Cogeco Communications (CCA) investor relations material

Executive summary

• Revenue and adjusted EBITDA declined year-over-year, mainly due to U.S. segment weakness and competitive pricing, while Canadian operations showed modest growth, cost efficiencies, and continued digital and wireless expansion.

• A $2.2 billion non-cash impairment charge was recognized in the U.S. segment, resulting in a net loss of $1.7 billion for the quarter.

• Free cash flow increased 17.6% for the quarter and 9.9% for the nine months, supported by lower financial expenses and capital expenditures.

• The Board declared a quarterly dividend of $0.987 per share, up 7% from the prior year.

• Transformation initiatives, including digitization, AI adoption, and network expansion, remain a focus to drive efficiencies and growth.

Financial highlights

• Q3 revenue: $696.7M (down 4.7% YoY); nine months: $2.10B (down 4.7% YoY); LTM revenue: $2.8B.

• Adjusted EBITDA: $351.5M for Q3 (down 3.0% YoY); $1.04B for nine months (down 3.8% YoY); LTM adjusted EBITDA: $1,443M; margin improved to 50.5%.

• Free cash flow: $169.2M for Q3 (up 17.6% YoY); $449.8M for nine months (up 9.9% YoY); LTM free cash flow (excluding network expansions): $626M.

• Dividend per share: $0.987 for Q3, $2.961 for nine months (up 7.0% YoY); dividend yield 6.2%.

• Net loss: $(1.74)B for Q3, driven by impairment; adjusted diluted EPS: $2.35 (up 29.1% YoY).

Outlook and guidance

• Fiscal 2026 guidance reaffirmed, with revenue expected to decrease 2–4% and adjusted EBITDA to decrease 1.5–3.5% year-over-year; free cash flow projected to increase 0–10%.

• Current income tax expense for fiscal 2026 revised to $25M.

• Capital investments to be optimized in the next fiscal year to support free cash flow generation.

• U.S. revenue and adjusted EBITDA expected to decline year-over-year, but at a smaller rate than earlier quarters.

• Anticipate increased consolidated CapEx in Q4 versus Q3, similar to prior years.