A.Operating Results The following discussion should be read in conjunction with our consolidated financial statements and accompanying notes and other information appearing elsewhere in this annual report. We prepared our consolidated financial statements included in this annual report in accordance with IFRS Accounting Standards. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those expressed or implied in such forward-looking statements as a result of various factors, including those set forth in “Cautionary Statement Regarding Forward-Looking Statements” and “Item 3. Key Information—D. Risk Factors.” 81 Table of Contents Significant Factors Affecting Our Results of Operations We believe that our results of operations and financial performance are driven by the following factors: Brazilian economic environment The Brazilian economic environment has historically been characterized by significant variations in economic growth, inflation and currency exchange rates. As a Brazilian company, our results of operations and financial condition are significantly influenced by these factors and the effect that these factors have on employment rates, the availability of credit and average wages in Brazil. While the Brazilian GDP is expected to have increased in recent years, we cannot assure that this trend will continue in the future. The modest fiscal adjustments that were put in place, combined with higher interest rates and economic slowdown, has maintained uncertainty regarding Brazil’s public debt sustainability. This has contributed to higher volatility in financial asset prices and Brazil’s risk premium, and a limitation in the room for the Brazilian real to strengthen. Regarding economic growth, after some years of GDP growth above 3%, boosted by fiscal and monetary stimuli, historically low unemployment levels and a strong performance in certain economic sectors, in 2025, GDP growth is estimated to have slowed to 2.3% (from 3.4% in 2024), according to market consensus, mainly driven by the monetary policy tightening. The macroeconomic outlook for 2026 is expected to be clouded by high interest rates in the beginning of the year, and uncertainty on both domestic political front due to presidential elections, and on global economic and geopolitical environments. The market consensus anticipates that Brazil’s GDP growth in 2026 will be lower than in 2025. Any slowdown in Brazil’s economic growth, changes in interest rates, unemployment levels, or general price stability could adversely affect our business, financial condition, and results of operations. Brazil registered a trade balance surplus of US$68.3 billion in 2025, down from the result of US$74.2 billion in 2024. Exports increased by 3.5%, reaching US$348.7 billion, while imports increased by 6.7%, totaling US$280.4 billion. Foreign direct investment inflows into Brazil amounted to US$77.7 billion in the 12 months accumulated as of December 31, 2025, compared to US$74.1 billion during the same period in 2024. International reserves as of December 31, 2025 stood at US$ 358.2 billion, reflecting a change from US$329.7 billion as of December 31, 2024. The primary fiscal result posted a deficit of 0.43% of GDP as of December 31, 2025, compared to a deficit of 0.4% of GDP at the end of December 2024, according to the Central Bank of Brazil. Gross public debt rose to 78.7% of GDP as of December 31, 2025 compared to 76.3% at the end of December 2024. These fiscal pressures can indirectly affect businesses through higher borrowing costs, reduced consumer purchasing power, and potential currency volatility, all of which could impact operational costs and demand for services. For companies in capital-intensive industries, such as telecommunications, the fiscal environment remains a key factor influencing strategic planning and results of operations. Inflation and governmental measures to curb inflation In recent years, inflation has oscillated around its target, set annually by the CMN. Inflationary shocks have pushed Brazil’s inflation rate above the target in the past few years. From 2005 to 2018, the target level was 4.5%, with a tolerance interval of 2.0 percentage points until 2016, when the tolerance band was narrowed to 1.5 percentage points. The CMN subsequently lowered the target to 4.25% in 2019, with 0.25 percentage point decreases implemented annually until it reaches 3.00%. In June 2023, the CMN made the 3.00% inflation target permanent for subsequent years. 82 Table of Contents In 2021, inflation increased to 10.1% at the end of the year (from 4.5% in 2020), as a result of several shocks that ranged from problems in global supply chains – which increased prices at the wholesale level – to climate setbacks – which hit energy and foodstuff prices – as well as the depreciation of the Brazilian real. In 2022, inflationary pressures escalated in Brazil, including as a result of the ongoing war between Ukraine and Russia, supply chain issues, the continued COVID-19 pandemic and increases in energy prices. As a result, inflation peaked at 12.1% in April 2022 (as measured by the IPCA in year-over-year terms) the highest levels since 2003 in Brazil. Following the dissipation of these shocks, accumulated inflation in Brazil slowed to 5.8% by the end of 2022 and to 4.6% by the end of 2023. In 2024, inflation increased to 4.8% by the end of the year, as a result of droughts which disrupted food supplies, increases in energy prices, and the depreciation of the real. In 2025, inflation receded to 4.3%, driven by the monetary policy tightening effects and exchange rate appreciation, but remained above the 3.00% target. Before 2006, the fees we charged our customers were periodically adjusted by ANATEL based on the inflation rates measured by the IGP-DI. Starting in 2006, telephone fees were indexed to the IST, which is a basket of Brazilian indexes that reflect the telecommunications sector’s operating costs. Such indexing reduced inconsistencies between revenue and costs in our industry and therefore reduced the adverse effects of inflation on our business. The IST for the year ended December 31, 2025 was 3.5% according