Cogeco (CGO) Q3 2025 earnings summary

Executive summary

• Strong Canadian Internet subscriber growth and successful wireless launch in 12 markets offset U.S. subscriber losses, with transformation and cost reduction initiatives driving margin expansion and significant free cash flow growth.

• U.S. operations faced increased competition and internal execution gaps, but improvements are expected as transformation initiatives take effect.

• Media segment revenue grew due to digital advertising and strong radio audience engagement, despite a challenging ad market.

• Unified management structure and ongoing network expansion, including fibre-to-the-home and leveraging government subsidies, support long-term growth.

• Strong history of capital returns, including consistent dividend increases and share repurchases.

Financial highlights

• Q3 2025 revenue was $758.5M, down 2.4% year-over-year (3.9% in constant currency); LTM consolidated revenue reached $2.98B.

• Adjusted EBITDA for Q3 was $367.8M, down 0.5% (2.0% in constant currency); LTM Adjusted EBITDA margin was 47.6%.

• Free cash flow for Q3 rose 63.6% to $147.5M, driven by lower capital expenditures and restructuring costs; LTM free cash flow was $476M.

• Net capital expenditures for Q3 fell 25.9% to $125.8M; guidance for fiscal 2025 is $600–$650M.

• Dividend of $0.922 per share declared, with a yield of 5.2%.

Outlook and guidance

• Fiscal 2025 revenue expected to decline low single digits year-over-year, with stable adjusted EBITDA and higher free cash flow versus prior year.

• Net capital expenditures guidance revised to $600–$650M; capital intensity forecasted at 16.5%–18.5% excluding network expansions.

• Free cash flow guidance raised to stable, an improvement from previous expectations of a decline.

• Q4 consolidated revenue expected to be lower than Q3, with adjusted EBITDA similar to or slightly better than Q3.

• Additional U.S. revenue pressure anticipated due to competition, but cost savings and operational efficiencies are expected to offset impact.