In This Article:
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Revenue Decline: Consolidated revenue decreased by 2.7%.
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Adjusted EBITDA: Stable in constant currency despite revenue decline.
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Diluted Earnings Per Share: Declined by 20% due to higher expenses and taxes.
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Capital Intensity: 21.6%, down from 23.4% last year.
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Free Cash Flow: Increased by 12.8% in constant currency.
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Net Debt-to-Adjusted EBITDA Ratio: 3.4 turns, unchanged from Q1.
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Dividend Declared: $0.922 per share.
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Canadian Revenue Decline: 0.9% decrease due to fewer video and wireline phone subscribers.
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US Revenue Decline: 4.5% decrease in constant currency due to subscriber base decline.
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Internet Subscriber Growth: Increased by 8,300 in Canada.
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Homes Passed: Nearly 145,000 new homes since fiscal 2022.
Release Date: April 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Cogeco Inc (CGECF) expects significant growth in free cash flow over the next two years, driven by the end of a CapEx investment cycle and network modernization efforts.
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The company is experiencing strong demand for its upcoming Canadian wireless launch, with pre-registrations exceeding expectations.
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Cogeco Inc (CGECF) reported operational performance ahead of expectations, with transformation efforts contributing to expanded EBITDA margins.
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The fibre-to-the-home expansion program added nearly 7,000 new homes passed in the quarter, primarily in Canada.
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Increased customer satisfaction and improved service mix in the US have led to stable EBITDA despite revenue pressures.
Negative Points
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Cogeco Inc (CGECF) experienced a 2.7% decline in consolidated revenue, driven by lower revenue in both US and Canadian segments.
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Adjusted EBITDA in Canada declined by 2.8% in constant currency due to lower revenue and higher operating expenses.
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The US segment, Breezeline, saw a 4.5% revenue decline in constant currency due to subscriber base decline, particularly in entry-level services.
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Diluted earnings per share decreased by 20% due to higher D&A expenses, acquisition integration, restructuring expenses, and higher taxes.
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The radio advertising market remains challenging, impacting Cogeco Media's revenue despite growth in digital advertising solutions.
Q & A Highlights
Q: What actions are being taken to address the decline in broadband disconnections in the US, particularly in Ohio? A: Frederic Perron, President of Cogeco Connexion, explained that while competition remains high, they expect a slowdown in fixed wireless access (FWA) growth based on competitors' forecasts. They are seeing an increase in wireless sales, which could support cable performance. Additionally, they are exploring a dual-brand strategy similar to oxio and improving sales and marketing efforts. Customer satisfaction improvements are also expected to contribute positively over time.