Executive Summary / Key Takeaways

• Grupo Televisa is undergoing a significant transformation, focusing on operational efficiencies, strategic integrations, and digital growth to enhance shareholder value. The company's core investment thesis hinges on its ability to leverage its dominant position in Spanish-speaking media and telecommunications while aggressively optimizing its cost structure and expanding its digital footprint.
• Recent financial performance highlights include a stabilized internet subscriber base in Cable, expanding operating segment income margins (up 80 basis points in H1 2025 to 38.1%), and robust free cash flow generation (MXN 3.6 billion in H1 2025), enabling substantial debt reduction.
• TelevisaUnivision's direct-to-consumer (DTC) platform, ViX, has emerged as a key growth driver, surpassing 10 million subscribers and achieving $1 billion in revenue in 2024, demonstrating strong engagement and profitability ahead of peers.
• Strategic initiatives, such as the integration of Sky with Izzi and a disciplined CapEx approach (2025 budget cut to $600 million), are yielding significant synergies and improving overall cash flow, while a relaunched MVNO service is boosting mobile subscriber additions.
• Key risks include the secular decline of the direct-to-home (DTH) satellite business and potential macroeconomic headwinds in Mexico, though the company's focus on value customers and efficient operations aims to mitigate these challenges.

A Transformed Vision for Mexico's Media Giant

Grupo Televisa, S.A.B., a foundational telecommunications and media corporation established in 1969, has long been a dominant force in Mexico and the broader Spanish-speaking world. Its integrated services, spanning cable, high-speed data, voice, and a leading direct-to-home (DTH) satellite pay television system, form the bedrock of its operations. As the largest shareholder of TelevisaUnivision, the company also commands a significant presence in Spanish-speaking content creation and distribution across multiple platforms globally. This extensive reach and deep market penetration have historically positioned Grupo Televisa as a critical player in the region's communication landscape.

The company is currently executing a profound strategic transformation, initiated in 2024, designed to streamline operations, enhance profitability, and unlock shareholder value. This multi-faceted approach centers on aggressive cost optimization, the strategic integration of acquired assets, and a decisive pivot towards digital growth, particularly through its direct-to-consumer (DTC) streaming platform, ViX. This strategic evolution is a direct response to the dynamic shifts within the global media and telecommunications industries, including the rise of streaming and the increasing demand for integrated, value-driven services.

Technological Edge and Digital Dominance

Grupo Televisa's competitive advantage is increasingly anchored in its technological differentiators and strategic digital initiatives. At the forefront is ViX, TelevisaUnivision's direct-to-consumer streaming platform. ViX leverages the company's unparalleled content library, which is the world's largest in Spanish, boasting over 300,000 hours of durable scripted entertainment. This vast repository allows for highly efficient content acquisition and deployment, significantly reducing content costs compared to competitors who must license or produce content from scratch. Furthermore, Televisa operates the largest and most prolific Spanish-language content production factory in Mexico, capable of producing approximately 100,000 hours of long-form video content annually across news, sports, and scripted entertainment. This vertically integrated system ensures a continuous supply of high-quality, culturally relevant content at a very attractive production cost, contributing directly to ViX's rapid scaling and profitability.

Another key technological differentiator is the relaunched Mobile Virtual Network Operator (MVNO) service, developed by ZTE . This innovative service, relaunched in late 2024, offers an enhanced user experience and is designed to make Grupo Televisa's bundled offerings more competitive. The tangible benefit is evident in its performance: mobile net additions of 83,000 subscribers in Q2 2025 were almost double those of Q1 2025 and more than triple the full-year net additions of 2024. This success allows the company to increase the share of wallet from existing customers, driving incremental revenue and strengthening customer loyalty within its integrated service ecosystem. These technological advancements, particularly in content production and digital distribution, provide a robust competitive moat, enabling higher average revenue per user (ARPU) through bundled services and lower operational costs for content, thereby enhancing margins and solidifying market positioning for long-term growth.

Competitive Landscape and Strategic Positioning

Grupo Televisa operates within a highly competitive and evolving landscape, facing both direct and indirect rivals. In the traditional telecommunications space, the company competes with other major players in Mexico, which management characterizes as "very rational," with stable pricing and a focus on maximizing revenue growth rather than aggressive discounting. Grupo Televisa's Cable segment, with a network reaching almost 20 million homes by June 2025, differentiates itself by focusing on "value customers" and offering integrated services. This strategy has resulted in a monthly churn rate falling below its historical average of 2% in Q2 2025, indicating strong customer retention.

