and more specifically data centers and cloud. Now that may be very euro-centric, my question, but certainly, what we're seeing over here is that with the geopolitical changes, sovereignty has become a big topic. And so a lot of countries and companies are thinking about having locally owned data centers. And I was wondering what was the debate there in Brazil and whether you guys had any data centers directly or plan to have in that context?
And lastly, just to make sure I got the question about the fixed ARPU right or rather the answer. Are you basically saying that one of the reasons why the ARPU is down is because I guess there's a discount to the sum of the parts in your product and maybe you're allocating a bit more to the fixed business than the mobile business? I mean that's really an accounting question.
Yes. This is Christian here. I'll go to the last one, and then David will jump to the first and then I go back. Yes, there is an allocation decision here, and I addressed that when we talk about Vivo Total. If you look the number of customers that we have in fiber 7.6 million, 3.2 million are already in Vivo Total. And I guess that's looking at a specific service ARPU, considering that our strategy is driven by selling more to the same customer, convergence being the key element of this strategy is going to be hard because there is some allocation here.
What is important is that in absolute numbers, we are growing revenues in double digits. And commercially speaking, net adds are in a very high level and churn is in the lowest level. Yes, and there is some accounting that may be impacting the distribution of revenues among the 2 technologies.
Mathieu, this is David. So the first question about the leases. Look, this quarter, we have no impact from what you mentioned about other carriers that just left the business a few years ago. What is benefiting the trend is that before we were 5 carriers, now we are 3 here in Brazil. That means that we have -- we had to review all the strategy of sharing infrastructure that before we were sharing because we were 5, and now we end up being single tenant in a percentage of our sites that we see a big opportunity.
So as I mentioned before, in the next -- let's say, in the next 3, 5 years, we are going to renegotiate a significant part of our sites where the contracts are about to expire. And therefore, we are prepared to face those negotiations with an approach where we can maximize the value in terms of return on capital, particularly to understand which are the strategic sites, which are the sites that we could pay less, which are the sites that we could share with someone who is just having a similar site, very near our existing infrastructure. So we will see synergies coming from this process that will be shown in our cash flows in the coming couple of years.
So our plan is to continue showing positive numbers in terms of free cash flow. And we will keep you updated on the number that we have just shown this quarter. So we are talking about a 1.4 agent per tower compared to other countries where it's about -- it's above 2. We could be talking about specific countries where U.S., we're talking about 2.2. So here, the 1.4, we want to keep you updated to see how we are progressing, make this number higher, and this will fund all the new deployment that we need to have to keep having the best quality of 5G in Brazil.
Going to the second question. No, we don't see the same issue that you described in the U.S. Here, what we are like trying to have is a more diversified portfolio of vendors to have it much more spread among different players. Many players are now entering strongly in the cloud area, and that's good for us because we are the key commercial partner of all of them, and we have a relationship with customers that these players don't have. What we see some companies, they want to have a hybrid strategy, having some on-premise servers combined with a cloud solution, but nothing related to what we described it before at the moment here in Brazil.
Okay. That's very clear. And just a follow-up on that. Do you guys have data center capacity? I mean, do you have infrastructure you own in Brazil that is important in size? Or is it essentially hyperscalers?
Yes, we have a sales leaseback that we used to have a data center that we sold, and we have an agreement to occupy part of this data center. Apart from that, we don't have other data center. We use other big players in data center, and we hire capacity from their data centers and resell it. So we have a commitment to use part of their capacity, but it's not ours.
The Q&A session is over. I would now like to hand the floor back to Mr. Christian Gebara for the company's final remarks. Please, Mr. Gebara, the floor is yours.
Thank you. Thank you all again for participating in our call. Just want to highlight the strong results that we just presented and more importantly, the positive outlook that we foresee, especially based on our strong and consistent commercial performance and our ability of monetize and retain customers in all services and in all segments. If you have any other additional doubts, please reach our team. Thank you again, and see you soon.
Vivo's conference call is now closed. We thank you for your participation and wish you a very good day.
Telefonica Brasil S.A., - ADR (Representing Ord) — Q3 2025 Earnings Call
Financial data from Telefonica Brasil S.A., - ADR (Representing Ord)
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 11,898 11,898 |
7%
7%
100%
|
|
| - Direct Costs | 6,541 6,541 |
5%
5%
55%
|
|
| Gross Profit | 5,357 5,357 |
10%
10%
45%
|
|
| - Selling and Administrative Expenses | 2,918 2,918 |
7%
7%
25%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 2,528 2,528 |
17%
17%
21%
|
|
| - Depreciation and Amortization | 506 506 |
2%
2%
4%
|
|
| EBIT (Operating Income) EBIT | 2,022 2,022 |
21%
21%
17%
|
|
| Net Profit | 1,271 1,271 |
13%
13%
11%
|
|
In millions USD.
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Telefonica Brasil S.A., - ADR (Representing Ord) Stock News
Company Profile
Telefonica Brasil SA engages in the provision of telecommunication services. It offers post paid mobile and fixed telecommunications services, such as fixed and mobile voice, fixed, mobile broadband and ultra broadband. The company was founded in May 1998 and is headquartered in São Paulo, Brazil.
StocksGuide Premium
| Head office | Brazil |
| CEO | Mr. Gebara |
| Employees | 35,010 |
| Founded | 1998 |
| Website | www.telefonica.com.br |


