América Móvil, S.A.B. de C.V. ($AMXB)

Good morning. My name is Samantha, and I will be your conference operator today. At this time, I would like to welcome everyone to the America Movil First Quarter 2026 Conference Call and webcast. [Operator Instructions]. I will now turn the call over to Ms. Daniela Lecuona, Head of Investor Relations.

Good morning. Thank you all for joining us today to discuss our first quarter of 2026 financial and operating report. We have today on the line Mr. Daniel, our CEO; Mr. Oscar Von Hausk, our COO; and Mr. Carlos Gracia Moreno, our CFO.

Thank you, Daniela. Thank you, everyone, for being in the call. Carlos is going to make a summary of the first quarter results. Carlos?

Thank you, Daniel. Good morning, everyone. Well, the downward trend on a short-term dollar interest rates following the 35 basis points rate reduction of the policy rate by detailing December continued in the beginning of the first quarter as the market became increasingly concerned with a potential slowdown in economic activity in the U.S. The value of the dollar restored currencies, including those in our region of operations declined throughout the first part of the quarter with the dollar falling 4.3 versus the Mexican peso the Chilean peso and 6.4% based to the Brazilian real by the end of February. With the major exception of the latter, U.S. dollar made up practically all losses in the weeks after imitation of the world with Idan. Throughout the period, the differential between short-term rates and 10-year rates widen significantly. from 8 basis points to 64 basis points at the close of the quarter with investors eyeing both a slowdown in the peso economic activity, positive a recession and higher inflation rates. In this context, in the first quarter, we continued to observe a trend towards an acceleration of both posted subscriber growth and, as you can see in this slide. The base increased 8.8% and 6%, respectively, vis-a-vis the year earlier quarter. First quarter revenue was up 2.1% in Mexican peso terms to MXN 237 billion, with service revenue of 0.6% equipment revenue 7.4% and other revenue accounted 8%, including the proceeds of a favorable ruling in Chile on account of a restricted uncertainty rights. -- rearly revenue at 3.8%. These are in Mexico. The figures are above reflect the appreciation of Mexican peso versus practically all of the currencies in our region of operations, having gained 16% versus the dollar 4.6% versus the euro, 4.5% versus the Brazilian real and 2.5% as the Colombian peso with respect to the same period of 2025. So major application of the peso, the first quarter of '26 vis-a-vis first quarter of '25. At constant exchange rates, revenue rose 6% -- 6.1% on the back of a 4.6% increase in service revenue. and 11.3% in equipment revenue, driving an 8% expansion in EBITDA. Adjusted for the extraordinary proceeds of the legal ruling, EBITDA was up 7.0%, and -- the greater operating leverage is allowing for faster EBITDA growth with EBITDA now expanding more rapidly than service revenue and led our consolidated EBITDA margin to reach 40%, 1 of our highest margins that we've seen. At 6.4% year-on-year, as similar the last several quarters, mobile service revenue growth has remained resilient with positive revenue growth at 7.3% and prepaid revenue at 5%, having expanded faster quarter-to-quarter over last year. Mobile service revenue growth has been on a up trend in Mexico and Colombia, as you can see in this slide, on the back of greater prepaid revenue, which has been recovering although the last 3 quarters. On the fixed-line platform, service revenue growth was up 1.7% in the first quarter. Some regions, particularly Eastern Europe, Central America, Peru and Ecuador registered very rapid growth driven by residential demand, okay -- as regards to our operating profit, it came in billion in Mexican peso terms. While our comprehensive financing costs declined 9.9%, reflecting lower net interest expenses. These concepts brought about a 25% increase in our net income to MXN 23.4 billion, which was equivalent to MXN 0.39 per share and for the 4. Our financial debt reached MXN 7 billion bid of March, have increased by MXN 2.5 billion that went to fund a because of December. But this means that our net debt for the period at the end of March stood at MXN 437 billion and was equivalent to 1.41x EBITDA after leases. Our cash flow in the first quarter allowed us to cover MXN 21.6 billion in CapEx, MXN 1.4 billion in share buybacks, MXN 1.5 million in labor obligation and further reduce our net debt by MXN 1 billion, a -- so this so that you can see here in the slide. So with that, I thank you for listening to the presentation, and I will pass the floor back to Daniel for Q&A.

Thank you. Thank you, Carlos, and we can start with the Q&A.

[Operator Instructions] Your first question comes from the line of Leonardo Olmos with UBS.

