Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mobile revenues increased by 6.2% year-over-year, driven by strong postpaid growth.
- EBITDA grew by 6.7% yearly, with margin expansion reflecting efficient operational execution.
- Significant growth in users following the launch of an updated version of the Meu TIM app.
- Successful expansion in Sao Paolo with a 360-degree approach to customer experience and network modernization.
- Strong performance in B2B IoT strategy, particularly in agribusiness, logistics, and utilities.
Negative Points
- Prepaid segment continues to perform below expectations, with a negative growth outlook.
- Inflationary pressures impacting lease payments, requiring renegotiations and cost control measures.
- Highly competitive broadband market affecting TIM Live's revenue growth.
- Seasonal effects and market constraints impacting prepaid revenue dynamics.
- Operational challenges in maintaining ARPU growth amidst market pressures and customer migration.
Q & A Highlights
Q: Could you elaborate on the adjustments made and the levers for improvement in the prepaid segment, and what are the main efficiency levers for improving margins in the current inflationary environment?
A: Alberto Mario Griselli, CEO: The prepaid segment is facing challenges as the market for recharges is decreasing. We have a plan involving offer adjustments, consistent communication, and tactical channel actions to increase customer loyalty and market share. Andrea Marques, CFO: We are focusing on cost reduction and efficiency programs, including AI, digitalization, and renegotiations, particularly concerning lease payments, which are impacted by inflation.
Q: How did the different seasonality in price increases impact postpaid growth, and what can we expect going forward?
A: Alberto Mario Griselli, CEO: Postpaid growth was driven by price adjustments, migrations from prepaid to control, and control to postpaid. The price adjustments occurred between the first and second quarters, contributing to strong performance. We expect postpaid to remain a growth engine, although growth may slow in subsequent quarters.
Q: Is there room for further ARPU improvement in postpaid, and how does this affect full-year revenue guidance?
A: Alberto Mario Griselli, CEO: ARPU has been growing, driven by price adjustments and migrations. While there are forces pushing ARPU up, such as price adjustments, there are also dilutive factors like prepaid to control migration. We are committed to our guidance of roughly a 5% revenue increase.
Q: Can you comment on leasing payments and working capital optimization?
A: Andrea Marques, CFO: Lease payments are impacted by inflation, but we aim to keep their increase lower than revenue growth through renegotiations and decommissioning towers. For working capital, we have initiatives to optimize it, with a trend of negative working capital in the first half and positive in the second half of the year.
Q: What are the plans for front book price increases, and what are the dynamics affecting TIM Live's revenue growth?
A: Alberto Mario Griselli, CEO: We are committed to market rationality and plan to implement front book price increases soon. TIM Live's revenue growth is pressured by a competitive market and the decline of copper technology. We are assessing options for inorganic growth in this segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
