Grupo Televisa Q3 Earnings Call Highlights

Key Points

• Televisa and Fintech Holdings agreed to acquire AT&T Mexico for $2 billion through a 50/50 joint venture, with closing expected in the first quarter of 2027 pending regulatory approval. The deal would expand the combined platform to more than 24 million wireless, 5.7 million broadband and 6.3 million video subscribers, while enabling fixed-mobile bundling and cost synergies.
• Cable & Sky profitability improved despite subscriber and broadband-growth pressures: segment operating income rose 5.6% to MXN6 billion and the margin expanded 380 basis points to a three-year high of 42.6%. Sky lost 250,000 revenue-generating units, while broadband recorded about 9,000 net additions.
• TelevisaUnivision benefited from World Cup-related activity in Mexico, with revenue rising 9% to $1.4 billion and Mexican revenue increasing 51%. Adjusted EBITDA was essentially flat at $461 million as sports-related costs and weaker U.S. advertising offset growth in Mexico, sublicensing and ViX subscriptions.

Grupo Televisa NYSE: TV said its proposed acquisition of AT&T’s wireless business in Mexico would expand its telecommunications footprint and create opportunities to bundle fixed and mobile services, while third-quarter Cable & Sky profitability improved despite subscriber losses at Sky and slower broadband growth.

During its third-quarter 2026 conference call, Co-Chief Executive Officer Alfonso de Angoitia said Televisa and partner Fintech Holdings agreed to acquire AT&T Mexico for $2 billion through a 50/50 partnership. Each partner plans to contribute $400 million in equity, while a five-year non-recourse loan would fund the remaining $1.2 billion.

Televisa expects the transaction to close in the first quarter of 2027, subject to regulatory approvals. Following the closing, Televisa expects to account for the operation as an equity-method investment in a joint venture.

AT&T Mexico Deal Targets Fixed-Mobile Convergence

De Angoitia said the combined platform would include more than 24 million wireless subscribers, 5.7 million broadband subscribers and 6.3 million video subscribers. The combined operations would generate about $8 billion in annual revenue, representing roughly 23% of Mexico’s telecommunications market, he said.

“This transaction will materially strengthen our competitive position and offer significant value creation opportunities,” de Angoitia said, pointing to fixed-mobile convergence, bundled offerings, cross-selling and operational optimization.

The company expects its net debt-to-EBITDA ratio to rise to 1.9 times from 1.6 times at the end of the third quarter after the acquisition. De Angoitia said Televisa does not currently expect to make additional equity contributions to the venture, adding that AT&T Mexico is expected to have a standalone capital structure capable of financing itself going forward.

Management said it intends to implement revenue and cost synergies immediately after closing, including through service agreements. Francisco Valim, chief executive officer of Televisa’s telco operations, said bundled offerings could be marketed to both companies’ subscriber bases, while shared back-office functions and greater scale could reduce costs across both businesses.

Televisa does not plan initially to publicly disclose AT&T Mexico’s standalone financial results, according to de Angoitia. He said AT&T Mexico currently reports under U.S. GAAP and that work will be needed to convert its reporting to IFRS.

Cable & Sky Margins Expand

Televisa’s cable network passed more than 20 million homes at the end of September after adding about 8,000 homes during the quarter. The company upgraded more than 4.3 million homes to fiber-to-the-home technology year to date, bringing fiber coverage to approximately 67% of its total footprint.

Broadband churn remained below the company’s historical 2% average for a sixth consecutive quarter. Broadband gross additions were comparable with the second quarter, resulting in roughly 9,000 net additions. Valim said Mexico’s broadband market is becoming more mature as penetration rises, and he expects industry growth to converge toward low-single-digit rates.

Residential net revenue totaled MXN10.6 billion and was essentially flat from a year earlier. Valim attributed part of the comparison to the phaseout of additional revenue from FIFA World Cup subscription packages. Enterprise revenue rose 6.8% to MXN1.1 billion, aided by new public- and private-sector customer agreements.

Sky lost 250,000 revenue-generating units during the quarter, primarily prepaid customers who did not recharge service. While the subscriber losses remained significant, they improved from average quarterly disconnections of about 290,000 units over the prior four quarters. Sky revenue fell 25.5% year over year to MXN2.4 billion, reflecting its smaller subscriber base.

• Cable & Sky segment revenue declined 3.8% year over year to MXN14.1 billion.
• Operating segment income rose 5.6% to MXN6 billion as operating expenses declined 9.7%.
• Operating segment income margin expanded 380 basis points year over year to 42.6%, Televisa’s best quarterly profitability level for the business in three years.
• Capital expenditures were MXN3 billion, or 21.3% of sales, while operating cash flow also totaled MXN3 billion.

Valim said the stronger margin reflected efficiency measures and ongoing integration synergies between izzi and Sky. He said Televisa was not expecting further margin expansion from the 42.6% level, but viewed it as a strong result given Sky’s lower-margin video business.

TelevisaUnivision Sees World Cup Benefits in Mexico

TelevisaUnivision reported third-quarter revenue of $1.4 billion, up 9% year over year, or 6% excluding the appreciation of the Mexican peso. Revenue in Mexico rose 51% to $665 million, supported by the conclusion of FIFA World Cup programming, while U.S. revenue declined 14% to $715 million amid anticipated domestic advertising softness.

Adjusted EBITDA was essentially flat year over year at $461 million as operating expenses increased 14%, reflecting planned sports-related costs tied to World Cup transmissions in Mexico and Latin America.

Consolidated advertising revenue declined 5%. U.S. advertising revenue fell 24%, which management attributed to broader weakness in the linear advertising market, lower ViX advertising revenue and competition from peer networks carrying the World Cup. De Angoitia said core U.S. linear commercial fundamentals remained stable, with market share improving 200 basis points sequentially.

Mexico advertising revenue increased 19%, supported by linear television, direct-to-consumer platforms, World Cup inventory monetization and programming including La Casa de los Famosos México, Liga MX, the NFL and Formula 1.

Subscription and licensing revenue increased 30%, driven by about $90 million in World Cup sublicensing revenue in Latin America and continued growth in ViX premium tiers. ViX exceeded management’s World Cup acquisition and engagement targets, with customer cohorts retaining above modeled expectations, according to the company.

TelevisaUnivision ended the quarter with $753 million in cash and about $690 million of available capacity under credit facilities. Net debt to EBITDA was 5.5 times, unchanged from the prior quarter.

About Grupo Televisa (NYSE:TV)

Grupo Televisa, SAB. is a Mexican media and telecommunications company headquartered in Mexico City. Its operations include pay television, broadband and fixed-line telecommunications services, primarily through its izzi brand, as well as satellite television services through Sky México. The company serves residential and commercial customers across Mexico.

Televisa also maintains interests in content and entertainment businesses. In 2022, it combined substantially all of its media and content assets with Univision to create TelevisaUnivision, a Spanish-language media company serving audiences in Mexico, the United States and other international markets.

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