Megacable Holdings

Mr. Raymundo Fernandez, Deputy CEO, and Luis Zetter, CFO. Let me remind you that the information discussed and today's earnings call may include forward-looking statements on the company's future financial performance and prospects, which are subject to risk and uncertainties. Megacable undertakes no obligation to update or revise any forward-looking statement. I will turn on the call to Mr. Enrique Yamuni. Sir, you may begin.

Good morning, everyone, and thank you for joining us today. I am pleased to present my accolades result for the second quarter of this year, a period in which we continue to grow our brand and enhance characteristics of our company in recent years, growing even faster than the market, despite the challenging competitive and macroeconomic environment. Our net additions came within the range we have communicated and sure remain stable, which speaks of the quality of our platform and the discipline behind our growth. Aligned with this approach, our continuous subscriber growth pace led to surpass the 6 million internet users mark. And as in previous periods, this trend has been accompanied by growth in revenue, thus providing that our subscribers are actively contributing to value creations. The company has entered a clearly defined strategy phase. Over the past four years, we have expanded and modernized our network, taking our footprint beyond 19 million homes past in transforming megacabinet into a predominantly fiber-based operator. Most of that expansion is now behind us. Our broader priority is to capture more value from the investments already made, increase penetration, monetize the network, and adapt execution to the specific conditions of each market. And regarding our most recent expansion, it is worth noting that during the first half of the year, we have added more than half a million new homes passed, but we have also upgraded more than 600,000 homes from HFC to FTTH for a total of more than 1.1 million new fiber homes built in the first six months of the year. Our growth strategy goes beyond consistently expanding our homes past footprint. It also focuses on migrating subscribers to the latest technology and providing them with a superior service experience. As a result, 88% of our subscribers are now served through GPON technology, substantially strengthening our ability to deliver high-quality services and higher bandwidth capabilities. And most importantly, we have shifted all of this while maintaining optical capex level. We continue to both convert and build our network and still maintain investment figures in line with the arrangements we have shared clear evidence of there, which is easy. with which we are now deploying our capital. Within the enterprise segment, we continue restructuring our corporate business in order to address a highly competitive market where integrating connectivity with services and solutions have become essential. During this period, we began to see signs of stabilizations. Financially, revenue on EBITDA continued to grow and net income remained strong among our best quarterly results since the second quarter of 2023. Our margin held stable rather than widening due to the one-time impact of our Bluefin promotions of last year. This effect is seasonal and distinct from the structural cost actions I described earlier. Once we move past it, we expect margins to resume steady growth. Our balance sheet remains a source of strength, as reflected in Fisheries Ratings' recent reaffirmation of our national scale AAA rating with a stable outlook. It is important to highlight that despite the dividend paid this quarter, which required no additional debt, our net-to-debt-to-ebit-debt ratio remained within the 1.1 to 1.3 times range. This means we do not need to pursue further deliberation as an objective. Cash generating above that level can support shareholders' distributions for strategic opportunities that meet our operating and return criteria. Capital allocation remains disciplined. Investment in the first half follows the seasonality we have seen in prior years, remains consistent with our annual plan. and Mark, the lowest first half capex level since the expansion project was announced. As we move beyond the peak of the expansion cycle, every peso invested must support network quality, penetration, productivity or an attractive return. Regarding artificial intelligence, we are focused on improving operational efficiencies. Our current objective is to enhance processes and functions through their digitalization. In addition, we are introducing this technology into the most critical areas of the business, aiming to achieve cost and expense efficiencies. The structure responsible for the implementation of AI has already been established, and we expect to share the results with you soon. In the meantime, we continue to pursue other opportunities to improve efficiencies, including workforce reduction across corporate back office, field sales, and operational areas, mainly due to the automation and digitalization of current processes. As a result, we have reduced headcounts by more than 1.3 thousand positions at the core end compared to the year end of 26. In summary, Megacable has completed a major expansion cycle and is moving into a face center on execution and returns. Our priorities are clear. Grow broadband with discipline, protect the consumer experience, monetize the footprints, improve efficiencies into the organization, and preserve the financial flexibility that has long distinguished the company. The resilience of this company lies not only in the homes we have built and our steady subscriber growth, but in our proven ability to efficiently migrate and acquire subscribers already on Fiverr. With that, let me turn the call over to Raymundo for the operational review.

Thanks Enrique and good morning everyone. Building on Enrique's remarks, the second quarter was characterized by a steady and disciplined operating growth. The company emphasizes profitable and sustainable improvement, ensuring that subscriber additions are accompanied by a strong monetization performance. While our commercial execution continues to support subscriber growth, prioritizing quality additions, the operating focus is increasingly shifting from adding scale to extracting more value from the scale already in place, highlighting efficiency and operational productivity. Let me begin with broadband. We added 112,000 internet subscribers sequentially and surpassed 6 million subscribers at quarter end. These results remain within the 100,000 to 150,000 quarterly range we have communicated and was above the first quarter. On a year-over-year basis, the internet base increased 8.5%, equivalent to 474,000 net additions over the last 12 months. That growth is supported by a superior network. At quarter end, our footprint reached 19.8 million home passes. of 9% year-over-year across approximately 111,000 kilometers. More importantly, 88% of our subscriber base has already been migrated to a full cyber service compared with 80% a year ago. Our increasingly fiber-based platform allows us to offer higher speeds, expand capacity, and improve reliability, strengthen both customer experience and the competitive position of our service, while giving us a stronger infrastructure for which to pursue operating efficiency. In content, the mix continues to shift from traditional video to a broader digital proposition. Traditional video closed at 3.8 million subscribers while uses of our streaming applications reached 2.4 million. As a result, unique video subscribers totaled roughly 4 million subscribers at QuadrantM. Our objective is to serve different viewing preferences through a combination of linear channels, applications, and other digital formats. Our MVNO operations also continue to expand. Mobile lines increased 26% year-over-year to 781,000 with 40,000 sequential net additions. Mobile complements our fixed service and extends the customer relationship beyond the home, adding a converged dimension to our value proposition. Sean, remain at the same level compared with the first quarter and increase on an annual comparison to reach 2.0% for broadband. Maintaining these levels in a competitive market indicates that service quality and their overall value proposition remains sound. ARPU, measure over internet subscribers on the methodology introduced at year end 2025. was $430.8 and declined on a sequential basis. This decrease is primarily attributable to the temporary effect of commercial promotions implemented last year. Nevertheless, this commercial strategy contributed to straining customer acquisition and rotation, driving subscriber-based growth and long-term value creation. We continue to manage our pension together, balancing monetization, retention and sustainable subscriber growth. The corporate telecom segment showed the greatest improvement in this quarter. After several quarters of contraction, revenue increased 5% year-over-year in the quarter and 0.1% in the first half. Looking ahead to the second half of the year, we remain optimistic. Our diversified portfolio and our dedicated team focus on delivering value positionals to build on this momentum. To conclude, we are successfully transitioning from expansion to a stage of consolidation marked by the pursuit of efficiency and higher productivity, including process automation and digitalization, in which AI will play a very relevant role. Overall, the operating platform remains strong. Subscriber growth continues within the range we have communicated. The fiber transition is well advanced, shorn is stable, and corporate has returned to growth. Our priorities for the remainder of the year are to improve penetration, deepen the customer relationship, capture more value from the existing footprint, and advance the efficiency initiatives now underway. Thank you for your attention. I will now turn the call over to Luis for the financial review.