Rents on the results. I've got a couple of questions here. The first on capital allocation and buyback. -- with the reduction of net debt to the debt to 1.4%. How should we think about the balance between continued deleveraging and a more visible acceleration buybacks from here? What leverage would you make more comfortable stepping up capital returns. And the second one, still on leverage, but more on the M&A context. -- if operating trends and FX remain broadly stable, should we expect leverage to continue trending lower from here? And how do you think about M&A activity in that context, which -- how it's going to impact your free cash flow this earning I mean the actual payments of the M&A. That's it.

Thank you, Leonardo. Well, a couple of -- what we need to see and what we want is some space because I think the region is in very good shape, okay? So the region is going to -- we're going to have some opportunities in the region in Latin America and in Eastern Europe. So both we are growing good. and we're doing very good so. We think that in Eastern Europe and Latin America, there is going to be good opportunities. And we are looking for some of them. We already -- we -- just a few months ago, we closed Astec, the network of Astec in Colombia, -- we just closed the desktop. So there is -- there's going to be more opportunities on that. So as you said, we need to have a good balance between buybacks between deleverage and the opportunities that we have. We are looking for some opportunities. And these opportunities are going to give us very good competitive position in the places where we are looking. So -- these opportunities are going to make a very good fit and are going to allow us to grow more in -- or faster as where we are -- so that's where we are, and that's the balance that we have. Carlos, as Carlos are saying, we want to have the debt to 1.3%, more or less is what we want to have. We have more opportunities. And we are also -- we are increasing our -- the local dividend, okay. We're increasing the 10,000 -- then MXN 10,000 more to have so on the fund off. We want to buy -- we want to buy back more. We want to take the opportunities, and we want to deleverage. As you are saying, we want to have a good balance on that. Right now, I'm personally seeing good opportunities in some countries that makes very good fit for us, and we are looking and doing that. So that's where we are Leonardo.

In both of my questions in 1 answer. Just a quick follow-up. In the past, you used to talk about fiber opportunities. Are we still on that? Or are you considering mobile or other type of network complementarity?

No, we're considering everything. We're considering fiber. I think there's a lot of fiber companies in the region that makes it instead of putting fiber, they are already with fiber and some customers and also spectrum, you know that we buy last year some spectrum in Puerto Rico. There's a lot of things that you can see. What we do in desktop, the backbone that we do with -- at Colombia and you are going to see all this year good opportunities, Lonardo. So we want to take those -- to have a chance to take those opportunities.

Our next question comes from Marcelo Santos at JPMorgan.

I have 2. The first is if you could provide us an update on the CapEx plan for 2026. There was a lot of changes in currencies. The Mexican peso getting stronger. So -- just wanted to hear what you plan for CapEx this year, maybe in the next couple of years? And the second 1 on, you mentioned in the release some operational issues in Argentina. Could you please comment a bit on that? -- just give more -- a bit more color on that would be great.

Well, as you said, we have been having a lot of movements in the exchange rates. And we have been reviewing carefully what we're going to have in each country for the CapEx. You know that the CapEx is part in dollars part in local currency. So we are reviewing that. But all overall, what we think finalizing our CapEx, we think that the CapEx for this year is going to be $7 billion, around $7 billion. depending to be a little bit more, a little bit less, depending on, as we said, the exchange rates. And we think that for the next years will be around that, we are going to have our Investor Day in May, and we can finalize the numbers for the next years, but I can say that we are more or less in that number. And Argentina, I don't know what you are asking on Argentina.

I think you mentioned on the fixed line business in Argentina that you said fixed line market has become more challenging because of the difficulties in assessing clients in the Benoit metropolitan area. So just wanted to better understand.

We're doing very good putting fiber in Argentina. Very difficult for us to do it in Buenos iris as the capital city -- so that's the only thing where we're putting fiber, we are growing. We're putting broadband, we're giving TV and doing fourth play. It's been very good for us. We are growing very good in Argentina and -- and the only place where it has been difficult for us on is because I think we have permission, but we don't -- it's difficult because they don't rent the telephone post and they don't allow all the competition to go there and difficult to do it underground -- the underground has been very difficult to do it that mainly reason that we have. Where we have fiber, we're growing very good penetrating the network, doing fiber, doing quad-play doing excellence. So it has been good for us. With all of that Well, we're going to have a big competitor in Buenos Aires because the market share of our competitor, telecom buying Telefonica is going to be high -- so let's see what is going to happen there.

Your next question comes from Andreas Coello of Scotiabank.

