TIM S.A.

Good morning, ladies and gentlemen. Welcome to Team S.A. 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 Team S.A. remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given.

Welcome to Tim's second quarter 2026 results presentation. Following today's presentation, Alberto Griselli, CEO, Andrea Viegas, 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.

Hello everyone. The second quarter was marked by solid execution. We deliver 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 continues 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 revenues increased around 6%, reflecting broader contributions across the business. This performance was accompanied by further profitability gains, a bid that grew around 7% in the first half, while a bid 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 platform, with mobile remaining, of course, as the foundation of our performance, while ultra-fibra and B2B playing an increasingly more important role in our business evolution. In mobile, results were supported by continued post-paid 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 team-controlled 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 Teamplay, 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 maintains positive momentum, with customer expansion and consistent revenue growth, strengthening its relevance within our portfolio. To propel this further, we just launched Team Ultracombo, our first truly convergent offer. It combines fiber, mobile, and content to strengthen our value proposition in selected markets, enabling teams 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 depth 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 team 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.

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

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 iSEAS and then FTTH. How's the iSEAS acquisition change your FTTH built economics and home space 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 grass heads? Thank you.

Hi, Luis. Good morning. So let me go quickly through the two questions. When it comes to iSystem, iSystem for us, it's... and 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 vector 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 Thank you very much. It is important to say that we look at the revenue growth in a portfolio way. So we've got two business lines growing double digit, and we have mobile growing at single digit at around 4.7%. 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-based dynamics in the first half. So the net additions, the results of 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 evolution of our value proposition, so the new offerings that we've been launched to give more dynamisms to the customer-based dynamics. When you look at the customer-based 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 additional dynamics. Was it clear, Luis?

Yes, very clear. Thank you, Alberto.

Thank you for your question. The next question comes from Mr. Rogério Araújo from Bank of America.

Hi, Alberto, Andrea, Vicente and Luisa. Thanks a lot for the opportunity. I have a couple here. The first one on revenue growth, excluding M&A, revenue grew just slightly below inflation, mainly as the core client-generated business is growing at 3.1% year-over-year. My question is, is there any plan to address growth in the core mobile line and re-accelerate its space? 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 TIN is planning to increase control plans Thank you so much.

Revenue growth has slowed down, building up on the previous answers to Luis. So the main driver behind the slowdown is the dilution effect of the price ups plus the customer-based dynamics. And do we have plan to give more dynamic seems to the mobile revenue growth? Yes. As a matter of fact, we restructure 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-based dynamics in a number of different ways. So if you look, we have four main areas of interest. So the first one is the ultra combo, which is the convergent offering that we just launched. This would help primarily the broadband. but this also has a positive effect on the channel of our customer base. Then we launched the team play portfolio that is an evolution of the way we go to market with the streaming products. It's a paid product and therefore this will support monetize our own customer base so it's an output driver and of course this also support the optimization of the cost related to the acquisition of this content. Then we have the third one, which is Team Fit, which is a new control plan that is payable via credit card. This is 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 Thank you very much. Thank you very much. and many more complementary business objectives, both in terms of ARPU growth, internal migration, so on our customer base, and more attractiveness on the market itself. When you go to your second question, which is related to the competitive dynamics, so 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. So the end is that there is more predominancy of what we call a BTL offering or pricing. So you know that in the market we have what we name, what we call ATL, above the line offering. It is our general postpaid, pure postpaid, and prepaid pricing. The front book offering that you see in shops, in the e-commerce. And then you have a number of offering that we label like below the line offering that are generally used to migrate the customer from prepaid to control. So one of our competitor at the end of last year made one of these offer available through an MVNO agreement. And so something that is, let's say, more contained became a bit more widespread. And if you look at the way the market responded, then we saw the other competitor that launched this BTL offering they'd already had in a more widespread fashion. And that's the reason why we also had to adopt our portfolio. And so we launched this team feed proposition that basically complement this one as well the partnership with P-Pay. Now, it is also important to say that when you go to the market rationality, let's put it this way, you always have up and downs. And in the past already, we had moments where one of our competitors increased price and then afterwards decreased price. And so it's a sort of cycle. So there is a good moment and there is a moment that is not that good. Nowadays the market is more competitive because more competitive or it looks more promotional because these BTL offerings are more available and visible. And that doesn't mean that then after this period we 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 post-paid market share, so let's see what they do, and then we will move accordingly.

Okay, thanks a lot for the clarifications, very helpful.

Thank you.

And the next questions come from Mr. Marcelo Santos from JP 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 M&A. Are you seeing the prospects? What is the current view of team in going to broadband? Like if you could expand a bit on that, that would be great. Thank you very much.

