Cogeco (CGO) Q1 2025 earnings summary

Executive summary

• Strong internet subscriber growth in Canada and improving U.S. subscriber metrics supported by transformation initiatives, digitization, and network expansion.

• Revenue declined 1.4% year-over-year to $764.96M, mainly due to lower American telecom and media revenues, while Canadian telecom remained stable.

• Adjusted EBITDA rose 1.4% to $371.1M, driven by cost reductions and efficiencies, especially in Canadian telecom.

• Free cash flow increased 7.3% to $152.5M, aided by asset disposals and cost efficiencies.

• Fiscal 2025 guidance maintained, with continued focus on operational optimization, cost efficiencies, and network expansion.

Financial highlights

• Revenue: $764.96M (down 1.4% year-over-year); Adjusted EBITDA: $371.1M (up 1.4%).

• Net profit increased 9.8% to $108.4M, aided by a $13.8M non-cash gain from a sale and leaseback transaction and lower financial expenses.

• Free cash flow: $152.5M (up 7.3%); Free cash flow excluding network expansion: $174.3M (up 0.3%).

• Capital intensity was 20.4% (up from 19.6% last year), or 17.4% excluding network expansion projects.

• Quarterly dividend increased 8% to $0.922 per share.

Outlook and guidance

• Fiscal 2025 guidance reaffirmed, with expectations of continued network expansion and operational transformation.

• Q2 revenue and Adjusted EBITDA expected to decrease low single digits year-over-year due to competition and investments.

• Capital intensity for Q2 anticipated to be about 200 basis points above last year.

• D&A expense to be slightly above last quarter; restructuring costs of CAD 4–5 million expected in Q2.