TIM Q2 2026 Earnings Call Transcript

TIM (NYSE: TIMB ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary TIM SA reported solid financial performance in Q2 2026, with revenue nearing 7 billion reais and service revenues increasing by around 6% in the first half of the year. EBITDA grew by approximately 7% in the first half, supported by operational efficiency and cost discipline, while net income surpassed 1 billion reais, marking a 6% year-over-year increase. Key growth platforms include mobile, Ultrafibra, and B2B, with postpaid mobile services now representing close to 70% of mobile revenues. The launch of TIM Play and a partnership with PicPay are strategic moves to expand the company's digital ecosystem and increase customer engagement.

TIM Ultrakombo, a converged offer combining fiber, mobile, and content, aims to strengthen the company's position in select markets. B2B revenues are gaining prominence, contributing to around 7% of service revenues, with advancements in IoT, private networks, and digital solutions. The company continues to focus on AI as a transformative tool for efficiency gains, particularly in customer interactions and debt collection. TIM is optimizing its capital expenditure profile and expects no significant impact from the acquisition of iSystems.

Management remains confident in growth opportunities within broadband and B2B, despite macroeconomic challenges. Full Transcript OPERATOR Good morning, ladies and gentlemen. Welcome to TIM SA 2026 second quarter results video conference call. We would like to inform you that this event is being recorded and all the participants will be in listen-only mode during the company's presentation.

There will be a replay for this call on the company's website. After TIM SA's remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given. Vicente Ferreira, Investor Relations Officer & Strategy VP Welcome to TIM's second quarter 2026 results presentation.

Following today's presentation, Alberto Griselli, CEO, Andrea Villegas, CFO, and the Investor Relations team will be available for the live Q&A session. Before we begin, please note that this presentation may contain forward-looking statements which are subject to risks and uncertainties, and now I'll hand it over to Alberto. Alberto Griselli, CEO Hello everyone. The second quarter was marked by solid execution.

We delivered revenue growth, profitability expansion and cash generation in a balanced way while continuing to diversify our revenue profile and strengthen our operation. As our growth avenues diversify, we increase the resilience of the business and develop a sustainable path for value creation to our shareholders. Let me walk you through the main highlights. Revenue continued to show a consistent dynamic, approaching 7 billion reais in the quarter, with service revenues maintaining a solid pace.

In the first half of the year, service revenue increased around 6%, reflecting broader contribution across the business. This performance was accompanied by further profitability gains. EBITDA grew around 7% in the first half, while EBITDA after lease increased close to 8%, supported by operational efficiency, cost discipline and continued margin expansion. Net income surpassed 1 billion reais in the quarter, increasing around 6% year over year.

In the first half, net income also grew despite a more challenging comparison base for the lines below EBITDA. Cash generation remained strong. Operating cash flow surpassed 3 billion reais in the first half, growing at a double-digit pace and reinforcing the consistency of our cash generation. Looking to the different areas of the business, we saw solid performance from our key growth platforms, with mobile remaining, of course, as the foundation of our performance, while Ultrafibra and B2B play an increasingly more important role in our business.

Evolution in mobile results were supported by continued postpaid expansion, which now represents close to 70% of mobile service revenues. This reinforces a higher-value and more resilient customer base. During the first half, we focused on building a more dynamic and segmented portfolio, allowing us to better address customer needs while creating additional monetization opportunities. This includes expanding the usage of credit cards as a payment method in annual and monthly options materialized in T Control Fit.

This launch expands our addressable market through more flexible propositions, strengthening value perception and engagement. Our streaming proposition is also evolving following the launch of TIM Play, a content aggregation platform, creating new opportunities for monetization while increasing customer stickiness. In financial services, the partnership with PicPay represents another step in expanding our digital ecosystem and creating cross-selling opportunities through an integrated customer journey. In broadband, Ultrafibra maintained positive momentum with customer expansion and consistent revenue growth, strengthening its relevance within our portfolio.

To propel this further, we just launched TIM Ultrakombo, our first truly converged offer. It combines fiber, mobile and content to strengthen our value proposition in selected markets and enabling TIM to target new pockets of growth while supporting LTV-oriented actions. In B2B, we continue to build a strategic growth platform. Revenue is expanding and gaining relevance, now representing around 7% of our service revenues.

