América Móvil, S.A.B. de C.V. (AMXB) Earnings Call Transcript & Summary

Good morning. My name is Caleb, and I will be your conference operator today. At this time, I would like to welcome everyone to the América Móvil Third 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, everyone. Thank you so much for joining us today to discuss our third quarter financial and operating results. We have on the line Mr. Daniel Hajj, CEO; Mr. Carlos Garcia Moreno, CFO; and Mr. Oscar Hauske, COO.

Thanks, Daniela. Welcome, everyone. Thanks for being here in the third quarter 2026 conference call. Carlos is going to make a summary of the results.

Thank you, Daniel. Good morning, everyone. Well, we had the third quarter with oil price repricing to a new peak in mid-September of [indiscernible] per barrel of WTI crude. Long-term inflation expectations were duly affected pushing [indiscernible] with the yield on 10-year treasury notes accelerating its gains from the week of August. These factors, together with a particularly strong nonfarmer report for that month, that exceeded expectations, were the main drivers of the first decision on September 16 to increase its policy rate by 25 basis points. The higher rates in the U.S. supported a recovery of the dollar versus some currencies in our region of operations. The Mexican peso gave up in September, all the [indiscernible] in the first 2 months of the quarter, 20 period down approximately 2.1%. The Colombian peso managed to [indiscernible] part of this while the Brazilian real and the euro remains practically unchanged over the quarter. In the third quarter, we added 3.1 million postpaid subscribers, roughly the average of the prior 4 quarters, as Brazil led the way with [indiscernible] additions. Colombia followed with 348,000, Peru with 229,000, Mexico with 144,000 and Argentina with 126,000 subscribers. In the prepaid segment, we recorded 5 million net disconnections primarily reflecting subscriber base cleanups in Mexico and Colombia. Notwithstanding the cleanups, we managed to post net prepaid subscriber gains in Eastern Europe Argentina, Central America and Ecuador that totaled 745,000 subscribers. In the fixed line segment, we connected 390,000 new broadband assets. Brazil was the main contributor with 94,000 additions, followed by Colombia with 67,000 and Argentina with 53,000. Pay TV net additions totaled 50,000 units with Eastern Europe and Central America accounting for most of the growth. Mobile postpaid and fixed broad and accesses remained the main drivers of customer growth, increasing 8.9% and 5.6%, respectively, compared to the year earlier quarter. América Móvil third quarter revenue totaled MXN 251 billion, 7.6% year-on-year increase with the EBITDA reaching 4.8% margin, 0.5 percentage points increase from a year before. At constant exchange rates, service revenue was up 5.3% and EBITDA 6.7%. EBITDA continued to grow faster than service revenue. Service revenue growth resulted from mobile service revenue increasing 6.3%, very much in line with the pace of service [indiscernible] quarters and fixed line revenue growth accelerating to 3.7% from 2.7% in the prior quarter. On the mobile platform, [indiscernible] revenue increased 7.5% year-on-year at constant exchange rate also very similar to that [indiscernible], while prepaid revenue rose 4.3%, slightly less rapidly than the pace of the preceding quarter, but very much in line with the prior quarters. Postpaid revenue growth accelerated in Mexico, Brazil and Colombia to 8%, 8.5% and 12%, respectively. Gross rate in Chile and Peru also moved up to 11.5% and 7.5%, respectively. Operating profit for prepaid service revenue growth, decelerated in Mexico, partly reflecting the subscriber registration process mandated by regulators as well as in Brazil and Austria but accelerated in Eastern Europe, Central America, Caribbean and Ecuador. Operating profit totaled MXN 57 billion, up 13.9% from the year earlier quarter. Outpatient EBITDA growth, our depreciation and amortization charges rose only 3%. Although net interest expense were down 11.2% year-on-year, our comprehensive financing cost increased as a result of foreign exchange losses of MXN 3.6 billion in the period compared to foreign exchange gains in the prior year. We posted a net profit of MXN 34 million in the quarter, 7% higher than in the year-earlier quarter, bringing our year-to-date net income to MXN 72 billion. In the 9 months to September, our capital expense to total MXN [ 76 ] billion. They were fully funded by our cash flow which also enabled us to reduce net debt and cash flow terms by MXN 34 billion and distributed MXN 27 billion to our shareholders by way of share buybacks and dividends. Our labor obligations came down by MXN 13 billion in the quarter. Our free cash flow was 41% higher than that of 2025, which in turn has been 47% greater than that as the year before and which year the cash flow went to the reduction of our effect. Such that at the end of the quarter, our net debt stood at MXN 400 billion, excluding leases. It was equivalent to 1.21x net debt to EBITDA after leases down from 1.5x at the end of 2025. So with this, I will pass the floor back to Daniel so that we can begin the Q&A session. Thank you.