to the most recent ANATEL data. The table below shows the Brazilian general price inflation (according to the IGP-DI, IPCA and the IST) for 2021 through 2025: Inflation (%) as Measured by the IGP-DI Inflation (%) as Measured by the IPCA Inflation (%) as Measured by the IST December 31, 2021 17.7 10.1 17.3 December 31, 2022 5.0 5.8 6.9 December 31, 2023 (3.3) 4.6 2.1 December 31, 2024 6.9 4.8 4.6 December 31, 2025 (1.2) 4.3 3.5 Source: FGV, IBGE and ANATEL. In 2021, the Central Bank began a monetary tightening cycle in response to rising inflation, the depreciation of the real, and a perception of recovery in certain economic activities following the easing of COVID-19-related restrictions. The SELIC rate increased from 9.25% as of December 31, 2021, to 13.75% as of December 31, 2022. In 2023, the Central Bank initiated an easing cycle as inflationary pressures subsided, reducing the SELIC rate to 11.75% as of December 31, 2023. The easing continued into the first half of 2024, with the SELIC rate reaching 10.50% in May 2024. However, inflationary pressures resurfaced in mid-2024, driven by adverse climatic conditions affecting food and energy prices and a depreciation of the real, amid robust economic activity and tight labor market. In response, the Central Bank resumed tightening monetary policy, increasing the SELIC rate up to 15.00% in June 2025 and maintaining it at this level until December 2025. These adjustments reflect the Central Bank’s efforts to balance inflation control with economic stability. As of the date of this annual report, the SELIC rate is 15.00%. Periods of higher inflation coupled with higher interest rates and other measures to combat inflation may lead to reduced demand for our products. Inflation is also likely to increase some of our costs and expenses, which we may not be able to fully pass on to customers and could adversely affect our operating margins and operating income. In addition, inflation affects our financial liquidity and financial capital resources primarily by exposing us to variations in our floating-rate loans. Higher interest rates may also impact the costs of our fundraising and indebtedness, increasing our financial expenses. Such an increase could adversely affect our ability to pay our obligations to the extent it reduces cash on hand. On the other hand, we have generally been able to pass through price increases, mostly in line with inflation, to our customer base, partially offsetting the negative effects. 83 Table of Contents Although we are not able at this time to predict the extent to which these events may have a material, or any, effect on our financial or operational results in future periods, we could be negatively impacted if economic conditions decline further and remain volatile. Geopolitical developments The geopolitical conflicts between Russia and Ukraine, and between Israel and Hamas, have led to disruptions in the global markets for various commodities - particularly oil, fuel, certain agricultural products, and fertilizers - including through sanctions, export/import controls and other trade restrictions. In addition, developments in other jurisdictions (including Venezuela) and changes in applicable sanctions regimes may from time to time create further uncertainty and volatility in global energy and commodity markets. While the precise effect of the ongoing war and these geopolitical developments on global economies remains uncertain and ever-changing, they have already resulted in significant volatility in financial markets, as well as an increase in energy and commodity prices globally. While, as of the date of this annual report, there have not been any material impacts from these conflicts on our business, we are continuously monitoring the developments to assess any potential future impacts that may arise as a result of such developments. The adverse effects—global or localized—of these developments, and/or economic sanctions and import and/or export controls to be imposed by the United States, the UK, the EU or others in connection with any such conflicts, and their adverse effects on the wider global economy and market conditions could have a material adverse effect on our business, financial condition and results of operations. Foreign exchange rates The Brazilian currency has, during the last decades, experienced frequent and substantial variations in relation to the U.S. dollar and other foreign currencies. The real/U.S. dollar exchange rate reported by the Brazilian Central Bank was R$4.8413 per US$1.00 on December 31, 2023, which reflected a 7.4% appreciation in the real against the U.S. dollar during the year. The real/U.S. dollar exchange rate reported by the Brazilian Central Bank was R$6.1923 per US$1.00 on December 31, 2024, which reflected a 27.9% depreciation in the real against the U.S. dollar during the year. The real/U.S. dollar exchange rate reported by the Brazilian Central Bank was R$5.5024 per US$1.00 on December 31, 2025, which reflected an 11% appreciation in the real against the U.S. dollar during the year, influenced in part by higher Brazilian interest rates relative to the U.S., attracting capital inflows, alongside improving global risk sentiment and solid commodity exports. As of February 23, 2026, the real/U.S. dollar exchange rate reported by the Brazilian Central Bank was R$5.17 per US$1.00. Depreciation of the real relative to the U.S. dollar has created additional inflationary pressures in Brazil, which has led to increases in interest rates and limited Brazilian companies’ access to foreign financial markets. Depreciation of the real may also, in the context of an economic slowdown, lead to decreased consumer spending, deflationary pressures and reduced growth of the Brazilian economy as a whole, and thereby harm our asset base, financial condition and results of operations. Conversely, appreciation of the real relative to the U.S. dollar and other foreign currencies could lead to a deterioration of the Brazilian foreign exchange currency balance of payments, as well as dampen export driven growth. Depending on the circumstances, either depreciation or appreciation of the real could materially and adversely affect the growth of the Brazilian economy and our business, financial condition and results of operations, as volatility of the Brazilian real against the U.S. dollar may in any case affect the purchasing power of Brazilian consumers and cause a negative impact on the ability of our customers to pay for our telecommunications services. 