Grupo Televisa SAB Q3 FY2026 earnings call

Strategic Acquisition:

• Announced agreement to acquire AT&T’s wireless telco business in Mexico for $2 billion via a 50-50 joint venture with FinTech Holdings.
• Post-closing combined assets will include over 24 million wireless, 5.7 million broadband, and 6.3 million video subscribers, generating ~$8 billion annual revenue.
• Transaction expected to close in Q1 2027 after regulatory approval; accounted for as an equity method investment. Operational Efficiency & Margins:
• Achieved best profitability in three years with a 42.6% operating margin, driven by OPEX reduction of 9.7% and integration synergies between Easy and Sky.
• Churn remained below historical average of 2% for six consecutive quarters. Content & Sports Momentum:
• Strong monetization from the FIFA World Cup in Mexico and Latin America, driving significant revenue growth in advertising and sublicensing.
• VIX streaming platform exceeded acquisition targets, anchored by successful franchise 'La Casa de los Famosos'. Network Expansion:
• Passed over 20 million homes with fiber-to-the-home technology covering 67% of the footprint.
• Upgraded 4.3 million homes to Fiber to the Home year-to-date.

Cable Operations: Net revenue was 14.1 billion pesos, a 3.8% year-on-year decline. Operating segment income reached 6 billion pesos, a 5.6% increase, with an operating margin of 42.6%. Broadband net adds were approximately 9,000; video subscribers decreased by 48,000; and mobile net adds were 68,000. Sky: Revenue was 2.4 billion pesos, down 25.5% year-on-year due to subscriber churn. Revenue-generating units declined by 250,000. Televisa Univision: Total revenue was $1.4 billion, up 9% year-on-year (up 6% excluding FX impact). Mexico revenue surged 51% to $665 million, while U.S. revenue fell 14% to $715 million. Adjusted EBITDA was $461 million, essentially flat year-on-year.

• Full-year 2026 CAPEX expected to be consistent with 2025 levels.
• No additional equity contributions planned for the AT&T joint venture beyond the initial $400 million per partner.
• U.S. advertising market outlook remains prudent; focus on deepening client relationships and accelerating new client activations.
• Expectation for low single-digit growth convergence across Mexican broadband providers as market maturity increases.

• Regulatory risks associated with the pending acquisition of AT&T Mexico, requiring approvals before closing in Q1 2027.
• Competitive pressure in the Mexican telecommunications market regarding pricing and speeds.
• Potential slowdown in mobile subscriptions due to new laws requiring photo ID registration.
• Softness in U.S. linear advertising markets due to competition from peer networks holding World Cup rights.

Q: Marcelo Santos asked about decelerating revenue trends among competitors and whether this indicates a common market issue or specific company challenges.

A: Alfonso de Angoitia noted the Mexican market is highly competitive with dynamic pricing and speed wars. Francisco Valim explained that broadband growth naturally slows to low single digits as penetration matures in Mexico. He attributed the sequential decline partly to the first half being loaded with World Cup packages, suggesting all major operators are converging toward similar low-single-digit growth rates.

Q: Emilio Fuentes inquired about how synergies from the AT&T acquisition would be recognized and disclosed, specifically if they would flow into EBITDA and if standalone financials would be public.

A: Management confirmed synergies will begin immediately post-close via service agreements. Francisco Valim detailed that synergies will materialize on both P&Ls through bundled offerings and shared back-office services. They stated AT&T Mexico’s standalone financials will not be publicly disclosed initially due to US GAAP to IFRS conversion complexities.

Q: Fani Kanumari questioned the drivers behind the strong 42.6% margin and future cost control plans, noting the $400 million equity investment in the AT&T deal.

A: Alfonso de Angoitia credited efficiency measures and Sky integration. Francisco Valim clarified that the high margin includes Sky, which typically has lower margins due to content costs, so further expansion is limited. He added that the entity will maintain a standalone capital structure.

Q: Luca Brend asked about higher other expenses, specifically if impairment and legal fees were one-offs, and requested color on CAPEX fluctuations.

A: Carlos Phillips confirmed the impairment was a non-cash, non-recurring accounting adjustment for technical equipment carrying value. Legal and advisory costs were also deemed non-recurring due to recent M&A activity. Francisco Valim explained CAPEX fluctuations are driven by import timing of materials for fiber deployment, expecting full-year intensity to remain in the low 20s percentage of sales.