2Q25 Results: Telefonica Brasil S.A.

Rhea-AI Summary

Telefonica Brasil (NYSE:VIV) reported strong 2Q25 results with significant growth across key metrics. Net revenue increased 7.1% YoY to R$14.6 billion, driven by robust postpaid (+10.6%) and fiber (+10.4%) performance. The company achieved an EBITDA of R$5.9 billion (+8.8% YoY) with a margin of 40.5%.

Notable operational highlights include 68.5 million postpaid customers (+7.0% YoY), record-high mobile ARPU of R$31.1 (+5.1% YoY), and FTTH network expansion reaching 30.1 million homes passed (+10.2% YoY). Net income grew 10.0% YoY to R$1.3 billion. The company's 5G network now covers 64% of Brazil's population across 596 cities.

Telefonica Brasil committed to distribute ≥100% of net income to shareholders during 2024-2026, with R$5.2 billion already paid by July 2025 and an additional R$330 million in interest on equity announced.

Positive

• Net revenue growth of 7.1% YoY to R$14.6 billion
• EBITDA increased 8.8% YoY with improved margin of 40.5%
• Net income grew 10.0% YoY to R$1.3 billion
• Record-high mobile ARPU of R$31.1 (+5.1% YoY)
• Strong FTTH growth with 7.4 million homes connected (+12.6% YoY)
• 5G network expansion reaching 596 cities, covering 64% of Brazilian population
• Commitment to distribute ≥100% of net income to shareholders (2024-2026)

Negative

• Free Cash Flow declined 3.5% YoY to R$2,979 million
• Other Revenues decreased 9.5% YoY
• Total costs increased 5.9% YoY to R$8,712 million

Insights

Telecommunications Financial Analyst

Telefonica Brasil delivered strong Q2 results with revenue up 7.1%, EBITDA up 8.8%, and net income up 10.0% year-over-year.

Telefonica Brasil's Q2 2025 results showcase robust financial performance across key metrics. Net operating revenue grew 7.1% year-over-year to R$14.65 billion, driven by strong performance in high-value segments. The postpaid mobile business was particularly impressive with 10.6% revenue growth, supported by a 7.0% expansion in customer base to 68.5 million accesses and a 5.1% increase in mobile ARPU to a record R$31.1.

The company's fiber strategy continues to yield results with FTTH (fiber-to-the-home) revenue increasing 10.4% year-over-year. The FTTH network now passes 30.1 million homes (+10.2% YoY) with 7.4 million homes connected (+12.6% YoY), demonstrating strong penetration in their fiber footprint. Even more impressive was the 20.7% growth in Corporate Data, ICT and Digital Services, indicating successful business segment diversification.

Profitability metrics show disciplined cost management despite inflationary pressures, with EBITDA growing 8.8% to R$5.93 billion and margin expanding by 0.6 percentage points to 40.5%. The EBITDA After Leases (AL) margin of 31.5% also improved by 0.6 percentage points.

Capital expenditure increased moderately by 4.2% to R$2.44 billion, representing 16.7% of revenue, a 0.5 percentage point reduction in capital intensity. This calculated investment approach prioritizes 5G expansion (now in 596 cities covering 64% of Brazil's population) and fiber infrastructure.

Perhaps most significant for investors is the company's shareholder remuneration, with R$5.23 billion paid by July 2025, including a R$2 billion capital reduction payment on July 15. The newly announced R$330 million interest on equity payment reinforces management's commitment to distribute at least 100% of net income to shareholders through 2026, following last year's 105.3% payout ratio.

Sao Paulo, Brazil--(Newsfile Corp. - July 28, 2025) - Telefônica Brasil (B3: VIVT3) (NYSE: VIV) announces its results for 2Q25.

Strong operating performance led to robust Revenue, EBITDA and Net Income growth.

R$ million		2Q25			2Q24			% Y-o-Y
Net Operating Revenue		14,645			13,679			7.1
Mobile Services		9,555			8,907			7.3
FTTH		1,940			1,757			10.4
Corporate Data, ICT and Digital Services		1,361			1,128			20.7
Handsets and Electronics		820			817			0.3
Other Revenues¹		969			1,070			(9.5	)
Total Costs		(8,712	)		(8,224	)		5.9
EBITDA		5,933			5,455			8.8
EBITDA Margin		40.5%			39.9%			0.6 p.p.
EBITDA AL²		4,607			4,216			9.3
EBITDA AL² Margin		31.5%			30.8%			0.6 p.p.
Net Income³		1,344			1,222			10.0
Earnings per Share (EPS)4		0.42			0.37			12.2
CAPEX ex-IFRS 165		2,439			2,341			4.2
Operating Cash Flow (OpCF)6		3,494			3,114			12.2
OpCF6 Margin		23.9%			22.8%			1.1 p.p.
Operating Cash Flow AL (OpCF AL)7		2,168			1,875			15.6
OpCF AL7 Margin		14.8%			13.7%			1.1 p.p.
Free Cash Flow		2,979			3,089			(3.5	)
Total Subscribers (Thousand)		116,190			114,683			1.3

