Daily Call: Vivo update and 1Q26 conference call highlights

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Daily Call: Vivo update and 1Q26 conference call highlights

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Daily Call

Vivo update and 1Q26 conference call

highlights

Industry Overview

Vivo: Reiterate Underperform 12 May 2026

We reiterate our cautious view on Vivo after a slight 1Q26 miss, mainly on margins. Equity

While headline trends remained healthy (revenues +7.4% YoY and EBITDA +9% Latin America

YoY), core MSR dynamics were softer, with postpaid slowing to +7.8% YoY and missing Daily Call

BofAe by ~1%, while prepaid improved on tariff changes and WhatsApp monetization. Rogerio Araujo >>

This is consistent with TIM's 1Q26, when client-generated and postpaid revenues also Research Analyst

decelerated, suggesting sector core mobile growth may be moderating. We lowered our Merrill+55 11Lynch2188 (Brazil)4255

PO to R$39/US$14 from R$41/US$15, reflecting higher costs, lower margin rogerio.araujo@bofa.com

assumptions, concession asset-sale spillover, and slightly higher financial expenses (see Lucca R Brendim >>

Research Analyst

our report, Small miss, high bar; Reiterating Underperform). Merrill Lynch (Brazil)

+55 11 2188 4100

Vivo conference call highlights lucca.brendim@bofa.com

After results (see our report, Vivo 1Q26 review), Vivo held its earnings call. Highlights

were as follows: 1) Management reaffirmed its 2026 shareholder return commitment, B2C: business to consumer

including at least R$7bn in distributions (6% dividend yield) and at least 100% of 2026

net income, supported by strong cash generation and a R$1bn buyback. 2) Margin FTTH: fiber to the home

expectations remain constructive, with management reiterating that cost growth should

MSR: mobile service revenue

remain below revenue growth, although 1Q26 results still showed some underlying cost

pressure.