Analysis: a smaller authorisation, and the arithmetic of why

The headline share count dropped. Programme 8 authorised 67,210,173 shares against Programme 9’s 55,187,638, even though both carry the same R$1 billion ceiling. Only part of that gap is about the share price. Programme 8 carved out roughly 5 million shares for the long-term incentive plan, a carve-out Programme 9 does not repeat; the new authorisation is framed purely around treasury and cancellation. Separately, a fixed R$1 billion ceiling simply buys fewer shares at a higher price, so the share count the board set is consistent with that ceiling. The percentage of capital also fell, from about 2.78% to about 2.31%, partly because the denominator shrank: 28,678,509 shares were cancelled in December 2025, reducing the base against which the new percentage is measured.

The more telling comparison is execution. Programme 7 bought nothing at all. Programme 8 came close to spending its full R$1 billion ceiling, pulling in 46,884,500 shares, roughly seven tenths of what it was allowed, and was closed a day early to clear the way for the new program. The record across the two prior programmes therefore runs from no purchases at all under Programme 7 to close to the full ceiling under Programme 8, and that is the execution record against which the new authorisation is being read.

Cash flow shows where the constraint sits. Operating free cash flow of R$1,242 million in a single quarter comfortably covers an R$1 billion authorisation spread across eighteen months, but that same cash already has claims on it: R$935 million of quarterly capex, R$400 million of interest on capital declared in June, and capital contributions of up to R$600 million to I-Systems and up to R$70 million to V8.Tech approved in July. Cash and marketable securities fell 17.2% over the year while debt rose R$292 million. The buyback is not being funded out of a growing cash pile; it is competing with subsidiary funding and shareholder remuneration for the same operating cash.

The macro backdrop is shifting under the decision too. The Selic target stood at 14.75% at the start of April 2026 and at 14.25% on 30 June 2026, while 12-month IPCA inflation ran at 4.64% in June 2026. Higher nominal rates raise the return available on cash held in interest bearing instruments, and they raise the discount rate applied to long-dated cash flows, the value management says the share price does not reflect.

The pace is what the disclosure leaves open. Nothing in the material fact binds TIM to a buying schedule, and Programme 7’s zero purchases are the reminder that authorization is permission, not a promise. Worth watching over the coming months: the monthly CVM Resolution 44 trading reports the company files, the treasury share balance in the quarterly financial statements, and whether the Programme 8 shares still sitting in treasury get cancelled or redirected.

What the documents say

On 19 August 2026, TIM S.A.'s (NYSE: TIMB) board signed off on a new buyback mandate, Program 9, for up to 55,187,638 common shares, and used the same meeting to close out the prior program. Investor relations officer Vicente de Moraes Ferreira signed the material fact in Rio de Janeiro, and it reached the U.S. Securities and Exchange Commission a day later. TIM’s common shares trade on B3 as TIMS3.

The terms of Programme 9

Program 9 covers roughly 2.31% of TIM’s total common shares and caps spending at R$1 billion. Shares bought will sit in treasury before being cancelled, subject to legal and regulatory limits, and the window runs through 19 February 2028. The company grounded the authorization in Article 157 of Law No. 6,404/76 and CVM Resolution No. 44/21, and approved it under Article 22, V of its bylaws and CVM Resolution No. 77/22. Details required by Annex G of CVM Resolution No. 80/22 appear in the board meeting minutes, posted on the CVM, B3 and TIM investor relations sites.

Management gave its reasoning in the filing. It said the decision reflects confidence in the company’s fundamentals, strategy and long-term value creation potential, and that the market price of the shares does not adequately reflect intrinsic value, the strength and resilience of the business model, cash generation capacity and growth prospects. On that basis, it said, repurchasing shares is an efficient use of capital that preserves the ability to invest in the business.

What the previous programme actually did

Programme 8, approved 12 February 2025, was wound down on 12 August 2026, a day ahead of its scheduled end. Across its run, TIM repurchased 46,884,500 common shares for close to R$1 billion, and cancelled 28,678,509 of them on 16 December 2025. What remains sits in treasury, to be allocated as the company sees fit under Programme 8’s own rules.

The February 2025 material fact that created Programme 8 set out terms worth placing beside the new ones. It authorised up to 67,210,173 common shares, about 2.78% of the total, with the same R$1 billion ceiling, and named Morgan Stanley, J.P. Morgan, BTG Pactual and UBS BB as the intermediating brokers. Part of the authorisation, described as less than 8% of the total and about 5 million shares, was earmarked for the long-term incentive plan rather than for cancellation. The funding source was the profit reserves recorded in the financial statements for the year ended 31 December 2024. Programme 8 in turn replaced Programme 7, approved on 30 July 2024, under which no shares were bought at all.

The cash behind the authorisation

The board’s decision sits against the backdrop of TIM’s second quarter results, published 28 July 2026. Normalised net income came to R$1,036 million, a 6.2% rise on R$976 million a year earlier, while net revenues reached R$6,965 million versus R$6,600 million, up 5.5%. Normalised EBITDA was R$3,586 million on a 51.5% margin, and EBITDA after leases was R$2,802 million on a 40.2% margin. Normalised earnings per share came to R$0.43 against R$0.40.

Quarterly capital expenditure was R$935 million. Operating cash flow, TIM’s own measure of EBITDA after leases less capex, was R$1,868 million, and operating free cash flow was R$1,242 million, up 10.1% year on year. Cash and marketable securities fell 17.2% year on year to R$4,530 million at the end of June 2026, which the company tied to buying out the remaining stake in I-Systems, the December 2025 advance payment of 2025 dividends, and the first debenture instalment. Total post-hedge debt climbed R$292 million year on year to R$17,048 million. Separately, the board approved interest on capital of R$400 million on 17 June 2026, against R$300 million declared in the same quarter of 2025.