If I understood correctly your second question, let me go to the first one. So the risk of cannibalization, it of course exists and generally we mitigate this risk of cannibalization with a number of strategy including the remuneration of our commercial networks. And so when you look, for example, to a Team Fit, Team 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 along 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 in terms of the prospect of broadband?

M&A, I was asking about mergers and acquisitions, like what's your appetite for M&A, how you see this as a strategy to grow in broadband. Just wanted a refresher on your M&A plans and fixed strategy. Thank you.

Okay, right. So when it comes to the fixed strategy, so we already bought iSystem 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 team ultra combo plan. We launched 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 communications, so we didn't launch any commercial advertising campaign yet. When it comes to the M&A, I think that the answer is similar to the answer of the previous quarters. So basically we profile and we analyze almost all targets. We know its 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 the interest rate can create good conditions for us going forward. So we don't have any rush at this point in time because we just We think that we got significant and material opportunities in front of us related to what we are doing and therefore that on this one, as well on the B2B one, we can grow revenues at a faster pace while clearly we work on putting more dynamisms on the mobile side.

Perfect. Thank you very much.

Thank you. And the next question comes from Mr. Gustavo Farias from UBS.

Hi, everyone. Thanks for taking my questions. Two questions. The first one on the margin dynamics. So we've seen a deceleration in client-generated revenue, but margins continue to expand So if you could provide color on the margins of the part of revenue that is not client generated and if it is what currently allows the consolidated margin to hold up or this expansion is explained by other drivers. And my second question is on capital allocation. So how do you balance the distribution to shareholders Thank you. Okay, let me go on the margin dynamics. So I think that the margin of...

You have a different business line with different margins. So broadband has a high margin, B2B has a lower margin, mobile has a higher margin. We have quite a wide set of initiatives to increase the productivity of our operations and that it's the opportunity lies ahead and the opportunity that is underpinning our margin expansion going forward. If you look at the cost performance, you will see that there are some costs that are increasing, but that is increasing a bit while we are comfortable that we can manage this. There are a number of costs that are going down. You will see HR and G&A increasing a bit because we are consolidating V8 and iSystem. But at the end of the day, we have a wide set of initiatives to keep on increasing marginality going forward. And that is underpinning the expansion that we are seeing and we will keep seeing. When it comes to the capital allocation, and now I will hand over the word to Andrea, the acquisition of a system, as I was saying, Basically, I see them as a positive impact on OPEX and potentially a negative impact on CAPEX. But when it comes to the CAPEX, we share with you guys that we have been optimizing our CAPEX profile in terms of we acquire especially network systems, the swap and all these sort of things. and therefore we're able to absorb this within our CapEx profile, maintaining the plan that we have in place for mobile.

Hi, Gustavo. Related to the capital allocation, the way we think about capital allocation didn't change with the acquisition of ICE systems. As Alberto mentioned, we have some opportunity with ICE system They have an important asset that we have room to monetize, increase take-up. So we are not considering increase our CAPEX, the CAPEX we already declare in our guidance, because of our systems. What we will do is monetize the assets. So our capital allocation will We continue with the same goal to invest in attractive returns and maximize the shareholder's remuneration. And we consider that we have enough cash for this, even with the increase of debt of our system that we will work on. We just announced an increase of capital of the ICE system exactly to deal with this debt. But we have enough cash to support our dividends and the capex of the ICE system.

Very clear. Thank you very much.

Thank you for your question. The next question comes from Mr. Gustavo Miele from Goldman Sachs.

Good morning, Alberto, Andrea, Vicente, Luisa. Thanks for the opportunity. I also have two questions. The first one is related to bad debt expenses. We once again saw a small volatility in this line. You mentioned the release that this has some relation with a non-recurring effect of like a specific client in the B2B market. Just want to make sure whether if we were to adjust for this non-recurring event, if you would still see some Thank you very much. Thank you very much.

Sorry, let me go with the second one and then I will leave the bed there to Andrea. So when it comes to B2B, we are not seeing so far a slowdown in our activity. I would say, Gustavo, that one of the reasons is also that You see, we disclosed in this report that our B2B revenues is 6.6% of our overall revenues. So basically we are a small player and an attacker in this space. Through, let's say, a very specific business model, that is related to the IoT solution and services and with V8, the digital and artificial intelligence solution. So we didn't see or we are not experiencing a slowdown in the verticals where we operate. As a matter of fact, we have the best second quarter in the IoT solutions in our history. And when you look at V8 prospects, and Pipeline is quite rich, so we are not seeing a deceleration yet. Now, of course, there is a number of things that are happening in Brazil and outside of Brazil. So the impact of the macro environment is a sort of volatile, but we don't see, we are not seeing a slowdown in the B2B line. For the bad data, Andrea.