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

[Operator Instructions] Your first question comes from the line of Marcelo Santos with JPMorgan. Please go ahead.

I think the first question I wanted to approach is the M&A pipeline and outlook for buybacks. I think in the Investor Day in New York, you mentioned that, that was a priority. I want to know how is that pipeline if there is room to increase in buybacks? I know we have been increasing so far, but I wanted to get a better feeling about the outlook there? And the second question is about Mexican broadband. I think there are a couple of different moving parts. I mean, this was a quarter where you -- the net adds were much lower than in previous quarters. So I just wanted to get understand what's happening there. But at the same time, the revenue growth was much stronger than in previous quarters. So I just want to understand these moving parts in Mexican broadband.

Thank you, Marcelo. Well, on -- you were mentioning the Investor Day, where we provided [indiscernible] for the period '26 to '28, right? Here, what we stated a leverage ratio that we intended to remain [indiscernible] which was 1.2x to 1.5x, which is basically where we have been. And we said this had also to accommodate the share buyback or the overall distributions plus the M&A. In this quarter, we are going to have an important amount that we have to accommodate in the M&A front, which is the consolidation of [indiscernible]. As you know, the total value equipment announced started MXN 4 billion that although we still have not completed the tender offer, but it should be completed probably just after the turn of the year. But for the most part, most of the, MXN 4 billion will be accounted for in the last quarter. And then also we have the last impairment of dividends, which will take place in a couple of weeks to 3 weeks, which is in the neighborhood of MXN 17 billion. So those are the things that we have in the immediate time on the year period. But as I said, the guidance that we provided is basically for the next -- for the overall -- for the next 2 years as well. And we don't have anything more in the M&A pipeline other than the acquisition in Peru that is waiting for regulatory approval, likely to be received until the second half of the year, and we don't have anything else on the [indiscernible] And Colombia that we think that it could be at the end of this year. So the -- and on the Mexico broadband, Oscar can talk a little bit more, but I can tell you that we have been growing good the last quarters. And what we do this last quarter, we cleaned a little bit also our base, people [indiscernible] not consume, not paying or not consuming, and we clean it up. So that's the reason why revenues are increasing, and the net adds are not as previous quarters. I don't know what's got...

No, it is what you say, but I will add that we increase the speed of all the customer base to be more competitive in the market. And we are focused more in turn as well and upselling the customer base. That's why we had a good increase in the revenues.

And we have how many [indiscernible] already in fiber.

94% of the customers have already connected with [indiscernible]

Your next question comes from the line of Phani Kanumuri with HSBC.

The first question is on Argentina. You seem to have a very strong momentum there, but also there is a new operator now after Telecom Argentina has divested assets. So how are you seeing the competitive scenario there? And what do you expect from this new competition in Argentina. The second question is more accounting related. In your cash flow statements, I observed that your taxes that you paid this year are lower than last year in the first 9 months. Could you please specify what is driving it? Are you seeing better realization from these taxes?

