Cogeco 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 Inc. (TSX:CGO) (“Cogeco” 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.

“At Cogeco Media, while radio advertising continues to face a challenging market, revenue increased during the quarter, helped in part by ongoing growth of our digital advertising solutions and strong listener engagement. Our leading radio stations have continued to achieve strong market share in their target markets from recent audience surveys.”

Consolidated financial highlights

Operating results

For the third quarter of fiscal 2025 ended on May 31, 2025:

• Revenue decreased by 2.4% to $758.5 million. On a constant currency basis⁽²⁾, revenue decreased by 3.9%, 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.
  • Revenue in the media activities increased by 4.4%, helped in part by ongoing growth of our digital advertising solutions and strong listener engagement.
• Adjusted EBITDA decreased by 0.5% to $367.8 million. On a constant currency basis, adjusted EBITDA decreased by 2.0% 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 $74.0 million, of which $20.5 million, or $2.13 per diluted share, was attributable to owners of the Corporation compared to $75.3 million, $19.0 million, and $1.97 per diluted share, respectively, in the comparable period of fiscal 2024. The decreases in profit for the period resulted mainly from higher depreciation and amortization expense, financial expense and income tax expense, as well as non-cash pre-tax impairment charges of $2.6 million, mostly related to assets under construction write-offs, and lower adjusted EBITDA, partly offset by lower acquisition, integration, restructuring and other costs. The increase in profit for the period attributable to owners of the Corporation reflected a higher proportional decrease in the profit for the period attributable to non-controlling interest.
  • Adjusted profit attributable to owners of the Corporation⁽³⁾ was $23.1 million, or $2.40 per diluted share⁽³⁾, compared to $29.1 million, or $3.02 per diluted share, last year.
• Net capital expenditures were $125.8 million, a decrease of 25.9% compared to $169.8 million in the same period of the prior year. In constant currency, net capital expenditures⁽²⁾ were $123.6 million, a decrease of 27.2% 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 $112.5 million, a decrease of 22.6% compared to $145.3 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects⁽²⁾ were $110.4 million, a decrease of 24.0% 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.
• Acquisition of property, plant and equipment decreased by 26.8% to $126.2 million, mainly resulting from lower spending.
• Free cash flow⁽¹⁾ increased by 63.6%, or 61.9% in constant currency, and amounted to $147.5 million, or $146.0 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 and current income taxes, as well as lower adjusted EBITDA. Free cash flow, excluding network expansion projects⁽¹⁾ increased by 40.3%, or 38.9% in constant currency, and amounted to $160.8 million, or $159.2 million in constant currency.
• Cash flows from operating activities increased by 19.8% to $401.4 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 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 has revised its fiscal 2025 financial guidelines as issued on October 31, 2024 for revenue, net capital expenditures 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’s 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 projections.

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.

Financial highlights

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