Cogeco (CGO) Q4 2025 earnings summary

Executive summary

• Completed year one of a three-year transformation program, delivering targeted OpEx and CapEx synergies, network upgrades, and meeting cost reduction targets.

• Achieved best Canadian internet subscriber growth in 13 years, adding 16,988 new subscribers in Q4 2025, driven by market share gains and constructive competition.

• U.S. operations saw improved subscriber trends, with Ohio recording its first customer growth since acquisition, despite ongoing ARPU pressures and prior customer losses.

• Launched Canadian wireless service ahead of plan, now deployed across most of the footprint, with strong early sales.

• Unified management structure for Canadian and U.S. operations to drive synergies and accelerate growth.

Financial highlights

• Fiscal 2025 revenue was $2.91B; Adjusted EBITDA $1.44B; free cash flow $517M; Q4 2025 revenue declined 4.9% year-over-year to $731.4M, and adjusted EBITDA fell 3.8% to $357.1M.

• Adjusted EBITDA margin consistently above 47% over the past five years.

• Dividend increased by 7% to $0.987 per share, with a yield of 6.1%.

• Net debt to Adjusted EBITDA ratio at 3.1x; available liquidity of $944M.

• Free cash flow in constant currency decreased 27.4% in Q4 but rose 7.9% for the full year; Q4 free cash flow was $101.6M, down 29.0% year-over-year.

Outlook and guidance

• Fiscal 2026 guidance: consolidated revenue expected to decrease 1–3% and Adjusted EBITDA to decrease 0–2% year-on-year, reflecting U.S. competition and investments in sales, marketing, and Canadian wireless.

• Capital expenditures projected at $560–600M, with $100–140M for network expansions; capital intensity expected at 19–21%.

• Free cash flow (excluding network expansions) expected to increase 0–10% versus fiscal 2025.

• Q1 2026: consolidated revenue and Adjusted EBITDA expected to decline mid-single digits year-on-year, with sequential improvement from Q2 onward.

• Targeting $600M free cash flow in fiscal 2027, supporting further dividend growth and deleveraging.