Good morning, and welcome to Axtel's Fourth Quarter 2025 Earnings Webcast. My name is Nancy Llovera, Axtel's Investor Relations and Corporate Finance Manager.

And today, I am joined by Armando de la Pena, Chief Executive Officer; and Adrian de los Santos, Chief Financial Officer. Financial information for both Axtel and Controlado Axtel, including the unaudited fourth quarter report, is available on our corporate website.

We will begin today's session with an overview of our business performance followed by a Q&A segment. For your convenience, this webcast is being recorded and will be available on our website.

Before we begin, please note that today's discussion may include forward-looking statements. These statements reflect management's current views and expectations and are subject to risks and uncertainties that could cause actual results to differ.

Axtel assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. With that, I will now hand the presentation over to Armando.

Thank you, Nancy, and thank you all for joining us today. I wish you well this year.

Before reviewing our financial results, I would like to comment about fourth quarter and full year performance as well as opportunities we see for our business. Results in the fourth quarter capped a year in which we generated the highest annual operating cash flow in our history.

Fourth quarter performance faced a tough comparison versus a strong fourth quarter 2024, particularly in EBITDA. A 14% increase in Government segment revenues helped offset marginal declines in the Enterprise and Wholesale segments.

For the full year, we increased revenues, EBITDA and generated $80 million in cash flow. Even excluding the extraordinary first quarter cash flow related to the execution of the conclusive agreement with a major mobile customer, cash flow still improved more than 20% year-over-year, demonstrating our commitment to financial discipline and shareholder value creation.

The year presented challenges in closing new projects as customers remain cautious amid economic uncertainty. Although we expanded the Enterprise segment opportunities pipeline by 24%.

New contract acquisitions remained similar to 2024 levels. Services such as cybersecurity were particularly affected by slower adoption of new offerings and upgrades by clients.

Overall, customers' technology and telecommunication investments were focused mainly on cost optimization rather than capacity expansion or modernization. Mixed performance across the enterprise segment business lines resulted in 3% growth, moderating from a stronger growth achieved in 2024.

Mobile services delivered a robust moment with revenues expanding by over 50%. And IT services posted a solid growth of 13%.

These gains were particularly partially offset by a more modest growth of 1% in the telecom services and a decline in cybersecurity revenues. Notably, the 1% growth in telecom services significantly outperformed overall industry trends, highlighting the resilience of the core business despite a challenging market environment.

The decline in cybersecurity revenues reflects a difficult comparison to the extraordinary performance achieved in 2024 as well as a softer demand conditions across the industry. The Government segment delivered a solid fourth quarter following a year with limited new public acquisitions and auction opportunities, which were mostly restricted to renewal of ongoing services.

Performance for the year was well balanced with recurring revenues growing at 22% and onetime revenues increasing 24%. During the year, we continued the implementation of the new platform for the digitalization of our international trade documentation in Mexico, contributing to the growth of our recurring revenue.

This initiative is particularly meaningful as it emphasized Axtel growth in advancing the digital transformation of international trade in Mexico and reinforces our commitment to delivering innovative high-value solutions. The Wholesale segment had a very positive year with revenues growing close to 20%, supported by a contract with a major hyperscaler customer.

Our new Querétaro Texas fiber optic route deployed in 2025 is expected to continue generating opportunities for infrastructure and capacity sales, capitalizing on the next-generation low latency network with more than 5x the capacity of competing routes. Axtel announced a collaboration agreement with McAllen Data Center, MDC, to strengthen digital interconnection along the Mexico United States border through the integration of MDC Center 2 as Axtel's new primary point of presence in Texas.

This alliance represents a significant step in meeting the growing demand from operators, enterprises and digital platforms requiring greater density, neutrality and stability in the cross-border connectivity. As part of our artificial intelligence strategy, Axtel established a strategic alliance with SimplyAsk, a Canadian company specialized in AI-driven automated solutions.

