Cogeco (CGO) Q3 2025 earnings summary

Executive summary

• Strong Canadian Internet subscriber growth and successful launch of Canadian wireless service, now expanding to 12 markets, with initial users and a time-limited bonus for early adopters.

• U.S. operations faced increased competition and higher-than-usual customer losses, but improvement initiatives and transformation programs are underway.

• Transformation program and cost reduction initiatives are delivering OpEx and CapEx synergies ahead of plan, supporting free cash flow growth and margin expansion.

• Network expansion continues, with nearly 25,700 homes added, mainly in Canada, and ongoing fibre-to-the-home and wireless rollouts.

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

Financial highlights

• LTM consolidated revenue: $2.98B; Q3 revenue: $758.5M, down 2.4% year-over-year (3.9% in constant currency).

• Adjusted EBITDA: $1.46B LTM (margin 47.6%); Q3: $367.8M, down 0.5% (2.0% in constant currency).

• Free cash flow surged 63.6% in Q3 to $147.5M, driven by lower CapEx and restructuring costs; LTM free cash flow: $476M.

• Net capital expenditures: $125.8M for Q3, down 25.9%; guidance for fiscal 2025: $600–$650M.

• Dividend per share increased 8.0% to $0.922; dividend yield 5.2%.

Outlook and guidance

• Fiscal 2025 revenue expected to decline low single digits year-over-year, with stable adjusted EBITDA.

• Free cash flow guidance raised to stable versus prior year, reflecting cost savings and lower CapEx.

• Capital intensity forecasted at 16.5–18.5% (excluding network expansions); net capital expenditures revised to $600–$650M.

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