#Brazil #São Paulo #Telecommunications #Telefônica Brasil #1Q25 Results

Telefônica Brasil Shows Solid Growth in 1Q25

Telefônica Brasil recently published its financial results for the first quarter of 2025, highlighting a strong operational performance that fueled notable increases in key financial metrics, including EBITDA and net income. With net operating revenue reaching R$14,390 million, the company observed a year-over-year growth of 6.2%, driven by a remarkable performance in mobile and fiber services.

In particular, mobile services accounted for R$9,272 million, marking a 6.5% rise from the previous year. Fiber-to-the-home (FTTH) services experienced an impressive growth rate of 10.6%, bringing in R$1,899 million. Furthermore, the corporate data and digital services sectors also exhibited significant growth, with revenues increasing by 15.8% year-over-year to reach R$1,312 million. Overall, while some categories, such as handsets and electronics, saw modest growth of 3.2%, the segment labeled 'Other Revenues' decreased by 10.3% from the previous quarter, attributing to a complex revenue landscape but not detracting significantly from the overall performance.

The company's total costs amounted to R$8,687 million, leading to an EBITDA of R$5,704 million, which was an increase of 8.1% compared to Q1 2024. This resulted in an impressive EBITDA margin of 39.6%, representing a 0.7 percentage point growth in margin from the earlier period. The adjusted EBITDA (EBITDA AL) mirrored this steady increase, showcasing an enhancement in operational efficiency as margins expanded.

Telefônica Brasil's net income for the quarter reached R$1,058 million, a significant increase of 18.1% compared to the same period last year, translating to an earnings per share of R$0.65, which improved by 20.3%. This growth in profitability reflects the company's strategic focus on expanding its subscriber base and enhancing service offerings.

The total subscriber base also saw a positive trend, increasing by 2.3% year-over-year to reach 116,127 thousand individuals. This was bolstered by a 7.7% increase in the postpaid customer segment, which culminated in a total of 67.4 million accesses as of the quarter's end. The annual price adjustments and service migrations further contributed to a 2.0% increase in postpaid average revenue per user (ARPU), reaching R$52.2.

In terms of infrastructure investment, the company reported capital expenditures (CAPEX) totaling R$1,869 million, which reflected a slight decrease of 0.3% year-over-year. This investment predominantly focused on enhancing the 5G network, which now serves 62% of the Brazilian population across 519 cities, demonstrating a substantial increase in network reach.

Telefônica Brasil's commitment to shareholder returns remains steadfast, with a total remuneration of R$2,576 million by the end of April 2025. Additionally, the company has pledged to distribute 100% or more of its net income to shareholders from 2024 through 2026, achieving a payout ratio of 105.3% in 2024. This proactive approach underscores the company's dedication to maximizing shareholder value.

In summary, Telefônica Brasil's 1Q25 financial results indicate a strong growth trajectory, bolstered by robust operational performance and strategic investments in telecommunications infrastructure. The outlook for the remainder of the fiscal year remains positive, as the company continues to expand its service offerings and enhance operational efficiencies.

For further details on the full financial report, stakeholders can visit Telefônica Brasil's Investor Relations page.

Conclusion

Overall, Telefônica Brasil's performance in the first quarter of 2025 paints an optimistic picture for the company's operation in the telecommunications market, underlined by aggressive growth in revenue, a commitment to shareholder value, and continuous investment in technology and infrastructure.