Canadian wireless deployed across most of our footprint since October 15
Improving U.S. subscriber metrics, with positive Ohio Internet subscriber net additions for the first time in 4 years
3-year transformation program well underway; year one delivered as expected and next two years focused on both revenue generation and cost efficiencies
Increasing quarterly dividend by 7.0% to $0.987 per share
MONTRÉAL, Oct. 29, 2025 /CNW/ - Today, Cogeco Inc. (TSX:CGO) ("Cogeco" or the "Corporation") announced its financial results for the fourth quarter ended August 31, 2025 and is issuing its fiscal 2026 financial guidelines.
"Last quarter, we stated we were expecting strong continued Canadian customer growth, combined with some improvement in the U.S.," said Frédéric Perron, President and CEO. "We are pleased to be delivering on that expectation.
"Our Canadian business is firing on all cylinders, achieving its best Internet subscriber growth in 13 years with 16,988 new subscribers, and our wireless rollout is ahead of schedule", Mr. Perron continued.
"In the U.S., our turnaround efforts are starting to take hold, as shown by our improving customer metrics. We expect continued improvements in our subscriber trends over the coming quarters.
"Cogeco Media saw another quarter of year-on-year revenue growth, despite a challenging radio advertising market. This success was driven by the strong performance of our digital advertising solutions and continued engagement from our listeners.
"We just finished year one of our 3-year transformation program, where we met our internal cost reduction targets. Years two and three will now increasingly focus on our top-line performance, driving additional customers, in addition to cost efficiencies, as per our original plan.
"Our financial guidelines for next year reflect our focus on cash generation, while at the same time making additional investments to scale wireless in Canada and certain sales channels in the U.S."
Consolidated financial highlights
Three months ended August 31
2025
2024
Change
Change in
constant currency
(1)
(In thousands of Canadian dollars, except % and per share data) (unaudited)
$
$
%
%
Revenue
731,367
768,656
(4.9)
(5.0)
Adjusted EBITDA (1)
357,084
371,216
(3.8)
(3.9)
Profit for the period
76,197
81,437
(6.4)
Profit for the period attributable to owners of the Corporation
16,483
19,248
(14.4)
Adjusted profit attributable to owners of the Corporation (1)(2)
20,491
25,562
(19.8)
Cash flows from operating activities
266,738
326,723
(18.4)
Free cash flow (1)
101,596
143,055
(29.0)
(29.1)
Free cash flow, excluding network expansion projects (1)
159,414
199,966
(20.3)
(20.5)
Acquisition of property, plant and equipment
159,222
156,577
1.7
Net capital expenditures (1)(3)
155,871
154,570
0.8
0.7
Net capital expenditures, excluding network expansion projects (1)
98,053
97,659
0.4
0.6
Diluted earnings per share
1.71
1.99
(14.1)
Adjusted diluted earnings per share (1)(2)
2.12
2.65
(20.0)
Operating results
For the fourth quarter of fiscal 2025 ended on August 31, 2025:
Revenue decreased by 4.9% to $731.4 million. On a constant currency basis(1), revenue decreased by 5.0%, mainly explained as follows:
American telecommunications' revenue decreased by 9.0%, or 9.2% 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, as well as a competitive pricing environment.
Canadian telecommunications' revenue decreased by 1.5%, 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.
Revenue in the media activities increased by 8.5%, helped in part by ongoing growth of our digital advertising solutions and continued engagement from our listeners.
Adjusted EBITDA decreased by 3.8% to $357.1 million. On a constant currency basis, adjusted EBITDA decreased by 3.9% 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 7.6%, or 7.9% in constant currency.
Canadian telecommunications' adjusted EBITDA decreased by 1.4% as reported and in constant currency.
Profit for the period amounted to $76.2 million, of which $16.5 million, or $1.71 per diluted share, was attributable to owners of the Corporation compared to $81.4 million, $19.2 million, and $1.99 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 lower adjusted EBITDA, as well as higher financial expense and acquisition, integration, restructuring and other costs, partly offset by last year's non-cash pre-tax impairment charges of $15.2 million, mostly related to assets under construction write-offs, and lower depreciation and amortization expense.
Adjusted profit attributable to owners of the Corporation(2) was $20.5 million, or $2.12 per diluted share(2), compared to $25.6 million, or $2.65 per diluted share, last year.
Net capital expenditures were $155.9 million, an increase of 0.8% compared to $154.6 million in the same period of the prior year. In constant currency, net capital expenditures(1) were $155.7 million, an increase of 0.7% compared to last year, mainly due to higher capital spending related to customer premise equipment in the Canadian telecommunications segment. The increase is partly offset by the timing of certain initiatives in the Canadian telecommunications segment, as well as lower capital spending in the American telecommunications segment, mainly related to customer premise equipment.
Net capital expenditures in connection with network expansion projects were $57.8 million, or $57.4 million in constant currency(1), compared to $56.9 million in the same period of the prior year. Excluding network expansion projects, net capital expenditures were $98.1 million, an increase of 0.4% compared to $97.7 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(1) were $98.2 million, an increase of 0.6% compared to last year.
Network expansion projects continued, mostly in Canada, with additions over 47,000(4) homes passed during fiscal 2025, of which more than 15,000(4) were in the fourth quarter.
Acquisition of property, plant and equipment increased by 1.7% to $159.2 million, mainly resulting from higher spending.
Free cash flow decreased by 29.0%, or 29.1% in constant currency, and amounted to $101.6 million, or $101.5 million in constant currency(1), mainly due to lower adjusted EBITDA, higher current income taxes, financial expense and acquisition, integration, restructuring and other costs. Free cash flow, excluding network expansion projects decreased by 20.3%, or 20.5% in constant currency, and amounted to $159.4 million, or $158.9 million in constant currency.