Daniel, as you know, starting back in December that the direct-to-sale service is already available in -- will be available in Mexico. Obviously, users will appreciate that. And I'm wondering if American Mobile who work with StarLink?

I don't hear you so well. Can you repeat the question, please?

Sure. So Starling said in December, that direct to cell service is available in Mexico since December. So they could provide the service in Mexico. And this will be obviously very good for users, especially in remote areas. So I'm wondering if America Mobile will work with StarLink to provide direct to sell service?

Yes. I think the real direct to sell service what I understand is going to be in 2027, something like that. They are going to launch a new satellite and that will be the direct to sell. Well, they have been successful selling broadband to the houses in Latin America, I think all around the world, we are open to do anything for them that makes sense for us, of course. And we're talking with them. And -- and I think it's going to be a good -- it's going to be a good technology. So for doing that, you need to have spectrum. So I don't know if they already have a spectrum in some places. I understand that they buy spectrum in the U.S. and some in Europe. But I don't know if they have a spectrum in Latin America. So -- but we are open. If your question is, we want -- or we can do something with them, of course, we can -- I think it's a service that makes complement with us. And of course, we are open to do something with them.

Okay. As you know, Intel is doing direct to sell in Chile and Peru, and I understand that in Costa Rica, the service will be available soon. So you are saying that you will wait until 2027 for the service to be available in Mexico?

No, no, we're not waiting. We're talking with them. But I think the real and the orbits of satellite for cell is going to be available in 2027. They are doing something today in some countries, of course. But the 1 that is going to be big and it's going to be directly to sell is going to be -- I think they said is what they said I'm not starting, but what they said is going to be in 2027. Of course, they already have constellation -- the new constellation is going to be in 2027, but they already have a constellation that can do the fixed broadband. But we're talk with them -- we are talking with them and see what opportunities we can have.

[Operator Instructions]. Our next question comes from the line of Luca Brendan at Bank of America.

I have 2 from my side here. The first one, can you comment a little on how are you seeing the expansion of your partnership with cell and how relevant it has been for the strong expansion we have seen in Brazil mobile this quarter in terms of new net additions? And then the second 1, how do you see the potential impact of the recently announced M&A in Mexico Mobile? And what the impact that this could have to the market and to America more specifically.

The second question is the announcement in mobile in Mexico of what?

Yes, the recent M&A that was announced at Telefonica selling their asset product.

They buy the -- the purchase from Telefonica, the sale of Telefonica in Mexico.

Yes, yes. That's it.

Okay. Well, I don't know if in Brazil, we are disclosing the numbers of number portability between what we have and what we sell -- what I can tell you that we have been doing very well. In number portability, we have been gaining number portability for the last 4 years, 3, 4 years gaining number portability in all the regions with all our competitors. So we have been doing well -- and with Ncell, we increased that number portability. So that's nothing that we have been doing but and then with the sale change and we're doing good. So we have been gaining in number portability because we have a very good -- we have customer care. We do combos with the peak. So we have a lot of promotions, and we are, I think, in a very good shape in terms of technology. in customer care. We have been investing in Brazil and that's giving us good results for the last years. So with Newell our portability expands. We are growing. I don't know -- I don't have the numbers here, how much is in us and how much is in use. I don't know if in Brazil, but is in Brazil, they disclosed that Daniela can give it to you, but it's something on top of what we have been doing very well. I'm not saying that Noel it's doing very well. And we think that we can still grow more in Brazil in number portabilities. Since October, I think we're gaining more and more. And I hope we -- I hope we can do more Luca. And well, how I can see in Mexico, I can say that the last years of Telefonica in Mexico has been shrinking a little bit in terms of technology, in terms of infrastructure in terms of frequencies. So they are -- they start to be like an MVNO of, I think, Partaltan and the other of AT&T. They are buying that. So there is a good company, good name, but not investing what they need to invest in Mexico. And I don't know what's going to be the strategy of this new buyers. And I don't know if they are going to still do and manage the company as a or they are going to put infrastructure and buy spectrum and compete. So let's see, still, right now, I don't know what they are going to do.

Our next question comes from the line of Sami Kanamori from HSBC.

My first question is on Mexico Mobile. The growth seems to be accelerating. What are the major drivers behind the growth in Mexico mobile? And can we expect this growth to continue in 2026? My second question is on working capital. It seems to have increased a bit in 1Q, '26 compared to 1Q '25. What are the reasons behind the increase in working capital.

