Megacable Holdings (MEGACPO) Q4 2024 earnings summary

Executive summary

• Achieved record revenues and double-digit EBITDA growth for both the quarter and full year 2024, with margins exceeding 2023 levels and market expectations.

• Consolidated EBITDA for 4Q24 rose 10.9% year-over-year to Ps. 3,765 million, with a 44.3% margin, marking a quarterly record.

• Subscriber base grew strongly, with 574,000 net additions for the year, a 12% increase, and 75% of subscribers now served by fiber.

• Net income for 4Q24 was Ps. 524 million, down 19% year-over-year, mainly due to higher depreciation and financial expenses.

• Integration of Ho1a, MetroCarrier, and MCM into MCM Business TechCo to enhance B2B offerings and operational efficiency starting 2025.

Financial highlights

• Quarterly revenues reached MXN 8.5 billion, up 8% year-over-year; full-year revenues totaled MXN 33 billion, a 10% increase.

• Mass market segment contributed 83% of 2024 revenue, growing 10% year-over-year; corporate segment grew 5%.

• Fourth quarter EBITDA was MXN 3.7 billion (44.3% margin), up 70 bps sequentially and 100 bps year-over-year; full-year EBITDA was MXN 14.6 billion (44.5% margin).

• Cash and short-term investments increased 174.7% year-over-year to Ps. 4,228 million.

• CapEx for 2024 was MXN 10.3 billion (31.5% of revenue), the lowest in three years and below guidance.

Outlook and guidance

• CapEx-to-revenue ratio expected to fall below 30% in 2025 and reach low 20s by 2027 as expansion winds down.

• EBITDA margins projected to gradually improve, targeting 47% in three to four years, though not returning to previous highs of 49-50%.

• Subscriber growth expected to continue at 100,000–150,000 net additions per quarter.

• Management expects sustained cash generation due to revenue growth and reduced investment pace.

• Focus on closing the margin gap between new and legacy territories and accelerating free cash flow.