Grupo Televisa Q2 Earnings Call Highlights

Key Points

• Televisa’s telecom turnaround continued to gain traction in Q2 2026, with internet subscribers rising for a fifth straight quarter and churn holding below 2% for the same period. Operating segment income for Cable and Sky increased 5% as margins expanded to 41.8%, helped by lower expenses and fiber upgrades.
• The company is accelerating its fiber-to-the-home rollout, having upgraded more than 1.5 million homes in the quarter and reaching about 60% fiber coverage of its footprint. Management said it plans to upgrade another 8 million homes over the next year and aims for a fully fiber-based network by mid-2027.
• TelevisaUnivision got a major boost from World Cup-related activity in Mexico, with revenue up 10% overall and Mexico revenue surging 53%. World Cup advertising, subscriptions and sublicensing drove strong results, while the U.S. business saw weaker advertising and an 11% revenue decline.

Grupo Televisa NYSE: TV said its telecom operations continued to improve in the second quarter of 2026, with lower churn, expanding profitability and ongoing fiber-network upgrades, while TelevisaUnivision benefited from World Cup-related momentum in Mexico.

Co-Chief Executive Officer Alfonso de Angoitia said the company was marking three years since Francisco Valim joined to lead the telecom turnaround. During that period, Televisa has focused on attracting and retaining higher-value cable customers, reduced operating costs and accelerated its transition to fiber-to-the-home technology.

De Angoitia said the company’s internet subscriber base has grown sequentially for five consecutive quarters, while churn remained below 2% for the same period. Second-quarter churn was the lowest in 10 quarters, he said.

Telecom revenue and margins improve

For the first half of 2026, residential and enterprise revenue totaled MXN 23.7 billion, up 2.6% from a year earlier, according to de Angoitia. He said the company believes that growth pace is sustainable.

Valim said Cable and Sky segment revenue in the second quarter was MXN 14.3 billion, down 3% year over year, while operating segment income rose 5% to MXN 6 billion. The operating segment income margin expanded 310 basis points from a year earlier to 41.8%, which Valim described as the segment’s best profitability level in three years.

The improvement was driven by an 8% decline in operating expenses, including ongoing efficiencies and synergies from the integration of Izzi and Sky. De Angoitia said annual telecom operating expenses have declined 18.4% over the past three years to MXN 34.5 billion, despite cumulative inflation of 14.7%.

Headcount has fallen to approximately 25,000 employees from about 34,000 in mid-2023, helping reduce labor costs by nearly 8% despite minimum-wage increases exceeding 50% over the period, he said. Programming costs and expenses were also reduced by around 20%.

• Residential net revenue rose 1.8% year over year to MXN 1.7 billion, marking the strongest quarterly residential revenue-growth performance in two and a half years, Valim said.
• Enterprise net revenue increased 0.8% to MXN 1 billion, following stronger growth in the first quarter.
• Operating cash flow for Cable and Sky, calculated as revenue from operations minus capital expenditures, was MXN 2.4 billion, or 16.6% of sales.

Fiber upgrade advances as broadband additions slow

Televisa ended June with a network covering 20 million homes after passing roughly 12,000 additional homes in the quarter. The company upgraded more than 1.5 million homes to fiber-to-the-home technology during the quarter, bringing fiber coverage to about 60% of its footprint.

The company plans to upgrade another 8 million homes over the next 12 months and expects to have a fully fiber-based network by the end of the second quarter of 2027. De Angoitia said the company had only about 22.5% of homes passed by fiber at the end of 2024 and has since reached 12 million homes with fiber.

Broadband net additions were 9,400 in the second quarter, which Valim attributed to an April price increase, more aggressive competitor promotions and an earlier-than-expected rainy season. However, the company added more than 80,000 broadband subscribers over the past four quarters, which Valim said was in line with internal annual goals.