Hi, Gustavo. As I mentioned in the first quarter, we have this situation with a B2B customer partnership that also impacts the second quarter. And this is a one-off situation. Of course, we have expansion in our customer base, in our post-paid customer base, that came with a slight increase in the bad debt. But we consider that we are achieving a plateau. So we have this increase from the past two quarters, the first and the second quarter. But we consider that we have achieved a plateau and we expect a gradual stabilization moving forward. We are working hard to mitigate this impact, besides the one-off, of course. working with our credit score models and customer segmentation. And we are doing collection initiatives now with EI that we expect to improve this line in the coming future.

That's very clear. Thanks, Andrea. Thanks, Alberto.

Thank you for your question. The next question comes from Mrs. Maria Clara from Itaú BBA.

Hi everyone, thanks for this opportunity. So my first question comes on the B2B. After the two first months of the incorporation of V8, can you please provide us how you feel about the asset? What is your B2B strategy going forward? What should be the low-hanging fruit in terms of revenue growth ahead? And the second question comes on top of profitability. Andrea, you just mentioned about AI. So could this be a lever in terms of operating efficiencies, especially when it comes to call centers expenses already in the short term? Thank you.

So Maria Clara, let me go with the B2B. The incorporation, so we are already working very closely with the V8 guys, and the long-hanging fruits are basically the cross and upselling of our strategic verticals with V8 product portfolio. So if you look at our strategy, basically on B2B, especially in IoT, it's where V8... We selected some verticals. These verticals are the agribusiness, the logistic business, the utility business, and the mining business. And so we have important core customers that we've been serving for a while now and successfully. So the idea is to identify the opportunities of cross-up selling our sort of coverage as a service portfolio with the V8 digital and AI services. A number of discussions are already in place. The cycles for selling these more complex projects, we know that they are not like short because they are business critical, they got business impact, but the low-hanging fruit is basically it's upselling our strategic customers with a wider set of portfolio. When it comes to profitability, I will leave it to Andrea to address this.

Hi, Maria Clara. Related to EI, we are continuing work with EI. We mentioned several times we work in several fronts, network, of course, customer care. Now I just mentioned the collection and we have in legal areas We consider that it's not a structural change, but we have several fronts where we work and increase the productivity, but we believe this is a combination. I will put some additional color, Mara Clara, on

If you look at the last page of our presentation today, you will see on the right a number of use case categories that we are working on. And some of them are already in the implementation and material impact. And I would say that network is one of them and IT is another one of them. What does it mean? That the impact is already there, it's material, and by the way, it's not completed. So we implemented the first wave where basically we achieved some kind of reduction in increasing productivity and increasing the quality of output. And there are others where basically we still need to get to the material impact, but we are getting there. When it comes to the call center, for example, that you mentioned, a number of activities are already fully digitalized. And so now we are working on the complex one. One of the complex one is, for example, the guest to the human operators, and they are related to the questions or complaints or explication related to the bills. Since there is a trade-off between the revenue that you trade off versus the customer satisfaction, this is a difficult one that is still managed and handled by the human attendees. And so now we are working on the complex part, and the idea is clearly to get to the point whereby the system can handle this 100%, almost 100%, We are doing good progress, so the first wave has been done on this part and now we're getting to the complex one. It takes some time, but we have quite a wide set of portfolio of initiatives that will support us to increase productivity for a number of years ahead.

Very clear, thank you.

Thank you. Our next question comes from Fanny Kanumuri from HSBC.

Hi, thank you for taking my questions. The first one is on Tim Ultracombo. What percentage of your mobile subscriber base is covered by Tim Ultracombo? And do you have plans to expand it? And if you have plans, like how do you plan to expand the coverage? Is it by your M&A strategy or do you have intentions of partnering with other fixed broadband operators to offer a converged product? Thank you.

Fanny, let me try to rephrase it just to make sure that I understood it correctly. Did you ask what our plan in terms of an expansion of Team Ultracombo?

Yes, so basically you have your fiber base is pretty low compared to other operators, some other big operators. So what percentage of your mobile subscriber base is currently covered by Team Ultra Combo? And then do you have plans to expand it? And then do you have plans to expand it by either going for a different M&A and fixed or doing product collaboration with other fixed broadband operators?