However, the DTH satellite business (Sky) faces a secular decline globally due to technological shifts and the expansion of alternative services. While this segment is expected to see declining revenues, its integration with Izzi has largely absorbed its cost structure, transforming it into a high-margin revenue stream rather than a cost burden. This strategic move, coupled with an installation fee of MXN 1,250 for new satellite subscribers, aims to maximize cash generation from the existing base.

In the content and streaming arena, TelevisaUnivision competes with global giants like Netflix , Comcast , Walt Disney Company , and Paramount Global . While these competitors offer vast content libraries and advanced streaming capabilities, Grupo Televisa's strength lies in its unparalleled dominance in Spanish-language content and its deep cultural relevance in Latin American markets. ViX, for instance, has rapidly become the largest streaming platform in Spanish globally within two years, demonstrating the power of localized content and efficient production. The company's unified Chief Content Officer position and the hiring of digital sales experts like Tim Natividad (formerly of TikTok) underscore its commitment to enhancing digital monetization, particularly for sports and entertainment assets.

Compared to global streamers like Netflix, Grupo Televisa's integrated model and regional focus provide a unique value proposition, especially in markets where broadband access may be less ubiquitous. While Netflix excels in global scalability and technological innovation, Grupo Televisa's localized content and regulatory licenses provide a strong defensive moat. Similarly, against diversified conglomerates like Comcast, Grupo Televisa's expertise in Spanish-language media and its efficient content factory offer a distinct advantage, even as it works to match the operational scale and efficiency of its larger rivals. The company acknowledges increased competition from players like Netflix and Amazon in the AVOD and SVOD space in Mexico but views this as a reinforcement of the market's attractiveness and an impetus to further enhance its offerings.

Financial Performance and Operational Discipline

Grupo Televisa's recent financial performance reflects the tangible benefits of its strategic initiatives and operational discipline. In the first half of 2025, the company's consolidated operating segment income margin expanded by approximately 80 basis points to 38.1%, driven by a year-on-year OpEx reduction of around 7%. This efficiency gain is a direct result of the ongoing integration between Izzi and Sky and broader cost-cutting measures.

The Cable segment, a cornerstone of Grupo Televisa's operations, showed signs of stabilization and potential growth. Broadband net additions improved significantly, with over 6,000 net adds in Q2 2025, a notable turnaround from disconnections in prior quarters. Residential net revenue, while slightly down year-on-year in Q2 2025 due to a lower subscriber base, remained stable sequentially, suggesting a turning point. Enterprise net revenue, accounting for about 9% of Cable revenue, increased by 3% year-on-year in Q2 2025, driven by higher recurring revenue.

TelevisaUnivision also demonstrated strong financial progress. In Q2 2025, adjusted EBITDA increased by 10% year-on-year (14% excluding FX impact), reflecting margin expansion from a streamlined cost structure and continued DTC profitability. ViX, the company's streaming service, has become a "real and substantial business," generating $1 billion in revenue in 2024 and achieving profitability in Q3 2024, significantly faster than industry peers. An efficiency plan at TelevisaUnivision is on track to reduce operating expenses by over $400 million in 2025, with approximately $226 million in savings realized in the first half of the year.

Liquidity and deleveraging remain paramount. Grupo Televisa generated approximately MXN 3.6 billion in free cash flow in the first half of 2025, enabling the prepayment of a MXN 2.65 billion bank loan due in 2026 and $219 million in senior notes due in 2025.

This focus on cash flow generation has improved Grupo Televisa's leverage ratio to 2.2x EBITDA at the end of Q2 2025, down from 2.4x in Q1 2025. Similarly, TelevisaUnivision's leverage ratio improved to 5.5x EBITDA in Q2 2025 from 5.8x in the prior quarter, supported by growth and the refinancing of $1.5 billion in debt, eliminating most of its 2027 bond maturities. The company's strong liquidity position, with approximately $2.3 billion equivalent in cash, further underpins its commitment to debt reduction and maintaining investment-grade ratings.

Outlook and Strategic Trajectory

Grupo Televisa's outlook for 2025 is characterized by continued operational optimization and a disciplined approach to capital allocation. The company has revised its 2025 CapEx budget downward from $665 million to $600 million, primarily due to successful negotiations with suppliers, while still targeting the passing of close to 1 million new homes with fiber. This reflects a commitment to efficient network expansion and subscriber growth without sacrificing free cash flow generation. Management anticipates low churn rates in Cable due to ongoing customer retention efforts and a focus on high-value subscribers, expecting quarter-over-quarter revenue and subscriber growth in this segment.

