• Total Revenue Growth: Increased by 7.7% in Q4 2024.
• Mobile Revenue Growth: Grew by 7% in Q4 2024.
• Fixed Revenue Growth: Increased by 8% in Q4 2024.
• EBITDA Growth: Increased by 7.8% year-over-year.
• Operating Cash Flow: BRL13.7 billion, growing 11% year-over-year.
• Capital Expenditure (CapEx): BRL9.2 billion in 2024.
• Net Income: BRL5.5 billion, a growth of 10.3% versus the previous year.
• Free Cash Flow: BRL8.2 billion in 2024, with a yield of 10.8%.
• Shareholder Remuneration: Over BRL5.8 billion paid, a 22% increase year-over-year.
• Postpaid Access Growth: 7.6% increase, reaching 66.5 million in 2024.
• Fiber Homes Connected Growth: 12.7% increase, totaling 7 million access.
• Net Cash Position: BRL1.4 billion at the end of 2024.
• EBITDA Margin: Maintained at 42.5% in Q4 2024.
• Postpaid Revenue Growth: 9.1% in Q4 2024.
• FTTH Revenue Growth: 12.4% in 2024.
• B2B Digital Services Growth: 21.1% in 2024.
• Cloud Solutions Revenue: Close to BRL2 billion, up 32.6% year-over-year.

• Warning! GuruFocus has detected 6 Warning Signs with VIV.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Telefonica Brasil SA (NYSE:VIV) achieved a significant increase in postpaid access, growing by 7.6% to reach 66.5 million in 2024.
• The company reported a 7.7% increase in total revenues for the fourth quarter, with mobile and fixed revenues growing by 7% and 8%, respectively.
• EBITDA increased by 7.8% year-over-year, reflecting strong operational performance.
• The company paid over BRL5.8 billion to shareholders in 2024, marking a 22% increase in shareholder remuneration year-over-year.
• Telefonica Brasil SA (NYSE:VIV) joined the Dow Jones Best-in-Class World Index, highlighting its commitment to sustainability and ESG initiatives.

Negative Points

• Total OpEx grew by 7.7% year-over-year, driven by an 11% increase in the cost of services and goods sold.
• The company faced a slight decrease in mobile service revenue quarter-over-quarter, attributed to a strong prior quarter and lower price increases in 2024 compared to 2023.
• Excluding one-off effects, the EBITDA margin faced year-over-year compression due to rising inflation and cost pressures.
• Fiber ARPU has been declining sequentially, influenced by bundling discounts and new market entries.
• The company has not yet increased prepaid prices, which could pose a challenge for upselling and maintaining competitive pricing.

Q & A Highlights

Q: Can you discuss the perspective on dividends for 2025 and whether you expect an increase compared to 2024? A: David Sanchez-Friera, CFO, stated that for 2025, the company is committed to delivering a payout of 100% of net income or above. They have already planned a capital reduction and interest on capital payments totaling BRL4.2 billion. Additionally, they continue with their share buyback program, with a total plan of BRL1.75 billion. The company is optimistic about maintaining attractive shareholder remuneration due to strong business trends and cash generation.

Q: Could you provide more detail on the reasons for the quarter-over-quarter slight decrease in mobile service revenue and how you see it going forward? A: Christian Gebara, CEO, explained that the company had a strong growth of 7% in the fourth quarter, with postpaid growth even higher. The slight decrease quarter-over-quarter is due to a strong third quarter comparison. The average price increase in 2024 was lower than in 2023, impacting year-over-year comparisons. Despite this, the company remains optimistic about future growth due to low churn rates and strong commercial performance.

Q: What can we expect regarding margin trends considering rising inflation, and what elements could drive the margin up? A: David Sanchez-Friera, CFO, noted that despite some cost pressures, the company achieved a strong EBITDA growth of 9% for the full year. The company expects to benefit from cost efficiencies and digitalization. The transformation related to the concession migration will also positively impact margins, with benefits expected to be captured over the next few years.

Q: Can you provide more details on the B2B revenue growth and whether this strong level of growth will continue into 2025? A: Christian Gebara, CEO, stated that the strong B2B revenue growth is driven by digital services, which represent 21.2% of B2B revenue. The company has a vast portfolio and partnerships, and they expect continued growth in both telco and digital services due to their strong market position and customer base.

Q: Regarding the concession migration, what are the expected impacts on free cash flow and the timeline for realizing these benefits? A: David Sanchez-Friera, CFO, explained that the company plans to capture a significant portion of the benefits from the concession migration within the first four years. The migration will lead to cost savings and revenue opportunities, positively impacting free cash flow. The company is prepared to start capturing these benefits immediately.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.