Talking a little bit about Argentina. Well, yes, I think it was a very good quarter for Argentina. We have been investing for a long time. We have a very good 5G network. We have also a lot of broadband the Telefonica and Telecom has merged. I think they already approved it, but they have been. We know that since maybe 1 year. So I think it's a good market. The economy is improving. Things are going good with us. So we are taking advantage on that. So we have good quality, good networks, good distribution, a very good data center for corporate businesses, and that's the reason why we are growing there.

Okay. And on the question of the taxes paid, they basically have to do partly with some money that we received back from the tax authorities in some countries at of Mexico, partly something having to do limited measures that we've done and then something having to do basically with the cash flow during the year, how much you pay throughout the year [indiscernible] how much you pay in the annual amount. So whenever you have paid too much during the year based on the formula that we have in different countries. And I think this is the most important thing. Then the at the moment that you present your annual returns then you basically get some credit back, okay? So that's -- it basically has to do with that. [indiscernible]

And adding a little bit more in Argentina. So where there's -- they approved the merge the remedies, we understand that there's a new company called Metrotel. There's going to move 6 million subscribers. There's only -- there's not going to be a new network. It's like I think it's going to be like an [ MDNO ] 200,000 broadband subscribers, and they have to do it in 18 months. So well, there's a lot of things going on in Argentina, but we are well prepared to still grow and that we are good in corporate business. We have a very good fiber network doing good in broadband and in 5G and spectrum and the network also quality we're doing okay. So let's see what's going to happen.

Your next question comes from the line of Walter Piecyk with LightShed.

What do you guys expect Televisa to do differently after they buy or if they complete the purchase of the AT&T assets in Mexico?

Well, it's difficult to say. I think AT&T was a strong competitor, do a lot of things. Well, it's one of the biggest companies in the U.S. and do a lot of things in Mexico. I think Televisa is also going to be a strong competitor. We think that that's going to happen. But at the end of the day, we need to do what we have been doing for a long time. We need to have the best network, good investments, 5G coverage good quality. We have almost 700 customer care centers good to take care of the people, our customers. So all of this, the distribution with Telcel is a very strong brand in Mexico. So all of that, we need to follow that and still do what we have been doing we don't know exactly what they are going to do, what they are going to change or what's going to be their strategy. Let's see what's going to happen when they authorize and take the operation of the company. What -- as I told you, AT&T used to be at is a strong competitor. And I'm sure that Televisa is going to be also a strong competitor. So we still need to do what we have been doing reinforce our investment take train our people, more salespeople, more distributors all of that, we have to still focus on that and do what we have been doing for the last years.

Got it. And then I guess, Carlos, on CapEx. I think in the past, you've cited currency moves having an impact on CapEx, given the more recent currency move of the dollar recovering, does that give you more to change CapEx there? Or is MXN 7 billion in the number? Or like how do you -- what type of moves, I guess, in currency have an impact.

Sorry, what you see this year is we have less CapEx and it's exactly because what you are saying, we give CapEx in dollars to the subsidiaries and then the movement of the currencies make that we have less CapEx in pesos. So at this time, we don't need to move the CapEx to do more -- some countries are exceeding a little bit their budgets or the ones they are not exceeding. So we -- all overall, we said MXN 7 billion, 5% plus, 5% less, and it's where we are -- and I think for next year, we're going to have the same, $7 billion, something like that. And we are still making. I don't know if we need to do a little bit more or a little bit less. We haven't finished our budget, but no major changes in CapEx. So that's what we have been doing and what we do budgeting for next year.

Your next question comes from the line of Gustavo Farias with UBS.

So 2 on my end. On Brazil competition, so we've seen Brazil mobile trends improve in this quarter. Do you believe the competitive environment is stabilizing or promotional pressures are still increasing? And my second one on convergent offers. In Brazil, within mobile service revenue accelerating, but fixed service revenue has slowed down. So my question is, as convergence becomes more relevant, do you believe investors should focus more on the total service revenue and not maybe only on or more focused on mobile service revenue alone?