For TelevisaUnivision, the focus remains on driving further efficiencies and integration, with the expectation that ViX will become even more profitable in 2025. The full impact of synergies from the Izzi and Sky integration is expected to materialize throughout 2025, contributing to continued margin expansion. The company aims for low single-digit subscriber base growth in the medium term for its Cable business, supported by rational CapEx intensity and effective churn reduction. Management also anticipates ARPU growth through upselling enhanced services and new products, rather than relying on broad price increases.

Risks and Challenges

Despite the positive momentum, Grupo Televisa faces several pertinent risks. The secular decline of the DTH satellite business (Sky) presents an ongoing challenge, though management has strategically integrated its cost structure into Izzi to mitigate its financial impact. Macroeconomic headwinds in Mexico, including potential deceleration in consumption trends, could impact advertising revenues and subscriber churn, although the company's cable and broadband offerings are considered relatively resilient. Furthermore, while digital content is currently exempt from U.S. tariffs, any unforeseen changes in trade policy could affect TelevisaUnivision's content production and distribution model. The competitive intensity in the streaming market, with aggressive investments from global players, also necessitates continuous innovation and strategic adaptation to maintain ViX's leadership in Spanish-language content.

Conclusion

Grupo Televisa is executing a comprehensive transformation, strategically positioning itself for sustained value creation in a dynamic media and telecommunications landscape. By prioritizing operational efficiencies, leveraging its unique technological advantages in Spanish-language content, and maintaining a disciplined approach to capital allocation and debt reduction, the company is building a more resilient and profitable business. The successful integration of Izzi and Sky, coupled with the rapid growth and profitability of ViX, underscores management's ability to adapt and innovate. While challenges such as the DTH decline and competitive pressures persist, Grupo Televisa's focus on value customers, efficient content production, and deleveraging provides a compelling investment thesis for discerning investors seeking exposure to a dominant player in the evolving Spanish-speaking media and telecom markets. The company's commitment to strengthening its balance sheet and enhancing free cash flow generation, alongside its strategic digital expansion, positions it favorably for long-term growth and shareholder returns.Grupo Televisa: Forging a Path of Efficiency and Digital Expansion (GRPFF)

Executive Summary / Key Takeaways

• Grupo Televisa is undergoing a significant transformation, focusing on operational efficiencies, strategic integrations, and digital growth to enhance shareholder value. The company's core investment thesis hinges on its ability to leverage its dominant position in Spanish-speaking media and telecommunications while aggressively optimizing its cost structure and expanding its digital footprint.
• Recent financial performance highlights include a stabilized internet subscriber base in Cable, expanding operating segment income margins (up 80 basis points in H1 2025 to 38.1%), and robust free cash flow generation (MXN 3.6 billion in H1 2025), enabling substantial debt reduction.
• TelevisaUnivision's direct-to-consumer (DTC) platform, ViX, has emerged as a key growth driver, surpassing 10 million subscribers and achieving $1 billion in revenue in 2024, demonstrating strong engagement and profitability ahead of peers.
• Strategic initiatives, such as the integration of Sky with Izzi and a disciplined CapEx approach (2025 budget cut to $600 million), are yielding significant synergies and improving overall cash flow, while a relaunched MVNO service is boosting mobile subscriber additions.
• Key risks include the secular decline of the direct-to-home (DTH) satellite business and potential macroeconomic headwinds in Mexico, though the company's focus on value customers and efficient operations aims to mitigate these challenges.

A Transformed Vision for Mexico's Media Giant

Grupo Televisa, S.A.B., a foundational telecommunications and media corporation established in 1969, has long been a dominant force in Mexico and the broader Spanish-speaking world. Its integrated services, spanning cable, high-speed data, voice, and a leading direct-to-home (DTH) satellite pay television system, form the bedrock of its operations. As the largest shareholder of TelevisaUnivision, the company also commands a significant presence in Spanish-speaking content creation and distribution across multiple platforms globally. This extensive reach and deep market penetration have historically positioned Grupo Televisa as a critical player in the region's communication landscape.

The company is currently executing a profound strategic transformation, initiated in 2024, designed to streamline operations, enhance profitability, and unlock shareholder value. This multi-faceted approach centers on aggressive cost optimization, the strategic integration of acquired assets, and a decisive pivot towards digital growth, particularly through its direct-to-consumer (DTC) streaming platform, ViX. This strategic evolution is a direct response to the dynamic shifts within the global media and telecommunications industries, including the rise of streaming and the increasing demand for integrated, value-driven services.

