Earnings call transcript: America Movil sees strong Q2 2025 growth

America Movil reported a robust financial performance in its second quarter of 2025, with significant revenue growth and an increase in wireless subscribers. Despite the absence of specific earnings forecasts and stock market reactions, the company demonstrated resilience and strategic expansion in key markets.

Key Takeaways

• Revenue grew by 13.8% year-on-year, reaching 234 billion pesos.
• EBITDA increased by 11.2% in peso terms.
• Added 1.7 million wireless subscribers and 462,000 broadband accesses.
• Strong performance in Brazil and Mexico, with postpaid revenue growth.

Company Performance

America Movil showcased a strong performance in Q2 2025, driven by a notable increase in revenue and subscriber growth. The company reported a 13.8% rise in revenue compared to the same quarter last year, marking the strongest growth in over a decade when adjusted for constant exchange rates. This performance underscores the company’s effective strategies in expanding its customer base and enhancing service offerings.

Financial Highlights

• Revenue: 234 billion pesos, up 13.8% year-on-year.
• EBITDA: 92.4 billion pesos, an 11.2% increase in peso terms.
• Net profit: 22.3 billion pesos, translating to 37 pesos per share.
• CapEx for the first six months: 54.9 billion pesos.

Outlook & Guidance

Looking ahead, America Movil maintains a positive outlook with expected capital expenditures for 2025 ranging between 6.7 and 6.8 billion euros. The company anticipates continued market rationalization due to consolidation, particularly in Brazil and Mexico. This strategic focus is expected to sustain its growth trajectory and competitive edge in the telecommunications sector.

Executive Commentary

CEO Daniel Hajj highlighted the company’s strategic initiatives, stating, "When you do all the things together then the market is responding very good." He also emphasized the benefits of market consolidation, noting, "As markets consolidate, I think we’ll be more rational promotions and the market will be more rational."

Risks and Challenges

• Regulatory changes in key markets, such as Mexico, could impact operations.
• Economic fluctuations in regional currencies may affect financial performance.
• Market consolidation could intensify competition in certain areas.
• Legal challenges, particularly in Colombia, could pose financial risks.

America Movil’s Q2 2025 results reflect its strategic focus on growth and innovation, positioning it well in a competitive telecommunications landscape. The company’s ability to adapt to market changes and expand its customer base will be crucial as it navigates potential challenges and opportunities in the coming quarters.

Full transcript - America Movil LA (AMXL) Q2 2025:

Nadia, Conference Operator: Hello, everyone. The America Movil Second Quarter twenty twenty five Conference Call and Webcast will begin shortly. Thank you for your patience. Good morning. My name is Nadia, and I’ll be your conference operator today.

At this time, I would like to welcome everyone to the America Movil Second Quarter twenty twenty five Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. Thank you. Now I will turn the call over to Ms.

Daniella Lecuana, Head of Investor Relations.

Daniella Lecuana, Head of Investor Relations, America Movil: Thank you. Good morning, everyone. Thank you for joining us today to discuss our second quarter financial and operating results. We have on the line Mr. Daniel Hajj, CEO Mr.

Carlos Garcia Moreno, CFO and also Mr. Oscar Rumshauske, COO.

Daniel Hajj, CEO, America Movil: Thank you, Daniela. Welcome everyone. Carlos is going to make a summary of the second quarter results.

Carlos Garcia Moreno, CFO, America Movil: Thank you, Daniel. Good morning, everyone. Well, the second quarter was characterized by significant uncertainty associated with the tariffs the U. S. Government seeks to impose on merchandise imports.

While this uncertainty did not have much of an impact on interest rate volatility during the period, the ten year treasury notes ended the first quarter at 4.21% and the second quarter at 4.23%. It did weigh on the value of the U. S. Dollar, which during the period fell against most currencies in our region of operation, 7% versus the Mexican peso, 5% versus the real, 2.9% versus the Colombian peso, 2.1% versus the Chilean peso and 8.2% versus the euro. We added 2,900,000 postpaid clients with Brazil contributing 1,400,000.0, followed by Colombia with 109,000 and Mexico with 102,000.

