Q2 2025 Grupo Televisa SAB Earnings Call

Operator: 's second quarter 2025 conference call.

Operator: Before we begin, I would like to draw your attention to the press release, which explains the use of forward-looking statements. everything we discussed in today's call and in the earnings.

Good morning. Want to tell a Visa's second quarter 2025 conference call.

before we begin, I would like to draw your attention to the press release, which explains the use of 4 looking statements,

Alfonso de Agotia: Now I'm going to call over to Mr. Alfonso de Agotia, Co-Chief Executive Officer of Grupo Televisa. Please go ahead, sir. Thank you, Elcita. Good morning, everyone, and thank you for joining.

Everything we discussed in today's call and then and in the earnings release.

Speaker Change: Now Tom's call over to Mr. Alfonso de and Gothia co-chief executive officer of groupo. Tell a Visa. Please go ahead sir.

Alfonso de Agotia: With me today are Francisco Balin, CEO of Cable and Sky, and Carlos Phillips, CFO of Grupo Televisa. Before discussing our second quarter operating and financial performance, let me share with you what we believe are the key milestones achieved so far this year, both at Grupo Televisa and Televisa Universe. At Grupo Televisa, let me touch on four major achievements. First, our strategy to focus on attracting and retaining value customers in cable has allowed us to stabilize our Internet subscriber base in the first half of the year and potentially grow it sequentially over the coming quarter. Second, we keep executing on the implementation of OPEX efficiencies and the integration between EASY and SKY to extract further synergy.

Alfonso: Thank you, Elsa. Good morning, everyone, and thank you for joining us.

Francisco Valim: With me today are Francisco valim, CEO of cable and sky, and Carlos Phillips CFO of group.

Francisco Valim: Before discussing our second quarter operating and financial performance let me share with you. What we believe are the key Milestones achieved so far this year both at groupo Televisa and Televisa Univision.

Francisco Valim: A group of Televisa. Let me touch on 4 major achievements. First, our strategy to focus on attracting and retaining value customers. In cable has allowed us to stabilize our internet subscriber base, in the first half of the year. And potentially grow, it sequentially over the coming quarters.

Alfonso de Agotia: This has already contributed to expanding our consolidated operating segment income margin by around 80 basis points in the first half of the year to 38.1 percent, driven by a year-on-year OPEX reduction of around 7 percent. Third, we continue to maintain a disciplined CAPEX deployment approach to focus on free cash flow generation. So far this year, we have invested 3.9 billion pesos in CapEx, which is equivalent to 13% of sales. While we expect CAPEX deployment to accelerate during the second half of the year, we are cutting our CAPEX budget from 2025 to 600 million dollars from the 665 million dollars previously disclosed, mainly because we have had successful negotiations with suppliers resulting in more favorable terms. And fourth, during the first half of the year, we have generated around 3.6 billion pesos in free cash flow, allowing us to prepay a bank loan due in 2026 with a principal amount of 2.65 billion pesos.

Francisco Valim: Second, we keep executing on the implementation of Opex efficiencies, and the integration between easy and Sky to extract further synergies.

Francisco Valim: Discuss already contributed to expanding our Consolidated. Operating segment income margin by around 80 basis points in the first half of the year to 38.1% driven by a year on year Opex reduction of around 7%.

Third, we continue to maintain a disciplined capex deployment approach to focus on free cash flow generation.

So far this year we have invested 3.9 billion pesos in capex, which is equivalent to 13% of sales.

Francisco Valim: While we expect capex deployment to accelerate. During the second half of the year, we are cutting our capex budget from 2025 to 600 million

Francisco Valim: from the 6605 million previously, disclosed

Francisco Valim: Mainly because we have had successful negotiations with suppliers resulting in more favorable terms.

Alfonso de Agotia: This debt repayment comes on top of the $219 million principal amount of our senior notes already paid on March 18. Additionally, at the end of the second quarter, Grupo Televisa's leverage ratio of 2.2 times IVETA compared to 2.4 times at the end of the first quarter, mainly driven by our free cash flow generation.

Francisco Valim: And forth. During the first half of the year. We have generated around 3.6 billion pesos in free cash flow, allowing us to prepay a bank loan due in 2026 with a principal amount of 2.65 billion pesos

Francisco Valim: This debt repayment comes on top of the 219 million principal amount of our senior notes already. Paid on March 18th,

Alfonso de Agotia: And at Televisa Univision, I will elaborate on three key miles. First, engagement and growth for VIX remain strong, with momentum accelerating across both our free and premium tiers. Moreover, subscribers have now surpassed 10 million, implying double-digit growth year on year.

