In This Article:
Release Date: January 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cogeco Communications Inc (CGEAF) reported strong early progress on its transformation initiatives, contributing to an expansion of EBITDA margins.
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The company achieved strong internet subscriber growth in Canada, with an increase of 10,700 subscribers under the Cogeco and Oxio brands.
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Cogeco Communications Inc (CGEAF) has successfully rolled out Breezeline Mobile, and its Canadian wireless efforts are on track for market entry in the coming quarters.
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The company reported improved customer satisfaction and subscriber metrics in the US, particularly in Ohio, marking the best quarter since acquiring the business.
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Cogeco Media's digital advertising solutions revenue showed resilient growth, contributing meaningfully to overall revenue despite challenges in the radio advertising market.
Negative Points
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Cogeco Communications Inc (CGEAF) experienced a decline in revenue by 1.6% in constant currency, primarily due to lower revenue in the US.
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The US segment, Breezeline, saw a revenue decline of 3.4% in constant currency, impacted by subscriber base decline and video cord-cutting.
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The company faces ongoing challenges in the radio advertising market, leading to lower than anticipated revenue for Cogeco Media.
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Capital intensity increased to 20.4% from 19.6% last year, driven by higher spending in the US, excluding network expansion projects.
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Cogeco Communications Inc (CGEAF) anticipates a mid-single-digit decrease in adjusted EBITDA for Q2 due to competitive pressures and higher content costs.
Q & A Highlights
Q: Can you elaborate on the decline in the subscriber base, especially for entry-level services in the US? Are you still seeing a headwind from ACP, or is it a more sustained change in customer buying behavior? A: The ACP impact is over. The decline is primarily due to entry-level customers moving to Fixed Wireless Access (FWA), which tends to have a lower ARPU. The competitive environment in the US is stable, and some fiber builders are differentiating on service rather than price, which is positive. - Fred, CEO
Q: Is Cogeco considering switching customers to one gig plus plans in the US? How should we think about one gig speeds in your US footprint? A: One gig speed is available across our US footprint and constitutes a significant share of new sales. However, specific details are not disclosed for competitive reasons. - Fred, CEO