84 Table of Contents Sources of Revenue The breakdown of our operating revenue is presented net of discounts. In addition, we categorize our revenue according to the following groups: •Exploitation of communications and telecommunications services; •Development of activities necessary or useful to the execution of these services, in conformity with the concessions, authorizations and permissions granted thereto; •Exploitation of value-added services, development, availability, distribution, and commercialization of digital services, as well as audio, video, image, text, and internet based applications in any medium, including advertising and promotional materials; •Exploitation of integrated solutions, management and provision of services related to: (i) data center, including hosting and colocation; (ii) storage, processing and management of data, information, texts, images, videos, applications and information systems and similar activities; (iii) information technology; (iv) information and communications security; (v) telecommunications; and (vi) electronic security systems related to theft, intrusion, fire and others; and •Licensing and sub-licensing of any nature. Results of Operations The following table sets forth certain components of our net income for each year ended December 31, 2025, 2024 and 2023, as well as the percentage change of each component. Year ended December 31, Percent change 2025 2024 2023 2025–2024 2024–2023 (in millions of reais) Net operating revenue 59,595.0 55,845.0 52,100.1 6.7 % 7.2 % Cost of sales (32,925.4) (31,352.1) (29,415.4) 5.0 % 6.6 % Gross profit 26,669.6 24,492.9 22,684.7 8.9 % 8.0 % Operating (expenses) income (16,810.4) (15,819.4) (14,766.9) 6.3 % 7.1 % Selling expenses (13,348.1) (12,953.8) (12,439.2) 3.0 % 4.1 % General and administrative expenses (3,771.6) (3,205.0) (2,957.3) 17.7 % 8.4 % Other operating income, net 327.5 343.8 640.3 (4.7 %) (46.3 %) Share of results in investees - equity method (18.2) (4.4) (10.7) 313.6 % (58.9 %) Operating income 9,859.2 8,673.5 7,917.8 13.7 % 9.5 % Financial expenses, net (2,588.3) (1,909.7) (2,343.9) 35.5 % (18.5 %) Income before taxes 7,270.9 6,763.8 5,573.9 7.5 % 21.3 % Income and social contribution taxes (1,093.4) (1,206.5) (533.9) (9.4 %) 126.0 % Net income for the year 6,177.5 5,557.3 5,040.0 11.2 % 10.3 % Net income attributable to: Controlling shareholding 6,167.9 5,547.9 5,029.4 11.2 % 10.3 % Non-controlling shareholders 9.6 9.4 10.6 2.1 % (11.3 %) 85 Table of Contents Results of Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 The table and descriptions below set forth explanations for the variations: Year ended December 31, Percent change % 2025 2024 2025-2024 (in millions of reais) Net operating revenues 59,595.0 55,845.0 6.7 % Services 55,094.7 51,751.4 6.5 % Sale of goods 4,500.3 4,093.6 9.9 % Net operating revenue Net operating revenue increased by R$3,750.0 million, or 6.7%, from R$55,845.0 million in 2024 to R$59,595.0 million in 2025, maintaining the tendency of growing our revenues from services and sale of goods above the inflation rates registered in the period (IPCA of 4.3% in 2025) at rates of 6.5% and 9.9%, respectively, when compared to 2024. Our services revenue, which increased by R$3,343.3 million, or 6.5%, to R$55,094.7 million in 2025 from R$51,751.4 million in 2024, was boosted by the strong performance of the mobile business, mainly in postpaid services, supported by the growth in our customer base, reduction in churn and annual price adjustments. As for revenues from the sale of goods, which increased by R$406.7 million, or 9.9%, to R$4,500.3 million in 2025 from R$4,093.6 million in 2024, such performance was mainly impacted by the increased demand for 5G smartphones and accessories, combined with the broad range of electronics that composes our portfolio. Cost of sales Cost of sales increased by R$1,573.3 million, or 5.0%, from R$31,352.1 million in 2024 to R$32,925.4 million in 2025. The table and descriptions below set forth explanations for these variations: Year ended December 31, Percent change 2025 2024 2025-2024 (in millions of reais) Cost of goods sold (4,555.5) (4,468.0) 2.0 % Depreciation and amortization (12,367.7) (11,713.1) 5.6 % Third-party services and other (11,349.9) (10,391.6) 9.2 % Rental, insurance, condominium and connection means (1,242.3) (1,383.8) (10.2 %) Personnel (1,414.6) (1,366.5) 3.5 % Taxes, charges and contributions (1,995.4) (2,029.1) (1.7 %) Cost of sales (32,925.4) (31,352.1) 5.0 % Cost of Goods Sold: Cost of goods sold increased by R$87.5 million, or 2.0%, from R$4,468.0 million in 2024 to R$4,555.5 million in 2025, mainly due to the growth of handsets and ICT equipment's sales, combined with the broad range of electronics that composes our portfolio, corresponding to an increase in the sale of goods revenue line. Depreciation and Amortization: Costs related to depreciation and amortization increased by R$654.6 million, or 5.6%, from R$11,713.1 million in 2024 to R$12,367.7 million in 2025, resulting from accelerated depreciation of legacy technologies equipments. 