This partnership adds virtual assistance and intelligent agents into the iAlestra's portfolio, solutions characterized by rapid flexible deployment and immediate results. Organization effectiveness remains a key factor in our artificial intelligence and business agenda, require the mix of talent, experience and diversity of perspectives.

General diversity has been a strategic priority for many years, and it's embedded in certain trade agreements. In 2025, women represented more than 25% of the workforce with strong representation at senior leadership positions.

Looking ahead, the 2026, the organization will evolve following the planned retirement of 2 executive directors. As part of this transition, the enterprise and government commercial organization will be consolidated after a single executive leader.

And all artificial intelligence initiatives will be centralized within one team under the executive leadership of commercial development. We remain committed to maintaining an agile and efficient organizational structure aligned with evolving needs of the business in 2026 and beyond.

In 2025, we strengthened our infrastructure to capitalize on the increased demand of AI-driven data transport between the United States and Mexico. We also diversified our U.S.-Mexico connectivity portfolio by linking our Cancún network to Trans American Fiber TAM-1, submarine cable, providing an alternative route to the U.S.

East Coast and Central and South America. Likewise, our new generation Querétaro Texas route is expected to bring meaningful business opportunities in the years ahead.

In 2026, we aim to continue outperforming industry growth by focusing on cross-sell and upsell opportunities, particularly with our top accounts. In the Government segment, we will pursue multiyear projects to expand our base of recurring revenue.

For Axnet, we will enhance connectivity toward the U.S. and promote high-capacity services, particularly wavelengths, driven by hyperscaler data centers and artificial intelligence.

We will maintain our financial discipline, increase cash flow generation and continue building stronger business and financial platform in the best interest of our shareholders and all stakeholders. I will now turn the call over to Adrian for additional remarks and discuss Axtel's financial results.

Thank you, Armando, Nancy, and good morning to all participants. Last year, we prepaid $55 million of our syndicated bank loan using cash generated from operations.

In addition, we refinanced nearly $90 million more through a new 10-year loan with Bancomext, shifting our debt profile to 60%, 40% pesos and dollars, respectively. Our goal is to align our debt currency mix with that of our revenues.

In 2025, we generated approximately 20% of our revenues in dollars, which are generated in both pesos and dollar. Notwithstanding the higher proportion in peso-denominated debt, which carries a higher interest rate, we estimate $45 million in interest expenses for 2026, a $5 million reduction compared to last year, resulting from the debt prepayments achieved in 2025 and the more favorable interest rates environment expected for 2026.

During the fourth quarter, Fitch Ratings upgraded the company's credit rating from BB- to BB with a stable outlook. This reflects expectations of continued delevering and solid cash flow generation.

We will maintain active engagement with both rating agencies to ensure that their assessments accurately reflect Axtel's strong operating and financial performance. For 2026, we expect ongoing economic uncertainty and anticipate that clients will remain cautious in their technology and telecommunications investment decisions.

We're continuing to advance the development of artificial intelligence-based solutions supporting clients who are primarily focused on optimizing their operations. Internally, we will concentrate resources on the business lines with the strongest demand and maintain strict discipline in our spending and investment decision.

Under this scenario, we estimate revenues of MXN 12,850 million and comparable EBITDA of MXN 3,800 million. We expect capital expenditures of approximately $83 million and cash flow generation of more than $60 million.

Based on these estimates, our net debt-to-EBITDA ratio should reach approximately 2x by year-end. For budgeting purposes, we are using an average exchange rate of MXN 18.65 per dollar.

I will now move on to review our financial results for the fourth quarter and full year. Fourth quarter revenues decreased 1% year-over-year, while full year 2025 revenues increased 7%, reflecting solid performance across all 3 business segments.

Enterprise revenues declined 3% in the quarter, mainly due to a 10% contraction in IT and cybersecurity services following extraordinary licensing and equipment sales recorded in the prior year. Within IT, hosting and systems integration revenues grew 30%.