Well, on Mexico mobile, I think we are growing part is I think that the economy in Mexico is getting better. The increase in the salaries, the minimum wages increased 12%, I think, and that gives us an increase also in the prepaid side. So as we have been saying, prepaid is very related to the economy. And if the economy is starting to be better than the people starting to spend a little bit more, and that's what we have been seeing in the prepaid side. In postpaid, people like our promotions. We are increasing ARPU and it's not new. I think in postpaid, the growth rate has been very good for the last 5 quarters. So our ARPU is growing, and we are growing in new customers and our actual customers are moving to better plans and consuming more. So that's more or less what you have been seeing. And I hope that will be -- but it's not in this quarter, I think for the last 5 quarters, 6 quarters, 4 quarters, the growth of postpaid has been doing good. And in prepaid, I think -- last year, we have a little bit of slowdown because of the slowdown of the economy. But I think the economy is getting better and the recovery is doing good. So that's more or less what we have.

And on the working capital, I think there's 2 things to note. One is that we are taking in a bit more inventory. We have been more cautious about availability of supplies. If you look at equipment revenues, they've been extremely good, extremely solid this quarter and the last one. And if you look across countries, you will see in New Mexico, Brazil, showing very, very strong sales of equipment. So that's partly reflected in the working capital. And then again, and it's partly linked to this, we have been asking very successfully handsets and the consequence in Mexico are the way we do it is we are basically leasing the handsets. And this basically entails some additional working capital. But it's been good sales and very, very successful these methods of selling the equipment.

And to add a little bit of what Carlos is saying, we all know that the chips the memory chips has been increasing a lot the prices. So the price of the handsets starting to increase. So we want to be sure that we have enough handsets to serve our base, our customer base. So that's really the reason why we increase on inventory. So prices are increasing. So -- and we don't know if only price is increasing or we're going to have a lack of handsets. So that's why we are taking that decision to increase a little bit our inventory.

Our next question comes from the line of Emilio Fante Dillon from GBM.

I have 2 questions regarding Mexico on the operating side. First, regarding the disconnections from the initiative from the digital transformation agency, can you give us a little more color on the nature of these clients? Were they mostly on active lines? And my second question would be on the broadband side. Given that you're reaching 90% of customers connected to fiber should -- would this mean that we should expect the net adds to decelerate going forward?

Well, you know that since January the registry of lines is -- we have to do it by law. We have to register the line and do a lot of things there. So maybe people is starting to activate less and churn less because they don't want to do it both well. That is going to happen. So I think there's going to be a lot of clean in the basis of subscribers and subscribers that they are not using -- the -- at the end of the day, you need to cancel them because they are not going to be registered in the first of July. So there's going to be a lot of things. But all overall, -- it's only a number of lines, not money and consumption and -- so for me, I don't know if I'm not looking on how many lines or how many new activations because if I activate a lot, but then they churn in the next 3 or 4 months it's worse because it's cost for me, and it's not a revenue for me. So that will make subscribers -- the base of subscribers to be more clean and to really understand where we are in number of subscribers with this new register off line. So let's see it's been not as fast as all on the register. All the new 1 has to be registered and all the old ones has to be registered until July 1. So let's see what is going to happen. There was -- all overall, what I'm saying is a lot of people maybe it's not buying a new phone and staying with that because if they buy the new one, then they have to register, but that's going to finish maybe in July. So there is going to be a lot of things all overall, the importance is how many good subscribers and subscribers that are consuming are the ones that the company has and that you see in the revenues in the ARPU in all of that. So that's what is going to happen. bank in the broadband -- and what's the reason why the broadband will slow down? What's your second question?

Yes. My question was regarding the broadband net adds. Should we expect this to slow down as you reach full penetration on your fiber network?

Well, still, we have, I don't think that our adequate broadband will slow down because -- what we're doing is we're moving from copper to fiber, I think 93% of our base is in fiber right now. We have a very good bundles in the market. We recently increased the speed almost 1/3 with the same price. So we -- I think we will continue with a good level of net adds is Okay. We hope they don't slow down, and we can continue with that number.

Our next question comes from David Lopez at New Street Research.

Congrats on the results. A couple of questions, please. First 1 is a follow-up on Mexican broadband. I was wondering if you could comment on the competition recently, if there have been any changes? And if you could expand a bit on the reason why you have increased the speed on all the packages -- and with Televisa upgrading to fiber, a large part of its business. Does that mean it's going to be harder for your net adds. And the second question on Brazil. I was wondering if you could comment a bit on your plan for price increase this year.