Cash flows from operating activities decreased by 18.4% to $266.7 million, mostly due to the timing of payments of trade and other payables, and of the collection of trade and other receivables, as well as to lower adjusted EBITDA.
At its October 29, 2025 meeting, the Board of Directors of Cogeco declared a quarterly dividend of $0.987 per share, an increase of 7.0% compared to $0.922 per share last year.
FISCAL 2026 FINANCIAL GUIDELINES
Cogeco released its fiscal 2026 financial guidelines. Fiscal 2026 will be the second year of a three-year transformation program, where investments are made in order to set the Corporation on a path to sustainable growth. On a constant currency basis, the Corporation expects fiscal 2026 revenue to decrease by 1% to 3%, resulting mostly from a growing Internet subscriber base, a decline in video and wireline phone subscriptions, as well as a competitive pricing environment. On a constant currency basis, fiscal 2026 adjusted EBITDA is expected to decrease by 0% to 2%, as we continue to face revenue pressures in the U.S., and are investing into new sales and marketing capabilities, especially in the U.S., as part of our three-year transformation program, while generating additional operational efficiencies. In addition, fiscal 2026 adjusted EBITDA reflects operating costs and investments to scale wireless in Canada. Net capital expenditures are anticipated to be between $565 and $605 million, including net investments of approximately $100 to $140 million in growth-oriented network expansions, which will increase the Corporation's footprint in Canada and the United States. On a constant currency basis, free cash flow and free cash flow, excluding network expansion projects are expected to increase by 0% to 10%, due to lower financial expense, partially offset by higher current income tax and continued growth-oriented investments.
October 29, 2025
Projections
(i)
Actual
Fiscal 2026
(constant currency)
(ii)
Fiscal 2025
(In millions of Canadian dollars, except percentages)
$
$
Financial guidelines
Revenue
Decrease of 1% to 3%
3,008
Adjusted EBITDA
Decrease of 0% to 2%
1,453
Net capital expenditures
$565 to $605
591
Net capital expenditures in connection with network expansion projects
$100 to $140
108
Free cash flow
Increase of 0% to 10%
(iii)
514
Free cash flow, excluding network expansion projects
Increase of 0% to 10%
(iii)
623
(i)
Percentage of changes compared to fiscal 2025.
(ii)
Fiscal 2026 financial guidelines are based on a USD/CDN constant exchange rate of 1.3962 USD/CDN.
(iii)
The assumed current income tax effective rate is approximately 11.5%.
These financial guidelines, including the various assumptions underlying them, contain forward-looking statements concerning the business outlook for Cogeco, and should be read in conjunction with the "Forward-looking statements" section of this press release. These financial guidelines exclude the impact from possible business acquisitions and/or disposals, and do not take into consideration unusual adjustments that could result from regulatory environment changes (including changes to Internet wholesale rates), and/or unforeseeable legal matters or non-recurring items.
__________
(1)
Adjusted EBITDA and net capital expenditures are total of segments 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 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.
(2)
Excludes the impact of non-cash impairment charges, and acquisition, integration, restructuring and other costs, net of tax and non-controlling interest.
(3)
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.
(4)
During the fourth quarter of fiscal 2025, homes passed were adjusted following an exhaustive review of the calculation of American homes passed. This change has been applied retrospectively to the comparative figures.
Financial highlights
Three months and years ended August 31
2025
2024
Change
Change in
constant currency
(1)
(2)
2025
2024
Change
Change in
constant currency
(1)
(2)
(In thousands of Canadian dollars, except % and per share data)
$
$
%
%
$
$
%
%
Operations
Revenue
731,367
768,656
(4.9)
(5.0)
3,008,101
3,073,985
(2.1)
(3.3)
Adjusted EBITDA (2)
357,084
371,216
(3.8)
(3.9)
1,452,901
1,454,817
(0.1)
(1.3)
Acquisition, integration, restructuring and other costs (3)
17,298
12,177
42.1
25,290
63,298
(60.0)
Impairment of property, plant and equipment
(132)
15,229
—
2,433
15,229
(84.0)
Profit for the period
76,197
81,437
(6.4)
335,165
349,381
(4.1)
Profit for the period attributable to owners of the Corporation
16,483
19,248
(14.4)
84,968
96,746
(12.2)
Adjusted profit attributable to owners of the Corporation (2)(4)
20,491
25,562
(19.8)
91,187
119,048
(23.4)
Cash flow
Cash flows from operating activities
266,738
326,723
(18.4)
1,126,848
1,185,150
(4.9)
Free cash flow (2)
101,596
143,055
(29.0)
(29.1)
514,387
475,765
8.1
7.4
Free cash flow, excluding network expansion projects (2)
159,414
199,966
(20.3)
(20.5)
622,862
613,159
1.6
0.9
Acquisition of property, plant and equipment
159,222
156,577
1.7
599,294
664,004
(9.7)
Net capital expenditures (2)(5)
155,871
154,570
0.8
0.7
591,398
642,747
(8.0)
(9.3)
Net capital expenditures, excluding network expansion projects (2)
98,053
97,659
0.4
0.6
482,923
505,353
(4.4)
(6.0)
Per share data (6)
Earnings per share
Basic
1.74
2.02
(13.9)
8.94
8.63
3.6
Diluted
1.71
1.99
(14.1)
8.81
8.55
3.0
Adjusted diluted (2)(4)
