By Brazil Stock Guide – TIM (B3: TIMS3; NYSE: TIMB) delivered a sharp improvement in profitability in the fourth quarter of 2025, posting record margins and double-digit earnings growth as postpaid momentum and cost control reshaped its operating profile. Normalized net income rose 27.9% from a year earlier to R$ 1.35 billion, while normalized EBITDA margin reached an all-time high of 53.1%.
Revenue growth remained steady in a mature market. Net revenue increased 4.4% year over year to R$ 6.92 billion, while service revenue advanced 5.1%, comfortably above Brazil’s inflation rate. Mobile service revenue climbed 4.8%, driven by the postpaid segment, where revenue expanded 9.5% and ARPU reached R$ 43.3, reflecting customer migration to higher-value plans and pricing adjustments.
Record profitability
Alberto Griselli, chief executive officer of TIM Brasil, said the company ended 2025 after meeting all its targets and is entering a new growth phase. “2025 was marked by solid execution and consistent delivery. We met all targets and strengthened the foundations to move forward in 2026, with value generation anchored in mobile, B2B and fixed broadband, supported by AI, operational efficiency and ESG.”
Operational leverage was the main driver. Normalized EBITDA rose 9.7% to R$ 3.67 billion, while normalized operating costs fell 1.1%, amplifying margin expansion. EBITDA after leases grew 12.3% to R$ 2.92 billion, pushing the after-lease margin to 42.2%, also a record for the company.
Investment remained elevated but controlled. Capex totaled R$ 1.35 billion in the quarter, down 2.0% year over year, as TIM continued to expand its 5G footprint while keeping capex intensity at 19.5% of net revenue. EBITDA after leases minus capex jumped 28.3% from a year earlier to R$ 1.57 billion, lifting the margin to 22.8%.
Segment mix shift
The quarter highlighted a clear divide between growing and declining segments. Postpaid subscribers increased 8.4% year over year, underpinning revenue resilience and margin expansion. In contrast, prepaid revenue fell 6.5%, extending a structural decline, while revenue from devices and products dropped 11.3%, reflecting lower volumes and a focus on higher-value offers.
Cash generation closed the quarter on a softer note due to working-capital swings, with operational free cash flow at R$ 2.11 billion, down 10.6% year over year. Even so, the underlying trend remained positive, supported by stronger EBITDA and lower lease-related payments.
The fourth quarter confirmed a structural shift in TIM’s business model. With margins at record levels, the company enters 2026 more dependent on postpaid execution and service monetization than on subscriber scale, leaving less room for missteps but greater sensitivity to pricing discipline and competitive intensity in Brazil’s telecom market.
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