Telefonica Brasil Q1 Earnings Call Highlights
Telefonica Brasil (NYSE:VIV), operating under the Vivo brand, reported a stronger first quarter of 2026, with management pointing to growth in postpaid mobile, fiber broadband, digital services and disciplined cost control as drivers of higher profitability and cash generation.
Chief Executive Officer Christian Gebara said Vivo “began 2026 at a strong pace,” delivering growth above inflation across core metrics. Total revenue rose 7.4% year over year, while EBITDA increased 8.9%, lifting the EBITDA margin to 40.2%. Net income expanded 19.2% to BRL 1.3 billion, and free cash flow totaled BRL 2.2 billion in the quarter.
Gebara said operating cash flow reached BRL 4.2 billion, up 8.5%, and reiterated the company’s focus on shareholder returns. Vivo has allocated BRL 7 billion for distribution in 2026, according to management.
Postpaid and fiber remain central growth drivers
Vivo’s postpaid base grew 6.9% year over year to 72.1 million accesses, representing 69.5% of the company’s mobile base. Excluding machine-to-machine and dongles, postpaid accesses rose 7.2% to 51.6 million. Gebara said postpaid net additions accelerated 22.7% from the prior year, while postpaid churn remained controlled at 1.0%.
Mobile service revenue increased 6.6% year over year. Postpaid revenue rose 7.8%, supported by what Gebara described as disciplined pricing, stronger customer experience and migration to higher-value plans. Mobile average revenue per user reached a record level, rising 5.7% year over year.
In prepaid, the company said revenue trends improved, with the year-over-year decline narrowing to 1% in the quarter. During the question-and-answer session, Gebara said Vivo sees room to raise prepaid prices and is moving more customers toward monthly tariffs while adding features such as WhatsApp access as part of its monetization strategy.
Fiber also remained a major contributor. Vivo reached 8 million homes connected, up 11.5% year over year, while its footprint expanded to 31.5 million homes passed. Fiber-to-the-home revenue rose 9.2% in the quarter. Gebara said convergence is a key differentiator, with Vivo Total accesses up 32.6% year over year to 3.6 million customers, representing 44.7% of the FTTH base.
In response to an analyst question from Luís Chagas of XP, Gebara said Vivo increased prices for about 25% of its fiber back book in January and raised Vivo Total prices in April. He said the broadband market remains competitive and fragmented, but Vivo added 200,000 net fiber customers in the first quarter and increased its market share to 19.2% from 18.4% a year earlier.
Digital services expand revenue mix
Management highlighted continued diversification beyond core connectivity. New businesses accounted for 12.1% of total revenue in the first quarter, up 1.8 percentage points from the prior year. Gebara said postpaid and fiber revenue now represent more than 74% of service revenue, creating what he called a more resilient revenue mix.
On the consumer side, Vivo reported BRL 45.7 billion in B2C revenue over the last 12 months, up 5.9% year over year. B2C new businesses grew 31.5% and represented 3.2% of total B2C revenue. Video and music over-the-top services grew 24.8%, consumer electronics revenue rose 56%, and health and wellness revenue increased nearly 68%. Vale Saúde surpassed 500,000 subscribers, up 13% year over year.
The company also expanded financial services through Vivo Pay, launching a proprietary installment plan intended to support handset and electronics purchases.
In B2B, Vivo reported BRL 13.7 billion in revenue over the last 12 months, up 11.8%. Digital B2B revenue increased 23.8% to BRL 5.4 billion, led by cloud services growth of 29%, IoT and messaging growth of 17.3%, and digital solutions growth of 21.1%. Gebara cited a partnership with São Martinho in agribusiness as an example of Vivo’s role in enterprise digital transformation.
Costs, cash flow and capital spending
Chief Financial and Investor Relations Officer Rodrigo Monari said total costs were slightly above BRL 9 billion in the quarter. Cost of services and goods sold rose 12%, reflecting higher handset and accessory sales and growth in new business revenue. Operating costs increased 3.9% year over year, with commercial and infrastructure costs rising below inflation for the 50th consecutive quarter, according to Monari.
Bad debt remained stable at 2% of gross revenue. During the Q, Gebara said B2C bad debt had not changed materially and that, excluding one B2B customer, bad debt would have been 1.88% of revenue compared with an average of 1.92% last year.
CapEx totaled BRL 2 billion in the quarter. Monari said capital intensity was in line with the first quarter of 2025 and below the previous year’s average, with spending focused on mobile network enhancement, fiber expansion and customer connections. He said Vivo remains committed to improving annual CapEx intensity in 2026.
Operating cash flow before leases totaled BRL 4 billion, while operating cash flow after leases rose 10% year over year to BRL 3 billion. Monari said net cash increased 65% year over year, and net debt to EBITDA improved to 0.4 times on a last-12-month basis.
Shareholder returns and asset sales
Vivo reiterated its commitment to distribute at least 100% of 2026 net income. Monari said BRL 7 billion has already been confirmed for distribution this year, including interest on capital declared in 2025 and paid in April, as well as a capital reduction scheduled for July 2026. The company has also declared BRL 890 million year to date to be paid by April 2027.
In February, Vivo’s board approved a new share buyback program of up to BRL 1 billion, to be executed through February 2027.
Management also discussed concession-related asset sales, including copper. Monari said copper revenue decelerated slightly in the quarter after the company paused sales in March due to a tax-related issue. Sales resumed in late April, and Vivo remains on track to deliver BRL 4.5 billion in concession-related assets by the end of 2028. Gebara said copper sales should increase over the remaining quarters of 2026.
ESG and outlook commentary
Gebara said ESG remains a core part of Vivo’s strategy. The company said it led B3’s Corporate Sustainability Index across all sectors for the third time and remains the only Brazilian telecommunications company included in the Dow Jones Sustainability World Index. Vivo was also recognized by CDP for supplier climate engagement for the sixth consecutive year.
The company said women now account for 42% of its board of directors following the appointment of a new board member in April. Vivo was also named the winner of Anatel’s 2026 Accessibility Ranking.
In closing remarks, Gebara reaffirmed Vivo’s focus on shareholder remuneration, revenue and EBITDA growth above inflation, and optimized CapEx allocation. During the Q, he said the company was not seeing an impact from higher oil prices or the broader macroeconomic environment on its business.
About Telefonica Brasil (NYSE:VIV)
Telefônica Brasil SA, commonly marketed under the Vivo brand, is one of Brazil's largest telecommunications providers, offering a broad range of consumer and enterprise communications services. The company's core activities include mobile voice and data services, fixed-line telephony, broadband internet (including fiber-to-the-home), and pay-TV solutions. It also provides ICT and managed services for business customers, such as cloud, data center, connectivity, Internet of Things (IoT) and security solutions.
Vivo operates a nationwide network across Brazil and serves both individual consumers and corporate clients.
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