BCE (BCE) Q1 2026 earnings summary

Executive summary

• Consolidated revenue grew 4.0% year-over-year in Q1 2026, with adjusted EBITDA up 2.9% and net earnings down 2.3% to $667 million, reflecting disciplined execution and strong contributions from AI-powered solutions and fiber platforms.

• Free cash flow increased 0.8% to $804 million, while cash flows from operating activities declined 26.9% due to higher income taxes from strategic divestitures.

• Capital allocation focused on deleveraging, funding growth, and returning capital to shareholders, supported by divestitures and disciplined CapEx.

• Strategic priorities advanced in fibre, AI-powered enterprise solutions, and digital media/content.

• Announced divestiture of Land Mobile Radio business for CAD 675 million and completed sale of MLSE stake, both at attractive valuations.

Financial highlights

• Q1 2026 revenue: $6,168M (+4.0% y/y); Adjusted EBITDA: $2,631M (+2.9% y/y); Net earnings: $667M (-2.3% y/y).

• Adjusted EPS declined by CAD 0.06 year-over-year to $0.63 (-8.7%), due to higher depreciation, amortization, and interest costs.

• Free cash flow increased 0.8% to CAD 804 million, with a new definition excluding taxes on significant divestitures.

• Margin declined 40 bps to 42.7% as higher-growth services carry lower margins than legacy businesses.

• Total CapEx rose 15.4% to $841 million, driven by U.S. fiber buildout and AI Fabric investments.

Outlook and guidance

• 2026 guidance reaffirmed: revenue growth of 1–5%, adjusted EBITDA growth of 0–4%, and capital intensity of ~20% due to $1.3B incremental capex for the Saskatchewan AI data center.

• Adjusted EPS expected to decline 5–11% and free cash flow to decrease 28–34% due to higher capex and expenses.

• Annualized common share dividend maintained at $1.75.

• Targeting net debt leverage ratio of 3.5x by end of 2027, moving below that in 2028.

• AI-powered solutions revenue objective raised to CAD 2 billion by 2028, with potential upside.