Wireless business continues to scale up sales in both countries
Successfully launched welo, a new U.S. digital challenger brand
Delivered positive Ohio Internet subscriber growth for a third consecutive quarter
3-year transformation program on track
Updated fiscal 2026 financial guidelines for revenue, adjusted EBITDA and capital spending on network expansion projects; free cash flows and net capital expenditures projections maintained
Cogeco on Forbes' list of best Canadian employers (#1 telecom)
MONTRÉAL, April 9, 2026 /CNW/ - Today, Cogeco Communications Inc. (TSX:CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the second quarter ended February 28, 2026.
"Our Canadian performance remains strong and resilient," stated Frédéric Perron, President and CEO. "While, in the U.S., we were expecting financial results to be more challenging in the first half of the year, I am pleased to report that we are still on track to deliver clear improvements in the second half.
"I am encouraged by the turnaround progress in our U.S. operations, including the scaling up of new sales channels and the launch of welo, our digital challenger brand. Those actions should enable us to grow in areas where we currently have market share upside.
"As we hit the halfway mark of our three-year transformation program, we are pleased with the advancements we have made to date, as well as additional opportunities leveraging new artificial intelligence-based tools.
"Our wireless businesses continue to scale up and give us a powerful new tool to compete with, in both countries," concluded Mr. Perron.
Consolidated financial highlights
Three months ended February 28
2026
2025
Change
Change in
constantcurrency
(1)
(In thousands of Canadian dollars, except % and per share data) (unaudited)
$
$
%
%
Revenue
693,560
732,426
(5.3)
(3.6)
Adjusted EBITDA (1)
337,745
356,499
(5.3)
(3.6)
Adjusted EBITDA margin (1)
48.7 %
48.7 %
Profit for the period
83,585
79,637
5.0
Profit for the period attributable to owners of the Corporation
80,006
74,674
7.1
Adjusted profit attributable to owners of the Corporation (1)(2)
83,217
80,693
3.1
Cash flows from operating activities
170,558
253,212
(32.6)
Free cash flow (1)
155,045
116,603
33.0
33.6
Free cash flow, excluding network expansion projects (1)
169,073
132,176
27.9
28.7
Acquisition of property, plant and equipment
123,626
159,371
(22.4)
Net capital expenditures (1)(3)
121,778
157,895
(22.9)
(20.9)
Net capital expenditures, excluding network expansion projects (1)
107,750
142,322
(24.3)
(22.3)
Capital intensity (1)
17.6 %
21.6 %
Capital intensity, excluding network expansion projects (1)
15.5 %
19.4 %
Diluted earnings per share
1.89
1.76
7.4
Adjusted diluted earnings per share (1)(2)
1.96
1.90
3.2
Operating results
For the second quarter of fiscal 2026 ended on February 28, 2026:
Revenue decreased by 5.3% to $693.6 million. On a constant currency basis(1), revenue decreased by 3.6% due to a decline in the American telecommunications segment, offset in part by revenue growth in the Canadian telecommunications segment, as explained below:
American telecommunications' revenue decreased by 11.6%, or 8.1% in constant currency, mainly due to a lower subscriber base compared to the previous year, and to a higher proportion of customers subscribing to Internet-only services, as well as a competitive pricing environment.
Canadian telecommunications' revenue increased by 0.9%, mainly resulting from the cumulative effect of high-speed Internet service additions over the past year, offset in part by an overall 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.
Adjusted EBITDA decreased by 5.3% to $337.7 million. On a constant currency basis, adjusted EBITDA decreased by 3.6%, mainly due to lower revenue in the American telecommunications segment, offset in part 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 11.7%, or 8.1% in constant currency.
Canadian telecommunications' adjusted EBITDA increased by 2.3%(4), or 2.0%(4) in constant currency.
Profit for the period amounted to $83.6 million, of which $80.0 million, or $1.89 per diluted share, was attributable to owners of the Corporation compared to $79.6 million, $74.7 million, and $1.76 per diluted share, respectively, in the comparable period of fiscal 2025. The increases in profit for the period and profit attributable to owners of the Corporation resulted mainly from lower depreciation and amortization expense, financial expense, and acquisition, integration, restructuring and other costs, partly offset by lower adjusted EBITDA.