Francisco Valim: Additionally, at the end of the second quarter group Visa's, leverage ratio of 2.2 times Eva compared to 2.4 times. At the end of the first quarter, mainly driven by a free cash flow generation,

Francisco Valim: and that the Visa Univision, I will elaborate on 3 key milestones

Alfonso de Agotia: Second, the efficiency plan to reduce operating expenses at Televisa Univision by over $400 million in 2025 is proving to be successful. In the first half of the year, our total operating expenses have declined by around 13% year-on-year for total savings of around $226 million. This shows a disciplined execution of our cost-saving initiatives, including lower content, technology, and marketing costs.

First engagement and growth for Vicks remains strong with momentum accelerating across. Both our free and premium tiers moreover subscribers. Have now surpassed 10 million implying double digit growth year on year.

Francisco Valim: Second, the efficiency plan to reduce operating expenses at the levisa Univision, by over 400 million dollars in 2025 is proving to be successful.

Francisco Valim: In the first half of the Year, our total operating expenses have declined by around 13% year on year for total Savings of around 226 million.

This shows a disciplined execution of our cost-saving initiatives.

Alfonso de Agotia: and the normalization of our DTC-related investments.

Technology and marketing costs.

Francisco Valim: And the normalization of our DTC related Investments.

Alfonso de Agotia: And third, looking at Televisa Univision's leverage and debt profile, the company ended the quarter at 5.5 times EBITDA, an improvement from 5.8 times in the prior quarter driven by growth. Furthermore, last week, Televisa Univision addressed its near-term debt maturity profile by refinancing $1.5 billion, eliminating the majority of its 2027 bond maturity. The leveraging remains a core strategic priority for Televisa Univision and management remains committed to further strengthening the capital structure of the company during the second half of the year.

Francisco Valim: And third looking at the Leisa, Univision, leverage and debt profile, the company entered the quarter. At 5.5 times. IA, an improvement from 5.8 times in the prior quarter driven by growth.

Francisco Valim: Furthermore last week the levisa Univision addressed its near-term debt maturity profile by refinancing 1 and a half billion dollars eliminating. The majority of its 2027 Bond maturities.

Valim: Having said that, let me turn the call over to Valim, as he will discuss the operating and financial performance of our consolidated assets. Thank you, Alfonso. Good morning, everyone.

Francisco Valim: The leveraging Remains a core strategic priority for telisa, Univision and management remains committed to further, strengthening the capital structure of the company during the second half of the year.

Francisco Valim: Having said that, let me turn the call over to valim. As he will discuss the operating and financial performance of our Consolidated assets.

Valim: First, let me walk you through the operational and financial performance of our cable operations. We ended June with a network of almost 20 million homes after passing around 18,000 new homes during the quarter. In the second quarter, our monthly churn rate fell below our historical average 2% as we kept executing our strategy to focus on value customers while working on customer retention and satisfaction. Our broadband growth has continued to improve on a sequential basis, allowing us to deliver more than 6,000 net ads during the second quarter, compared to the disconnections of around 6,000 of the first quarter and losses of about 85,000 on the fourth quarter of last year.

Speaker Change: Tank Alonso. Good morning everyone. First, let me walk you through the operational and financial performance of our cable operations. We ended June with a network of almost 20 million homes after passing around 18,000 new homes during the quarter.

Speaker Change: In the second quarter, our monthly churn rate fell below our historical average 2%. As we kept executing our strategy to focus on value customers, while working on customer retention and satisfaction

Valim: In video, we also experienced stronger gross ads than in the first quarter. Therefore, we lost about 53,000 video subscribers during the second quarter compared to 73,000 cancellations in the first quarter and 95,000 disconnections in the fourth quarter of 2024. Our mobile net ads of 83,000 subscribers during the quarter were almost two times higher than those of the first quarter and more than triple compared to the full year of net ads of 2024. We are able to achieve this because, late last year, we re-launched a new and innovative MVNO service developed by ZTE, offering an enhanced user experience.

Speaker Change: Our Broadband growth has continued to improve on sequential basis. Allowing us to deliver more than 6,000. Net ads. During the second quarter compared to the disconnections of around 6,000 of the first quarter, and losses of about 85,000 on the fourth quarter of last year.

Speaker Change: In video. We also experienced a stronger grass heads than in the first quarter. Therefore, we lost about 53,000 video subscribers during the second quarter compared to 73,000 cancellations. In the first quarter and 95,000 disconnections in the fourth quarter of 2024.

Speaker Change: Our mobile bionet ads of 83,000 subscribers during the quarter were almost 2 times higher than those of the first quarter, and more than triple compared to the full year of net ads of 2024.

Valim: We are confident that this new service will make our bundles more competitive while allowing us to increase the share of wallet from our existing cost. During the quarter, net revenue from residential operations of 10.5 billion pesos, which accounted for around 91% of total cable revenue, decreased by 3.1% year-on-year, mainly because we had a slight lower subscriber base. However, net revenue from our residential operations remained stable on a sequential basis, potentially suggesting a turning point.

