1Q25 Results: Telefônica Brasil S.A.

Rhea-AI Summary

Telefônica Brasil (NYSE: VIV) reported strong Q1 2025 results with notable growth across key metrics. Net revenue increased 6.2% YoY to R$14,390 million, driven by postpaid (+10.3%) and fiber (+10.6%) services. The company's EBITDA grew 8.1% YoY to R$5,704 million, with margin expanding to 39.6%. Net income surged 18.1% YoY to R$1,058 million, with EPS reaching R$0.65. The postpaid customer base grew 7.7% YoY to 67.4 million accesses. FTTH network expanded to cover 29.6 million homes (+10.5% YoY) with 7.2 million homes connected. The company's 5G network now covers 519 cities, reaching 62% of Brazil's population. Telefônica Brasil committed to distribute ≥100% of net income to shareholders during 2024-2026, with 2024 achieving a 105.3% payout ratio.

Positive

• Net income increased 18.1% YoY to R$1,058 million
• EBITDA grew 8.1% YoY with margin expansion to 39.6%
• Net revenue up 6.2% YoY to R$14,390 million
• Strong postpaid customer base growth of 7.7% YoY
• FTTH homes connected increased 12.9% YoY
• 5G network expansion reaching 62% of Brazilian population
• Commitment to distribute ≥100% of net income to shareholders (2024-2026)

Negative

• Free Cash Flow declined 10.7% YoY to R$2,124 million
• Other Revenues decreased 10.3% YoY

Insights

Telecommunications Financial Analyst

Telefônica Brasil delivered strong Q1 results with 6.2% revenue growth, 8.1% EBITDA growth, and 18.1% net income growth.

Telefônica Brasil has posted robust financial performance in Q1 2025, demonstrating healthy growth across key metrics. The company's net operating revenue increased by 6.2% year-over-year to R$14,390 million, driven by strong performance in high-value segments.

The growth story is particularly impressive in the company's strategic focus areas. Postpaid mobile services grew 10.3% year-over-year, benefiting from a 7.7% expansion in customer base to 67.4 million accesses and a 2.0% increase in ARPU to R$52.2. The fiber business (FTTH) continued its strong trajectory with 10.6% revenue growth, expanding its footprint to 29.6 million homes passed (10.5% YoY) and 7.2 million homes connected (12.9% YoY).

Corporate data, ICT, and digital services emerged as the fastest-growing segment at 15.8% YoY, highlighting the company's successful diversification beyond traditional telecom services. Meanwhile, legacy services continue their expected decline, reflected in the 10.3% decrease in "Other Revenues."

Profitability metrics showed meaningful improvement. EBITDA grew 8.1% to R$5,704 million, outpacing revenue growth and expanding margin by 0.7 percentage points to 39.6%. This indicates effective cost management despite inflationary pressures. The net income jumped 18.1% to R$1,058 million, with earnings per share increasing 20.3% to R$0.65.

Capital expenditure remained stable at R$1,869 million, representing 13.0% of revenue (down 0.9 percentage points YoY), reflecting improved capital efficiency. The investments focus on strategic priorities: 5G network expansion (now in 519 cities covering 62% of Brazil's population) and fiber infrastructure.

Telefônica Brasil maintains a shareholder-friendly capital allocation policy, committing to distribute at least 100% of net income through 2026. The company has already paid R$2,576 million to shareholders by April 2025, with another R$2,000 million capital reduction planned for July 2025, and additional R$500 million in interest on equity recently approved.

SÃO PAULO, May 12, 2025 /PRNewswire/ -- Telefônica Brasil - (B3: VIVT3; NYSE: VIV) announces its results for 1Q25.

Strong operating performance led to robust EBITDA and net income growth.

