TIM S.A. Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Service Revenues: Increased by 5.2% year-over-year for the first nine months of 2025.

EBITDA: Rose 6.7% year-over-year with a margin of 50.3%.

Net Income: Up 42.2% year-over-year, reaching BRL 1.2 billion for the quarter and nearly BRL 3 billion year-to-date.

Operational Cash Flow: EBITDA after lease minus CapEx reached BRL 1.7 billion in Q3, up 8.1% year-over-year.

CapEx Discipline: The company maintained a disciplined approach to capital expenditures, supporting operational efficiency.

2Strategic Updates and Business Highlights

B2B Expansion: Continued focus on B2B initiatives, notably the TIM Smart Mining solution, with a new partnership with Vale.

Postpaid Growth: Added 415,000 postpaid lines in Q3, with low churn at 0.8%. The "more-for-more" strategy is enhancing average revenue per user (ARPU).

Broadband Performance: TIM ULTRAFIBRA showed improvements with broadband ARPU at BRL 94 and a 3.7% year-over-year growth in the client base.

5G Leadership: 5G is now available in 1,000 cities, with ongoing network modernization efforts enhancing customer experience and operational efficiency.

Customer Engagement: The revamped MyTIM app has over 17.7 million users, driving digital engagement and e-commerce growth.

3Forward Guidance and Outlook

TIM is on track to meet its 2025 goals, with confidence in achieving full-year guidance across service revenue, EBITDA, CapEx, and shareholder remuneration.

The company expects continued strong performance in mobile postpaid and B2B segments, with prepaid and broadband showing signs of recovery.

4Challenges and Points of Concern

Mobile Service Revenue Deceleration: Slight deceleration in mobile service revenue growth was noted, attributed more to seasonal patterns than competitive pressures.

Competitive Environment: The market remains rational, but there are concerns about aggressive promotions from smaller players and new entrants in the fiber space.

Broadband Revenue Pressure: Despite positive net additions, broadband revenue growth remains under pressure, with negative growth reported in the quarter.

5Notable Q&A Insights

Mobile Revenue Dynamics: Management indicated that the deceleration in mobile service revenues is expected and not solely due to competition, but rather seasonal trends.

Price Adjustments: Future price increases for postpaid services are being considered for early next year, while prepaid pricing adjustments are more complex due to current promotional strategies.

B2B Margins: While B2B offerings may be dilutive to EBITDA margins, they are expected to be accretive to cash flow generation.

Lease Efficiency: Discussions regarding lease agreements and partnerships are ongoing, with a goal to keep lease costs aligned with inflation despite network expansion. Overall, TIM S.A. reported solid financial performance with strategic initiatives in place to foster growth, although challenges in revenue growth and competitive pressures remain areas to monitor closely.