Cogeco Communications Announces Q3 2025 Financial Results and Canadian Wireless Launch
Continued strength in Canadian Internet customer growth.
Canadian wireless launch underway, with a first cohort of users already on the service and expansion into 12 Canadian markets over the coming weeks.
Updated fiscal 2025 financial guidelines reflect lower revenue, stable adjusted EBITDA, lower net capital expenditures and higher free cash flow compared to previously issued financial guidelines.
MONTRÉAL, July 15, 2025 /CNW/ - Today, Cogeco Communications Inc. (TSX:CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the third quarter ended May 31, 2025.
"Our financial results for the third quarter of fiscal 2025 were notable for our strong Canadian Internet subscriber loading, efficiencies-driven margin expansion and significant free cash flow," stated Frédéric Perron, President and CEO. "We are deeply excited to ramp up our wireless customer base in Canada over the coming weeks, adding to our prior launch of a similar service in the U.S. last year. Wireless will become a powerful tool to retain and grow our North American wireline customer base over time.
"We already have a first cohort using the wireless service and are progressively expanding to cover 12 Canadian markets (Alma, Magog, Rimouski, Saint-Georges, Saint-Hyacinthe, Saint-Sauveur and Trois-Rivières in Québec, and Brockville, Chatham, Cobourg, Cornwall and Welland in Ontario) over the coming weeks, in anticipation of a full geographic deployment in the fall season.
"We continued to solidly grow our Canadian Internet customer base for yet another quarter. While we experienced higher-than-usual customer losses in the U.S., this was partially caused by a few temporary factors. We are implementing several go-to-market enhancements as part of our transformation, and are confident that our U.S. customer trends will improve as these initiatives are executed over the coming quarters."
Consolidated financial highlights
Three months ended May 31
2025
2024
(1)
Change
Change in
constant currency
(2)
(In thousands of Canadian dollars, except % and per share data) (unaudited)
$
$
%
%
Revenue
730,679
750,583
(2.7)
(4.1)
Adjusted EBITDA (2)
362,377
365,824
(0.9)
(2.4)
Adjusted EBITDA margin (2)
49.6 %
48.7 %
Profit for the period
73,300
76,334
(4.0)
Profit for the period attributable to owners of the Corporation
69,895
70,402
(0.7)
Adjusted profit attributable to owners of the Corporation (2)(3)
77,186
103,597
(25.5)
Cash flows from operating activities
400,789
333,626
20.1
Free cash flow (1)(2)
143,946
88,185
63.2
61.5
Free cash flow, excluding network expansion projects (1)(2)
157,231
112,618
39.6
38.2
Acquisition of property, plant and equipment
125,933
171,034
(26.4)
Net capital expenditures (2)(4)
125,462
168,384
(25.5)
(26.8)
Net capital expenditures, excluding network expansion projects (2)
112,177
143,951
(22.1)
(23.5)
Capital intensity (2)
17.2 %
22.4 %
Capital intensity, excluding network expansion projects (2)
15.4 %
19.2 %
Diluted earnings per share
1.64
1.67
(1.8)
Adjusted diluted earnings per share (2)(3)
1.82
2.45
(25.7)
Operating results
For the third quarter of fiscal 2025 ended on May 31, 2025:
Revenue decreased by 2.7% to $730.7 million. On a constant currency basis(2), revenue decreased by 4.1%, mainly explained as follows:
American telecommunications' revenue decreased by 3.5%, or 6.6% in constant currency, mainly due to a decline in our subscriber base, especially for entry-level services, and to a higher proportion of customers subscribing to Internet-only services.
Canadian telecommunications' revenue decreased by 1.8%, mainly due to a lower revenue per customer as a result of a decline in video and wireline phone service subscribers as an increasing proportion of customers subscribe to Internet-only services, as well as a competitive pricing environment, partly offset by the cumulative effect of high-speed Internet service additions over the past year.
Adjusted EBITDA decreased by 0.9% to $362.4 million. On a constant currency basis, adjusted EBITDA decreased by 2.4% mainly due to lower revenue in both the American and Canadian telecommunications segments, offset in part by lower operating expenses driven by cost reduction initiatives and operating efficiencies across the Corporation as a result of our ongoing three-year transformation program.
American telecommunications' adjusted EBITDA decreased by 0.5%, or 3.7% in constant currency.
Canadian telecommunications' adjusted EBITDA decreased by 1.5%, or 1.3% in constant currency.