Well, let's talk a little bit. In Brazil, we have a lot of competition. That's no doubt there's a lot of competitors. There are different competitors in mobile, and we have other competitors in broadband, fiber, TV. So it's a lot of competition there. So if you are telling, I think in mobile, we are stabilizing a little bit the promotions, but we don't know what is going to happen on the third -- in the fourth quarter. It's coming Christmas and all of that. So we don't know what is going to happen. I don't know what the competitions are going to do. But I think all of them want to have a long-term view, not only -- so maybe they have promotions, but there will be some promotions not reducing price for a year or 2 years. So let's see what we're going to get in the fourth quarter in promotions. But that's what it is. In the broadband business and the TV business, there's a lot -- as you know, there's a lot of companies with fiber as they call them [indiscernible] in Brazil. So we are growing good. We grow 90 broadband subscribers. That's good for us. And maybe we have more promotions that we used to do, but those promotions should have some time and then the revenue will come later. We are working very hard because we are just taking desktop in 1st of October. So I see I think we have a lot of synergies. And we're going to have also good synergies on the commercial side, where we can sell to these customers or the other products that we have and to some postpaid or mobile customers that we have, we can sell also where we have fiber this new because Desktop has around 4.8 million home passes and made more than half of that, we are not in those areas.

A greenfield [indiscernible]

Exactly. So we're going to have a lot of opportunities there, and it's what we're focusing. So these next 6 months, we want to integrate the company and take advantage as much as possible to all these desktop subscribers that we have and the mobile that -- where we don't have a footprint of fiber to give an offer fiber to them.

And just a comment. We haven't made any changes in the allocation of fast-lane revenues as the different services, okay? So between broadband and Pay TV and voice, we haven't made any changes in the way how we allocate those revenue.

Your next question comes from the line of Rogério Araújo with Bank of America.

I have a follow-up on the Brazilian market regarding pricing outlook and also on the sales autonomy. Given the limited front book price increases this year, how do you see the pricing outlook for next year? And if you could be more specific on unlimited what's happening in prepaid as well. We noticed that [indiscernible], they took it out from their plans if [indiscernible] could follow? And then if there is any expectation of prepaid price increase after several years of flattish prices? And also, if you could tell us a little bit on the strategy for pricing of new sell if they have full autonomy or if [indiscernible] participates in those decisions and what to expect for -- looking into '27?

The first one, [indiscernible] . I think we have an agreement with them and they can do whatever they want to do inside this agreement, okay? Now they can decide the prices alone. But they do, let's say, they reduce the price, I don't think we're going to reduce the cost. So they have -- they are going to manage their prices on the area that they can do. So that's what the agreement that we have with NuCel. I think they are doing good they have good customer base and they are still growing and doing good as an MVNO. So NuCel is doing okay. On the promotions and in what's up and prepaid promotions. It's sometimes it's very difficult to increase the price of the card. So what I think it's better if you want to increase the prices to take out some promotions. And that's what we do on the what's up inside the card. So take promotions, and it's a little bit increasing the price. So I think that's more or less the way to do things in prepaid because if you sell at MXN 100 [indiscernible], it's difficult to do it at MXN 103, so it's not so easy. You can do it, but it's not so easy. So sometimes it's better. I'm not saying that always, sometimes it's better to reduce the [indiscernible] the time of the card. So that's a way to increase price or take out some promotions or increase the card or take out some [indiscernible]. So there's a lot of things. And in postpaid, well, you can increase price. I don't know. I can like to you if I can tell you what is going to be our price strategy for next year. Of course, there's inflation in Brazil. Costs are increasing. But I don't know if we are going to be allowed [indiscernible] competition to increase or not increase prices. So still, we haven't discussed that. And we we're sure that costs are increasing but we don't know we still -- if we are going to increase or when we are going to increase prices or take out some promotions. So that's what we have -- what I can tell you is that the promotions in broadband are high and where we're going to still and we will remain competitive and do what we need to do to be competitive in all the segments in Brazil. So that's what we do and what's what we're going to do this year and next year.