América Móvil Q1 2025 Earnings Preview:subscriber Surge Meets Structural Challenges

América Móvil, Latin America’s telecommunications giant, is set to report Q1 2025 earnings on April 29, 2025, offering critical insights into its ability to navigate macroeconomic headwinds while capitalizing on subscriber growth. The quarter’s results will test whether the company’s postpaid strategy and broadband expansion can offset challenges like currency volatility and rising churn.

Revenue and EBITDA: A Seasonal Dip, but Trends Matter

Analysts project Q1 2025 revenue of 203,298 million MXN, a slight decline from Q4 2024’s 236,940 million MXN, reflecting typical seasonality. EBITDA is expected to hold steady at 80,584 million MXN, down slightly from Q4’s 90,941 million MXN but in line with historical averages.

The critical question is whether América Móvil can stabilize margins amid rising costs. In Q4 2024, net income fell 47.5% due to currency depreciation (e.g., the Brazilian real’s 13.7% drop) and higher financing costs. A comparison will reveal whether cost controls or revenue diversification are mitigating these pressures.

Subscriber Growth: A Latin American Dominance

The earnings call will hinge on subscriber metrics, where América Móvil has historically excelled. Preliminary data suggests:

• 6 million net wireless additions in Q1 2025, bringing total subscribers to 231 million. This outpaces Q1 2010 growth by 38–52%, driven by:
• Mexico: 1.5 million net adds, including 271,000 postpaid customers.
• Brazil: 1.8 million net adds, with 687,000 postpaid additions (up 100% YoY).
• Tracfone (U.S.): 780,000 net adds, boosting ARPU to $14 from $11 in 2010.

The postpaid focus is strategic: These customers generate 2–3x more revenue than prepaid users. Brazil’s postpaid base now accounts for 24.8% of its total subscribers, a sign of progress in shifting toward higher-value customers.

Risks Lurking in the Prepaid Segment

While postpaid growth is promising, prepaid churn is rising in key markets:
- Brazil: Churn increased to 3.3% (from 2.8% in 2010).
- Argentina/Paraguay/Uruguay: Churn rose to 2.7% (from 1.9%).

This reflects pricing pressures and competition. In Brazil, mobile ARPU fell 10% to $11.30 as the company prioritized market share over margins. The trade-off is clear: subscriber growth vs. profitability.

Broadband: A Quiet Growth Engine

América Móvil’s broadband business, often overlooked, added 320,000 accesses in 2024, ending the year with 35 million accesses. This momentum could accelerate in Q1 2025, as 5G rollouts in Mexico and Brazil boost data demand. A would highlight this underappreciated asset.

Strategic Crossroads: Buybacks or Investments?

With $71 billion in cash and short-term investments (as of March 2024), América Móvil has the liquidity to pursue either shareholder returns or infrastructure projects. Management may emphasize:
- 5G spectrum acquisitions: Despite Mexico’s delayed IFT-12 auction, the company must secure spectrum to compete.
- Debt reduction: A could show if leverage is stabilizing.

Conclusion: A Story of Resilience, but Not Without Hurdles

América Móvil’s Q1 2025 results will likely confirm its dominance in Latin American telecom, with subscriber growth outpacing regional competitors. The 6 million net wireless additions and postpaid gains in Brazil and Mexico underscore operational excellence. However, challenges like currency volatility, rising prepaid churn, and inflation in Argentina threaten margins.

Investors should focus on two key metrics:
1. EBITDA margin stability: A 39.6% margin (Q1 2024) must hold amid cost pressures.
2. Postpaid revenue contribution: If postpaid ARPU rises while prepaid churn stabilizes, América Móvil could justify its valuation.

The stock’s performance since the last earnings call (a 0.54% rise) suggests markets are cautiously optimistic. Yet, with 35 million broadband accesses and 5G investments, the company is positioning itself for long-term growth. For income-focused investors, the 3.2% dividend yield remains attractive—if earnings stability is maintained.

In short, América Móvil’s Q1 report is a litmus test for its ability to balance growth, profitability, and resilience in a volatile region. The data will reveal whether its strategies are paying off—or if structural risks demand a course correction.