Profit for the period amounted to $73.3 million, of which $69.9 million, or $1.64 per diluted share, was attributable to owners of the Corporation compared to $76.3 million, $70.4 million, and $1.67 per diluted share, respectively, in the comparable period of fiscal 2024. The decreases in profit for the period and profit attributable to owners of the Corporation resulted mainly from higher depreciation and amortization expense, financial expense and income tax expense, as well as lower adjusted EBITDA, partly offset by lower acquisition, integration, restructuring and other costs.
Adjusted profit attributable to owners of the Corporation(3) was $77.2 million, or $1.82 per diluted share(3), compared to $103.6 million, or $2.45 per diluted share, last year.
Net capital expenditures were $125.5 million, a decrease of 25.5% compared to $168.4 million in the same period of the prior year. In constant currency, net capital expenditures(2) were $123.3 million, a decrease of 26.8% compared to last year, mainly due to operational efficiencies, lower spending in the Canadian telecommunications segment, partially due to the timing of certain initiatives, as well as lower spending in the American telecommunications segment, mostly due to lower construction activity.
Net capital expenditures in connection with network expansion projects were $13.3 million ($13.2 million in constant currency) compared to $24.4 million in the same period of the prior year. Excluding network expansion projects, net capital expenditures were $112.2 million, a decrease of 22.1% compared to $144.0 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(2) were $110.1 million, a decrease of 23.5% compared to last year.
Fibre-to-the-home network expansion projects continued, mostly in Canada, with the addition of close to 9,500 homes passed during the third quarter of fiscal 2025.
Capital intensity was 17.2% compared to 22.4% last year. Excluding network expansion projects, capital intensity was 15.4% compared to 19.2% in the same period of the prior year.
Acquisition of property, plant and equipment decreased by 26.4% to $125.9 million, mainly resulting from lower spending.
Free cash flow(1) increased by 63.2%, or 61.5% in constant currency, and amounted to $143.9 million, or $142.4 million in constant currency(2), mainly due to lower net capital expenditures and acquisition, integration, restructuring and other costs, offset in part by higher financial expense, lower adjusted EBITDA and higher current income taxes. Free cash flow, excluding network expansion projects(1) increased by 39.6%, or 38.2% in constant currency, and amounted to $157.2 million, or $155.6 million in constant currency.
Cash flows from operating activities increased by 20.1% to $400.8 million, mostly due to higher cash from other non-cash operating activities, and lower income taxes paid, partly offset by higher interest paid.
At its July 15, 2025 meeting, the Board of Directors of Cogeco Communications declared a quarterly eligible dividend of $0.922 per share, an increase of 8.0% compared to $0.854 per share in the comparable quarter of fiscal 2024.
FISCAL 2025 REVISED FINANCIAL GUIDELINES
Cogeco Communications has revised its fiscal 2025 financial guidelines as issued on October 31, 2024 for revenue, net capital expenditures, capital intensity and free cash flow. Adjusted EBITDA projections remain the same as previously disclosed. The Corporation expects additional pressure on its revenue, particularly in the United States, driven by increased competition. As part of its three-year transformation program, the Corporation has initiated several cost reduction initiatives and operating efficiencies across the organization in order to minimize the revenue impact on adjusted EBITDA. Additionally, net capital expenditures are expected to be lower than under the previous financial guidelines, partially resulting from operational efficiencies following the combination of the Canadian and U.S. management teams.
Consequently, compared to fiscal 2024, on a constant currency and consolidated basis, we are lowering Cogeco Communications' revenue projections for fiscal 2025 to a low single digit decline, while adjusted EBITDA is expected to remain stable. In addition, due to some better-than-anticipated transformation-related cost savings and lower expected net capital expenditures, we are increasing the Corporation's free cash flow financial guidelines, from a decrease compared to fiscal 2024 to a stable free cash flow, while reducing net capital expenditures and capital intensity projections.
July 15, 2025
October 31, 2024
Revised projections
(1)
Original projections
(1)
Actual
(In millions of Canadian dollars, except percentages)
Fiscal 2025
(constant currency)
(2)
Fiscal 2025
(constant currency)
(2)
Fiscal 2024
$
$
$
Financial guidelines
Revenue
Low single digit decline
Stable
2,977
Adjusted EBITDA
Stable
Stable
1,442
Net capital expenditures
$600 to $650
$650 to $725
638
Net capital expenditures in connection with network expansion projects
$110 to $150
$140 to $190
137
Capital intensity
20.5% to 22.5%
22% to 24%
21.4 %
Capital intensity, excluding network expansion projects
16.5% to 18.5%
17% to 19%
16.8 %
Free cash flow
Stable
(3)
Decrease of 0% to 10%
(3)
476
Free cash flow, excluding network expansion projects
Stable
(3)
Decrease of 0% to 10%
(3)
613
(1)
Percentage of changes compared to fiscal 2024.