86 Table of Contents Third-Party Services and Other: Costs related to outside services and other increased by R$958.3 million, or 9.2%, from R$10,391.6 million in 2024 to R$11,349.9 million in 2025, mainly due to the costs related to third-party services, associated with the expansion of our network, and Corporate Data & ICT revenue. Rental, Insurance, Condominium and Connection Means: Costs related to rent, insurance, condominium and connection means decreased by R$141.5 million, or 10.2%, from R$1,383.8 million in 2024 to R$1,242.3 million in 2025, mainly due to decreases as a result of network rental efficiencies and lower condominium fees. Personnel: Personnel expenses increased by R$48.1 million, or 3.5%, from R$1,366.5 million in 2024 to R$1,414.6 million in 2025, driven by annual wage and benefits readjustments. Taxes, Charges and Contributions: Taxes, charges and contributions decreased by R$33.7 million, or 1.7%, from R$2,029.1 million in 2024 to R$1,995.4 million in 2025, primarily due to lower regulatory fees and other taxes. Operating (expenses) income Operating (expenses) income increased by R$977.2 million, or 6.2%, to R$16,792.2 million in 2025 from R$15,815.0 million in 2024. The table and descriptions below set forth explanations for these variations: Year ended December 31, Percent change 2025 2024 2025–2024 (in millions of reais) Selling expenses (13,348.1) (12,953.8) 3.0 % General and administrative expenses (3,771.6) (3,205.0) 17.7 % Other operating income (expenses), net 327.5 343.8 (4.7 %) Total (16,792.2) (15,815.0) 6.2 % Selling Expenses: Our selling expenses increased by R$394.3 million, or 3.0%, from R$12,953.8 million in 2024 to R$13,348.1 million in 2025, given higher costs with third-party services related to the increased commercial activity as well as personnel-related expenditures resulting from annual wage and benefits readjustments and greater costs with variable compensation. General and Administrative Expenses: Our general and administrative expenses increased by R$566.6 million, or 17.7%, from R$3,205.0 million in 2024 to R$3,771.6 million in 2025, mainly due to higher expenses with systems development, licenses and software, and consultancy firms. Other Operating Income (Expenses), Net: Other operating income, net decreased by R$16.3 million, or 4.7%, from R$343.8 million in 2024 to R$327.5 million in 2025, due to the effect of higher expenses related to contingencies and asset disposal services, was offset by higher tax recoveries, investment gains, sales of scrap metal and extinguished fibers, and gains from real estate sales. Financial income (expenses), net: In 2025, our financial expense, net amounted to R$2,588.3 million, an increase of R$678.6 million, or 35.5%, from an expense of R$1,909.7 million in 2024, mainly due to the reversal of monetary updates on provisions related to the migration of fixed-line voice concession to an authorization regime in 2025 combined with net gains related to adherence to tax amnesty programs, partially offset by higher level of revenue from interest income. 87 Table of Contents Income and social contribution taxes: Income and social contribution tax expenses decrease R$113.1 million, or 9.4%, from R$1,206.5 million in 2024 to R$1,093.4 million in 2025. This was primarily due to benefits from the Good Law. As a result, in 2025, our effective rate of income and social contribution taxes amounted to 15.0%, a decrease of 2.8 p.p. as compared to 17.8% in 2024. Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 For a discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, please see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023” of our annual report on Form 20-F for the year ended December 31, 2024. B.Liquidity and Capital Resources General We fund our operations and capital expenditures primarily from operating cash flows, loans obtained from financial institutions or development banks, and debentures. As of December 31, 2025, we had R$7.0 billion in cash and cash equivalents. We do not have any material unused sources of liquidity. Our principal cash requirements include: •the servicing of our indebtedness; •capital expenditures; and •the payment of dividends. Our management believes that our sources of liquidity and capital resources, including working capital, are adequate for our present requirements. Sources of Funds Our net cash generated by operating activities was R$20.7 billion in 2025, an increase of R$841 million, or 4.2%, compared to R$19.9 billion in 2024. The increase in cash flow from operations is primarily due to a rises of taxes to recover, which are mainly a result of certain tax credits and taxes, charges and contributions, partially offset by interest paid on loans, financing, debentures and leases. For a discussion of our sources of funds for the year ended December 31, 2024 compared to the year ended December 31, 2023, please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Sources of Funds” of our annual report on Form 20-F for the year ended December 31, 2024. Uses of Funds Our net cash used in investing activities was R$10.0 billion in 2025, an increase of R$1.1 billion, or 12.4%, compared to R$8.9 billion in 2024. This increase was primarily driven by higher investments as a result of M&A activities in connection with the acquisition of Samauma, FiBrasil and CyberCo. Our net cash used in financing activities recorded an outflow of R$10.4 billion in 2025, an increase of R$1.7 billion, or 20.0%, compared to R$8.6 billion in 2024. This increase was mainly due to higher debt repayments, as well as share buybacks and capital reductions. 88 Table of Contents For a discussion of our uses of funds for the year ended December 31, 2024 compared to the year ended December 31, 2023, please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Uses of Funds” of our annual report on Form 20-F for the year ended December 31, 2023. Indebtedness As of December 31, 2025, our total debt was as follows: Debt Currency Annual interest rate payable Maturity Total amount outstanding (in millions of reais) Finance Leases (1) BRL — 2056 15,432.9 Debentures Telefônica Brasil 7th issue - Second Series BRL CDI rate + 1,35% a.a. 2027 2,150.4 Debentures FIBrasil 3rd issue - First Series BRL IPCA + 7,3609% a.a. 2034 916.5 5G License BRL SELIC rate 2040 1,034.0 Acquisition - M&A VSS BRL SELIC rate 2029 4.1 Acquisition - M&A VITA IT BRL IPCA 2027 40.5 Acquisition - M&A IPNET BRL SELIC rate/IPCA 2029 170.6 Acquisition - M&A I2GO BRL CDI rate 2031 44.6 Acquisition - M&A Cyber BRL - 2027 16.5 Tax amnesty programs (2) BRL SELIC rate 2029 405.3 Financial institutions BRL CDI rate + 2.92% p.a. 2026 3.7 Other creditors (3) BRL CDI rate + 3.75% p.a. 2028 78.3 Intercompany loan (4) EUR Six-month EURIBOR + 2.4% p.a. 2027 49.3 Total debt 20,346.7 Current 5,348.9 