Cogeco Communications (CCA) investor relations material

Executive summary

• Canadian operations delivered year-over-year revenue and adjusted EBITDA growth, while U.S. operations faced revenue declines but showed improving Internet subscriber trends and launched new digital brands such as welo.

• Transformation plan and digital initiatives, including AI deployment and wireless expansion in both countries, remain on track to drive operational efficiencies and growth.

• Unified management structure for Canadian and U.S. operations aims to drive synergies and accelerate growth.

• Free cash flow is growing, de-leveraging continues, and the dividend remains well-funded with a recent 7.0% increase.

• LTM revenue reached $2.8B with 1.6M subscribers across Canada and the U.S.

Financial highlights

• Q2 2026 revenue decreased by 5.3% to $693.6M (down 3.6% in constant currency) year-over-year, mainly due to U.S. segment declines.

• Adjusted EBITDA margin consistently above 48.7%, with LTM margin above 49%.

• Free cash flow increased 33.0% to $155.0M, driven by lower capital expenditures and a $14.8M retroactive tax adjustment.

• Dividend yield at 5.6%, with a history of annual increases.

• Net income attributable to owners at $316M LTM; diluted EPS at $7.60.

Outlook and guidance

• Fiscal 2026 revenue expected to decrease 2–4% and adjusted EBITDA to decrease 1.5–3.5% year-over-year (constant currency).

• Net capital expenditures projected at $560–$600M, with $85–$110M for network expansion.

• Free cash flow and free cash flow excluding network expansion projects expected to increase 0–10%.

• Effective income tax rate revised to 8.5% due to accelerated tax depreciation measures.

• Debt leverage ratio at 3.2x, targeting 3x by fiscal year-end.