Cogeco Communications (CCA) Q1 2026 earnings summary

Executive summary

• Consolidated Q1 results aligned with internal plans and guidance, with Canadian operations showing resilience and U.S. operations demonstrating improved subscriber trends for a second consecutive quarter, resulting in the best U.S. subscriber metrics in 15 quarters.

• Revenue declined 4.3% year-over-year to $707.2 million, mainly due to lower U.S. telecommunications revenue and competitive pricing pressures, while Canadian revenue remained stable.

• Adjusted EBITDA decreased 3.1% to $353.8 million, with margin improving to 50.0% from 49.4% as cost reduction initiatives partly offset revenue pressure.

• Canadian wireless service was fully launched and integrated into the Canadian segment, with subscriber growth in Internet offset by declines in video and wireline phone.

• Fiscal 2026 financial guidelines were reaffirmed, and both S&P and Moody's improved their credit outlooks for the company.

Financial highlights

• Revenue for Q1 2026 was $707.2 million, down 4.3% year-over-year (4.9% in constant currency); Canadian segment stable, U.S. segment down 8.6% (9.9% in constant currency).

• Adjusted EBITDA: $353.8 million (down 3.1%); margin at 50.0%; Canadian adjusted EBITDA grew 2% in constant currency, U.S. adjusted EBITDA fell 7.8% (9.1% in constant currency).

• Profit attributable to owners was $88.7 million ($2.09 per diluted share), down 11.8% year-over-year; adjusted profit was $89.5 million ($2.11 per diluted share), down 1.3%.

• Free cash flow declined 15.7% to $125.5 million, mainly due to lower proceeds from asset disposals and higher capital expenditures.

• Quarterly dividend increased 7% year-over-year to $0.987 per share.

Outlook and guidance

• Fiscal 2026 financial guidelines were reaffirmed, with expectations for improved U.S. financials in the second half of the year and continued Canadian customer growth as wireless and rural expansions scale.

• Q2 consolidated revenue and EBITDA expected to decline low to mid-single digits year-over-year, driven by U.S. business.

• Net capital expenditures expected between $560M–$600M for fiscal 2026; capital intensity targeted at 19–21%.

• Free cash flow projected to increase 0–10% for fiscal 2026.

• Financing, acquisition integration, and restructuring costs expected to be similar to Q1; depreciation to be slightly lower.