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 initiatives and cost reductions drove higher adjusted EBITDA and margin expansion.

• Profit for the period declined 17.5% to $79.6M, mainly due to higher depreciation, restructuring, and tax expenses.

• Free cash flow increased 14.5% in Q2, supported by lower capital expenditures and financial expenses.

• The company is focused on transformation priorities including Canada-U.S. synergies, digitization, analytics, network expansion, and wireless ramp-up, with integration largely complete.

• Fiscal 2025 guidance is maintained, with a quarterly dividend increased by 8% to $0.922 per share.

Financial highlights

• Adjusted EBITDA rose 2.7% to $356.5M in Q2, with margin improving to 48.7%; free cash flow increased 14.5% to $116.6M.

• Diluted EPS fell 20% year-over-year; adjusted diluted EPS was $1.90 in Q2, down 14%.

• Net capital expenditures decreased 7.5% to $157.9M; capital intensity dropped to 21.6%.

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

• Available liquidity was $1.19B as of February 28, 2025.

Outlook and guidance

• Fiscal 2025 annual guidance is maintained; management expects continued revenue and cost pressures from competition and evolving consumer trends.

• Free cash flow is projected to grow by CAD 150 million by fiscal 2027, mainly due to network expansion completion and lower CapEx.

• Net capital expenditures projected at $650M–$725M for fiscal 2025; capital intensity 22%–24%.