On the prepaid platform, we recorded net disconnections of 1,100,000 subscribers with each of Brazil, Chile and Central America is connecting approximately 500,000 clients each, while Colombia added 229,000 subscribers, Argentina 251,000 and Mexico 83,000. Altogether, we gained 1,700,000 wireless subscribers in the quarter between prepaid and postpaid. In the fixed line segment, we gained 462,000 broadband accesses, including 231,000 in Mexico compared to 155,000 in the prior quarter, 66,000 in Brazil and 51,000 in Central America. Both lines and trade TV units declined by 225,000 respectively during the quarter. At the June, we had four zero four million accesses, of which 137,000,000 were postpaid clients and 78,000,000 were fixed line RGUs.

Year over year, our postpaid base increased 6.8%, one of fastest growing by accesses and fixed broadband accesses increased by 4.5%. Those accesses constitute our main drivers of revenue growth. In Mexican peso terms, our second quarter revenue totaled ARS $234,000,000,000. That’s a 13.8% year on year increase, which partly reflects depreciation over that period of the Mexican peso versus most of the currencies in our region of operations. We’re talking about a second quarter versus the second quarter of twenty twenty four.

At constant exchange rates, we posted our strongest revenue performance in over a year. I think it’s on report I saw that it was over twelve years in twelve years, a 7.9% increase. Our revenue expansion was broad based across business lines and across countries, with service revenue growth moving up to 7.3% as can be seen in this slide and that of equipment revenue to 12.5%. It’s important to note that practically all our subsidiaries registered faster growth sequentially, practically all of them. On the mobile platform, postpaid service revenue expanded 9.5%, also the best result in the prior year with FoodTech revenue growth recovering to 3.1% from a 0.9% in the preceding quarter.

The rebounding prepaid revenue growth was driven by Mexico with the sales prepaid ARPU climbing 2.2% in the quarter after posting a 2.2% decline in the first quarter. As can be seen in this slide, pre per ARPU growth mirrors the growth rate of power consumption in the country, which likely bottomed in the first quarter. On the fixed line platform, copper networks revenue and petech revenue were up 1510.1% respectively, representing also the best performance in several quarters with broadband revenue decelerating slightly sequentially to 8.2% or 9.8%. Mexico and Colombia were the countries that have the greatest impact on the sequential acceleration of revenue growth as can be seen here in this slide. EBITDA came in at 92,400,000,000.0.

It was up 11.2% in Mexican peso terms and 5.1% at constant exchange rates, improving sequentially from the prior quarter. And I think again something to note is that EBITDA margins were nearly flat sequentially across the board, practically in all countries. Margins were flat sequentially. Our operating profit came in at MXN 47,000,000,000, that’s a 4% increase from the year earlier quarter as the depreciation of price reviews associated with our leases jumped 24.5% on account of deconsolidation with Chilean operation and certain effects of Sierra Leone’s accounting methodology applicable to Argentina as a hyperinflationary company. Our integral financial costs were down significantly on account of our having registered ARS 11,000,000,000 in foreign exchange gains.

This helped us post a net profit of ARS 22,300,000,000.0 in the quarter. Our net profit was equivalent to 37 per share and ARS $38.00 0 per ADR. In cash flow terms, our net debt fell by ARS 7,300,000,000.0 in six months to June. In that period, our CapEx amounted to ARS 54,900,000,000.0. Our shareholder distributions to ARS 9,400,000,000.0 with and that’s including ARS 8,700,000,000.0 in share buybacks and we covered ARS 2,700,000,000.0 in labor obligations.

Our net debt to last twelve months EBITDA stood at 1.36 times, a slight increase over the prior quarter, mostly on account of the appreciation in the second quarter of the Mexican peso and the euro vis a vis the euro the U. S. Dollar. As I mentioned before, the in cash flow terms, net debt actually fell over the quarter by $10,300,000 So that’s return to our reduced leverage in order to leverage the greater leverage is basically on account of exchange rate movements. Okay?

So with that, I will pass the floor back to Daniel, and maybe we can open it for Q and A.

Daniel Hajj, CEO, America Movil: Thank you, Carlos, and let’s open the Q and A.

Nadia, Conference Operator: The first question goes to Marcelo Santos of JPMorgan. Marcelo, please go ahead.