Speaker Change: We are able to achieve this because late, last year, we relaunched a new and Innovative mvno service developed by ZTE offering an enhanced user experience.

Speaker Change: We are confident that this new service will make our bundles more competitive while allowing us to increase the share of wallet from our existing customers.

Valim: On the other hand, net revenue from our enterprise operations of 1.1 million pesos, which accounted for around 9% of cable revenue, increased by 3% year on year, mainly driven by higher recurring revenue.

During the quarter, net revenue from residential operations of 10.5 billion pesos, which accounted for around 91% of total cable Revenue decreased by 3.1% year on year. Mainly because we had a slight lower subscriber base. However, net revenue from our residential operations remains stable, as sequential basis, potentially suggesting a turning point.

Valim: Moving on to Sky's operating and financial performance. During the second quarter, we lost $347,000 revenue-generating units, mostly coming from prepaid subscribers that had not been recharging their services.

Speaker Change: On the other hand, net revenue from our Enterprise operations of 1.1 million pesos, which accounted for around 9% of cable, Revenue increased by 3% year on year, mainly driven by higher recurring Revenue.

Valim: In addition, beginning the second quarter, we started to charge an installation fee of $1,250 to all new satellite PTV subscribers to increase the return on investment for this service. This translated into a slowdown in video graphs additions for Sky. Sky's second quarter revenue of 3.2 billion pesos declined by 16.3% year-on-year, mainly driven by a lower subscriber base.

Move on to the skies operating and financial performance. During the second quarter we lost 347,000 Revenue generating units mostly coming from prepaid subscribers. That had not been recharging their services in addition. Beginning the second quarter, we started to charge an installation fee of 1,250 pesos to all new satellite PTV subscribers, to increase the return on investment for this service, this translator into a Slowdown in video, grass additions for Skype,

Valim: To sum up... segment revenue of 14.8 billion pesos fell by 5.9% year-on-year, while operating segment income of 5.7 billion pesos declined by 4.3%. Our operating segment income margin of 38.4% expanded by 70 basis points year-on-year, mainly driven by the efficiency measures that we have been implementing and synergies from the ongoing integration between East and Sky.

Speaker Change: Sky second quarter revenue of 3.2 billion pesos declined by 16.3% year on year. Mainly driven by a lower subscriber base to sum up.

Valim: On a sequential basis, our operating segment income for the second quarter was basically flat. Why? Our operating segment income margin expanded by 60 basis points.

Speaker Change: Segment revenue of 14.8 billion pesos fell by 5.9% year on year, while operating segment income of 5.7 billion pesos declined by 4.3% our, operating segment income. Margin of 38.4%, expanded by 70 basis points year on year. Mainly driven by the efficiency measures that we have been implementing and synergies from the ongoing integration between East and sky.

Valim: Regarding CAPEX deployment, our total investments of 2.1 billion pesos accounted for 14.3% of sales during the second quarter.

Speaker Change: On a sequential basis. Our operating segment income for the second quarter was basically flat why our operating segment income margin expanded by 60 basis points.

Valim: Finally, operating cash flow for cable and sky, which is equivalent to EBITDA minus CAPEX, was 3.6 billion pesos in the second quarter, representing 24.1% of sales.

Valim: Thank you, Waleed. Now let me walk you through Televisa Univision's second quarter results. The company's second quarter revenue of $1.2 billion declined by 4% year-on-year, while adjusted EBITDA of $398 million increased by 10%. Excluding the impact from the depreciation of the Mexican peso, Televisa Univision's second quarter revenue remained unchanged year-on-year despite the impact of the renewal cycle with key distribution partners in Mexico. On the other hand, adjusted EBITDA increased by 14% year-on-year, reflecting margin expansion driven by the benefits of a streamlined cost structure and continued DTC profitability. Moving on to the details of our revenue performance during the quarter, consolidated advertising revenue decreased by 5% year on year or 1% excluding the FX impact.

Speaker Change: Regarding capex deployment, our total Investments of 2.1 billion pesos accounted for 14.3% of sales. During the second quarter, finally operating cash flow for cable and Sky, which is equivalent to a minus capex was 3.6 billion pesos. In the second quarter representing 24.1% of sales.

Speaker Change: Now, let me walk you through the Lisa Univision, second quarter results.

Speaker Change: the company's second quarter revenue of 1.2 billion dollars declined by 4% year-on-year while adjusted Eva of 398 million increased by 10%

Speaker Change: excluding the impact from the depreciation of the Mexican peso Visa Univision. Second quarter Revenue remained unchanged year on year despite the impact of the renewal cycle with key distribution Partners in Mexico. On the other hand,

Speaker Change: Adjusted Eva increased by 14% year on year reflecting margin expansion, driven by the benefits of a streamlined cost structure and continued DTC profitability.