Telecom revenues were stable year-over-year as solid performance in managed networks and mobile services revenues offset the expected decline in collaboration services. For the full year, enterprise revenues increased 2%, supported by 6% growth in IT and cybersecurity solutions and a 2% increase in telecom services, driven by strong results in connectivity, managing networks and mobility, exceeding telecom industry performance.

Voice revenue declined 6%, representing 7% of this segment revenues. Government revenues grew 14% in the fourth quarter, driven by a 59% in recurring revenues.

Full year revenues increased 22%, supported by a similar increase in recurring revenues, reflecting the company's successful strategy to renew 99% of expiring contracts and expand service penetration among existing federal customers. Revenue mix consisted of 70% federal and 30% state and local entities.

Wholesale infrastructure revenues decreased 5% in the quarter, primarily due to a lower volume of upfront high-capacity contracts in this period. However, for the full year, revenues increased 19%, driven by strong demand from high-capacity contracts due to AI-related data transport and increased data center connectivity.

Even excluding extraordinary revenues from the conclusion of our workout agreement with a mobile customer in the first quarter, revenues will have registered double-digit growth in the year. Fourth quarter cost of revenues, excluding depreciation and amortization, decreased 5%, resulting in a contribution margin improvement to 66% compared to 65% a year ago.

Enterprise segment costs declined 9%, reflecting stronger margins in IT and cybersecurity services. Government segment costs increased by 2% with margin expansion supported by greater proportion of recurring revenue.

Wholesale segment costs increased 5%, reflecting lower margins in the quarter. For the full year, cost of revenues increased 5% with lower enterprise costs offset by higher government and wholesale costs, probably aligned with the revenue trends.

Contribution margin remained stable at 71%. Commercial and operating expenses are allocated to the 3 business segments, while corporate expenses remain centralized.

Commercial and operating expenses increased 35% in the quarter and 11% for the full year, mainly due to the extraordinary bad debt provision benefit recorded in the Wholesale segment during the fourth quarter of 2024, creating an unfavorable comparison base. General corporate expenses increased in the quarter and for the full year, driven by higher personnel expenses.

Higher personnel expenses were influenced by labor legislation changes and an extraordinary pension provision benefit recorded in 2024. Excluding these effects, company-wide personnel expenses will have increased 6% in the year.

EBITDA reached MXN 833 million in the quarter, a 30% decline compared to fourth quarter 2024, reflecting lower contribution from the business segments and higher corporate expenses. For the full year, EBITDA increased 3%, supported by contributions across all 3 business segments affected by higher general corporate expense.

EBITDA margin stood at 31% for the year. CapEx totaled $86 million, equivalent to 13% of total revenues compared to $72 million in 2024, equivalent to 11% of revenues.

The increase mainly reflects an extraordinary investment related to the new Querétaro-McAllen fiber optic deployment and the renewal of a 15-year fiber optic lease ensuring the long-term resiliency and competitiveness of our network infrastructure. Cash balance at year-end reached $73 million compared to $39 million at the beginning of the quarter.

Fourth quarter cash flow was positive $40 million and full year cash flow was positive $80 million, resulting from $196 million in EBITDA, $20 million in positive working capital, $86 million in CapEx and $49 million in interest expense. Additionally, we recorded $71 million debt reduction in the year.

Year-end net debt stood at $456 million with a net debt-to-EBITDA ratio of 2.3x compared to 2.5x a year ago. And with this, we conclude the presentation and open the call for questions concerning both Axtel and Controladora Axtel.

[Operator Instructions] Our first question comes from [ Miriam Toto ].

Can you hear me?

Yes.

Yes.

Okay. Sorry, this is Andres Coello with Scotia.

I think you are projecting very little revenue growth for this year. It seems like a conservative projection.

And I'm wondering if that is a direct response to weak economic conditions. So I'm wondering if you can just discuss a little bit what you're seeing in terms of corporates willing to adopt IT solutions and how the economy may be affecting your outlook for this year?