At the same time, we are advancing beyond connectivity with progress in IoT, private networks and digital solutions. At the same time, artificial intelligence remains an important enabler of our transformation journey and a key lever for efficiency gains. One example is collections, where artificial intelligence supports more proactive and personalized interactions with customers in debt collection and negotiating processes. Early results are encouraging, with more than 2 million customers engaged and a meaningful improvement in recovery rates through the artificial intelligence agents.

Together, these initiatives reinforce the evolution of TIM's business supported by disciplined growth, a broader set of revenue drivers and consistent execution. We also continue to strengthen the foundation of the company through our culture, recognized by Great Place to Work, and through solid governance practices. Thank you. And now let's move to the live Q&A session.

OPERATOR Thank you, Mr. Alberto. To make your questions, please press the raise hand button. The first question comes from Luis Chagas from Chispe.

Luis Chagas, Analyst Hi Alberto, Andrea, Vicente and Luisa. Good morning and thank you for the opportunity of making questions. I have two questions from my side. So the first one is about iSystems and FTTH.

How's the iSystems acquisition change your FTTH build economics and homes passed ambition and what incremental CapEx commitment should be expected. The second question is about the mobile base which contracted in this quarter while the market share fell. Is this a deliberate value over volume decision or has the competitive response, including the intermediate price offers now in the market, decided to cost you gross adds? Thank you.

Alberto Griselli, CEO Hi Luis. Good morning. So let me go quickly through the two questions. When it comes to iSystem, for us it's some kind of accelerator of our broadband strategy because now we control the network, the experience of the client and, to a better extent, the financial profile of broadband, and therefore once we have acquired and we own back our network, this is one of the growth vectors of our company going forward on our own network, besides the agreement that we have with Vital.

When it comes to the additional CapEx, basically we already discussed in previous quarters that we saw some kind of upside risks on our CapEx profile, meaning that we are optimizing our CapEx base through a number of different mechanisms, and therefore there shouldn't be any material impact of iSystem CapEx in our CapEx profile. So we are able to absorb it, basically. When it comes to the revenue growth and the mobile revenue growth, it is important to say that we look at the revenue growth in a portfolio way. 7%.

This slowdown was somewhat expected because if you look at our revenue evolution quarter by quarter, once we do the price-up, then it tends to slow down, and that was also accompanied by a slower or softer customer base dynamics in the first half. So the net additions result from a mixture of gross and churn has been softer in this first half versus last year and the second half last year, and that's the reason why we put together on the ground a number of evolutions of our value proposition, so the new offerings that we've launched, to give more dynamism to the customer base dynamics.

When you look at the customer base dynamics also remember that we executed a price-up in the first quarter, and therefore churn is a big pressure in the first quarter and second quarter, and so this also impacted our net addition dynamics. Was it clear, Luis? Luis Chagas, Analyst Yes, very clear. Thank you, Alberto.

OPERATOR Thank you for your question. The next question comes from Mr. Rogera Rajo from Bank of America. Rogera Rajo, Analyst at Bank of America Hi Alberto, Andrea, Vicente and Luisa, thanks a lot for the opportunity.

I have a couple here. 1% year over year. My question is, is there any plan to address growth in the core mobile line and reaccelerate its pace? If you could please share with us your thoughts on that.

And also the second question, a follow up from the first one. Could you please walk through the competitive environment, if there is any unusual discount from other players, and also if TIM is planning to increase control plans front-booking prices this year. Thank you so much. Alberto Griselli, CEO Building up on the previous answers to Luis, the main driver behind the slowdown is the dilution effect of the price-ups, plus the customer base dynamics.

And do we have a plan to give more dynamism to the mobile revenue growth? Yes. As a matter of fact, we restructured a number of our offerings just this quarter or at the end of the previous quarter. So there is a wide portfolio review, and the objective is to give a push or a boost to the customer base dynamics in a number of different ways.

So if you look, we have four main areas of interest. The first one is the Ultra Combo, which is the convergent project offering that we just launched. This would help primarily the broadband, but it also has a positive effect on the churn of our customer base. Then we launched the TIM Play portfolio.

It is an evolution of the way we go to market with the streaming products. It's a paid product and therefore this will support monetizing our own customer base. So it's an ARPU driver and, of course, this also supports the optimization of the costs related to the acquisition of this content. Then we have the third one, which is TIM Fit, which is a new Control plan that is payable via credit card.

This has a double objective. The first one is to feed our prepaid-to-Control migration with a lower credit risk. And the other one is to fill a gap that we have in our portfolio related to the, let's say, digital or BTL offering that our competitors already had. And the last one is a new go-to-market, which is the one related to the partnership with BigPay.