Marcelo Santos, Analyst, JPMorgan: Hi, good morning. Thanks for the opportunity for asking questions. I have two. First question is about the Brazilian mobile environment. If you could comment a bit, you had a strong performance with revenue acceleration.

I just wanted to hear your comments on the main drivers of that. And the second question would be if you could comment a bit on the recently approved regulatory changes in the Mexican telco framework. Just wanted to hear your considerations. Thank you very much.

Daniel Hajj, CEO, America Movil: Hi, Marcelo. Well, I think talking about postpaid in Brazil, we’re doing very good. We are growing. We have been some quarters growing revenue, doing good in postpaid. All of these things has to be with a very, very strong and good quality network.

We have been improving our network and putting more coverage all around Brazil. We have also increasing our sales force stores and all the let’s say all the commercial area we have been increasing that. And we have been doing good plans. Also our ClaroFlex program has been very successful. So all overall, we are doing good.

Customer care is doing also. We have been a good performance, digitalizing everything. And our NPS has been growing very good. People is thinking of a very good service when we talk about Claro. And I think that’s what we need to do.

It’s not only price. It’s not only the commercial area. It’s not only quality. When you do all the things together then the market is responding very good. So that’s what we have been doing and that’s what we we have also our new bank.

It’s still small, but our agreement with new bank has been good. And they are looking for good customers and that’s also something that has been helping us. Convergence, it’s important. So a lot of our fixed customers had also our postpaid or prepaid or vice versa. So all overall, I think we have a very strong performance and we have been executing very good in Brazil.

So that’s more or less what you could see. I see for the next no big changes on the next quarters in Brazil. I think we are doing very good. In the telecom law, what I can tell you is that the new telecommunications law and antitrust law are substantially similar to the original proposal sent by President Schenbaum to Congress. Under the new law, we will be regulated by two different entities, the Comision Nacional Antimonopolio, the new regulator for antitrust matters, which will be responsible for the imposition and revision of asymmetric regulations to preponderant and dominant agents.

And the other one will be the commission Reguladora de Telecommunicatione. The new telecommunications regulator will assume the powers and responsibilities of the former IFT. And if you I can tell you some relevant some of the most relevant changes that we see. The first one is increasing the fines regulators may impose. That’s one.

Potential discounts on payments for the use of spectrum in exchange for coverage obligations in remote areas and highways. That’s very good for us. The third one similar terms for public and private concessions for obtaining a spectrum for commercial service. That one’s something that we have a lot of questions. So all the spectrum is going to be with similar terms.

And the fourth is the new obligations relating to the identity of all users of telecommunication services for activating and maintaining activated all the telecom service including mobile and prepaid. So that would be a lot of work to do. And that’s more or less the changes and the relevant things that we see in the new telecom law.

Marcelo Santos, Analyst, JPMorgan: Perfect. Thank you very much for the comprehensive answers. Just one follow-up. In Brazil, do you have any particular comments regarding prepaid? There seems to have been a big shift in trends from first quarter to second quarter.

Is there anything extra you could say on prepaid Brazil?

Daniel Hajj, CEO, America Movil: No. I think what is happening I think in all Brazil not only for us is that the prepaid is moving to postpaid. So it’s helping us a lot on postpaid. The prepaid but nothing new. So that’s something that we have been working prepaid and postpaid different strategies, but I think the same results.

We are doing good in both.

Marcelo Santos, Analyst, JPMorgan: Perfect. Thank you very much.

Daniel Hajj, CEO, America Movil: In prepaid, I don’t not only in Brazil Marcelo, but in all the countries, it’s very important to see in prepaid revenue growth not subscribers because subscribers it’s very different. Some companies will disconnect after before. We don’t know. So what it will be important is to follow the revenue growth in prepaid. And I think in prepaid, we have 10% more than 10% growth in Brazil.

So very good for us.

Marcelo Santos, Analyst, JPMorgan: Thank you.

Carlos Garcia Moreno, CFO, America Movil: Thank you.

Nadia, Conference Operator: The next question goes to Gustavo Farias of UBS. Gustavo, please go ahead.

Carlos Garcia Moreno, CFO, America Movil: Hi, everyone.