Valim: In the U.S., advertising revenue was 2% lower, reflecting a sequential improvement compared to the first quarter as growth in VIX and linear ratings stabilized, driven by the strong performance of our content. In Mexico, advertising revenue declined by 13% year-on-year driven by the depreciation of the Mexican peso. FX Neutral advertising revenue in Mexico was stable, driven by VIX and a strong sports programming slate that was partially offset by a decline in local advertising revenue. During the quarter, consolidated subscription and licensing revenue was flat year-on-year, but grew by 2%, excluding the FX impact. The growth was driven by VIX's premium tiers in both geographies, offsetting linear platform declines primarily related to the renewal cycle with key distribution partners in Mexico.

Speaker Change: Moving on to the details of our Revenue performance. During the quarter Consolidated, advertising Revenue decreased by 5% year on year or 1% excluding the FX impact.

In the US advertising Revenue was 2%, lower reflecting a sequential Improvement. Compared to the first quarter as growth in Vicks and linear rating, stabilized driven by the strong performance of our content.

Speaker Change: In Mexico, advertising Revenue declined by 13% year on year driven by the depreciation of the Mexican. Peso

Speaker Change: FX neutral advertising Revenue in Mexico, was stable driven by Vicks and a strong Sports Programming slate. That was partially offset by a decline in local advertising Revenue.

During the quarter Consolidated, subscription and Licensing. Revenue was flat year-on-year but grew by 2% excluding the FX impact.

Valim: In the US, subscription and licensing revenue increased by 9% while in Mexico it fell by 23%. Excluding impacts from FX and the renewal cycle, subscription and licensing revenue in Mexico grew by 13%.

Speaker Change: The growth was driven by Biggs premium tiers in both geographies. Offsetting linear platformer declines primarily related to the renewal cycle with key distribution Partners in Mexico.

Speaker Change: In the US subscription and Licensing Revenue increased by 9% while in Mexico. It fell by 23%.

Alfonso de Agotia: To wrap up, Bernardo and I remain confident that our focus on value customers, efficiencies, and ongoing integration between EZ and Sky at Grupo Televisa, and further integration and operational optimization at Televisa Univision, now that our DTC business has gained scale and achieved profitability, will allow us to create greater value for our shareholders throughout this year.

Speaker Change: Excluding impacts from FX and the renewal cycle subscription and Licensing Revenue in Mexico, grew by 13%.

To wrap up. Bernardo and I remain confident that our focus on value customers efficiencies and ongoing integration between EC and sky at Lupo de lovisa.

Operator: Now, we're ready to take your questions. Elcita, could you please provide instructions for the Q&A?

Speaker Change: And further integration and operational optimization at the levisa Univision. Now that our DTC business has gained scale and Achieve profitability will allow us to create greater value for our shareholders throughout this year.

Speaker Change: Now we're ready to take your questions. Elsa, could you please provide instructions for the Q&A?

Operator: Ladies and gentlemen at this time we'll begin the question and answer session. To ask a question you may press star and then 1 using a touch-tone telephone. To withdraw your questions you may press star and 2. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question.

Speaker Change: Time. We'll begin the question and answer session to ask a question. You may press star and then 1 using a touchtone. Telephone, please draw your questions, you may press star and 2

Speaker Change: If you are using a speaker-phone, would you ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality.

Operator: We'll pause momentarily to assemble the roster.

Speaker Change: Once again, that is star and then 1 to join the question queue.

Speaker Change: We'll pause momentarily to assemble the roster.

Emilio Fuentes: Our first question today comes from Emilio Fuentes from GBM. Please go ahead with your question. Hi, thank you for taking my question.

Our first question today comes from Amelio Fuentes from GBM. Please go ahead with your question.

Alfonso de Agotia: First of all, regarding Televisa Univision, I was wondering how are you thinking the business in light of the ongoing separation between content streaming and cable TV in the U.S.? We work with doubled value in keeping distribution and content bundled both in streaming and Windows channels, would it make more sense to separate from traditional Cable TV And regarding Sky, given the current rate of these connections, could this eventually become a cost burden for EC, or is that something you would not allow to happen?

Speaker Change: Hi. Thank you for taking my question. First of all, regarding to Lisa, Univision,

Speaker Change: I, I was wondering how are you thinking the business in light of the ongoing separation between content streaming and cable TV in the US? Do you still see value in keeping distribution and content bundled both through streaming and renew channels? Or would it make more sense to separate from traditional cable TV?

Speaker Change: And regarding Sky giving a tone rate of these connections to this eventually, become a custard, and for easy. Or is it that something you want? You would not allow to happen.

Speaker Change: Thank you.