Technological Edge and Digital Dominance

Grupo Televisa's competitive advantage is increasingly anchored in its technological differentiators and strategic digital initiatives. At the forefront is ViX, TelevisaUnivision's direct-to-consumer streaming platform. ViX leverages the company's unparalleled content library, which is the world's largest in Spanish, boasting over 300,000 hours of durable scripted entertainment. This vast repository allows for highly efficient content acquisition and deployment, significantly reducing content costs compared to competitors who must license or produce content from scratch. Furthermore, Televisa operates the largest and most prolific Spanish-language content production factory in Mexico, capable of producing approximately 100,000 hours of long-form video content annually across news, sports, and scripted entertainment. This vertically integrated system ensures a continuous supply of high-quality, culturally relevant content at a very attractive production cost, contributing directly to ViX's rapid scaling and profitability.

Another key technological differentiator is the relaunched Mobile Virtual Network Operator (MVNO) service, developed by ZTE (0763.HK). This innovative service, relaunched in late 2024, offers an enhanced user experience and is designed to make Grupo Televisa's bundled offerings more competitive. The tangible benefit is evident in its performance: mobile net additions of 83,000 subscribers in Q2 2025 were almost double those of Q1 2025 and more than triple the full-year net additions of 2024. This success allows the company to increase the share of wallet from existing customers, driving incremental revenue and strengthening customer loyalty within its integrated service ecosystem. These technological advancements, particularly in content production and digital distribution, provide a robust competitive moat, enabling higher average revenue per user (ARPU) through bundled services and lower operational costs for content, thereby enhancing margins and solidifying market positioning for long-term growth.

Competitive Landscape and Strategic Positioning

Grupo Televisa operates within a highly competitive and evolving landscape, facing both direct and indirect rivals. In the traditional telecommunications space, the company competes with other major players in Mexico, which management characterizes as "very rational," with stable pricing and a focus on maximizing revenue growth rather than aggressive discounting. Grupo Televisa's Cable segment, with a network reaching almost 20 million homes by June 2025, differentiates itself by focusing on "value customers" and offering integrated services. This strategy has resulted in a monthly churn rate falling below its historical average of 2% in Q2 2025, indicating strong customer retention.

However, the DTH satellite business (Sky) faces a secular decline globally due to technological shifts and the expansion of alternative services. While this segment is expected to see declining revenues, its integration with Izzi has largely absorbed its cost structure, transforming it into a high-margin revenue stream rather than a cost burden. This strategic move, coupled with an installation fee of MXN 1,250 for new satellite subscribers, aims to maximize cash generation from the existing base.

In the content and streaming arena, TelevisaUnivision competes with global giants like Netflix (NFLX), Comcast (CMCSA), Walt Disney Company (DIS), and Paramount Global (PARA). While these competitors offer vast content libraries and advanced streaming capabilities, Grupo Televisa's strength lies in its unparalleled dominance in Spanish-language content and its deep cultural relevance in Latin American markets. ViX, for instance, has rapidly become the largest streaming platform in Spanish globally within two years, demonstrating the power of localized content and efficient production. The company's unified Chief Content Officer position and the hiring of digital sales experts like Tim Natividad (formerly of TikTok) underscore its commitment to enhancing digital monetization, particularly for sports and entertainment assets.

Compared to global streamers like Netflix, Grupo Televisa's integrated model and regional focus provide a unique value proposition, especially in markets where broadband access may be less ubiquitous. While Netflix excels in global scalability and technological innovation, Grupo Televisa's localized content and regulatory licenses provide a strong defensive moat. Similarly, against diversified conglomerates like Comcast, Grupo Televisa's expertise in Spanish-language media and its efficient content factory offer a distinct advantage, even as it works to match the operational scale and efficiency of its larger rivals. The company acknowledges increased competition from players like Netflix and Amazon (AMZN) in the AVOD and SVOD space in Mexico but views this as a reinforcement of the market's attractiveness and an impetus to further enhance its offerings.

Financial Performance and Operational Discipline

Grupo Televisa's recent financial performance reflects the tangible benefits of its strategic initiatives and operational discipline. In the first half of 2025, the company's consolidated operating segment income margin expanded by approximately 80 basis points to 38.1%, driven by a year-on-year OpEx reduction of around 7%. This efficiency gain is a direct result of the ongoing integration between Izzi and Sky and broader cost-cutting measures.

