Rogers Communications Inc. Q1 FY2025 earnings call

• Continued 2% growth in service revenue and adjusted EBITDA with strong margin improvements. - Focus on disciplined execution, profitable growth, delevering the balance sheet, and surfacing value from sports assets. - Cable & Wireless delivered strong financials with 57,000 Wireless and Internet net additions. - Network reliability recognized with accolades like being awarded Canada's most reliable 5G wireless network for the seventh straight year. - Launched 4-gig download and 1-gig upload speeds in select Calgary communities with Rogers Xfinity modem. - Renewed NHL partnership with media rights locked in until 2038. - Closed $4 billion hybrid securities offering and agreed to $7 billion equity investment, reducing leverage to 3.6 times pro forma.

Wireless: Service revenue and adjusted EBITDA each grew 2% year-over-year. 34,000 net new wireless subscribers in Q1, postpaid mobile phone churn down to 1%. Blended mobile phone ARPU was $57, down just under 2% from the prior year. Cable: Service revenue was down 1% in the quarter due to competitive promotional activity and customer churn, but cable's adjusted EBITDA was up 1% year-over-year driven by a 4% decrease in operating costs. Internet net additions were 23,000. Rogers Sports and Media: Revenue was up 24% year-over-year, driven by additional Toronto Blue Jays home games and advertising revenue, with EBITDA improving by $36 million year-over-year.

• Revenue and EBITDA growth profile remains positive for 2025. - Free cash flow guidance was provided based on existing balance sheet and capital structure, with the structured equity transaction to be reflected in reporting going forward without altering guidance range. - Cable revenue expected to return to breakeven and grow in the back half of the year.

• Tariff impacts on handsets as a potential risk. - Competitive market dynamics affecting pricing discipline. - Macro-economic factors such as slower sector growth due to lower immigration.

Q: Clarify free cash flow guidance and Wireless pricing.

A: Glenn states free cash flow guidance was based on existing structure, and the structured equity transaction will be reflected in reporting without altering guidance; on Wireless pricing, Tony mentions market slowdown, price discipline in Q1, and focus on higher value segments.

Q: Expectations about MLSE equity.

A: Glenn says in discussions with investors interested in MLSE assets, and expectation is to close MLSE transaction mid-2025 with league and regulatory approvals.

Q: Tariff impact on handsets and roaming ARPU.

A: Tony says tariff has little direct impact on Rogers, and Glenn mentions roaming impact on ARPU was ~15% of the quarter's decline, with continued pacing in April.