Alfonso de Agotia: Thank you, Emilio, for your question. I think that the transactions that Warner and Comcast did make a lot of sense for them. It's part of the evolution of this industry that is undergoing an existential transformation. For us at Televisa, the distribution business, or selling our networks to distributors, is still a $1.1 billion revenue business. Our channel packages continue to be very strong, especially in entertainment and sports. We just renewed our deals with DirecTV and Cox, and we just launched our U.S. networks on Hulu. So, it makes sense for now to keep everything together as a bundle, but we will always analyze alternatives to generate value.

Speaker Change: Thank you, Amelia for your question. Um,

Speaker Change: I think that the transactions that Warner and, uh, Comcast did make a lot of sense for them. Um, it's part of the evolution of this industry that uh, is undergoing an existential transformation.

Speaker Change: For us at the Visa, uh, the distribution business or, um, selling our networks to Distributors is still a 1.1 billion dollar Revenue business. Um, our channel packages continue to be very strong, especially um, in uh, entertainment and sports.

Speaker Change: Direct TV and cops. And uh, we just launched our us networks on Hulu.

Alfonso de Agotia: Dave Sazloff is a director of ours, he's part of the board of directors, and we learn always a lot from Dave. So, we'll keep analyzing alternatives, but for the time being, it's a large business and it makes sense to keep it together.

Speaker Change: So, uh, it makes sense for for now to keep everything, uh, together, uh, as a bundle. But, uh, we will always analyze alternatives to generate, uh, value. Um, Dave Salve is, uh, uh, director of ours. He's part of a board of directors and, um, we learn always a lot from, uh, from Dave. So, uh, I will keep, uh, analyzing Alternatives but for the time being, it's a large business and it makes sense, uh, to keep it together.

Alfonso de Agotia: I think that's a great question because it gives me the opportunity to address an issue that I see there's a little confusion regarding the sky. As far as integration is concerned, we are almost towards the very end, meaning that all the cost structure that Sky used to have has now basically disappeared. So Sky, as we see it, is a revenue stream of prepaid and postpaid subscribers with a variable cost of programming and a satellite cost. Other than that, everything is already embedded in the infrastructure that EASY already has. So there is no potential likelihood of Sky being a burden because it only becomes a revenue stream.

Speaker Change: Um, as to your second question, I'll ask valim to uh, answer it. Uh, thank you. I think that's a, that's a great question because it gives me the, the opportunity to, to address an issue that I I I see there's a little confusion, okay, uh, regarding the sky.

Speaker Change: As far as the integration is concerned, we are almost towards the, the very end, uh, meaning that all the cost structure, the sky used to have, it has now basically disappeared. So sky. As as we see it is, is a revenue stream of prepaid and postpaid subscribers with a variable cost of programming and, uh, a satellite cost. Other than that, everything is already embedded in the infrastructure that easy already has. So, uh, there is no, there is no potential, uh,

Alfonso de Agotia: And like we've mentioned before on the initial presentation, we are charging the installation fee of $1,200. So we make sure that we have a payback on every new subscriber. So the disconnections don't generate any sort of CapEx or OpEx to us, basically, as we collect them as part of the payment that they have to pay back as part of collections, so there is no impact. So if I see this moving forward... This guy, it will be this revenue stream that will be declining as it is in this business everywhere in the world. So that there is a declining rate of revenue, but still a very robust, you know, very high margin generation.

Speaker Change: Uh, likelihood of Sky being a burden, uh, because it only becomes a revenue stream. And and like, uh, We've mentioned before, on on the, on the initial presentation we are charging a uh, installation fee of uh 12,200 pesos.

Speaker Change: So we make sure that we have a payback on every new uh subscriber. So the disconnections don't don't don't generate any any sort of capex or Opex to us. Uh basically uh as we collect them as part of the payment that they have to pay back as part of the collections,

Speaker Change: so there is no impact. So uh, if I see this moving forward,

Alfonso de Agotia: And since what we are paying or will be paying for the stake that we bought, we basically have amounted for that in the first 12 months of So everything else that Sky generates from now on will be basically going to the bottom line of our business. So I think there needs to be some clarity. So we're not so concerned about the decline of the Sky business because that was already in our forecast. And for technological reasons, we don't see that changing anytime soon. But we are, yes, generating a lot of cash from that transaction that we think was very profitable to all of us.

Speaker Change: The sky, it will be this Revenue stream, that will be declining as as it is in in this business everywhere in in the world. So that there's a declining rate of Revenue but still a very robust, you know, very high margin uh generation and since what we we are paying or will be paying uh uh for the state that we bought. We basically have amounted for that in the first 12 months of synergies. So everything else that jet Sky generated generates from now on will be basically going to the to the bottom line uh of our business. So I think I think that needs to be some clarity. So we're not so concerned about the

Speaker Change: the decline of of the sky business because there was already in our in our forecasts and

Alfonso de Agotia: Yeah, I think to add on that, the deal that we made where we bought 42% of Sky from AT&T was a great deal and the execution by Valim and his team in terms of the synergies that he was mentioning has been great. So now it's all a matter of extending the life of the subscribers that we have. But of course it's no surprise to us that we have lost subscribers and we will continue to lose subscribers as the whole industry, the DDH industry is in secular decline. Thank you.

for technological reasons. We we don't see that changing anytime soon. Uh but we are yes generating a lot of cash from that transaction that we think was very profitable to all of us.