Adjusted profit attributable to owners of the Corporation(2) was $83.2 million, or $1.96 per diluted share(2), compared to $80.7 million, or $1.90 per diluted share, last year.
Net capital expenditures were $121.8 million, a decrease of 22.9% compared to $157.9 million in the same period of the prior year. In constant currency, net capital expenditures(1) were $124.9 million, a decrease of 20.9% compared to last year, mainly due to lower capital spending related to customer premise equipment and the timing of certain initiatives in both the American and Canadian telecommunications segments.
Net capital expenditures in connection with network expansion projects were $14.0 million, or $14.2 million in constant currency(1), compared to $15.6 million in the same period of the prior year. Excluding network expansion projects, net capital expenditures were $107.8 million, a decrease of 24.3% compared to $142.3 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(1) were $110.6 million, a decrease of 22.3% compared to last year.
Capital intensity was 17.6% compared to 21.6% last year. Excluding network expansion projects, capital intensity was 15.5% compared to 19.4% in the same period of the prior year.
Acquisition of property, plant and equipment decreased by 22.4% to $123.6 million, mainly resulting from lower spending.
Free cash flow increased by 33.0%, or 33.6% in constant currency, and amounted to $155.0 million, or $155.8 million in constant currency(1), mainly due to lower net capital expenditures, as well as lower current income taxes, mostly due to a retroactive adjustment of $14.8 million recognized following the reintroduction of accelerated tax depreciation measures in Canada, offset in part by lower adjusted EBITDA. Free cash flow, excluding network expansion projects, increased by 27.9%, or 28.7% in constant currency, and amounted to $169.1 million, or $170.1 million in constant currency.
Cash flows from operating activities decreased by 32.6% to $170.6 million, mostly due to the timing of payments made to suppliers and to lower adjusted EBITDA, as well as to higher income taxes paid.
At its April 9, 2026 meeting, the Board of Directors of Cogeco Communications declared a quarterly dividend of $0.987 per share, an increase of 7.0% compared to $0.922 per share in the comparable quarter of fiscal 2025.
Fiscal 2026 revised financial guidelines
Cogeco Communications revised its fiscal 2026 financial guidelines as issued on October 29, 2025.
In Canada, the Corporation's revenue and adjusted EBITDA performance remains in line with assumptions in its original guidelines. In the U.S., while Internet subscriber trends are improving, the Corporation faces higher pressure on its revenue than initially anticipated when guidelines were introduced in October 2025 due to the ongoing competitive pricing environment. Consequently, Cogeco Communications is lowering its revenue and adjusted EBITDA projections for fiscal 2026, while maintaining its free cash flow projection. Furthermore, while it does not expect a significant impact on its overall net capital expenditures, the Corporation expects lower capital spending in connection with network expansions projects than initially planned, due to the timing of certain initiatives. Accordingly, Cogeco Communications also revised its projections for net capital expenditures in connection with network expansion projects and capital intensity, excluding network expansion projects, while maintaining its projection for free cash flow, excluding network expansion projects.
