Business Context and Reporting Period
Company: Telefônica Brasil S.A. (Vivo)
Filing Type: Form 6-K (Foreign Private Issuer)
Reporting Period: First Quarter 2026 (ended March 31, 2026)
Disclosure Date: May 11, 2026
Telefônica Brasil reported record customer base growth, reaching 117.4 million total accesses. The company continues to expand its 5G footprint to 905 municipalities and its fiber network to 453 cities. Strategic focus remains on postpaid migration, fiber penetration, and the expansion of digital ecosystems (B2B and B2C) beyond traditional connectivity.
Key Financial Metrics
| Metric | 1Q26 Value | YoY Change |
|---|---|---|
| Net Revenue | R$15,457.0 million | +7.4% |
| EBITDA | R$6,209.3 million | +8.9% |
| EBITDA Margin | 40.2% | +0.5 p.p. |
| EBITDA After Leases (AL) | R$4,808.0 million (implied) | +9.7% |
| EBITDA AL Margin | 31.1% | +0.6 p.p. |
| Net Income | R$1,261.1 million | +19.2% |
| Operating Cash Flow | R$4,161.8 million | +8.5% |
| Free Cash Flow | R$2,199.9 million | +3.6% |
| Capex | R$2,047.5 million | +9.6% |
| Net Debt (ex-IFRS 16) | R$4,838.1 million | -1.5% QoQ |
| Net Debt / EBITDA | 0.4x | Down from 0.5x |
Material Changes vs. Prior Period
- Revenue Growth: Driven by Postpaid (+7.8% YoY), FTTH (+9.3% YoY), and Corporate Data/ICT (+8.5% YoY). Prepaid revenue declined slightly (-1.0% YoY) due to migration to hybrid plans.
- Customer Base: Total accesses reached 117.4 million (+1.1% YoY). Postpaid mobile accesses grew +6.9% YoY to 72.1 million. Fiber homes connected grew +11.5% YoY to 8.0 million.
- Profitability: Net income saw its highest increase since 1Q24 (+19.2%), supported by EBIT growth of +16.9% YoY. EBITDA margin expanded to 40.2%.
- Cost Structure: Cost of Services and Products Sold rose +12.3% YoY, driven by digital services growth and higher handset sales. Operating expenses increased +3.9% YoY.
- Balance Sheet: Net debt (ex-IFRS 16) decreased QoQ despite the consolidation of FiBrasil debt, aided by regular amortizations. The company maintains a net cash position of R$4.49 billion (ex-IFRS 16).
Guidance, Outlook, and Risks
- Shareholder Remuneration: Reaffirmed commitment to distribute at least 100% of FY2026 net income. Total committed distribution for the period reached R$6,990.0 million, surpassing FY2025 by +9.6%.
- Capital Allocation: Board approved a new Share Buyback Program of up to R$1.0 billion (through Feb 2027) and a R$4.0 billion capital reduction (payment expected July 14, 2026).
- Asset Sales: Committed to R$4.5 billion in asset sales from the concession-to-authorization migration (R$3.0 billion copper, R$1.5 billion real estate), expected to accelerate in 2026–2027 and conclude in 2028.
- Risks & Contingencies:
- Regulatory/Tax: Asset sales were temporarily interrupted in March 2026 due to an STF ruling on scrap taxation but resumed in April 2026 following new legislation.
- Financial: Net financial expense increased +26.6% YoY due to higher debt levels from the FiBrasil acquisition and increased lease liabilities.
- Credit Risk: Provision for Bad Debt increased +13.2% YoY, impacted by a specific corporate client, though B2C levels remained stable.
Investor Verification Checklist
- Capital Reduction Status: Verify the completion of the 60-day creditor opposition period for the R$4.0 billion capital reduction.
- Asset Sale Execution: Monitor the ramp-up of copper and real estate asset sales following the April 2026 regulatory resolution.
- Debt Consolidation Impact: Assess the long-term impact of FiBrasil debt consolidation on future financial expenses and leverage ratios.
- Prepaid Migration: Track the sustainability of prepaid-to-postpaid migration rates and the associated ARPU improvements.
- Buyback Execution: Monitor the utilization of the new R$1.0 billion share buyback program.