Valim said the company is intentionally prioritizing customer value and retention rather than competing aggressively for lower-priced customers, which can bring higher churn and lower returns. He said customers who have remained with the company for more than 12 months have materially lower churn than newer subscribers.

Video subscribers declined by about 31,000 during the quarter, compared with average disconnects of approximately 38,000 in the prior four quarters. Mobile net additions were 72,000, below the 92,000 average of the preceding four quarters. Valim said new registration requirements for Mexican mobile users may be causing a temporary marketwide slowdown, though Televisa’s new mobile customers are postpaid and are automatically registered.

Sky lost 279,000 revenue-generating units, primarily prepaid subscribers who did not recharge their service. Sky revenue fell 20.3% year over year to MXN 2.5 billion, although the decline moderated from a 24.6% contraction in the first quarter. Valim said disconnections may have improved partly because of World Cup programming.

World Cup lifts TelevisaUnivision in Mexico

De Angoitia said TelevisaUnivision generated second-quarter revenue of $1.3 billion, up 10% year over year, including the impact of Mexican peso appreciation. Mexico revenue rose 53% to $605 million, supported by World Cup-related advertising, subscriptions and licensing activity.

Mexico advertising revenue increased 23% as TelevisaUnivision provided 39 consecutive days of World Cup coverage across linear and direct-to-consumer platforms. The company said it reached approximately 415 million viewers across 79 matches.

Consolidated subscription and licensing revenue increased 40%, including about $90 million in World Cup sublicensing revenue in Latin America. ViX, which was the exclusive streaming destination for the tournament, recorded its highest quarterly subscriber additions and record subscription revenue, according to de Angoitia. The company said it sold around 1 million add-ons for its World Cup offering in Mexico.

In the U.S., revenue fell 11% to $722 million, reflecting expected advertising weakness and the absence of World Cup broadcasts. U.S. advertising revenue declined 29%. Total operating expenses rose 16%, or 11% excluding peso appreciation, due largely to World Cup-related sports costs in Mexico and Latin America. Adjusted EBITDA declined 3% to $388 million.

TelevisaUnivision ended the quarter with MXN 766 million in cash and about MXN 770 million in available credit-facility capacity. Net debt to EBITDA improved to 5.5 times from 5.7 times in the prior quarter.

Management discusses capital allocation and technology

During the question-and-answer session, de Angoitia said Televisa continues to assess opportunities to consolidate Mexico’s telecom market but emphasized that any transaction would depend on the specific asset, potential partners, control structure, cash-flow profile and deleveraging prospects.

Chief Financial Officer Carlos Phillips said the company’s leverage ratio has fallen to 1.6 times EBITDA from 2.4 times at the end of the second quarter of 2023, supported by stronger cash generation. Over the past three years, Televisa generated MXN 16.4 billion in cumulative free cash flow, de Angoitia said.

Management also said it sees Starlink as a complementary partner in business-to-business and consumer offerings in areas where Televisa does not have fiber coverage. Valim said the company does not view Starlink as a near-term mass-market threat given current pricing and average-revenue conditions.

On artificial intelligence, de Angoitia said TelevisaUnivision is using the technology in production, set design, visual effects, music and dubbing. Valim said Izzi has embedded AI in processes including sales and collections, using internal infrastructure to manage costs and limit potential data leakage.

About Grupo Televisa (NYSE:TV)

Grupo Televisa, SAB. is a leading Mexican multimedia conglomerate headquartered in Mexico City, specializing in the creation, production and distribution of Spanish-language content. The company operates free-to-air television networks, subscription pay-TV services, broadband and telephony under its cable arm, and a range of digital streaming platforms. Grupo Televisa's portfolio spans news, sports, telenovelas, reality programming and original series, positioning it as one of the largest content producers in the Spanish-speaking world.

Televisa's broadcast division includes flagship channels such as Las Estrellas and Canal 5, while its pay-TV segment features operations under brands like Sky México and Izzi Telecom.

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