The following table outlines the Corporation's fiscal 2026 revised financial guidelines ranges compared to fiscal 2025 actual results, on a constant currency and consolidated basis, as well as the previous financial guidelines issued on October 29, 2025:
April 9, 2026
October 29, 2025
Revised projections
(i)
Original projections
(i)
Actual
(In millions of Canadian dollars, except percentages)
Fiscal 2026
(constant currency)
(ii)
Fiscal 2026
(constant currency)
(ii)
Fiscal 2025
$
$
$
Financial guidelines
Revenue
Decrease of 2% to 4%
Decrease of 1% to 3%
2,910
Adjusted EBITDA
Decrease of 1.5% to 3.5%
Decrease of 0% to 2%
1,443
Net capital expenditures
$560 to $600
$560 to $600
588
Net capital expenditures in connection with network expansion projects
$85 to $110
$100 to $140
108
Capital intensity
19.5% to 21.5%
19% to 21%
20.2 %
Capital intensity, excluding network expansion projects
16% to 18%
15% to 17%
16.5 %
Free cash flow
Increase of 0% to 10%
(iii)
Increase of 0% to 10%
(iii)
517
Free cash flow, excluding network expansion projects
Increase of 0% to 10%
(iii)
Increase of 0% to 10%
(iii)
626
(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)
Following the reintroduction of accelerated tax depreciation measures in Canada, for which the legislation became substantively enacted on February 26, 2026, the assumed current effective income tax rate is now expected to be approximately 8.5% (11.5% 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 and the Corporation's fiscal 2025 annual Management's Discussion and Analysis.
The Corporation presents its fiscal 2026 revised financial guidelines on a constant currency basis and believes this presentation enables an improved understanding of the Corporation's underlying financial performance, undistorted by the effects of changes in foreign currency rates. Measures on a constant currency basis are considered non-IFRS Accounting Standards measures and ratios, and do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore, may not be comparable to similar measures presented by other companies. The 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.
Overall, compared to fiscal 2025, on a constant currency and consolidated basis, the Corporation expects fiscal 2026 revenue to decrease by 2% to 4%, 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 1.5% to 3.5%, 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 $560 and $600 million, including net investments of approximately $85 to $110 million in growth-oriented network expansions, which will increase the Corporation's footprint in Canada and the United States. Capital intensity is expected to range between 19.5% and 21.5%, or 16% and 18% excluding network expansion projects.
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 and current income tax, partly offset by continued growth-oriented investments.
(1)
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.
(2)
Excludes the impact of acquisition, integration, restructuring and other costs (gains), and gains/losses on debt modification and/or extinguishment, which include gains/losses on repurchase of debt (all 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)
Following a full-scale launch of its Canadian wireless service offering across the majority of its operating footprint in Québec and Ontario during the first quarter of fiscal 2026, the Corporation changed the presentation of its reportable segments by including the Canadian wireless operations within its Canadian telecommunications segment. Cogeco Mobile's operations were previously included within "Corporate and eliminations" during the start-up phase. Comparative figures were restated to conform to the current presentation.
Financial highlights
Change in
constantcurrency
Change in
constantcurrency
Three and six months ended February 28
2026
2025
Change
(1)(2)
2026
2025
Change
(1)(2)
(In thousands of Canadian dollars, except % and per share data)
$
$
%
%
$
$
%
%
Operations
Revenue
693,560
732,426
(5.3)
(3.6)
1,400,807
1,471,121
(4.8)
(4.2)
Adjusted EBITDA (2)
337,745
356,499
(5.3)
(3.6)
691,568
721,714
(4.2)
(3.7)
Adjusted EBITDA margin (2)
48.7 %
48.7 %
49.4 %
49.1 %
Acquisition, integration, restructuring and other costs (gains) (3)
6,335
8,035
(21.2)
7,633
(1,923)
—
Profit for the period
83,585
79,637
5.0
176,680
186,797
(5.4)
Profit for the period attributable to owners of the Corporation
80,006
74,674
7.1
168,682
175,262
(3.8)
Adjusted profit attributable to owners of the Corporation (2)(4)
83,217
80,693
3.1
172,741
171,367
0.8
Cash flow
Cash flows from operating activities
170,558
253,212
(32.6)
346,881
472,077
(26.5)
Free cash flow (2)
155,045
116,603
33.0
33.6
280,582
265,461
5.7
5.8
Free cash flow, excluding network expansion projects (2)
169,073
132,176
27.9
28.7
313,364
302,833
3.5
3.7
Acquisition of property, plant and equipment
123,626
159,371
(22.4)
280,777
312,614
(10.2)
Net capital expenditures (2)(5)
121,778
157,895
(22.9)
(20.9)
278,741
308,540
(9.7)
(9.0)
Net capital expenditures, excluding network expansion projects (2)
