Cogeco Communications (CCA) Q1 2026 earnings summary

Executive summary

• Q1 results aligned with internal plans, with Canadian customer base growth and U.S. subscriber trends showing the best 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, 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, with Internet subscriber growth offsetting video and wireline phone declines.

• Three-year transformation program is progressing, focusing on cost optimization and revenue generation.

Financial highlights

• Revenue: $707.2 million (down 4.3% year-over-year); Canadian segment stable, U.S. segment down 8.6%.

• Adjusted EBITDA: $353.8 million (down 3.1%); margin at 50.0%.

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

• Capital intensity rose to 22.2% from 20.4% year-over-year.

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

Outlook and guidance

• Fiscal 2026 financial guidance is maintained, with expectations for improved U.S. financials in the second half and continued Canadian customer growth.

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

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

• Capital intensity targeted at 19–21%.

• Stronger U.S. performance anticipated in the second half, driven by customer trends and new initiatives.