Speaker Change: Yeah, I think to add on that uh the the deal that we made where we bought 42% of Skye.

Speaker Change: From AT&T was a great deal and uh the execution by balim in his team uh in terms of the synergies so he was mentioning has been great.

Speaker Change: so uh now it's uh all a matter of extending life uh of the subscribers that uh we have but um of course it's no surprise to us that uh, we have lost subscribers and we have, we will continue to lose subscribers as

Speaker Change: Uh, the whole industry, the dth industries in secular decline.

Leva Mizopata: Our next question comes from Leva Mizopata from J.P. Morgan. Please go ahead with your question. Hi, good morning, thank you for taking my questions. My first one would be on CapEx. Could you comment on your expectation for the year? Do you see room for a downside revision on the guidance and are you still targeting the 1 million homes passed for 2025? And the second one, we see broadband ads going back to positive territory. What can we expect for the second half of the year?

Speaker Change: All right. Next question.

Our next question comes from Leah, mabata, from JP Morgan, please. Go ahead with your question.

Leva Mizopata: Could you comment a little bit on your turn trajectory and how has been the response to your strategy to focusing on value clients? And what do you see as a healthy level for gross ads, net ads, and churn for the second half of 2025? Thank you.

Alfonso de Agotia: Hi, Livia. Yes, as I mentioned in the opening remarks, we have updated our CAPEX guidance for 2025 from $665 million to $600 million that had been previously disclosed. And I'll ask Malin to go into the details. Thank you, Alfonso. I think that, and also like was said in the beginning, this is mostly due to more efficient negotiation with suppliers. And because the way we approach the market with a very focused approach on higher-end subscribers, we don't have to worry too much about, you know, just bringing a whole bunch of subscribers that will churn very quickly.

Hi, good morning, taken for ticket. Thank you for taking my questions. My first 1 would be on capex. Could you comment on your expectation for the year? Do you see room for a downside revision on the guidance? And are you still targeting the 1 million homes pass for 2025 and the second 1 we see Broadband ads, going back to positive territory, what can we expect for the second half of the Year? Could you comment a little bit on your current trajectory? And how has been the response to your strategy to focusing on value clients? And what do you see as a healthy level for growth at and and turn for the second half of 2025. Thank you.

Speaker Change: Maybe yeah, yes. Uh, as uh, as I mentioned in the opening remarks, we have updated our capex guidance for 2025 from. Um,

Francisco Valim: Uh, 665 million to 600 million, uh, that had been, uh, previously disclosed and, uh, I left malim to go into the details.

Valim: And that's why churn is at its lowest rates, not only in this company, but also in the industry overall, which we think is very, very valuable. So as we see the world moving forward, we anticipate churn to be low because of the things that we are doing into retaining and value our existing customers. But also we are targeting growth of those high-end, more reliable, and more stable customers. So we are not trying to become the leader in market share of net ads. What we are trying to do is start increasing quarter over quarter the revenues of our cable business.

Speaker Change: Thank you, uh Alonso. I I think that uh and also like was said, in the beginning, this is mostly due to more efficient uh negotiation with suppliers and and because the way we approach the market with a very, uh, focused, uh, approach on higher-end subscribers, we don't have to worry too much about, you know, just to bring in a whole bunch of subscribers, but they're all churned very quickly. And that's why churn is that its lowest rates uh uh, it not only in in this company but also in the industry overall which we think is is very

Speaker Change: Very valuable. So as we see the world moving forward, we anticipate turn to be low because of the things that we are doing into retaining uh and and value our existing customers. But also we are targeting uh growth.

Valim: Like I said, the sky discussion, we just mentioned that a second ago. So that's our focus. So we see, yes, a trend moving upwards in terms of quarter over quarter revenue growth. And growth, not huge growth, but still growth in terms of subscribers in cable. I think that was basically your question. I don't know if that answers what you had in mind. Yeah, that answers.

Speaker Change: Of those high-end uh, more reliable and more stable customers. So we don't we are not trying to, to become the leader in in, in market, share of net, adds. What we are trying to do is start increasing uh, quarter over quarter, the revenues of our Cable business. Like I said, the sky discussion. I would, I just, we just mentioned that a second ago, so that that's our Focus. So we see, yes, a trend moving upwards in terms of a quarter over quarter Revenue growth and, uh, growth not know, huge growth but it's still growth in terms of subscribers, uh, in in, in, in, in cable. Uh, I think that's was basically your question. I don't know if you, if you if that answers what you had in mind.

