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 a 65% margin; cable revenue declined 2% but adjusted EBITDA increased 9% with a 57% margin.

• Record Wireless and Cable adjusted EBITDA margins in Q2, with Canadians choosing the company more than any other carrier.

• Net income increased 261% to $394 million compared to Q2 2023, driven by higher adjusted EBITDA and lower restructuring and acquisition costs.

• Media revenue grew 7%, led by the Toronto Blue Jays, with adjusted EBITDA at break-even or slightly negative due to higher expenses.

Financial highlights

• Total revenue increased 1% year-over-year to $5,093 million; total service revenue up 1% to $4,599 million.

• Adjusted EBITDA reached $2,325 million, up 6% year-over-year, with consolidated margin improving by 230 basis points to 45.7%.

• Adjusted net income rose 15% to $623 million; adjusted diluted EPS up 14% to $1.16.

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

• Cash provided by operating activities decreased 10% to $1,472 million.

Outlook and guidance

• 2024 guidance reaffirmed: 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 a leverage ratio of 4.2 by year-end, down from 4.7 at Q2 close.

• Expect continued ARPU growth in wireless, with disciplined focus on premium brand and bundling.

• Anticipate cable business to return to organic revenue growth by Q4, driven by subscriber growth and disciplined pricing.

• Media expected to be profitable in the seasonally strong second half of the year.