Telecom Argentina SA (TEO) Q1 2026 Earnings Call Highlights: Robust Revenue Growth and ...

This article first appeared on GuruFocus.

Release Date: May 11, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Telecom Argentina SA (NYSE:TEO) reported consolidated revenues of over $1.7 billion, marking a 34% year-over-year increase in dollars, driven by the full quarter impact of TMA's results. The company's EBITDA margin improved to 34.8% in Q1 2026, with Telecom standalone reaching over 38%, the highest since the merger with Cablevision in 2018. Investments in network expansion, particularly in fiber-to-the-home and 5G infrastructure, were prioritized, with CapEx amounting to approximately $0.3 billion. Telecom Argentina SA (NYSE:TEO) achieved a significant improvement in its net debt to EBITDA leverage ratio, reducing it to 1.4 times from 1.7 times in the previous year. The company reported strong growth in its regional operations, with Paraguay's revenue growing almost 25% year-over-year in US dollars and an EBITDA margin of over 50%.

Negative Points

The prepaid mobile segment saw a 12.2% reduction year-over-year, attributed to updated disconnection criteria for dormant prepaid lines. Postpaid mobile accesses decreased by 3.7% year-over-year, reaching almost 8 million accesses. TMA's pay TV subscriber base decreased by 1.8% year-over-year, with a net loss of approximately 7,000 customers. Operating costs grew by 28% year-over-year, which, although lower than revenue growth, still represents a significant increase. The company faced higher severance charges, impacting the EBITDA margin, which would have been higher without these charges.

Q & A Highlights

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Q: Can you provide more details on the impact of the TMA acquisition on your financial results? A: Federico Pra, Interim CFO: The acquisition of Telefonica Mobiles Argentina (TMA) significantly boosted our financial results. For the first quarter of 2026, consolidated revenues increased by 34% year-over-year, largely due to the full quarter contribution from TMA, compared to only one month in the first quarter of 2025. This acquisition has been a key driver of our revenue growth and improved EBITDA margins.

Q: How has the rollout of 5G and fiber-to-the-home (FTTH) networks progressed? A: Federico Pra, Interim CFO: We have made substantial progress in expanding our 5G and FTTH networks. In the first quarter of 2026, we upgraded nearly 780 existing sites and added over 210 new 5G sites. Our FTTH network now covers a significant portion of our broadband base, with FTTH representing 33% of our broadband connections. These investments are crucial for enhancing network quality and supporting data consumption growth.

Story Continues

Q: What are the main factors contributing to the improvement in EBITDA margins? A: Federico Pra, Interim CFO: The improvement in EBITDA margins is attributed to several factors, including the full integration of TMA, efficiency efforts, and cost management strategies. Excluding severance charges, our consolidated EBITDA margin would have reached 36%. Additionally, the deconsolidation of Microsistemas following the joint venture with Banco Macro positively impacted margins.

Q: Can you elaborate on the performance of your regional operations, particularly in Paraguay and Uruguay? A: Federico Pra, Interim CFO: Our regional operations have shown strong performance, especially in Paraguay, where revenues grew by almost 25% year-over-year in US dollars, and EBITDA increased by 34%. In Uruguay, we have a stable customer base with 94,000 pay TV customers and approximately 3,200 broadband customers. These operations continue to contribute positively to our overall financial performance.

Q: How is Telecom Argentina managing its debt and leverage ratios? A: Luis Rial Ubago, Head of Investor Relations: We have significantly improved our net debt to EBITDA leverage ratio, which now stands at 1.4 times, down from 1.7 times in the previous year. This improvement is due to stronger cash generation and a higher consolidated EBITDA base. We have also extended the average life of our debt to almost five years, reducing refinancing risk and maintaining a strong balance sheet.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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