Rogers Communications : Transcript (Rogers Q3 2025 Earnings Call)

Rogers Communications Inc. Third Quarter 2025 Results Conference Call Transcript Date: October 23, 2025 Time: 8:00 AM ET Speakers: Tony Staffieri

President, Chief Executive Officer

Glenn Brandt

Chief Financial Officer

Paul Carpino

Vice President, Investor Relations

Operator:

Welcome to the Rogers Communications Inc. Third Quarter 2025 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded.

Following the presentation, we'll conduct a question-and-answer session. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may reach an Operator by pressing star, then zero.

I would now like to turn the conference over to Paul Carpino, Vice President of Investor Relations with Rogers Communications. Please go ahead, Mr. Carpino.

Paul Carpino:

Thank you, Gaylene, and good morning everyone and thank you for joining us. Today I'm here with our

President and Chief Executive Officer, Tony Staffieri, and our Chief Financial Officer, Glenn Brandt.

Today's discussion will include estimates and other forward-looking information from which our actual results could differ. Please review the cautionary language in today's earnings report and in our 2024 Annual Report regarding the various factors, assumptions and risks that could cause our actual results to differ.

With that, let me turn it over to Tony to begin.

Tony Staffieri:

Thank you, Paul, and good morning, everyone. It's been quite a week for our Toronto Blue Jays-American League Champions, so just wanted to say a few words about Canada's team. We're thrilled the Blue Jays are in the World Series, and it all starts north of the border tomorrow. As owner, our job is to give leadership the tools and resources to win, and as Canada's communications and entertainment company, we're about providing Canadians with the best sports and entertainment experiences. This is one of those moments, and this is what Rogers is all about.

Let me now turn to the quarter. Q3 was another strong quarter for Rogers. We delivered industry-best combined mobile phone and internet customer additions. We continued to grow our cable business anchored by Canada's most reliable internet. We again delivered the best wireless and cable margins in our sector, and we're seeing healthy revenue growth from our media operations through organic growth and through now including MLSE revenue in our results. Overall, we executed with discipline and a clear focus on driving growth across our three main businesses.

Let me start with wireless. In a highly competitive wireless market, we saw some pressure on service revenue and ARPU. Our priority continues to be on the consistent delivery of results. We added 111,000 total mobile phone net additions in Q3 and year-to-date we added 206,000 mobile subscribers, with the vast majority on the Rogers postpaid brand. We are leading the industry with innovative, transparent, feature-rich add-a-line plans. These plans meet the dual objective of providing customers with simple, value-add options while targeting revenue growth opportunities to support strategic investments in our network.

We are also leading the industry with satellite-to-mobile. This new groundbreaking technology connects Canadians in remote areas, and we now deliver three times more coverage than any other carrier in Canada. Since launching our beta trial in July, we have seen terrific response from both our customers and Canadians. We recently extended the beta trial and will launch even more capabilities in the coming months. The launch of satellite-to-mobile reinforces our 65-year history of leading the industry and innovating for Canadians.

Our customers are embracing this strategic approach. Our postpaid churn in the quarter was 0.99%, down 13 basis points year-on-year and the lowest churn in over two years. We are leading in innovation and delivering more value for our customers while maintaining industry-leading wireless margins of 67%.

In cable, growth remains positive, reflecting a clear reversal of the negative trends seen in previous years. Retail internet additions were 29,000 in the quarter and we have delivered approximately 80,000 new internet subscribers year-to-date across the country. This is in part driven by Rogers leading 5G home internet technology.

5G home internet is one of many areas where we're leading. With the Xfinity road map, we're rolling out new features and plans that drive value and deliver new innovations on our world-class entertainment platform. We've launched Rogers Xfinity StreamSaver to bring together popular streaming services at a price point that's attractive to the consumer. We've launched more smart home device and new features for Rogers Xfinity Self Protection. We were the first Canadian internet provider to introduce Wi-Fi 7, the latest generation of Wi-Fi technology. Our focus on execution, efficiency and discipline continues to drive industry-leading cable margins of 58%.

Finally in media, revenue growth was up 26%, driven by a strong Blue Jays regular season and the consolidation of MLSE results. We are in the early stages of transforming our sports and entertainment business into one of the best sports businesses globally. This is our third pillar of growth beyond wireless and cable and will be meaningful to Rogers over time. With the acquisition of the additional stake in MLSE, we have added revenue and profitability growth to our core business.

Taking a step back, in calendar 2025 we project media revenue and Adjusted EBITDA including MLSE for the full year to be $4 billion and $250 million, respectively. Our collection of sports and media assets has a value in excess of $15 billion and is among the most impressive in the world. This value is not currently reflected in our share price. We are well positioned to surface this significant unrecognized value for Rogers shareholders over time. In 2026, we expect to acquire the outstanding minority stake in MLSE as part of this process, so more to come on this.

We are building a sports business at scale, and we are assessing multiple options to unlock additional value. We will take the time to be thoughtful, deliberate, and get it right. In the meantime, we will continue to operate with financial discipline while providing team leadership with the tool and resources to build championships.

Finally on balance sheet and capital spending, we are effectively managing to leverage down, even as we scale up our exceptional asset base. In Q3, we continued to execute on our commitment to maintain a strong balance sheet. We recorded a debt leverage ratio of 3.9 times. This was achieved after completing the acquisition of the additional stake in MLSE.

As you saw this morning, we now expect CapEx for the current year to come in at $3.7 billion. This is below our previous target of $3.8 billion and reflects the current regulatory environment. Free cash flow is now expected to be between $3.2 billion and $3.3 billion, higher than our previous target.

In the coming quarters, we will maintain our laser-like focus on preserving a strong investment-grade balance sheet, even as we complete our transformational investments. As we pursue growth in our three core businesses, we will continue to align capital spending and free cash flow growth to the best growth opportunities and balance sheet deleveraging priorities. As we get ready for peak selling in the fourth quarter, we will remain focused on balancing execution discipline with revenue and subscriber growth.

Thank you to our exceptional team for their continued commitment to drive growth long term. I will now turn the call over to Glenn.

Glenn Brandt:

Thank you, Tony, and good morning, everyone. Thank you for joining us. We are pleased to report that Rogers third quarter results reflect another quarter of strong, disciplined and leading financial and operating performance. Once again, we have delivered industry-leading margin performance in cable and wireless, and our wireless churn is the best we have seen in over two years. We have delivered positive cable revenue and Adjusted EBITDA growth, and we expect that our combined internet and wireless loading will once again lead our peers.

Media has once again delivered sector-leading growth driven by our added Warner Discovery media content and by our Toronto Blue Jays very strong regular season performance. As well, this is the first quarter in which MLSE results are now fully consolidated with our Rogers Sports & Media business segment; and we are pleased to report that Rogers is delivering solid results across all three core businesses against the backdrop of a competitive environment and slower growth economy.

Starting with Wireless, we continued to deliver solid market share supported by disciplined financials. Wireless service revenue was flat and Adjusted EBITDA was up 1% year-over-year, primarily reflecting the ongoing competitive intensity in the marketplace, continued lower immigration, and lower international roaming and wholesale revenue. Our sustained emphasis driving cost efficiencies has