Gustavo Farias, Analyst, UBS: Thanks for taking my questions. I have two on my end. The first one, if you could comment on the outlook for Mexico had higher seen economic activity trending and how’s competitive environment in the country, especially for mobile, but also for broadband? And my second one, we’ve seen a lower increase in CapEx this quarter. I wonder if the targets for the full year stands around EUR 7,000,000,000?

Thank you.

Daniel Hajj, CEO, America Movil: Well, the first one is, yes, CapEx, we are on target. I think it’s going to be, I hope, less than 7,000,000,000 It will be like 6,700,000,000.0 6,800,000,000.0 what we discussed, and that’s more or less what we’re going to have this year. So no changes on that. There’s a lot of questions about what will be the next year and the next one. And the target that we have been having is to have the same percentage CapEx to sales that we had this year to have the next one at The Netherlands.

So I don’t think there’s going to be any change on the way we are going to invest in the next two one or two years. So that’s something that all a lot of people have been asking us. And we have been doing a lot of investments in the last years. So that will help us to reduce and maintain what we have been doing this year. So that’s I think good news for all of us.

In Mexico, you want to talk there? I don’t think there’s new different when you talk about the market, there’s no different commercial or promotions in fixed or in wireless. I think we have the same competitors. In some, some of them are more aggressive, other ones less aggressive. But the competition in the market is the same as last year.

This year there’s a lot of competition in the Mexico market. And I think what we discussed last time and the rebound in revenues is also helped by we think that Mexico economy is starting to grow. It’s starting to grow a little bit. And what we discussed last quarter is that the reduction on revenues on prepaid mostly is because it’s related to the economy, the acceleration of the economy and it’s rebound a little bit today and we hope that the next quarters will be also better. So the competition is there.

We think we have a strong as we said, we have a strong network. We have a good revenue and commercial area, good promotions and good distribution also, customer care. And we’re doing good. In the peak side, we increased 200 more than 200,000. So it’s a very good growth for Telmex and we hope we can sustain and we’ll do good in the next quarters also.

So we are accelerating also in the big side.

Gustavo Farias, Analyst, UBS: Perfect. Thanks for the answers.

Carlos Garcia Moreno, CFO, America Movil: The

Nadia, Conference Operator: next question goes to Pani Kanemuri of HSBC. Pani, please go ahead. Yes.

Pani Kanemuri, Analyst, HSBC: Thanks for taking my questions. The first one is regarding the labor obligations. This first half you had paid much lower than you had paid last year. Do you expect the outflow to be lower in the labor obligations? And the second question is regarding yeah.

Hello?

Daniel Hajj, CEO, America Movil: No. You want Carlos to say

Carlos Garcia Moreno, CFO, America Movil: something more. Okay. On the page, you’re sorry, that you understand. Part of the obligations, these are basically challenges, are paid out of attention funds, the term itself, and part of the payments are made out of pocket. And this changes throughout the year, okay?

So for the full year of support, I think you should not expect to see any major changes relative to what we had last year. So that’s what I would say, okay? So how much we take out of performing a given quarter or how much we would pay out of pocket, That come by, right, during the year depending on market conditions and the like. Okay.

Pani Kanemuri, Analyst, HSBC: Okay. Okay. And the second question is regarding, you know, the changing competition in different markets. We are seeing a lot of M and A happen in different markets, whether it’s Argentina, Colombia, you know, and or Ecuador, Uruguay. Are you seeing a changing competition there?

Do you think the markets are becoming much more rational on a general level?

Daniel Hajj, CEO, America Movil: Yes. As markets consolidate, I think we’ll be more rational promotions and the market will be more rational. And well, it’s what we hope and we expect. So I think the Latin market with all the sales that the Telefonica sales that Telefonica is having are not for consolidating the market, okay? In Argentina, yes, it’s consolidating the market.

In Colombia. In Colombia, it’s consolidating the market. In Peru, it’s not we’re not. It’s another one. It’s a new entrant in Uruguay and in Ecuador also it’s a new one.

So it’s not consolidating. So it’s different in each market. So but we hope that in the markets where it’s consolidating will be more rational the competition.

Pani Kanemuri, Analyst, HSBC: Okay. Yes. Thank you. Thank you for that.

Oscar Rumshauske, COO, America Movil: You.

