BCE (BCE) Status update summary

Strategic project overview and rationale

• Announced a 300 MW AI data center in Saskatchewan, the largest investment in the province and Canada, fully aligned with long-term growth and strategic priorities.

• Facility is fully contracted under long-term, non-cancellable agreements with Cerebras and CoreWeave, ensuring 100% capacity utilization and infrastructure-like cash flows.

• Construction begins in spring 2026 with phased rollouts; all four data halls expected online and at full run rate by end of 2027.

• Project accelerates revenue, EBITDA, and free cash flow growth, focusing on secure, sovereign, Canadian-controlled AI infrastructure.

• Partnerships with Saskatchewan government, SaskTel, and SaskPower support power, fiber, and operational needs, with Bell and SaskTel jointly marketing AI-powered solutions.

Financial impact, guidance, and outlook

• Total CapEx is approximately CAD 1.7 billion, with CAD 1.3 billion expected in 2026, partially offset by CAD 400 million in setup fees and prepayments, funded by debt and cash-on-hand.

• At full run rate, the center is expected to generate CAD 500 million in revenue, CAD 400 million in EBITDA, and over CAD 250 million in free cash flow.

• Project delivers an IRR of about 20% at the data center level, is leverage-neutral, and supports deleveraging targets.

• 2026 revenue growth guidance is 1–5%, adjusted EBITDA growth 0–4%, and capital intensity below 15%; 2025–2028 revenue CAGR is 2–4.5%, adjusted EBITDA CAGR 2–3%, and free cash flow CAGR up to 16.5%.

• AI-powered solutions revenue target raised from CAD 1.5 billion to CAD 2.0 billion by 2028, with no change to baseline capital intensity.

Risk management and operational execution

• Construction risk mitigated through phased deployment, modular design, early procurement, and experienced partners.

• Counterparty risk minimized by securing long-term, renewable leases with well-capitalized tenants before capital commitment.

• Technology risk reduced as tenants own compute hardware; infrastructure remains attractive and fungible, with no direct exposure to AI pricing or utilization.

• No incremental earnings volatility expected; project is leverage-neutral and supports deleveraging targets.

• No anticipated need for common equity issuance; dividend policy and capital allocation priorities unchanged.