Rogers Communications (RCI) Q2 2024 earnings summary

Executive summary

• Achieved industry-leading wireless and internet net additions, with 188,000 in Q2 and 1.7 million over the past ten quarters, maintaining leadership in Canadian market share.

• Wireless service revenue grew 4% and adjusted EBITDA rose 6% year-over-year, with industry-leading wireless margins of 65%.

• Cable revenue declined 2% year-over-year, but adjusted EBITDA increased 9% and margins expanded to 57%.

• Media revenue grew 7%, led by the Toronto Blue Jays, with adjusted EBITDA at break-even or slightly negative; profitability expected in the second half.

• Net income increased 261% to $394 million, with adjusted net income up 15% to $623 million and adjusted diluted EPS up 14% to $1.16.

Financial highlights

• Q2 total service revenue grew 1% year-over-year to $4,599 million; adjusted EBITDA increased 6% to $2,325 million, with a margin of 45.7% (up 2.3pts).

• Free cash flow surged 40% to $666 million; capital expenditures declined 7% to $999 million.

• Cash provided by operating activities was $1,472 million, down 10% year-over-year.

• Available liquidity at quarter-end was $4.3 billion, with a weighted average interest rate of 4.7% and average term to maturity of 10 years.

• Adjusted net income rose 15% to $623 million.

Outlook and guidance

• Reaffirmed all 2024 guidance: total service revenue growth of 8–10%, adjusted EBITDA growth of 12–15%, capital expenditures of $3.8–$4.0 billion, and free cash flow of $2.9–$3.1 billion.

• Targeting leverage reduction to 4.2x by year-end, with plans to reduce leverage by half a turn annually.

• Expecting cable business to return to organic revenue growth by Q4, with further efficiency gains and margin improvements.

• Media business anticipated to be profitable for the full year, driven by seasonal strength.