Speaker Change: Yeah, that answers. Thank you very much.

Milena Okamura: Our next question comes from Milena Okamura from Goldman Sachs. Hey, thank you for taking our questions. The first one is you mentioned that you continue to focus on high-end customers.

Speaker Change: Our next question comes from Melena, okamura from Goldman Sachs, please. Go ahead with your question.

Melena Okamura: Hey, thank you for taking your questions. Um, the first 1.

Valim: Could you please detail a little bit about your commercial strategy recently and how have you seen competition evolving? Thanks. Thank you, Milena.

Melena Okamura: High-end customers. Could you please detail a little bit about your commercial strategy recently and how have you seen competition evolving?

Melena Okamura: Thanks.

Valim: Valim, can you please go over the question? Yes. So, like I said, we don't have any changes in that. We see the competition in Mexico being very, very rational. And I think that's a key element of the success of our strategy in this market. All the players are being very rational. Prices do not increase, but we don't see anyone discounting significantly prices, which means all the major players are seeing this as a stable market moving forward. So, no one should see big swings either way.

Melena Okamura: Uh, thank you Milena uh, Wing. Can you please, uh, go over the question. Yeah, so like I said, we we, we don't have any, any changes in that. We see the competition in Mexico being very, very rational. And I think that's a key element of uh, the success of our strategies in, in this market. Uh, all the players are being very rational prices are, you know, they do not increase, but we don't see any anyone, discounting significantly, uh prices, which which means all the the major players are seeing this as as a as a stable Market moving forward. So no 1 should see big swings, either way.

Operator: Thank you, very clear. Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two.

Melena Okamura: Thank you very clear.

Matthew Harrigan: Our next question comes from Matthew Harrigan from Benchmark. Please go ahead with your question. Thank you. There's a real tendency in the U.S. for more consumption, especially sports, but also, you know, hit streaming shows and even linear programming on social media, TikTok. Obviously, a lot of streaming consumption is on YouTube, and it doesn't really monetize that well yet, especially, you know, for sports.

Speaker Change: Once again, if you would like to ask a question, please press star and then 1 to withdraw your questions. You may press star and 2

Speaker Change: Our next question comes from Matthew Harrigan from Benchmark. Please go ahead with your question.

Matthew Harrigan: Oh, thank you. Uh, there's a a real tendency in the US for more consumption of a specially sports, but also, you know, hit streaming shows and even linear uh, programming on uh,

Matthew Harrigan: You know, with your primacy in Spanish-language media, what are you doing to get more efficient on realizing the digital revenues? Because your profile there, you know, including on sports, is really important. And then second question, and I know this is just inherently fuzzy, but any new concerns on U.S. tariff policy and specifically anything that might affect the composition of your programming with so much being produced in Mexico City on a very efficient basis? Thank you, and congratulations on the cost savings. Remarkable job. Thank you, Matthew. Yeah, I mean, there is a tendency where sports and also entertainment content is being streamed, of course, and we're putting a lot of effort at Televisa Univision into selling more digital packages.

Matthew Harrigan: Social media Tik Tok obviously a lot of streaming consumption is on YouTube and it doesn't really monetize that well yet, especially you know, for sports, you know, with your privacy in in Spanish language, media, what what are you doing to get more, uh, efficient on realizing the digital revenues because your your profile there. You know, including on Sports is, is really important. And then second question and I know this is just inherently fuzzy, but any new concerns on uh, us, tariff policy, and, and specifically anything that might affect uh, the composition of your programming with so much being produced in in Mexico City on a very efficient basis. Thank you, and congratulations on the cost savings remarkable job.

Alfonso de Agotia: I don't know if you saw, but we brought in as head of sales in the United States, Tim Natividad, that comes from TikTok, and he's somebody that knows a lot about the digital market, and he will help us to enhance all our digital products. So now we have centered on VIX and selling advertising on VIX. That has picked up. VIX is now a billion-dollar revenue business, including subscriptions and advertising sales on the AVOT product. So that has become a real and substantial business. However, we're also enhancing all our digital sales, more especially in the U.S., where we have to do a better job.

Speaker Change: Thank you. Uh, Matthew. Yeah, I mean, there is a tendency where, um, uh, Sports and uh, also entertainment content, um, is being uh, streamed of course. And uh, we're putting a lot of effort at the levisa Univision, into selling, uh, more digital packages. Um,

Speaker Change: I don't know if, uh, you saw, but, um, we brought in as head of sales in the United States, uh, Team Nutiva, that comes from, uh, Tik Tok. And, um, he's, uh, somebody, that knows a lot about the digital, uh, Market. Um, and, uh, he will help us to enhance all our digital products.

