América Móvil, S.A.B. de C.V. (AMX) Income Statement

The deceleration from 24.4% YoY growth in 2024Q4 to 3.6% in 2026Q2 suggests that the earlier surge was partly driven by one-off factors, likely including hyperinflation adjustments in Argentina and favorable FX. As those tailwinds fade, organic growth appears to be settling into a low-single-digit range, consistent with a mature telecom market. Investors should monitor whether postpaid ARPU and 5G adoption can reaccelerate service revenue, as equipment sales are unlikely to sustain momentum.

The consistency of operating margin between 20.2% and 22.8% over the past year indicates that AMX has managed to protect profitability despite the potential for regulatory intervention. However, the thin net margin of 8.8% leaves little room for absorption of any mandated price cuts or infrastructure sharing costs. The gap between operating and net margin highlights the impact of interest expenses and FX losses, which could widen if regulatory actions compress operating income.

While fuel and purchased power are not direct inputs for a telecom, energy costs for network operations are a significant variable expense. The reported operating margin stability suggests that AMX has been able to offset these increases through efficiency gains, but the thin net margin indicates limited buffer. If the Mexican peso or Brazilian real depreciates further, the translation of local costs into USD could compress margins, as seen in the 2024Q2 net loss of -$1.1B.

The elevated D&A levels, which have remained above $40B for the past five quarters, reflect the heavy investment in 5G and FTTH. However, the deceleration in revenue growth suggests that these investments are not yet yielding the expected returns, possibly due to competitive pricing and regulatory constraints. The shift from owned towers to leased infrastructure post-spin-off may also be inflating operating costs, further pressuring the conversion of CAPEX into earnings.