Cogeco (CGO) investor relations material

Executive summary

• Revenue and adjusted EBITDA declined year-over-year, mainly due to weakness in the U.S. telecommunications segment and a challenging radio advertising market, while Canadian operations showed resilience with modest growth and improved margins.

• A $2.2 billion non-cash impairment charge was recognized in the U.S. segment and $25.6 million in radio operations, resulting in a net loss for the period.

• Free cash flow increased significantly, supported by lower financial expenses, reduced restructuring costs, and disciplined capital allocation.

• The company reaffirmed its fiscal 2026 financial guidance and increased its quarterly dividend by 7%.

• Ongoing transformation initiatives focus on digital expansion, operational efficiency, and capital-efficient growth, including wireless launches and network expansion.

Financial highlights

• Quarterly revenue was $724.2 million (down 4.5%); nine months: $2,172.8 million (down 4.6%).

• Adjusted EBITDA for the quarter was $357.0 million (down 2.9%), with a margin of 54.1% in Canada and 49.9% in the U.S.

• Net loss for the period was $1.76 billion, primarily due to impairment charges; adjusted profit attributable to owners rose 29.2% to $29.9 million.

• Free cash flow for the quarter was $170.7 million (up 15.7%), and $454.5 million for nine months (up 10.1%).

• Dividend per share was $0.987 for the quarter, up 7% year-over-year.

Outlook and guidance

• Fiscal 2026 guidance reaffirmed, with a revised current income tax expense assumption of $25 million (down from $40 million), not expected to impact overall guidance.

• Management expects continued pressure in the U.S. segment but plans to optimize capital investments to support free cash flow.

• Net capital expenditures expected between $560 million–$600 million; free cash flow projected to increase 0–10% year-over-year.

• Further rollouts of the new U.S. digital brand and Canadian wireless expansion are planned.