Nadia, Conference Operator: The next question goes to Walter Piecyk of LightShed Partners. Walter, please go ahead.

Walter Piecyk, Analyst, LightShed Partners: Thanks. I was hoping you guys could comment a little bit about Bait. I think if I look at this quarter compared to last quarter in Mexico, particularly in prepaid, you did much better. When we look at the Bate numbers, they did worse. So I’m just wondering if that was the reason you were doing better.

And then in addition, I think Bate this week talked about maybe getting to the postpaid market. And I’m just curious kind of how you see that kind of playing out. It seems like the model is interesting in terms of them getting, you know, usage at grocery stores, I guess, to to pay for service. So just if you can comment on what’s going on in the market this quarter as it relates to Bait and how you anticipate competing against whatever they’re planning to do on postpaid?

Daniel Hajj, CEO, America Movil: Well, I think the first thing is for us that we have been improving the prepaid is, as I said, I think the economy is doing a little bit better. So as the economy will do better, I think we will increase more. So that’s the first thing. On I cannot talk too much about vape because I don’t understand their numbers. They said if it tells that they have less subscribers then they said that they have more the ARPUs.

I don’t know I really don’t understand the numbers. So it’s very difficult to compare quarter by quarter with that. But I think something that I see that is important is when you are a new entrant, it’s easy to when you have nothing, it’s easy to start to grow. But when you have a base, an important base, then it’s important to maintain the base. So it’s more difficult to grow, it’s important to maintain the base.

So I think it’s maybe what is happening with them. But as I told you, very difficult to understand their numbers. I don’t know their numbers. It’s not clear. And but in our case, I can tell you that we have been growing and it’s we have a very good network much better than all the other ones.

And coverage also very good coverage. So that economy and all these things are making that our prepaid start to grow again. Yes.

Carlos Garcia Moreno, CFO, America Movil: Hello?

Nadia, Conference Operator: Thank you, Walter. The next question goes to Vitor Tomeeta of Goldman Sachs. Vitor, please go ahead.

Vitor Tomeeta, Analyst, Goldman Sachs: Hello and thank you very much for taking our questions. We have two from our side. The first one is in on Mexico’s broadband market. We saw an acceleration in broadband net adds this quarter, quite a bit of commercial efforts in Mexico. Could you give us a bit more color on how you see that acceleration in your broadband volumes in Mexico in the quarter?

And on whether this commercial intensity is expected to continue into coming quarters? Also my second question would be on the litigation provision you booked in Colombia that affected margins this quarter. Could you give us a little bit more color on that? And particularly on whether the provisioning already assumes a worst case scenario with or whether there is risk of further provisioning depending on how this goes or even of provisions being reversed? Thank you.

Carlos Garcia Moreno, CFO, America Movil: Well, talking about the Mexico program. First, we increased our sales force in order to be more proactive in the market. Secondly, we reinforced all the retentions areas in order to keep the customers with Telmex. And now we have 91% of the customer base already connected with fiber. So we are delivering a very great speeds, very great quality.

And another thing that has been working for us is to add into the broadband streaming platform. So we’ve been adding streaming platforms all the major ones and has been very well received in the marketplace. So I believe if this continue, we will be seeing good figures in the next quarters.

Daniel Hajj, CEO, America Movil: And on Colombia, I think we there’s a case where we lost related to the content. It’s not only for us, it’s for all the industry. And what we booked is this we have to pay something right now that it’s what we book and then we have some payments to do in the next months until the end of the year. So less payments than what we booked today, but that case is closed. We lose.

It’s booked. It’s until December. And what we already put is maybe more than half of what we need to pay and the rest is divided in the next months is and we have to pay every month until the end of the year. So we are not going to see a big payment the next months. But it’s a case that it’s closed.

It’s something that we cannot reverse. But it’s for all the industries what I can tell you related to the content.

Vitor Tomeeta, Analyst, Goldman Sachs: Clear. Thank you very much.

Daniel Hajj, CEO, America Movil: Thank you.

Nadia, Conference Operator: The next question goes to Valeria Miranda of GBM. Valeria, please go ahead.

Daniella Lecuana, Head of Investor Relations, America Movil0: Yes. Thank you for taking my question. Focusing on Colombia, how are you seeing the dynamics with the consolidation there has been?

