TIGO — Millicom International Cellular S.A.

TIGO Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Service Revenues: $1.55 billion, up 15.9% year-over-year; organic growth (excluding Ecuador and Uruguay) was 5.2%.
• Adjusted EBITDA: $778 million for the quarter, representing a 25.9% increase year-over-year and an EBITDA margin of 47.1%.
• Equity Free Cash Flow (eFCF): $278 million for Q4, with full-year eFCF reaching $916 million ($864 million excluding tower sales).
• Net Debt: Ended the quarter with $4.6 billion in net debt, resulting in a leverage ratio of 2.31, comfortably below the target of 2.5.

2. Strategic Updates and Business Highlights

• Market Expansion: Successfully integrated operations in Ecuador and Uruguay, expanding TIGO's footprint to 12 countries, including a recent entry into Chile.
• Customer Growth: Added over 200,000 postpaid customers in Q4, totaling 1.8 million when including new markets. Home business grew by 40,000 new customers.
• Mobile Business Performance: Mobile service revenue reached $954 million, with a 5.7% year-over-year growth (excluding new markets).
• B2B Growth: Digital service revenues increased by 40.7% year-over-year, driven by government projects and strong demand for digital solutions.

3. Forward Guidance and Outlook

• 2026 Projections: Expected eFCF of at least $900 million, with a slight increase in leverage anticipated due to acquisitions. Aim to stabilize and enhance profitability in newly acquired operations.
• Long-term Goals: Targeting a return to equity free cash flow growth in Ecuador and Uruguay, with expectations for these markets to align with average profitability metrics by 2027.

4. Bad News, Challenges, or Points of Concern

• Integration Risks: Ongoing integration of Ecuador, Uruguay, and the acquisition of Coltel in Colombia poses execution risks and potential negative impacts on profitability.
• Market Volatility: Operating in Latin America involves macroeconomic volatility, including currency risks, particularly in Bolivia and other regions.
• Legal Settlements: The company faced a $118 million DOJ settlement, which impacted profitability but was absorbed within the overall strong performance.

5. Notable Q&A Insights

• Chile Acquisition: Management expressed confidence in stabilizing operations in Chile, despite current losses, citing a strong macroeconomic environment and a solid plan for operational improvements.
• Dividend Policy: While there is a focus on maintaining dividends, management indicated that any changes would depend on leverage levels and integration success, with no immediate plans to cut dividends.
• Postpaid Migration: The company is seeing significant growth in postpaid customers, driven by network investments and simplified migration processes, with a focus on improving ARPU.
• M&A Strategy: TIGO is prioritizing in-market consolidation and adjacent market opportunities, with a cautious approach to entering larger, more complex markets like Brazil and Mexico.

Overall, TIGO reported strong financial results for Q4 2025, driven by successful market integrations and customer growth, while also navigating challenges related to acquisitions and regional volatility. The outlook for 2026 remains positive, with a focus on enhancing profitability and maintaining a disciplined financial approach.