Noncurrent 14,997.8 (1)Our finance leases are related to towers and rooftops, IT equipment leases, infrastructure rent and other means of transmission. (2)Refers to (i) the State of São Paulo Amnesty Program (Law No. 17,843/2023), which allows for the settlement of ICMS debts with reductions in interest and principal for eligible taxpayers, (ii) the State of Paraná Amnesty Program (Law No. 20,946/2021), which provides similar debt settlement benefits, including reductions in fines and interest, (iii) the State of Rio Grande do Sul Amnesty Program (Decree No. 58,067/2025), which allows for the settlement and installment of ICMS debts with reductions in fines and interest, and (iv) the State of Minas Gerais ICMS installment and refinancing programs, related to energy‑related ICMS debts. For more information, please see note 20.c.1 to our audited consolidated financial statements included elsewhere in this annual report.. (3)Refers to the investments made by Polígono in Vivo Money in 2023. See “Item 4. Information on the Company—A. History and Development of the Company—Historical Background—Launch of Vivo Money Credit Rights Investment Funds (FIDCs).” (4)On September 26, 2024, the Company's subsidiary, CloudCo Brasil, entered into a loan agreement with TCCT, a Telefónica Group company, for an amount of €7.4 million (equivalent to R$45.0 million). This loan provides CloudCo Brasil with the financial capacity to fulfill its obligations related to the acquisition of IPNET. The principal amount will be adjusted daily until full repayment, based on the six-month Euro Interbank Offered rate, or the EURIBOR rate, plus 240 basis points per year, from the date the funds are made available until the date of repayment. Interest payments will be made semi-annually, beginning on March 27, 2025, while the principal will be repaid on September 27, 2027. To mitigate risk exposure, a swap contract was executed to hedge against exchange rate fluctuations and convert the fixed interest into CDI rate + 1.795% per year. As of December 31, 2025, the outstanding loan balance was R$49.3 million. Interest and principal payments on our indebtedness as of December 31, 2025 due in 2026 totaled R$5,348.8 million, in comparison to R$6,447.9 million as of December 31, 2024. As of December 31, 2025, our debentures have a sustainability component (Debentures linked to Environmental, Social and Corporate Governance - ESG) performance, classifying them as “sustainability-linked”, under the terms of the International Capital Market Association in the Sustainability-Linked Bond Principles, June 2020 release. 89 Table of Contents These agreements contain certain standard restrictive clauses. These agreements can provide an acceleration of the full balance of our obligations in the event of default. In general, such agreements are subject to the acceleration of maturity over: (i) the inclusion in the agreement of our shareholders, bylaws or articles of incorporation or of the companies that control us of conditions that lead to restrictions or loss of ability to pay financial obligations arising from these agreements; or (ii) liquidation, dissolution, insolvency; bankruptcy, judicial or extrajudicial recovery to any creditor or class of creditors. As of December 31, 2025, we were not in default of any of our obligations and therefore none of our liabilities were subject to acceleration. Foreign exchange and interest rate exposure We face foreign exchange risk due to our foreign currency-denominated accounts payable (including our capital expenditures, particularly equipment) and receivables in foreign currency. A devaluation of the real may increase our cost of debt and certain commitments in a foreign currency. Our revenue is earned in reais, and we have no material foreign currency-denominated assets, except income from hedging transactions, interconnection of international long-distance services and services rendered to customers outside Brazil. Equity investments in foreign companies also suffer effects with variations in the exchange rate. We use derivative instruments to limit our exposure to exchange rate risk. Since September 1999, we have hedged all of our foreign currency-denominated bank debt using swaps and other derivative instruments. Since May 2010, the Company began using net balance coverage, which is the hedging of net positions in foreign exchange exposures, or assets (issued invoices) minus liabilities (received invoices) for foreign exchange exposures, substantially reducing our risk to fluctuations in exchange rates. We could continue to face exchange rate exposure with respect to our planned capital expenditures, however, as a small part of our planned capital expenditures are denominated or indexed in foreign currencies (mostly U.S. dollars). We systematically monitor the amounts and time of exposure to exchange rate fluctuations and may hedge positions when deemed appropriate. The largest part of our reais-denominated debt originally pays interest as a percentage of the CDI rate or has been swapped to do so. The CDI rate is indexed to the average rate of operations transacted among the banks within Brazil. With the CDI rate being a floating rate, we remain exposed to market risk. This exposure to the CDI rate is also present in long derivatives positions and financial investments, which are indexed to percentages of the CDI rate. For more information, see “Item 11. Quantitative and Qualitative Disclosures about Market Risk.” 90 Table of Contents Tabular Disclosures of Contractual Obligations and Commercial Commitments Our contractual obligations and commercial commitments as of December 31, 2025 were as follows: Total Less than 1 year 1–3 years 4–5 years More than 5 years (in millions of reais) Contractual obligations: Loans, financing and leases (1) 15,436.5 4,885.4 6,112.9 3,089.5 1,348.8 Debentures 3,067.0 161.5 2,000.0 181.1 724.4 Derivatives 198.7 52.7 34.6 — 111.3 5G License and cash obligations 1,034.0 68.9 137.9 137.9 689.3 Other Creditors 78.3 31.8 46.5 — — Acquisition - M&A VSS 4.1 — 1.6 2.5 — Acquisition - M&A VITA IT 40.5 22.9 17.5 — — Acquisition - M&A IPNET 170.6 13.7 