Well, I'm going to start with the second question, and I'm going to let Oscar talk a little bit about the broadband in Mexico. Well, in Brazil, -- we don't have until now a plan of increasing prices at this moment. I don't know if there's going to be a chance to do it in the year. But right now, we don't have any idea on increasing prices in Brazil in anything in mobile, in broadband, in TV. So we don't have plans to increase prices. And on broadband in Mexico, as we mentioned before, we really upgrade the network. We have a very good network. And you mentioned about the business -- we want to be having our sales in broadband, adding value to our small business connectivity. So we are bundled with cloud services, cybersecurity, productivity tools for a small business. And really, we have a team really focused just on spot business to really penetrate not only Bronto bring value added to the small business as well on enterprise. So we believe that, that has been working very well, and the product has been very well adopted in the market. So we believe that we will continue with that.

And to talk a little bit about -- I want to do some other comments. I think all overall, America Movil is doing very well in other countries. We're talking about Mexico a lot. We're talking a lot about Brazil. What I think the recovery in Colombia has been very good. we're increasing in broadband. We're doing much better in postpaid. So in Colombia, I think the market is performing well. We are performing well. We are cutting costs and doing a lot of things. So our revenues are growing, our EBITDA are growing -- in Peru, in Colombia. In Peru, also things are going okay with us. We have a tough competitor that has a lot of, sorry, and in Colombia, we advance in 5G, and we have the best 5G network until now. we are doing okay. In Peru, also doing very good in broadband, growing our net adds and performing very well in revenue and if you see all the Central America has been doing also good we talk also about Eastern Europe growing a lot, moving a lot 5 years ago, we only have mobile. Today, we have mobile and pigs and doing a lot of convergence there. So I think the results and in almost all the countries, we are performing very well, cutting costs digitalizing that will help us for the future. We are putting a lot of money on the CapEx on digitalizing our processes, digit, IT and doing that in -- also in big businesses, we are putting more and more cloud selling more services. So all of that has been doing very strong in our region. And as we said, we want to speed up and take more opportunities there. So that's what I want to talk a little bit more on that.

Our next question comes from the line of Ernesto Gonzalez with Morgan Stanley.

And I wanted to ask exactly about Colombia, which you were commenting on a moment ago. and a few of the other markets where Tafonica has recently left. Could you discuss a little bit of the trends you're seeing, for example, Colombia, we saw an acceleration in revenues what is driven by your commercial strategy, what is driven by market consolidation? And any color you could give on these moves. It's greatly appreciated.

Well, in Colombia, we have been investing for a long time. We invest in 5G. We have the best 5G network. So our customers are happy. Our traffic is growing well. In terms of broadband, we have been decreased the last year a little bit, but we are increasing this quarter on the broadband side. We have a lot of competition in Colombia with these ISPs there and consolidation has been also good -- but I think consolidation in Latin America is also being good for all the competitors. So you need to invest, you need to take the opportunities, but all overall, we think the markets are looking better.

That's really clear. And just 1 more question on Mexico. Margins improved and they were the highest level a long time. You continue expanding really, really well and fixed. What drove the margin improvement? And how sustainable is it?

Well, in fixed, what Oscar is saying is we increased speeds to all of our customers. So we have fiber and we are using that fiber. So customers are being the evaluation of our customers is that they are happy with the network, happy with the service. and we are going to still give what the market is giving. So we want to be very competitive there. And also in prepaid, as we said, prepaid let's say, I think -- I don't remember exactly the number, but I think first quarter of last year, we have decreasing in revenues in prepaid. And this quarter, we are increasing -- so economy is doing better, customers are consuming more. So all overall, it's what -- and we are very strict on the cost control something that nobody sees and is giving us a lot of good is the digitalization of all our process. So we are taking -- we are being much more productive digitalizing all the process, doing better IT, using some AI and some processes that give us more knowledge of our customers. So all of that is helping us to perform better in each country.

We have reached the end of the Q&A session. I will now turn the call over to Mr. Daniel for final remarks. Daniel wants to...

Before we end the call, I just want to remind everyone that we're hosting our next Investor Day in New York City. This is a the saver dates have been sent out, and that we will be sharing details on the agenda. Wereally hope to see you all there. And please don't hesitate to contact the team if you have any questions or need any help with the registration.

And thank you. Thank you very much.

This concludes today's conference call. You may now disconnect.