Thank you for your question, Andres. In summary, I could say that the corporate clients are taking longer to make decisions.

They used to take decisions in a month or 2 months or so or a certain period and now that has doubled sometimes and in cases even delay until further notice. Particularly, as you said, at least in our case, in services or solutions that require evolution, require to upgrade but not necessarily inflicting any pain today.

So increasing capacity, if the network is saturated, that's not delayed at this -- or that's not being delayed what we saw last year but operates in cybersecurity, for example, that's taking longer for corporate clients to make decisions. So yes, definitely, there is a more conservative approach.

Clients are coming more with the request of how can we help them optimize their operations. We're not seeing significant expansion in new retail, new branches of banks, new locations, which obviously more locations, more presence means more services for our industry.

So that's more or less what we're seeing in the economy. We're not seeing a market, an industry that's stagnant.

It's just a slow business environment that has been prevailing since last year.

Okay, Adrian. And regarding the Infrastructure division, do you see the possibility of any other major projects for perhaps telephone companies or also the big data consumers or AI-related projects, et cetera.

How do you see the Infrastructure division?

I will take that one, Adrian. Thank you.

Our current new fiber from Querétaro-McAllen, is the only one with a new technology and all the new requirements in order to communicate the data centers of Texas with Mexico mainly. So that brings us an excellent opportunity to capitalize, as you were asking.

We are very active with customers that could rely on this connectivity. So we do see opportunities on that as well as the alliance, the commercial alliance that we did with Trans American fiber for the East Coast of the U.S.

and South America. So we are in a much better position for hyperscalers and big carriers, and that's mainly explained with the increase in CapEx because we are investing in the future demands, as you said, of AI and data center.

So yes, we do see opportunities. But this opportunity sometimes take months to [Foreign Language].

To crystalize.

Sorry, to crystalize. So we do see for the second semester that we could achieve some opportunities there.

Our next question comes from Emilio Fuentes.

And I was wondering what is your take on the competitive environment in the Enterprise segment. And in that context, what are Axtel's competitive advantages given the increase in importance it has gained also for the other large integrated players?

Could you repeat the second part of your question, please, Emilio?

Yes, that competitive environment and Axtel's competitive advantages and given how this sector has gained relevance for other large integrated players in the country.

Yes, sure. The competitive advantage has been tough.

Always there is -- there is a participant that holds a significant market share. But nonetheless, we've been able to compete since the inception of Alestra and Axtel.

Today, what we see is customers are looking for reliable partners, are looking for post service interaction. We have seen clients that might go away and come back sometime later because price was maybe an attractive decision maker, but both service was not necessarily what they were expecting.

So what I can say is we're dedicated B2B company. Second, we have an extensive network that provides the foundation for all the connectivity or database solutions that it's the base layer on which we add services like cloud, IT, managed services, obviously, cybersecurity.

So we leverage our infrastructure to continue adding solutions and services that have more attractive or have greater growth opportunities. We, obviously, over the so many years that we have been in operations, we have maintained a large number of certified engineers that when you're dealing with major brands in our industry, you need these certifications in order to deploy, to install and to maintain services.

So we have that environment in Axtel that, obviously, we think we are a very attractive competitor in the industry, and we've been maintaining that position for a while. I don't know if that answers your question, Emilio.

Yes.

We have another question from the Q&A function. What are your refinancing plans and timing for that?

Thanks, Nancy. We started this refinancing process last year, first of all, by reducing debt that's the most efficient way to refinance debt.

And on top of that, we were able to secure as informed a 10-year loan in pesos that shift the percentage of our debt in higher proportion in pesos now. And this year, we will expect to conclude the last piece of the refinancing where we would take out all maturities that come due in 2027 and 2028.

We expect to do that this year. Hopefully, we can be able to execute before the end of the third quarter.

Thank you, Adrian. There are no further questions at this time.

Thank you all for your interest in Axtel and for joining us today. If you require any additional information, please feel free to reach out.

Have a great day.