Cogeco (CGO) investor relations material

Executive summary

• Canadian internet subscriber growth remained strong, offsetting U.S. subscriber declines due to competition and execution gaps; a new Canadian wireless service launched in 12 markets, with full rollout expected in the fall.

• Transformation and cost reduction initiatives drove margin expansion and significant free cash flow growth, with unified management structures supporting synergies.

• Regulatory challenges persist in Canada, especially with the CRTC's TPIA regime, but commitment to competition and investment remains strong.

• Media segment revenue increased due to digital advertising and strong radio audience engagement, despite a challenging ad market.

• Company maintains a strong history of capital returns, including consistent dividend increases and share repurchases.

Financial highlights

• LTM consolidated revenue was $2.98B, with Q3 2025 revenue at $758.5M, down 2.4% year-over-year; adjusted EBITDA margin was 47.6%.

• Free cash flow rose 63.6% in Q3 2025 to $147.5M, driven by lower capital expenditures and restructuring costs.

• Net capital expenditures fell 25.9% to $125.8M in Q3 2025, reflecting operational efficiencies.

• Dividend per share increased 8.0% to $0.922, with a yield of 5.2%.

• LTM profit attributable to owners was $327M, with diluted EPS of $7.83.

Outlook and guidance

• Fiscal 2025 revenue is expected to decline low single digits year-over-year, with stable adjusted EBITDA.

• Net capital expenditures guidance lowered to $600–$650M; free cash flow guidance increased to stable or higher versus prior year.

• Capital intensity forecasted at 16.5–18.5% (excluding network expansions).

• Q4 consolidated revenue expected to be lower than Q3, with adjusted EBITDA similar to or slightly better than Q3.

• Additional U.S. revenue pressure anticipated due to competition, but cost savings and operational efficiencies are expected to offset the impact.