TELUS (T) Q1 2026 earnings summary

Executive summary

• Achieved industry-leading total customer growth of 262,000 in Q1 2026, driven by strong demand for bundled services and broadband networks.

• Delivered stable profitability and 19% year-over-year free cash flow growth to $583 million, with cash from operations exceeding $1 billion.

• Strategic focus on bundled services, AI enablement, and digital transformation continues to differentiate performance.

• Leadership transition announced: Doug French retiring as CFO, succeeded by Gopi Chande.

• Net income declined 52% year-over-year to $144 million, with basic EPS down 57% to $0.09; adjusted net income fell 8% to $356 million.

Financial highlights

• Consolidated Q1 2026 operating revenues were $5.0 billion, down 1% year-over-year due to lower mobile equipment revenue and other income.

• Adjusted EBITDA remained stable at $1.8 billion year-over-year; reported EBITDA declined 13% to $1.5 billion due to higher restructuring and other costs.

• Free cash flow increased 19% year-over-year to $583 million, primarily from lower income taxes paid.

• Capital expenditures rose 11% year-over-year to $651 million, mainly for new facilities and clinic expansions.

• Mobile network revenue grew 1% year-over-year, supported by subscriber base growth and ARPU stabilization.

Outlook and guidance

• 2026 targets: consolidated service revenue and adjusted EBITDA growth of 2–4%, free cash flow of ~$2.45 billion (10% growth), and capital expenditures of ~$2.3 billion (10% decrease).

• Free cash flow CAGR of ≥10% expected from 2026–2028, supporting deleveraging and dividend sustainability.

• Net debt-to-EBITDA targeted at 3.3x or lower by end of 2026 and 3.0x or better by end of 2027.

• Expecting margin expansion and improved EBITDA profile as AI and digital initiatives scale.

• Dividend maintained, with DRIP discount reduced to 1.75% and further reductions planned.