TELUS (T) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 customer net additions of 332,000, up 13% year-over-year, with strong growth in both mobile and fixed segments and industry-leading postpaid mobile phone churn of 0.89%.

• EBITDA grew 5.6% year-over-year, with margin expansion of 170 basis points, driven by cost efficiency programs and higher-margin service growth.

• Net income rose 13% to $221 million and basic EPS increased 7.1%; adjusted net income up 34% and adjusted EPS up 32%.

• Continued focus on profitable, margin-accretive customer growth, digital transformation, and returning capital to shareholders through a leading dividend growth program.

• Achieved $297 million in annualized synergies from LifeWorks acquisition, with $130 million remaining to reach target by end of 2025.

Financial highlights

• Consolidated operating revenues were $4.9 billion, down 0.7% year-over-year, while adjusted EBITDA increased by 5.6% to $1.8 billion.

• Net income reached $221 million, up 13% year-over-year; adjusted net income and EPS increased 34% and 32%, respectively.

• Free cash flow reached $478 million, up 71% year-over-year, driven by lower CapEx and higher EBITDA.

• CapEx declined by 14% to $691 million, with capital intensity at 13%, down 300 bps year-over-year.

• Dividend per share increased 7% to $0.3891, consistent with the multi-year dividend growth program.

Outlook and guidance

• Confirmed TTech revenue and EBITDA guidance, trending to the lower end of 2024 targets due to competitive pressures.

• Updated consolidated free cash flow guidance to approximately $2.1 billion, reflecting TELUS Digital's revised outlook.

• Annual CapEx target remains at approximately $2.6 billion; leverage ratio expected to improve as EBITDA grows and CapEx moderates.