(2)
Fiscal 2025 financial guidelines are based on a USD/CDN constant exchange rate of 1.3606 USD/CDN.
(3)
The assumed current income tax effective rate is approximately 11.5% (14% under the previous financial guidelines).
These financial guidelines, including the various assumptions underlying them, contain forward-looking statements concerning the business outlook for Cogeco Communications, and should be read in conjunction with the "Forward-looking statements" section of this press release.
(1)
During the fourth quarter of fiscal 2024, the Corporation updated its calculation of free cash flow and free cash flow, excluding network expansion projects, to include proceeds on disposals of property, plant and equipment, which includes proceeds from sale and leaseback transactions. Comparative figures were restated to conform to the current presentation. For further details, please refer to the "Non-IFRS Accounting Standards and other financial measures" section of this press release.
(2)
Adjusted EBITDA and net capital expenditures are total of segments measures. Adjusted EBITDA margin and capital intensity are supplementary financial measures. Constant currency basis, adjusted profit attributable to owners of the Corporation, net capital expenditures, excluding network expansion projects, free cash flow and free cash flow, excluding network expansion projects are non-IFRS Accounting Standards measures. Change in constant currency, capital intensity, excluding network expansion projects and adjusted diluted earnings per share are non-IFRS Accounting Standards ratios. These indicated terms do not have standardized definitions prescribed by IFRS® Accounting Standards, as issued by the International Accounting Standards Board ("IFRS Accounting Standards") and therefore, may not be comparable to similar measures presented by other companies. For more information on these financial measures, please consult the "Non-IFRS Accounting Standards and other financial measures" section of this press release.
(3)
Excludes the impact of non-cash impairment charges and acquisition, integration, restructuring and other costs, net of tax and non-controlling interest.
(4)
Net capital expenditures exclude non-cash acquisitions of right-of-use assets and the purchases, and related borrowing costs, of spectrum licences, and are presented net of government subsidies, including the utilization of those received in advance.
Financial highlights
Change in
constant currency
Change in
constant currency
Three and nine months ended May 31
2025
2024
(1)
Change
(2)(3)
2025
2024
(1)
Change
(2)(3)
(In thousands of Canadian dollars, except % and per share data)
$
$
%
%
$
$
%
%
Operations
Revenue
730,679
750,583
(2.7)
(4.1)
2,201,800
2,228,773
(1.2)
(2.8)
Adjusted EBITDA (3)
362,377
365,824
(0.9)
(2.4)
1,084,091
1,071,896
1.1
(0.4)
Adjusted EBITDA margin (3)
49.6 %
48.7 %
49.2 %
48.1 %
Acquisition, integration, restructuring and other costs (4)
9,211
45,669
(79.8)
7,288
49,170
(85.2)
Profit for the period
73,300
76,334
(4.0)
260,097
268,648
(3.2)
Profit for the period attributable to owners of the Corporation
69,895
70,402
(0.7)
245,157
253,576
(3.3)
Adjusted profit attributable to owners of the Corporation (3)(5)
77,186
103,597
(25.5)
248,553
301,377
(17.5)
Cash flow
Cash flows from operating activities
400,789
333,626
20.1
872,866
856,042
2.0
Free cash flow (1)(3)
143,946
88,185
63.2
61.5
409,407
327,832
24.9
23.8
Free cash flow, excluding network expansion projects (1)(3)
157,231
112,618
39.6
38.2
460,064
408,315
12.7
11.8
Acquisition of property, plant and equipment
125,933
171,034
(26.4)
438,547
504,830
(13.1)
Net capital expenditures (3)(6)
125,462
168,384
(25.5)
(26.8)
434,002
485,580
(10.6)
(12.3)
Net capital expenditures, excluding network expansion projects (3)
112,177
143,951
(22.1)
(23.5)
383,345
405,097
(5.4)
(7.4)
Capital intensity (3)
17.2 %
22.4 %
19.7 %
21.8 %
Capital intensity, excluding network expansion projects (3)
15.4 %
19.2 %
17.4 %
18.2 %
Per share data (7)