59.2 97.7 — Acquisition - M&A I2GO 44.6 5.6 11.2 27.9 — Acquisition - M&A Cyber 16.5 — 16.5 — — Amnesty Program 405.3 158.3 204.6 42.4 — Intercompany Loan 49.3 0.7 48.6 — — Pension and other post-retirement benefits 786.5 27.3 14.5 15.5 729.2 Total contractual obligations 21,331.8 5,428.9 8,705.6 3,594.3 3,603.0 Trade accounts payable 9,861.3 9,861.3 — — — Total trade payables 9,861.3 9,861.3 — — — (1)Includes the present value of minimum lease payments on operating leases of rental of equipment, facilities and stores, administrative buildings, and cell sites. See note 21 of our audited consolidated financial statements included elsewhere in this annual report. (2)For more information, see “—Indebtedness” above. Long-Term Debt – Loans, financing, leases and debentures Our long-term debt as of December 31, 2025 was as follows: Amount (in millions of reais) Year ending December 31 2027 5,431.9 2028 2,681.0 2029 1,977.8 2030 1,292.8 2031 onwards 2,073.2 Total 13,456.7 91 Table of Contents Our contractual commitments as of December 31, 2025 were as follows: Amount (in millions of reais) 2026 938.4 2027 838.7 2028 860.6 2029 840.3 2030 360.8 2031 onwards 1,574.5 Total(1)(2) 5,413.3 (1)Includes R$ 1,181.8 million, referring to contracts for the provision of security services with Telefónica Cybersecurity Tech, S.L.U. (“CyberCo”) and its subsidiaries, companies of the Telefônica Group. (2)Unrecognized contractual commitments arising from the purchase of goods and services. The amount presented above represents the total consolidated nominal values equivalent to the full contract period. See note 34(a) to our audited consolidated financial statements included elsewhere in this annual report. Our guarantees as of December 31, 2025 were as follows: Amount (in millions of reais) Insurance of guarantee(1) 30,925.7 Letters of guarantee 9,884.0 Judicial deposits and garnishments 2,964.3 Property and equipment 9.7 Financial investments in guarantee of lawsuits 41.3 Total(2) 43,825.0 (1) These refer to insurance amounts contracted to ensure the continuity of legal proceedings. For more information, see note 20 to our audited consolidated financial statements included elsewhere in this annual report. (2) Guarantees for several commitments with ANATEL, suppliers and legal proceedings. For more information, see notes 4, 10, 13.f and 34(b) to our audited consolidated financial statements included elsewhere in this annual report. For more information, see notes 21 and 34 to our audited consolidated financial statements included elsewhere in this annual report. Capital Expenditures and Payment of Dividends Our principal capital requirements are for capital expenditures and payments of dividends to shareholders. Capital expenditures consisted of additions to property, plant and equipment, additions to intangible assets, including licenses and excluding leases (IFRS 16) which totaled R$9.3 billion, R$9.2 billion and R$9.0 billion for the years ended December 31, 2025, 2024 and 2023, respectively. These expenditures relate primarily to the expansion of our network. We may seek financing for part of our capital expenditures and cash management assistance from the Brazilian government, in particular from BNDES, which is the main government financing agent in Brazil, as well as from the local or foreign capital markets or from local and foreign financial institutions. See “Item 4. Information on the Company—A. History and Development of the Company—Capital Expenditures.” Pursuant to our bylaws and Brazilian Corporate Law, we are required to distribute a mandatory minimum dividend of 25% of our “adjusted net income” (as defined below) in respect of each fiscal year to the extent earnings are available for distribution. 92 Table of Contents Adjusted net income, as determined by Brazilian Corporate Law, is an amount equal to our net income adjusted to reflect allocations to or from (i) legal reserve, (ii) bylaw reserve and (iii) a contingency reserve for anticipated losses, if any. We may also make additional distributions in the case that we have profits and reserves available to distribute. All of the above distributions may be made as dividends or as tax-deductible interest on shareholders’ equity. Interest on shareholders’ equity is tax-deductible payments pursuant to Brazilian Corporate law, that a company may make, in addition to dividends, which the company may treat as financial expenses for tax and social contribution purposes. For more information on the payment of interests on shareholders’ equity, see “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividends and Dividend Distribution Policy—Dividends and Interest on Shareholders’ Equity.” We deliberated in favor of the distribution of dividends and interest on shareholders’ equity of R$3.4 billion, R$3.1 billion and R$3.4 billion in 2025, 2024 and 2023, respectively. Our management expects to meet 2026 capital requirements primarily from cash provided from our operations. Net cash generated by operating activities was R$20.7 billion, R$19.9 billion and R$18.8 billion in 2025, 2024 and 2023, respectively. Adjustments to net income for purposes of calculating the basis for dividends include allocations to various reserves that effectively reduce the amount available for the payment of dividends. The proposal to pay dividends will be approved at the shareholders’ meeting that will approve the 2025 annual report. See “Item 3. Key Information—D. Risk Factors—Risks Relating to the Common Shares and the ADSs— Holders of our ADSs are not entitled to attend shareholders’ meetings and may only vote through the depositary.” and “Item 10. Additional Information—B. Memorandum and Articles of Association—Description of Our Bylaws—Voting Rights.” Accounting Pronouncements The accounting policies adopted in the preparation of the consolidated financial statements for the year ended December 31, 2025 are consistent with those used in the preparation of the consolidated annual financial statements for the year ended December 31, 2024. New IFRS pronouncements, issues, amendments and interpretations of the IASB The new and amended standards and interpretations