Cogeco (CGO) Q2 2026 earnings summary

Executive summary

• Canadian operations achieved year-over-year revenue and adjusted EBITDA growth, while U.S. operations faced revenue declines but showed improving Internet subscriber trends and launched the welo digital brand.

• Wireless business expanded in both countries, with positive Ohio Internet subscriber growth for a third consecutive quarter.

• Transformation plan remains on track, leveraging AI-based tools for operational efficiencies and focusing on OpEx and CapEx synergies.

• Free cash flow increased significantly, supported by lower capital expenditures and a $14.8M retroactive tax adjustment.

• Unified management structure and focus on digital transformation aim to drive synergies and accelerate growth.

Financial highlights

• Q2 2026 revenue was $713.0M (down 5.3% year-over-year), with LTM revenue at $2.8B; Canadian revenue grew, while U.S. revenue declined.

• Adjusted EBITDA for Q2 2026 was $337.1M (down 5.6%), with LTM margin above 49%.

• Free cash flow for Q2 2026 rose 35.5% to $152.9M, driven by lower capex and tax benefits; LTM free cash flow (excluding network expansions) was $636M.

• Net capital expenditures for Q2 2026 were $122.3M (down 23.0%); FY26 guidance for net capex is $565M–$605M.

• Dividend yield is 5.6%, with a quarterly dividend of $0.987 per share, up 7.0%.

Outlook and guidance

• Fiscal 2026 revenue expected to decrease 2%–4% and adjusted EBITDA to decrease 1.5%–3.5% year-over-year, mainly due to U.S. revenue pressures.

• Free cash flow and free cash flow excluding network expansions projected to increase 0%–10% due to lower financial expense and income tax.

• Net capital expenditures for FY26 expected between $565M–$605M, with $85M–$110M for network expansion.

• Canadian segment performance remains in line with original guidance; U.S. segment guidance lowered due to ongoing competitive environment.

• Transformation benefits, including AI tools and price adjustments, anticipated to support improved results in the second half.