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• Revenue Decline: Consolidated revenue declined by 2.7% in constant currency.

• Adjusted EBITDA: Stable in constant currency due to operating efficiencies and lower corporate costs.

• Diluted Earnings Per Share: Declined by 20% in reported currency.

• Capital Intensity: 21.6%, down from 23.4% last year.

• Free Cash Flow: Increased by 12.8% in constant currency.

• Net Debt-to-Adjusted EBITDA Ratio: 3.4 turns, unchanged from Q1.

• Dividend: Quarterly dividend of $0.922 per share declared.

• Canadian Revenue Decline: Cogeco Connections revenue declined by 0.9%.

• US Revenue Decline: Breezeline's revenue declined by 4.5% in constant currency.

• Internet Subscriber Growth: Canadian internet customer base grew by 8,300 subscribers.

• Homes Passed: Added nearly 145,000 Canadian homes since fiscal 2022.

• Warning! GuruFocus has detected 2 Warning Signs with CGEAF.

Release Date: April 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cogeco Communications Inc (CGEAF) expects significant growth in free cash flow over the next two years, driven by the end of a CapEx investment cycle.

• The company has successfully merged its US and Canadian teams, leading to high engagement and collaboration, and is beginning to capture technical and operational synergies.

• Cogeco Communications Inc (CGEAF) reported strong operational performance in Q2, with results ahead of expectations and expanded consolidated EBITDA margins.

• The company's fibre-to-the-home expansion program added nearly 7,000 new homes passed in the quarter, primarily in Canada, contributing to strong Internet subscriber metrics.

• Cogeco Communications Inc (CGEAF) is seeing increasing subscriber tenure and improved customer satisfaction in the US, particularly in Ohio, which is contributing to stable EBITDA despite revenue pressures.

Negative Points

• Cogeco Communications Inc (CGEAF) experienced a 2.7% decline in consolidated revenue, driven by lower revenue in both US and Canadian segments.

• Adjusted EBITDA in Canada declined by 2.8% in constant currency due to lower revenue and higher operating expenses aimed at driving subscriber growth.

• In the US, Breezeline's revenue declined by 4.5% in constant currency due to a cumulative decline in the subscriber base, especially for entry-level services.

• Diluted earnings per share declined by 20% in reported currency, impacted by higher D&A expenses, acquisition integration and restructuring expenses, and higher taxes.

• The radio advertising market continues to face challenges, impacting Cogeco Media's operations, although digital advertising solutions are growing.