Rogers Communications Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Financial and Strategic Initiatives: Delivered positive revenue and EBITDA growth in Wireless, Cable, and Media. Returned to revenue growth in Cable. Completed $7 billion equity investment for minority stake in wireless network, became majority owner of MLSE with 75% controlling interest. Ended Q2 at 3.6x leverage, 9 months ahead of plan.
• Operational Updates: Launched satellite-to-mobile texting, first in Canada. Started deployment of 5G advanced network technology. Ranked Canada's most reliable 5G Plus network. Rolled out Wi-Fi 7 nationally in Calgary and Atlantic Canada.
• Regulatory Concerns: CRTC decision allowing large providers to resell on competitors' networks stifles real competition; urged federal government to address.

Segment Performance

• Wireless: Service revenue and adjusted EBITDA each grew 1%. Total subscriber net additions were 61,000, including 35,000 postpaid. Blended mobile phone ARPU was $55.45, down 3% year-over-year.
• Cable: Service revenue up 1%, adjusted EBITDA up 3%. Internet net additions of 26,000. Margins just over 58%, a 150 basis point increase from prior year.
• Media: Revenue up 10% driven by Sportsnet's success with NHL playoffs, higher Toronto Blue Jays revenue, and launch of Warner Bros., Discovery suite of channels. Media EBITDA up $5 million year-over-year. With MLSE included, Media revenue estimated at $3.9 billion and EBITDA $250 million for full year.

Guidance

• Updated 2025 outlook to include MLSE consolidation. Total service revenue expected to grow 3%-5%, adjusted EBITDA 0%-3%. Capital expenditures expected at low end of $3.8 billion-$4 billion range. Free cash flow $3 billion-$3.2 billion. EBITDA accretion expected in 2026 from MLSE consolidation.

Risks

• Regulatory Risks: CRTC decision on reselling could stifle competition and impact network investment.
• Market Competition Risks: Intense competition in wireless and cable affecting ARPU and revenue growth.

Question and Answer

Q: On updated 2025 guidance and MLSE seasonality A: Glenn A. Brandt stated guidance update mainly due to MLSE inclusion; core telecom outlook unchanged, CapEx at lower end.

Q: MLSE performance and Wireless network revenue growth A: Glenn A. Brandt said MLSE performance aggregated without synergies; Wireless revenue growth driven by cost efficiencies and price initiatives.

Q: Competitive environment in wireless and roaming A: Anthony Staffieri mentioned competitive pricing, early signs for back-to-school; Glenn A. Brandt said roaming impacted by travel decline, but passes help.

Q: MLSE synergy timing and Cable ARPA A: Anthony Staffieri said synergies early days; Glenn A. Brandt noted Cable ARPA affected by competitive forces and video subscriber trimming.

Q: Rogers Satellite product road map and data centers A: Anthony Staffieri said satellite voice/data expected later in 2026; Glenn A. Brandt said no immediate plans for data centers beyond core business.