Cogeco Communications (CCA) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $732.4M, up 0.3% year-over-year, but down 2.7% in constant currency; transformation program is progressing with a focus on synergies, digitization, analytics, wireless, and network expansion.

• Adjusted EBITDA rose 2.7% to $356.5M, driven by cost reduction and operational efficiencies; profit for the period fell 17.5% to $79.6M due to higher depreciation, restructuring, and tax expenses.

• Free cash flow increased 14.5% to $116.6M, mainly from lower CapEx and financial expenses; excluding network expansion, free cash flow was $132.2M.

• Canadian wireless launch preparations are on track, with customer pre-registration underway; customer satisfaction improved year-over-year in both Canada and the U.S.

• Fiscal 2025 financial guidelines are maintained; quarterly dividend increased by 8.0% to $0.922 per share.

Financial highlights

• Adjusted EBITDA margin improved to 48.7% in Q2 (from 47.5%); basic EPS was $1.77 in Q2 (down 19.9%), adjusted diluted EPS was $1.90 (down 14%).

• Net capital expenditures decreased 7.5% in Q2 to $157.9M; capital intensity at 21.6%.

• Dividend per share increased 8% year-over-year to $0.922 in Q2.

• Free cash flow in constant currency increased by 12.8%, mainly from lower CapEx and financial expenses.

• Cash flows from operating activities declined 11.3% to $253.2M.

Outlook and guidance

• Fiscal 2025 annual guidance maintained; Q3 revenue and adjusted EBITDA expected to decrease low single digits year-over-year.

• Capital intensity for Q3 anticipated to be about 350 basis points above last year.

• Free cash flow projected to increase by CAD 150 million by fiscal 2027, mainly from reduced CapEx.

• Ongoing transformation program aims to improve agility, cost structure, and customer experience.

• Free cash flow and free cash flow (excl. network expansions) expected to decrease by 0%–10% from F2024.