issued, but not yet effective up to the date of issue of the Company’s financial statements, are described below. The Company intends to adopt these new and amended standards and interpretations, if applicable, when they become effective. The Company does not anticipate the early adoption for the year ended December 31, 2025 of any pronouncement, interpretation or amendment that has been issued before application is mandatory. •Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7: On May 30, 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments: (i) clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system; (ii) clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion; (iii) add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and (iv) update the disclosures for equity instruments designated at fair value through other comprehensive income. Effective for annual periods beginning on or after January 1, 2026. 93 Table of Contents •IFRS 18: Presentation and Disclosure in Financial Statements: In April 2024, the IASB issued IFRS 18, which replaces IAS 1. IFRS 18 introduces new requirements for presentation within the income statement, including specified totals and subtotals. In addition, entities are required to classify all income and expenses within the income statement into one of five categories: operating, investing, financing, income taxes and discontinued operations, of which the first three are new. The standard also requires disclosure of management-defined performance measures, subtotals of income and expenses, and includes new requirements for the aggregation and disaggregation of financial information based on the identified “functions” of the primary financial statements (PFS) and the notes. In addition, narrow-scope changes have been made to IAS 7 (equivalent to IFRS 18: Presentation and Disclosure in Financial Statements), which include changing the starting point for determining cash flows from operations using the indirect method, from “profit or loss for the period” to “operating profit or loss” and removing the optionality for classifying cash flows from dividends and interest. IFRS 18 and the amendments to the other standards will come into effect for reporting periods beginning on or after January 1, 2027, with early application permitted and required to be disclosed, although in Brazil early adoption is not permitted. IFRS 18 will be applied retrospectively. •IFRS 19: Subsidiaries without Public Accountability: Disclosures: In May 2024, the IASB issued IFRS 19, which allows eligible entities to elect to apply its reduced disclosure requirements while still applying the recognition, measurement and presentation requirements in other IFRS accounting standards. To be eligible, at the end of the reporting period, an entity must be a subsidiary as defined in IFRS 10, must not have a public accountability and must have a parent (ultimate or intermediate) that prepares consolidated financial statements, available for public use, that comply with IFRS accounting standards. IFRS 19 will be effective for reporting periods beginning on or after 1 January 2027, with early application permitted and required to be disclosed, although in Brazil early adoption is not permitted. The Company is currently working to identify all impacts that the new and amended standards will have on the primary financial statements. The Company did not early adopt any new accounting statements or interpretations, the application of which is not mandatory. C.Research and Development, Patents and Licenses Research and Development We operate in a fast-paced, dynamic and convergent industry, which demands that our products and services be continuously revamped to keep up with growth expectations. The evolution of products and services now includes features to offer new services such as health care, fintech and connected home. The table below presents our investments in the research and development, including investments in the updating and modernization of systems to support the launch of new products and services, for each of the periods indicated: For the Year Ended December 31, 2025 2024 2023 (in millions of reais) Development and Innovation (business incubator and tests) 32.4 25.8 57.9 94 Table of Contents Patents and Licenses Our principal intellectual property assets include: •permission to use the trademark name “Telefônica” and all names derived from “Telefônica”; •our commercial brands in Brazil, “Vivo”, and sub-brands such as “Vivo Fibra”, “Vivo Total”, “Vivo Pós”, “Vivo 5G“, “Vivo Controle”, “Vivo Pré”, “Vivo PlayTV”, “Vivo Easy Lite”, “Vivo Pay”, “Vivo Empresas”, “Vivo Agro”, “Vivo Ventures”, “Vivo Casa Inteligente” and “Velvet”; •the figurative trademark “Vivinho”; •the trademark “Aura”, which is Vivo’s Artificial Intelligence; •permission to use the trademark “Terra”, which provides media and digital services; •“Atma”, Vivo’s brand for a meditation app; •“OVVI”, Vivo’s brand for accessories; •“i2Go”, a brand of accessories of the recent acquired company Samauma Brands Comércio, Importação e Exportação de Eletro‑Eletrônicos Ltda., •“Vale Saúde Sempre”, Telefônica’s brand, which, through a monthly subscription, offers various health services to consumers in a cheap and accessible way; •“VivaE”, a brand of the joint venture between Telefônica/Vivo and the Educational Group Ânima that offers professional courses; and •“Gud Energia”, a brand of the joint venture between Telefônica/Vivo and Auren Energia for energy commercialization for the B2B market. •“IPnet by Vivo”, Vivo’s brand specializing in digital transformation through cloud solutions and services. In September 2016 and December 2024, the Brazilian Trademark Office recognized the “Vivo” trademark and the “Vivinho” figurative trademark, respectively, as “high reputation” trademarks and therefore protected in all branches of activities within Brazilian territory. In 2025, Telefônica’s commercial brand, Vivo, ranked third among the most valuable brands in Brazil, according to the TM20 ranking in partnership with Infomoney, accumulating a brand value of R$50.1 billion. D.Trend Information Reliable and