R$ million	1Q25	1Q24	% YoY
Net Operating Revenue	14,390	13,546	6.2
Mobile Services	9,272	8,702	6.5
FTTH	1,899	1,717	10.6
Corporate Data, ICT and Digital Services	1,312	1,132	15.8
Handsets and Electronics	909	881	3.2
Other Revenues¹	999	1,114	(10.3)
Total Costs	(8,687)	(8,269)	5.1
EBITDA	5,704	5,277	8.1
EBITDA Margin	39.6 %	39.0 %	0.7 p.p.
EBITDA AL²	4,376	4,047	8.1
EBITDA AL² Margin	30.4 %	29.9 %	0.5 p.p.
Net Income	1,058	896	18.1
Earnings per Share (EPS)	0.65	0.54	20.3
CAPEX ex-IFRS 16	1,869	1,874	(0.3)
Operating Cash Flow (OpCF)	3,835	3,403	12.7
OpCF Margin	26.7 %	25.1 %	1.5 p.p.
Operating Cash Flow AL (OpCF AL)²	2,508	2,173	15.4
OpCF AL² Margin	17.4 %	16.0 %	1.4 p.p.
Free Cash Flow	2,124	2,380	(10.7)
Total Subscribers (Thousand)	116,127	113,481	2.3
1 – Other Revenues include Voice, xDSL, FTTC and IPTV. 2 – AL means After Leases.

Net revenue expanded by +6.2% YoY, driven by the strong performance of postpaid (+10.3% YoY) and fiber (+10.6% YoY) revenues. Postpaid's performance is supported by the increase in the customer base (+7.7% YoY), that ended the quarter with 67.4 million accesses due to significant migrations and the acquisition of new customers. Additionally, the impact of annual price adjustments contributed to the +2.0% YoY increase in postpaid ARPU, excluding M2M and dongles, reaching R$52.2.

Fixed revenue increased +6.2% YoY, supported by strong growth in FTTH (+10.6% YoY) and Corporate Data, ICT, and Digital Services revenues (+15.8% YoY) in 1Q25. Our FTTH network reached 29.6 million homes passed (+10.5% YoY), with 7.2 million homes connected (+12.9% YoY).

EBITDA grew by +8.1% YoY, with a margin of 39.6%, an increase of +0.7 p.p. in the annual comparison. EBITDA AL also expanded by +8.1% YoY, with a margin of 30.4% (+0.5 p.p. YoY).

In 1Q25, Capex totaled R$1,869 million, a decrease of -0.3% YoY, representing 13.0% of revenues (-0.9 p.p. YoY), reflecting the reduction in Capex intensity over net revenue. Investments were directed towards strengthening our 5G network, which is already present in 519 cities (+2.9x YoY), covering 62% of the Brazilian population, and expanding our fiber operation.

Operating Cash Flow totaled R$3,835 million (+12.7% YoY), with a margin of 26.7% (+1.5 p.p. YoY) over net revenue.

Net income attributed to Telefônica Brasil reached R$1,058 million in the quarter, an increase of +18.1% YoY. The remuneration paid to shareholders totaled R$2,576 million by the end of April 2025. Additionally, on July 15, 2025, we will pay R$2,000 million related to the second capital reduction event. The Company has just deliberated an additional R$500 million in interest on equity, totaling R$1,120 million up to May 2025. We committed to distribute to our shareholders an amount equal to or greater than 100% of net income for each fiscal year from 2024 to 2026. In 2024, we met the guidance, with a payout of 105.3% of net income.

TELEFÔNICA BRASIL – Investor Relations

ir.br@telefonica.com 
To download the complete version of the Company's earnings release, please visit our website: https://ri.telefonica.com.br/en 

View original content:https://www.prnewswire.com/news-releases/1q25-results-telefonica-brasil-sa-302453046.html

SOURCE Telefônica Brasil S.A.

FAQ

What was Telefonica Brasil's (VIV) net income in Q1 2025?

Telefonica Brasil reported a net income of R$1,058 million in Q1 2025, representing an 18.1% increase year-over-year.

How many subscribers does Telefonica Brasil (VIV) have in Q1 2025?

Telefonica Brasil had 116,127 thousand total subscribers in Q1 2025, showing a 2.3% increase from the previous year.

What is Telefonica Brasil's (VIV) dividend payout policy for 2024-2026?

The company committed to distribute an amount equal to or greater than 100% of net income to shareholders for each fiscal year from 2024 to 2026, with 2024 achieving a 105.3% payout.

What was VIV's EBITDA margin in Q1 2025?

Telefonica Brasil's EBITDA margin was 39.6% in Q1 2025, an increase of 0.7 percentage points year-over-year.

How many homes are connected to Telefonica Brasil's FTTH network?

The company reported 7.2 million homes connected to its FTTH network, representing a 12.9% increase year-over-year.