Cogeco announces its Q2 2026 financial results

• Cogeco Inc. reported Q2 FY2026 results on April 9, 2026, showing revenue of C$713.0M (-5.3% YoY) and Adjusted EBITDA of C$337.1M (-5.6% YoY).
• Profit for the period increased +4.2% to C$79.8M, driven by lower capital expenditures rather than operational growth.
• Free cash flow rose significantly (+35.5% YoY) to C$152.9M due to reduced network expansion spending (-23.0% YoY).
• The Board declared a quarterly dividend of $0.987 per share, an increase of 7.0%.
• Management revised FY2026 guidance downward: Revenue decline widened from -1% to -3% to -2% to -4%; Adjusted EBITDA decline widened from 0% to +2% to -1.5% to -3.5%.
• Segment performance showed resilience in Canadian Telecommunications (+0.9% revenue) but significant contraction in American Telecommunications (-11.6% revenue).

• The guidance revision is material and negative, indicating management expects continued pressure on top-line growth that was not fully priced into previous expectations.
• Revenue decline acceleration (from -3.8% in Q1 to -5.3% in Q2) suggests the U.S. telecom weakness is structural rather than cyclical.
• EBITDA margin compression is evident as Adjusted EBITDA declined faster (-5.6%) than revenue (-5.3%), indicating cost controls are not fully offsetting pricing pressures or subscriber losses.
• The dividend increase and FCF growth are positive but secondary to the deterioration in organic revenue trends; they reflect capital discipline rather than business expansion.
• The market reaction implied by the price drop from March highs ($76.61) to April lows ($66.37) prior to earnings suggests investors anticipated weakness, yet the guidance cut confirms a lower growth trajectory for FY2026.

• Company: Cogeco Inc. is a Canadian telecommunications and media company operating in Canada and the United States.
• Flagship Projects/Segments:
  • Canadian Telecommunications: High-speed Internet and wireless operations; described as "firing on all cylinders" with best subscriber growth in 13 years.
  • American Telecommunications: Cable and broadband services facing significant competitive pressure and subscriber contraction.
  • Media Segment: Digital advertising driven, previously showing +8.5% revenue growth in Q4 FY2025.
• Development Status: Currently executing a three-year transformation program focused on cost reduction and AI integration; network expansion continues but at a reduced pace (C$14M in Q2 vs C$57.8M in Q4 FY2025).