The Cable segment, a cornerstone of Grupo Televisa's operations, showed signs of stabilization and potential growth. Broadband net additions improved significantly, with over 6,000 net adds in Q2 2025, a notable turnaround from disconnections in prior quarters. Residential net revenue, while slightly down year-on-year in Q2 2025 due to a lower subscriber base, remained stable sequentially, suggesting a turning point. Enterprise net revenue, accounting for about 9% of Cable revenue, increased by 3% year-on-year in Q2 2025, driven by higher recurring revenue.

TelevisaUnivision also demonstrated strong financial progress. In Q2 2025, adjusted EBITDA increased by 10% year-on-year (14% excluding FX impact), reflecting margin expansion from a streamlined cost structure and continued DTC profitability. ViX, the company's streaming service, has become a "real and substantial business," generating $1 billion in revenue in 2024 and achieving profitability in Q3 2024, significantly faster than industry peers. An efficiency plan at TelevisaUnivision is on track to reduce operating expenses by over $400 million in 2025, with approximately $226 million in savings realized in the first half of the year.

Liquidity and deleveraging remain paramount. Grupo Televisa generated approximately MXN 3.6 billion in free cash flow in the first half of 2025, enabling the prepayment of a MXN 2.65 billion bank loan due in 2026 and $219 million in senior notes due in 2025.

This focus on cash flow generation has improved Grupo Televisa's leverage ratio to 2.2x EBITDA at the end of Q2 2025, down from 2.4x in Q1 2025. Similarly, TelevisaUnivision's leverage ratio improved to 5.5x EBITDA in Q2 2025 from 5.8x in the prior quarter, supported by growth and the refinancing of $1.5 billion in debt, eliminating most of its 2027 bond maturities. The company's strong liquidity position, with approximately $2.3 billion equivalent in cash, further underpins its commitment to debt reduction and maintaining investment-grade ratings.

Outlook and Strategic Trajectory

Grupo Televisa's outlook for 2025 is characterized by continued operational optimization and a disciplined approach to capital allocation. The company has revised its 2025 CapEx budget downward from $665 million to $600 million, primarily due to successful negotiations with suppliers, while still targeting the passing of close to 1 million new homes with fiber. This reflects a commitment to efficient network expansion and subscriber growth without sacrificing free cash flow generation. Management anticipates low churn rates in Cable due to ongoing customer retention efforts and a focus on high-value subscribers, expecting quarter-over-quarter revenue and subscriber growth in this segment.

For TelevisaUnivision, the focus remains on driving further efficiencies and integration, with the expectation that ViX will become even more profitable in 2025. The full impact of synergies from the Izzi and Sky integration is expected to materialize throughout 2025, contributing to continued margin expansion. The company aims for low single-digit subscriber base growth in the medium term for its Cable business, supported by rational CapEx intensity and effective churn reduction. Management also anticipates ARPU growth through upselling enhanced services and new products, rather than relying on broad price increases.

Risks and Challenges

Despite the positive momentum, Grupo Televisa faces several pertinent risks. The secular decline of the DTH satellite business (Sky) presents an ongoing challenge, though management has strategically integrated its cost structure into Izzi to mitigate its financial impact. Macroeconomic headwinds in Mexico, including potential deceleration in consumption trends, could impact advertising revenues and subscriber churn, although the company's cable and broadband offerings are considered relatively resilient. Furthermore, while digital content is currently exempt from U.S. tariffs, any unforeseen changes in trade policy could affect TelevisaUnivision's content production and distribution model. The competitive intensity in the streaming market, with aggressive investments from global players, also necessitates continuous innovation and strategic adaptation to maintain ViX's leadership in Spanish-language content.

Conclusion

Grupo Televisa is executing a comprehensive transformation, strategically positioning itself for sustained value creation in a dynamic media and telecommunications landscape. By prioritizing operational efficiencies, leveraging its unique technological advantages in Spanish-language content, and maintaining a disciplined approach to capital allocation and debt reduction, the company is building a more resilient and profitable business. The successful integration of Izzi and Sky, coupled with the rapid growth and profitability of ViX, underscores management's ability to adapt and innovate. While challenges such as the DTH decline and competitive pressures persist, Grupo Televisa's focus on value customers, efficient content production, and deleveraging provides a compelling investment thesis for discerning investors seeking exposure to a dominant player in the evolving Spanish-speaking media and telecom markets. The company's commitment to strengthening its balance sheet and enhancing free cash flow generation, alongside its strategic digital expansion, positions it favorably for long-term growth and shareholder returns.