TIGO — Millicom International Cellular S.A.

TIGO (Q3 2025) Earnings Call Summary

1. Key Financial Results and Metrics

• Service Revenue: $1.34 billion, down 0.5% YoY, impacted by a $74 million negative effect from IAS 21 in Bolivia. Excluding FX, organic growth was 3.5%.
• Adjusted EBITDA: Reached $695 million, an increase of 23.8% YoY, with a record margin of 48.9%. Normalized growth (excluding one-time charges) was 10%.
• Equity Free Cash Flow: Totaled $243 million for the quarter, with a year-to-date total of $638 million, up 18.1% YoY.
• Net Leverage: Improved to 2.09x (2.33x pro forma excluding tower transactions), with a target to remain below 2.5x.

2. Strategic Updates and Business Highlights

• Acquisitions: Completed acquisitions in Uruguay and Ecuador, enhancing regional footprint and earnings quality. Uruguay adds 700 cell sites and Ecuador adds 2,500 cell sites.
• Mobile Subscriber Growth: Added 250,000 postpaid customers and 60,000 home subscribers. Postpaid customer base grew 14% YoY.
• B2B Performance: Service revenue in B2B reached $231 million, up 5.3% YoY, driven by digital services growth (cloud, cybersecurity, SD-WAN).
• Regional Performance: Colombia and Guatemala showed strong growth, with Colombia's service revenue up 6.5% and EBITDA margin expanding to 43.5%. Guatemala's postpaid customers grew 20%, driving mobile service revenue up 4.6%.

3. Forward Guidance and Outlook

• 2025 Targets: On track to meet the $750 million equity free cash flow target and maintain leverage below 2.5x.
• CapEx Expectations: Anticipated to remain around $700 million, focusing on efficiency and demand-driven investments.
• Integration Plans: Focus on operational efficiencies and network quality improvements in Ecuador and Uruguay.

4. Bad News, Challenges, or Points of Concern

• Regulatory Challenges: The Costa Rican regulator blocked a proposed merger with Liberty Latin America, leading to an appeal. This decision was unexpected and could hinder growth in that market.
• DOJ Investigation: A $118 million provision was recorded related to ongoing investigations, with uncertainty around the final outcome.
• Currency Risks: The ongoing devaluation of the Bolivian currency continues to pose risks to revenue stability.

5. Notable Q&A Insights

• Leverage Post-Acquisitions: CFO indicated that leverage would rise to approximately 2.3x post-acquisitions, with expectations to manage it back below 2.5x.
• Spectrum Costs: Future spectrum payments in Ecuador are expected to be in the mid-to-high double-digit millions, with a 5G auction anticipated in early 2026.
• Competitive Landscape: In Guatemala, competition remains intense, but TIGO is focusing on targeted strategies to maintain market share amidst new entrants.
• Future Actions in Costa Rica: The company plans to refocus on operational efficiencies and commercial strategies while awaiting the appeal outcome regarding the merger.

This summary encapsulates TIGO's financial performance, strategic initiatives, forward-looking guidance, and notable challenges, providing a comprehensive overview of the company's current standing and outlook.