Okay, so finally, let me go to the first one and then to the plan to expand it. So on the first one, the product itself is already available nationwide. And so we basically operate via a former system that is our network and our partner, Vital, in the main capitals of Brazil. The Ultra Combo has been launched across the board. So it's already available on the entire footprint. And clearly the business model is a bit different and this reflects or may reflect in some way in the commercial value proposition which is the price tag that we're putting in one region versus the others, remembering that The competition in broadband is regional, so we can adapt our offering regionally. But basically, the product is available nationwide, and the only things that may change is the commercial terms in one region versus the other region. And therefore, the footprint is already our footprint. The idea is to leverage our own customer base and our brand to accelerate broadband take-up. This is basically what we are going to see in the coming quarters. And with a positive fallback also on a longer term on mobile services. But this will appear over time. Then you have, and this is the organic, let's put it this way, this point is the organic plan. And then there is other organic plan where we can add to our portfolio additional technologies. So we are looking into that also. And then there is, and that would be organic also. And then there is another plan that is related to potential M&A where basically we buy somebody with their fiber and complement our footprint also through an acquisition. This plan, it's a plan that whereby I commented before, we profile all the players, we know pros and cons, we know what they add to our strategy and where clearly. and we're just waiting for the right condition to materialize and within the better condition can materialize going forward.

Great, thank you. Maybe one quick follow-up. In the comments you said that price increases have led to some increased churn in 1Q and 2Q. So as you look through 2Q into different months, are you seeing better churn trends in June compared to April?

So if I understood correctly, finally you're asking if I commented that we saw some kind of churn increase in quarter one and quarter two. The answer is yes. This is normal in generally when we do price up. That would be back book price up. What we are seeing The content was a bit more challenging because there was a bit more of ATL offering around, and we didn't move like last year with front book prices in the first and second quarter. Having said that, when you look at our churn level, it goes up and then goes down. If you ask if June is better than April in terms of churn level, the answer is yes. June is better than April.

Okay, yeah. Thank you. Thanks.

Thank you. And our next question comes from Mr. Daniel Federle from Bradesco BBI.

Good morning, everyone. Thank you very much for taking my questions. The first one related to the platform revenue that more than doubled in the second quarter. I would like to hear if you expect any kind of volatility in this line or we should see this as a trend going forward, very high growth going forward. Second question related to international roaming expenses that seem to be very volatile, making much more difficult to read if the margin was good or not, if there's any mismatch between roaming revenue and costs. So any caller here would be welcome. Thank you.

Let me address the first one and then I will leave the second one with Andrea. So we have in our revenue profile different types of revenue. So we got the mobile core revenues, then we got the platform revenues, then we got the advertising revenues, then we got the B2B revenues. And some of them are slightly more volatile versus the others. And therefore, these are part of our strategy now for being part of our strategy many, many years. And therefore, once we close one deal with mobile advertisement can be big or can be small. But overall, if you look in the year end results, the numbers have been growing year after year. When you look at the platform strategy, we got some partnerships that work better, some that don't work Thank you very much. Thank you very much. Like the ones that have been closing in the last quarter, like CNH and CPFL, you see clearly a spike. But if you take this year versus last year, it's growing. So some of the revenues, even because of their size, they are more volatile. But the general trend is positive and is part of our revenue portfolio growth, whereby until some years ago, we just had mobile, and now we've got mobile, we've got broadband. We got B2B, and we got platform strategy, and all contributed to a better resilience of our revenue, of our top line.

Hi, Daniel. Related to the roaming costs, we have disagreements with the big carriers. and we close amount for a year. So they send us the data and we send for them the data. So this is the difference between the revenue and the cost. So the revenue and the cost is not combined of each quarter. When you see the full year, you see a combination between revenue and cost, but each quarter They are, it's not aligned. So the first quarter we have a higher, the peak of our costs of inter-connectional roaming was one of the impacts that we had in our optics. In the second quarter, as we mentioned in the previous quarter, we was expecting a decrease and we expected this for the rest of the year. But the revenue will occur during the year. So, only when you see the full year, you can see the combination between the revenue and the cost. I don't know if I addressed your question.

Yes, yes. Just one follow-up. So, the roaming costs, the bottom happens in the second quarter. Is that correct?

The revenue occurs during the quarters. And the costs? The cost in this year, the major part occurring in the first quarter. So in the next quarters, we will see not a peak like we saw in the first quarter. If you remember, if you see our results in the first quarter, we have a very high interconnection roaming. And this quarter is normalized.

To make it simple, Daniel, generally the cost tends to be higher in the first half and the revenues tend to be higher in the second half. Okay, thank you very much. It's every year, every year is the same. Okay, thank you.

Thank you for your question. If you have another question, please press the raise hand button. Ladies and gentlemen, without any more questions, I'm returning to Mr. Alberto Griselli for his final remarks. Please, Mr. Alberto, you may proceed.

So, thank you all for joining today's video call. The market continues to evolve and we have been driving our strategy to capture the opportunities in broadband, B2B and obviously mobile. Our team is working relentlessly, so I want to thank them for the effort and results. And I look forward to meeting you in the coming days. Ciao.

You can disconnect from now on. Thank you and once again.