 

1 - Other Revenues include Fixed Voice, xDSL, FTTC and IPTV. 2 - AL means After Leases. 3 - Net Income attributable to Telefônica Brasil. 4 - Earnings per Share (EPS) calculated based on net income attributable to Telefônica Brasil divided by the weighted average of outstanding shares in the period. EPS for 2024 was calculated considering the effects of the Split and Reverse Stock Split effective on April 15, 2025. 5 - Does not include amounts related to IFRS 16 effects. 6 - Operating Cash Flow is equivalent to EBITDA less Capex ex-IFRS 16. 7 - AL Operating Cash Flow is equivalent to EBITDA After Leases less Capex ex-IFRS 16.

Net revenue expanded by +7.1% YoY, driven by a strong performance on postpaid (+10.6% YoY) and fiber (+10.4% YoY) revenues. Postpaid's performance is supported by the increase in the customer base (+7.0% YoY), that ended the quarter with 68.5 million accesses due to significant migrations and the acquisition of new customers. Additionally, the impact of annual price adjustments contributed to the +5.1% YoY increase in mobile ARPU, that reached the highest value in the Company's history, R$31.1.

Fixed revenue increased +8.0% YoY, supported by strong growth in FTTH (+10.4% YoY) and Corporate Data, ICT, and Digital Services revenues (+20.7% YoY) in 2Q25. Our FTTH network reached 30.1 million homes passed (+10.2% YoY), with 7.4 million homes connected (+12.6% YoY).

EBITDA grew by +8.8% YoY, with a margin of 40.5%, an increase of +0.6 p.p. in the annual comparison. EBITDA AL expanded by +9.3% YoY, with a margin of 31.5% (+0.6 p.p. YoY).

In 2Q25, Capex totaled R$2,439 million, an increase of +4.2% YoY, representing 16.7% of revenues (-0.5 p.p. YoY), reflecting the reduction in Capex intensity over net revenue. Investments were mainly directed to the strengthening of our 5G network, which is already present in 596 cities (+2.6x YoY), covering 64% of the Brazilian population, and expanding our fiber operation, with consistent growth in homes passed (+10.2% YoY).

Operating Cash Flow totaled R$3,494 million (+12.2% YoY), with a margin of 23.9% (+1.1 p.p. YoY) over net revenue.

Net income attributed to Telefônica Brasil reached R$1,344 million in the quarter, an increase of +10.0% YoY.

The remuneration paid to shareholders totaled R$5,233 million by the end of July 2025. Recently, on July 15, 2025, we paid R$2,000 million related to the second capital reduction event. The Company has just deliberated an additional R$330 million in interest on equity, totaling R$1.7 billion to be paid until April 30, 2026. 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. As a reminder, in 2024, we met the guidance, with a payout of 105.3%.

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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/260447

FAQ

What were Telefonica Brasil's (VIV) key financial results for Q2 2025?

In Q2 2025, Telefonica Brasil reported net revenue of R$14.6 billion (+7.1% YoY), EBITDA of R$5.9 billion (+8.8% YoY), and net income of R$1.3 billion (+10.0% YoY).

How many subscribers does Telefonica Brasil (VIV) have in Q2 2025?

Telefonica Brasil had 116.2 million total subscribers in Q2 2025, a 1.3% increase year-over-year, including 68.5 million postpaid customers.

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

The company committed to distribute ≥100% of net income to shareholders during 2024-2026. In 2024, they achieved a 105.3% payout, with R$5.2 billion paid by July 2025 and R$330 million additional interest on equity announced.

What is the status of Telefonica Brasil's (VIV) 5G network deployment?

Telefonica Brasil's 5G network is present in 596 cities (2.6x YoY increase), covering 64% of the Brazilian population.

How many homes does Telefonica Brasil's (VIV) fiber network reach?

The company's FTTH network reached 30.1 million homes passed (+10.2% YoY) with 7.4 million homes connected (+12.6% YoY).

What was Telefonica Brasil's (VIV) CAPEX in Q2 2025?

CAPEX totaled R$2,439 million, up 4.2% YoY, representing 16.7% of revenues, primarily invested in 5G network expansion and fiber operations.