TIM S.A. Q4 FY2025 earnings call

• Financial highlights: Service revenue grew 5.2% y-o-y, EBITDA margin reached 51% with EBITDA up 7.5%, CapEx essentially flat vs 2024, operating cash flow grew 16%, shareholder remuneration at BRL 4 billion in cash plus BRL 750 million in share buyback.
• Operational achievements: TIM remains leader in 5G in Brazil with coverage of over 1,000 cities, most awarded operator in Opensignal latest report, featured on CDP A list for climate and ESG practices. Completed network modernization project in Sao Paulo, extending modernization to other cities with plan for around 6,500 sites by 2027. B2B solution had meaningful impact in Agribusiness, Logistics, Utilities, Mining.

Mobile: Net service revenues grew steadily. Postpaid revenues in Q4 grew 9.5%, base expanded by 8.4% with positive net additions, ARPU in postpaid (excluding machine-to-machine) reached almost BRL 55, growing 3.1% y-o-y. Prepaid segment showed more encouraging signs with revenue decline accelerating less. Fixed services: Broadband revenues returned to growth in Q4, supported by improvement in net additions and nearly complete migration from FTTC to fiber. By end of year, reached 850,000 customers and FTTH ARPU of roughly BRL 95. TIM Ultrafibra revenues grew 6.2% y-o-y in Q4. B2B: Surpassed BRL 1 billion in total contracted value across all verticals for the third consecutive year.

• Drive value creation through mobile, B2B and broadband in 2026, supported by AI, efficiency and ESG. In mobile, focus on strengthening profitability via customer-first approach. In B2B, capture new opportunities with wider portfolio including acquisition of V8. In broadband, enter 2026 with more efficient operation. AI to transform operating model. Efficiency agenda ensures discipline in capital allocation. ESG as structural component guiding long-term value creation.
• Acquired full control of I-Systems to improve broadband operation efficiency and customer experience.

• Mobile competition: Mobile portability figures in Q4 for TIM, competition dynamics and impact on churn and net additions.
• Tax reform: Uncertainty regarding impact of effective sales tax from 2027 onwards and how it may be passed through to consumers or absorbed by the company.

Q: Congrats on the solid results. First question on margins and efficiency: How much of the efficiency is structural and how much temporary? Second on I-Systems: How to read the strategic move, potential sale of fiber business, next steps?

A: Bernardo Guttmann

• Alberto Griselli on I-Systems: Acquisition of I-Systems provides benefits like control of end-to-end operation, increased efficiency, and positions for next steps. Sale of broadband operation not on the table. Andrea Palma Marques on margins: Margin efficiency is result of cost optimization program in place, with some quarter-specific effects like visitor interconnection cost and reduction of taxation in overtime pay but overall structural.

Q: First question on network and interconnection expense drivers, cost optimization of digital content providers. Second on mobile competition, mobile portability numbers and new cell impact?

A: Gustavo Farias

• Alberto Griselli on mobile competition: Portability increase due to competitors' commercial practices, churn level stable, price adjustments in first quarter may affect churn. Andrea Palma Marques on network and interconnection: Visitors interconnection cost decreased, increase in content providers related to offers launched, increase in network related to 5G expansion.

Q: First question on personnel expense, retroactive recognition of gain. Second on broadband ARPU, rational market vs TIM-specific effect?

A: Marcelo Santos

• Alberto Griselli on broadband ARPU: ARPU expansion more due to TIM's commercial activities like evolving distribution to pull, less expensive channels, and customer management tweaks. Andrea Palma Marques on personnel expense: Impact of overtime pay affects past and future, but fourth quarter impact higher due to concentration of past years, gains not sizable in overall OpEx.

Q: First question on tower leases negotiations, incentives in 4Q, lease expenses percentage of revenue. Second on Brazil's tax reform impact?

A: Rogério Araújo

• Andrea Palma Marques on tower leases: Working on efficiency in tower lease, lease expenses percentage of revenue expected to slightly decrease. Alberto Griselli on tax: 2026 has no impact, 2027 neutral on free cash flow, no early estimates beyond announced years.

Q: First question on price increases in first Q, magnitude. Second on CapEx update?

A: Daniel Federle

• Alberto Griselli on price increases: Back book prices for postpaid underway, similar magnitude to last year, planning front book prices adjustment. Andrea Palma Marques on CapEx: On track with announced guidance, focus on free cash flow, controlling CapEx