Cogeco Communications (CCA) Q3 2025 earnings summary

Executive summary

• Strong Canadian internet subscriber growth and successful launch of Canadian wireless service, with expansion to 12 markets and positive trends expected to continue.

• U.S. operations faced subscriber and revenue pressures due to increased competition and internal execution gaps, but transformation initiatives and unified management are underway to improve trends.

• Transformation program delivering OpEx and CapEx synergies ahead of plan, driving operational efficiencies and cost reductions.

• North American telecom provider with 1.6M subscribers, focused on high-speed internet, video, phone, and expanding wireless services.

• Strong history of capital returns, including consistent dividend increases and share repurchases.

Financial highlights

• Q3 2025 revenue was $730.7M (down 2.7% year-over-year), with consolidated LTM revenue at $2.98B; adjusted EBITDA margin improved to 49.6%.

• Free cash flow surged 63.2% in Q3 and 61.5% in constant currency, driven by lower CapEx and restructuring costs.

• Net capital expenditures dropped 25.5% in Q3, with capital intensity reduced to 17.2% from 22.4%.

• Net debt to adjusted EBITDA improved to 3.1x as of May 31, 2025.

• Dividend per share increased 8% to CAD 0.922 in Q3, with a yield of 5.2%.

Outlook and guidance

• Fiscal 2025 revenue expected to decline low single digits due to U.S. competition, but adjusted EBITDA and free cash flow are projected to remain stable year-over-year.

• Net capital expenditures guidance lowered to CAD 600–650 million, with capital intensity projections at 16.5%–22.5%.

• Free cash flow guidance raised to stable versus prior year, an improvement from previous expectations of a decline.

• Q4 consolidated revenue expected to be lower than Q3, with adjusted EBITDA similar or slightly better than Q3.