Basically, it's a go-to-market whereby we will have another leg or another platform to grow our customer base. These different value propositions have complementary business objectives, both in terms of ARPU growth, internal migrations on our customer base, and more attractiveness in the market itself. When you go to your second question, which is related to the competitive dynamics, I think that it's important to step back for a while and just recap what has been going on in these last quarters. Let me go directly to the end.

The end is that there is more predominance of what we call BTL offering or pricing. You know that in the market we have what we call ATL (above-the-line) offerings. It is our general postpaid, pure postpaid, and prepaid pricing — the front-book offering that you see in shops and in e-commerce. And then you have a number of offerings that we label below-the-line offerings that are generally used to migrate the customer from prepaid to Control.

One of our competitors, at the end of last year, made one of these offers available through an MVNO agreement, and so something that is, let's say, more contained became a bit more widespread. If you look at the way the market responded, we saw the other competitor launch this BTL offering they already had in a more widespread fashion, and that's the reason why we also had to adapt our portfolio. So we launched this TIM Fit proposition that basically complements this, as well as the partnership with BigPay. Now, it is also important to say that when you go to the market rationality, let's put it this way, you always have ups and downs.

In the past already we had moments where one of our competitors increased price and then afterwards decreased price. It's a sort of cycle, and so there is a good moment and there is a moment that is not that good. Nowadays the market is more competitive — or it looks more promotional — because these BTL offerings are more available and visible. That doesn't mean that after this period we don't go back to a better period.

When it comes to the front-book adjustment of our Control price, we certainly want to do it, but in order for us to do it, we have two competitors with a higher postpaid market share. So let's see what they do and then we will move accordingly. Luis Chagas, Analyst Okay, thanks a lot for the clarification. Very helpful.

OPERATOR Thank you. The next question comes from Mr. P. Morgan.

P. Morgan Hi, good morning. Thanks for taking my questions. The first question, I wanted to double click on these new plans that you launched on the hybrid.

What is the risk of cannibalization of the higher-end Control plans? I mean, how do you control for that? And the second question is an update on material, how you're seeing the prospects. What is the current view of TIM in going to broadband?

If you could expand a bit on that, that would be great. Alberto Griselli, CEO Thank you very much. Understood correctly your second question. Let me go to the first one.

So the risk of cannibalization of course exists, and generally we mitigate this risk of cannibalization with a number of strategies, including the remuneration of our commercial networks. For example, TIM Fit is a product that is available primarily for people that do not pass the credit score for Control plans. So they won't be able to get a loan to buy a Control plan because they don't have the credit profile. Therefore, they pay by credit card.

The credit profile passes and the customer is converted. So if you design the process and the remuneration in the right way, you mitigate the risk of cannibalization. That's the first question. And Marcelo, can you repeat your second one?

P. Morgan I was asking about merger and acquisitions — what's your appetite for M&A, how you're seeing this as a strategy to grow in broadband. Just wanted that refresher on your M&A plans and fixed strategy. Thank you.

Alberto Griselli, CEO Okay. Right. So when it comes to the fixed strategy, we already bought I-Systems back, and that was the first driver of faster growth in broadband. That is related to the fact that we control the network; we can manage profitability and commercial push in a more controlled way, besides the customer experience.

And that's one of the reasons why we launched this TIM Ultra Combo plan a couple of weeks ago. The results are quite positive so far, so we're happy with what we are seeing, and this is before we even go to the wider communication — we didn't launch any commercial advertising campaign yet. When it comes to M&A, I think that the answer is similar to the answer of the previous quarters. Basically, we profile and we analyze almost all targets.

We know pros and cons. We know the way that they contribute commercially or industrially to our strategy. We also think that, given the overall environment, the pricing aspect is also important. The outlook ahead in terms of inflation and interest rates can create good conditions for us going forward.

So we don't have any rush at this point in time because we just launched an upgrade of our strategy. After the acquisition of I-Systems, we think that we have significant and material opportunities in front of us related to what we are doing, and therefore that on this one, as well as on the B2B one, we can grow revenues at a faster pace, while clearly we work on putting more dynamism on the mobile side. OPERATOR Thank you very much. Thank you.

And the next question comes from Mr. Gustavo Farias from UBS. Gustavo Farias, Analyst at UBS Hi everyone. Thanks for taking my questions.

Two questions. The first one on the margin dynamics: we've seen a deceleration in client-generated revenue, but margins continue to expand.