Daniel Hajj, CEO, America Movil: Well, the consolidation has to be declared before on September. And September, I think it’s the time where they are going to decide if they approve or they don’t approve this consolidation. And if you see consolidation are always good for the markets, still they are separate companies. So we don’t know what is going to happen. But the consolidation I think it’s good for the market.

But let’s see why the regulator or the people who have to decide in Colombia is what they are going to decide. Let’s see. Let’s wait until September.

Daniella Lecuana, Head of Investor Relations, America Movil0: Thank you.

Carlos Garcia Moreno, CFO, America Movil: Thank you.

Nadia, Conference Operator: And the next question goes to Luca Brendam of Bank of America. Luca, please go ahead.

Oscar Rumshauske, COO, America Movil: Hi, good afternoon. Thank you for taking my questions. I have two here. First, following up on Marcelo’s question, can you please double click on postpaid net adds in Brazil and break it down? According to net Anatel data for the past two months, machine to machine net adds were really strong.

So were there any new strategies on this front? And also you mentioned about the bank that is already helping with results. It is all reported in the postpaid? And then the second question, can you also give us some color on lease expenses? During the quarter, you expanded at a higher rate than the revenues.

So we wanted to understand how this line should behave going forward. Should it grow in line with revenues? Should grow at a higher pace, lower pace? Any color on that would be great. Thank you.

Daniel Hajj, CEO, America Movil: The last question I don’t understand. The first question is about postpaid and machine to machine. I think machine to machine is growing also. But I don’t think there’s a swap compared to the last quarters. I think it’s more or less the same.

But important, you have to see revenues. Revenues are very important. And in postpaid, we’re growing. I think I don’t have it here and I don’t have the mix on mobile machine to machine. But on revenues on the net adds, we have 1.4%, almost 1.4%.

I don’t know exactly how many are machine to machine and how many are there. But our revenue is growing 9%, almost 10% in postpaid. So it’s very good. So a lot of this growth is on the real postpaid, not machine to machine. So but if you want the numbers, think Brazil has the numbers.

They report the numbers or Daniela can give you the numbers. But there’s not a big difference between what we have been doing the last year and the last quarters that what we have right now. As I said, we are doing very good in Brazil in postpaid. We are also doing good in prepaid and in peaks also nobody is asking on peaks. And in peaks nobody is asking on peaks, but in peaks we’re starting to grow.

We have been two or three quarters growing our revenue in Brazil. So there are very good news also increasing putting a little bit putting more fiber changing some subscribers to fiber. Corporate is also growing, but we need to do much more in corporate. Also I think we have a good opportunity BMS in small and medium companies and in corporate also to do and we’re focusing a lot there. So that’s the second question what will be the second question?

Oscar Rumshauske, COO, America Movil: Yes. The second question was on the lease expenses lease. So how do you expect this line to grow going forward? This should grow in line inflation or more or less than sorry, with revenues or more or less than revenues? And also on the first question, if you can comment if new bank’s numbers are reported under the postpaid for AMEX?

Daniel Hajj, CEO, America Movil: It’s a good question. I don’t know if they have reported on prepaid or postpaid. Maybe when they are postpaid, should be postpaid when they are they are reporting in our numbers also, but I don’t know how we report it. But I can check and Daniela will let you know. The leases

Carlos Garcia Moreno, CFO, America Movil: On the leases, several lease agreements are just by inflation. But in many cases, they are dollar based. So to the extent that the currencies are appreciating, if there is a dollar, then you should not expect to see significant changes.

Oscar Rumshauske, COO, America Movil: Perfect. Thank you for the answers.

Carlos Garcia Moreno, CFO, America Movil: The appreciation is greater than the inflation.

Daniel Hajj, CEO, America Movil: Okay, perfect.

Carlos Garcia Moreno, CFO, America Movil: Thank you.

Nadia, Conference Operator: Thank you. We have no further questions. I’ll hand back to Daniel Hash for any closing comments.

Daniel Hajj, CEO, America Movil: No. Just want to thank everyone for joining the call. I think we have a very good quarter. Thank you all.

Nadia, Conference Operator: Thank you. This now concludes today’s conference call. You may now disconnect your lines.

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