ever-expanding high-speed connectivity will continue to gain relevance as consumers’ digital habits evolve and organizations progress in their digitalization journeys. Beyond technical excellence, customer experience will remain a major differentiator, with increasing adoption of artificial intelligence across customer services and operational service and operational processes. We also expect consumers and enterprise customers to become more selective in their choices, increasing the importance of trust, digital security and ESG-conscious agendas. The demand for ultra-broadband connectivity will continue to increase, notably driven by fiber in small cities. On the other hand, a more mature fiber market with higher penetration and fewer underserved areas will increase market competitiveness, likely accelerating consolidation in the medium term. Furthermore, the high cost of capital should continue to slow the growth pace of regional ISPs, especially those supported by private equity funds, leading these players to seek different strategic approaches to sustain growth. 95 Table of Contents Brazil’s main operators have launched 5G in more than 2,000 cities, with 5G coverage already reaching approximately two thirds of Brazil’s population. 5G adoption should continue to grow as device availability and affordability improve. 5G also marks the entry of new regional players into the mobile market in Brazil, which began launching their operations in early 2024. Vivo will continue expanding its 5G coverage, delivering the best speed and quality mix across the country. The company will also accelerate the rollout of its 5.5G network to more cities and regions, after being the first operator in Brazil to offer this technology to customers, reinforcing its leadership in next-generation connectivity. This will lay the groundwork for future legacy network switch-offs, always focusing on enhancing Vivo’s unmatched user experience. As consumers become more sophisticated in their digital habits, services beyond connectivity will gain relevance. Companies will leverage digitalization to broaden their service portfolios and offer more solutions, focusing on strengthening customer relationships and ultimately increasing revenue per user. Vivo will continue investing in digital services and innovative value propositions as a growth strategy, developing its digital platforms in education, healthcare, financial services, consumer electronics, energy and smart homes. Additionally, Vivo will leverage new partnerships and open innovation initiatives through Wayra and Vivo Ventures, strengthening its path to creating the leading B2C digital ecosystem in Brazil. In the B2B segment, digitization efforts will remain a top priority for CEOs, driving demand for better connectivity services and creating more opportunities for Professional & Managed Services in Cloud, Cybersecurity, IoT, Big Data and Messaging. Operators now have the technical capabilities to monetize their networks as open platforms. In line with this trend, Vivo has partnered with Brazilian operators to launch the Open Gateway initiative, transforming networks into developer-ready platforms, simplifying the development of cross-operator solutions, and supporting the rollout of a new generation of digital services. Customer experience will continue to play a fundamental role in differentiating operators, with generative AI opening a new competitive dynamics. Vivo is committed to providing its customers with the best experiences in the market by leveraging the potential of generative AI to create more engaging and seamless experiences in the Vivo App, while also supporting both call center and in-store agents with AI-enabled tools. On the ESG front, companies are expected to adopt more conscious agendas to foster trust among critical stakeholders, such as customers and investors. Vivo will remain positioned as an intersectoral reference in Brazil, operating in line with the United Nations’ Sustainable Development Goals and advancing towards becoming a Net Zero company by 2035, five years earlier than initially planned. To foster innovation and sustainable business growth, we will continue our journey of talent attraction and retention in an inclusive and diverse environment, always supported by a contemporary brand connected to key social themes. In this context, we believe we are well positioned to strengthen our leadership. Our strategic pillars, guided by Telefonica Group’s key drivers—Deliver best-in-class customer experience, Expand B2C offering, Scale B2B, Evolve technological capabilities, Simplify Telefónica’s Operating Model and Develop Talent—will enable us to achieve our purpose of advancing digitalization to bring people together (“Digitalizar para Aproximar”). E.Critical Accounting Estimates The preparation of the financial statements requires the use of certain critical accounting estimates and the exercise of judgment by the Company’s management in applying the Company’s accounting policies. These estimates are based on experience, better knowledge, information available at the end of the fiscal year, and other factors, including expectations of future events that are believed to be reasonable in the circumstances. Settlement of transactions involving these estimates may result in values that are different from those recorded in the financial statements due to the criteria inherent in the estimation process. The Company reviews its estimates at least annually. 96 Table of Contents The significant and relevant estimates and judgments applied by the Company in the preparation of the financial statements are presented in the following notes to our audited consolidated financial statements included elsewhere in this annual report: corporate events in 2025 (Business Combinations), trade accounts receivable; deferred income and social contribution taxes; property and equipment; intangible assets; impairment of non-financial assets; provision and contingencies; loans and financing, debentures, leases and other creditors; pension plans and other post-employment benefits; and financial instruments and risk and capital management.