Telecom Argentina SA (TEO) Q2 2025 Earnings Call Highlights: Strong Revenue Growth Amidst Challenges

Release Date: August 12, 2025

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 $2.8 billion, marking a 44% year-over-year increase in constant Argentine pesos. The company's EBITDA margin expanded by 30 basis points to 30% in the first half of 2025, with potential to reach 31.6% excluding severance charges. CapEx increased by 54% in real terms, prioritizing the expansion of fixed and mobile networks, including fiber to the home and 5G infrastructure. Telecom Argentina SA (NYSE:TEO) successfully issued and reopened a new international bond due in 2033, raising $1 billion to refinance acquisition loans. The company achieved a significant milestone in sustainability by having its decarbonization targets approved by the Science-Based Targets Initiative (SBTI).

Negative Points

Telecom Argentina SA (NYSE:TEO) recorded a consolidated net loss of almost 76 billion pesos in the first half of 2025, compared to a net income in the same period of 2024. The company faced exchange losses due to inflation being lower than peso devaluation, impacting financial results. The regulatory process regarding the acquisition of TMA is ongoing and may take 12 to 14 months to resolve. TMA's pay TV subscriber base decreased by 6% year over year, with a net loss of approximately 27,000 customers. Telecom Argentina SA (NYSE:TEO) reported a decline in its prepaid mobile subscriber base by 2.8% due to updated disconnection criteria.

Q & A Highlights

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Q: Can you provide more details on the financial impact of the TMA acquisition on Telecom Argentina's results? A: Gabriel, CFO: The acquisition of TMA has significantly contributed to our consolidated revenues, which totaled $2.8 billion for the first half of 2025. This represents a 44% year-over-year increase in constant Argentine pesos. The EBITDA margin expanded by 30 basis points to 30%, and would have been 31.6% excluding severance charges at TMA. The acquisition has also helped us maintain a strong credit profile with a net debt to EBITDA leverage ratio of 1.9 times.

Q: How is Telecom Argentina managing its debt following the acquisition of TMA? A: Gabriel, CFO: We have successfully issued and reopened a new international bond due in 2033 for $1 billion, which was used to refinance the acquisition loans almost in full. Our net debt stands at $3.3 billion, and we maintain a net debt to estimated pro forma EBITDA leverage ratio of 1.9 times. We continue to focus on liability management to extend the average life of our debt while maintaining cost efficiency.

Story Continues

Q: What are the key efficiency initiatives being implemented at TMA? A: Gabriel, CFO: TMA is progressing with several efficiency initiatives, including the elimination of management and brand fees, optimization of procurement processes, and reduction of video platform operating costs. The goal is to align TMA's EBITDA margin with Telecom's, which has already shown improvements with TMA's margin reaching above 26% in the first half of 2025.

Q: Can you elaborate on the regulatory process concerning the TMA acquisition? A: Luis, Head of Investor Relations: The regulatory process is ongoing, with a formal objection report issued by the CNDC. We have responded to this report and expressed willingness to assume commitments to address concerns. The review process may take 12 to 14 months, and both companies will continue to operate separately until a resolution is reached.

Q: How is Telecom Argentina advancing its sustainability strategy? A: Luis, Head of Investor Relations: Telecom Argentina has achieved approval of its near-term decarbonization targets by the Science-Based Targets Initiative (SBTI). This positions us as one of the few companies in Argentina with validated targets, enhancing our ESG strategy and access to sustainable financing. Our goals include achieving carbon neutrality by 2050 and increasing renewable energy consumption to 50% by 2030.

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

This article first appeared on GuruFocus.

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