Megacable Holdings (MEGACPO) Q1 2025 earnings summary

Executive summary

• Achieved highest EBITDA margin in 10 quarters, reflecting operational discipline and strategic clarity amid macroeconomic uncertainty.

• Total revenues reached MXN 8.6 billion in 1Q25, up 8% year-over-year, with Mass Segment revenues at a record MXN 7.19 billion, up 9.3%.

• Subscriber base grew within expected range, with unique subscribers up 10.3% to 5.6 million and RGUs up 7.9% to 14.1 million.

• Integration of Ho1a, MetroCarrier, and MCM into MCM Business Tech-Co aimed at maximizing profitability and synergies, reflected in results.

• Net profit declined 9.7% year-over-year to MXN 723 million, mainly due to higher depreciation and financial expenses.

Financial highlights

• Consolidated revenues reached MXN 8.6 billion, up 8% year-over-year, driven by 9% growth in mass market segment.

• EBITDA increased 8.2% year-over-year to MXN 4.0 billion; EBITDA margin expanded to 46.3% from 46.1%.

• Net income was MXN 723 million, down year-over-year due to higher depreciation and interest expenses, but up 38% sequentially.

• CapEx to revenue ratio was 26.8%, down from 29.5% a year ago, reflecting a slowdown in investment.

• Net debt at MXN 21.1 billion, with net debt to EBITDA ratio improved to 1.41x from 1.50x at 2024 year-end.

Outlook and guidance

• Expectation for 2025 remains unchanged, with anticipated acceleration in revenue and EBITDA growth toward double-digit levels.

• CapEx as a percentage of revenue expected to be around 28% for 2025, including both organic and special projects.

• Margins expected to expand on an annual basis, with sequential improvement possible.

• Free cash flow expected to be positive for the year before dividends.

• Investment cycle expected to slow down, with CapEx as a percentage of revenues decreasing.