Alfonso de Agotia: So Tim will help in using basically our sports assets and our entertainment assets to build up and enhance those sales. We're also doing a much better job in windowing our content. We own the sports rights and we own most of our content, and now we have a chief content officer for Televisa Univision. As you might remember, before we had a content officer for VIX, a content officer for Linear Mexico, and another one for Linear in the United States. Now we have unified that position, and now the chief content officer is a seasoned executive that comes from Televisa, and he's in charge of basically windowing all our content, including sports, and of course enhancing our monetization of that content.

Speaker Change: Um, so so now, uh, we have centered on on on Vicks and selling advertising on Vicks that has picked up. Um, dicks is now a billion dollar Revenue business including, uh, subscriptions and advertising sales on the aot product. So, um, that uh, has become a, a real and substantial business. However, we're also enhancing all our digital sales, um, more, especially in the us where we have to do a, a better job. So, uh, Tim will help us, um, in using basically, our Sports assets and our entertainment assets um to uh, build up and, and enhance that those uh, those sales, um,

Alfonso de Agotia: So I think we have a much better team now and we're doing things much better, and you'll see the results this year and in 2026. So I think that we're doing a much better job there, as I was mentioning.

We're also doing a much better job in uh windowing our content we uh own the sports rights and we own most of our content. And now we have achieved, um, content officer for telisa Univision. Uh, as you might remember before we had a Content officer for Vicks, a Content officer for linear Mexico, and another 1 for linear, uh, in the United States. Now we have unified that position it, uh, and, uh, now the chief content officer, um, is uh, a seasoned executive that comes from, uh, dear Visa. Um, and uh, he's in charge of uh, basically windowing all our content including Sports and, um, of course, um, enhancing our monetization of that content. So I think we have a much better team now. And, uh, we're doing things, uh, much better and you'll see the results, um, this year and, uh, in 2026.

Matthew Harrigan: And what was your second question? Just all the volatility in U.S. tariff policy and the posturing, and you occasionally see hypotheticals where there's effects on entertainment companies. I mean, clearly, you produce a lot of programming down in Mexico City that's also showed in the U.S. I know that wasn't a primary concern. People think more about agriculture and cars and chips and all that, but you have seen articles in the trade press about people at the major studios starting to worry about some things that administration might do or could do. It doesn't seem like it's too likely to happen, but it's definitely much more on people's radar screens than you would have thought before Trump was elected, to say the least.

So um, I I think that uh, we're doing a much better job there as I was mentioning. Um,

Speaker Change: And, uh, what what was your second question?

Uh, just all the volatility, all the in us, you know, tariff policy in the posturing and you occasionally, see hypotheticals, where there's effects on entertainment companies. I mean, clearly you, you produce a lot of programming down in Mexico City, that's also showed in the US. And I know that wasn't a prime.

Alfonso de Agotia: Yeah, great question Matthew. Fortunately, digital content is not considered a physical good for purposes of tariffs. So all the shows and films produced in Mexico and that are aired or streamed in the U.S. remain outside of the scope of the tariff laws. And under the U.S. MCA, it currently exempts digital transmitted content from tariffs. So we never know and we can never predict what is going to happen in respect to tariffs as you have seen many things change. But we think that we're in solid ground now.

Speaker Change: Primary concern, people think more about, you know, Agriculture and cars and chips, and all that. But you have seen articles in the trade, press about people, the major Studios, starting to worry about some things that Administration might do or, or could do it doesn't. It doesn't seem like it's too likely to happen, but it's, it's definitely much more in people's radar screens than you would have thought before. Trump was elected to say the least.

Speaker Change: Yeah, great question Matthew. Um, fortunately digital content is not considered a physical good um for purposes of uh of terrorists. So, um, all the shows and films produced in Mexico and uh, that are aired or streamed in the US remain outside of the scope of uh, the Tariff loss, um, and under the US MTA, um, that it's currently exempt, uh, it exempts digital transmitted content from tariffs,

Speaker Change: So, um, we never know when we can never pre predict what is going to happen in respect to, uh, tariffs as, uh, you have seen many things change. But, uh, we think that, uh, we're in Solid Ground, uh, now

Speaker Change: Great. Thank you.

Operator: And with that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to management for any closing Thank you very much for participating in our call, and we're always here to answer any questions that you may have. Have a great day. Bye.

Speaker Change: And listen with that. We concluding today's question and answer session. I'd like to turn the floor back over to management or any closing remarks.

Speaker Change: Thank you very much for participating, uh, in our call and uh, we're always here to answer any questions that you may have.

Speaker Change: Have a great day. Bye.

Operator: Ladies and gentlemen, that does conclude today's conference call and presentation. We thank you for joining. You may now disconnect your line.

Ladies and gentlemen, that does conclude today's conference call. I am presentation, we do thank you for joining. You may now disconnect your line.