Rogers Communications: Positive Earnings Call Highlights

Rogers Communication (($TSE:RCI.B)) has held its Q1 earnings call. Read on for the main highlights of the call.

Rogers Communications’ latest earnings call reflected a generally positive sentiment, highlighting strong financial performance, network reliability, and progress in deleveraging efforts. Despite these achievements, the company acknowledged challenges such as a decline in wireless subscribers, cable service revenue, and ARPU. Overall, the positive aspects slightly outweighed the negative ones.

Growth in Service Revenue and Adjusted EBITDA

Rogers Communications reported a 2% year-over-year growth in both service revenue and adjusted EBITDA, showcasing improved margins. This growth indicates the company’s ability to maintain financial stability and efficiency in a competitive market.

Subscriber Growth in Cable & Wireless

The company achieved 57,000 Wireless and Internet net additions, emphasizing its focus on price discipline and profitable subscriber growth. This strategic approach aims to enhance the company’s market position and long-term profitability.

Deleveraging Efforts

Rogers attracted $9 billion of equity capital, successfully reducing its leverage from 4.5 times at the end of 2024 to 3.6 times. This progress brings the company closer to its goal of returning leverage to 3.5 times post-Shaw merger, strengthening its financial foundation.

Network Reliability Recognition

Rogers was awarded the most reliable 5G wireless network in Canada by Ooma for the seventh consecutive year. Additionally, Opensignal recognized the company for its network reliability, underscoring Rogers’ commitment to providing high-quality service.

Strong Performance in Sports and Media

Rogers Sports and Media delivered a 24% revenue growth, driven by additional Toronto Blue Jays home games and advertising revenue from the Four Nations Hockey Tournament. This performance highlights the company’s successful expansion in the sports and media sector.

Decline in Wireless Subscribers

The company experienced a decline in net new wireless subscribers, decreasing to 34,000 from 61,000 last year. This reflects a smaller market size due to reduced immigration, posing a challenge for future subscriber growth.

Cable Service Revenue Decline

Cable service revenue fell by 1% due to competitive promotional activity and customer churn in satellite and video subscribers. This decline indicates the challenges faced in retaining customers in a highly competitive market.

Challenges in Wireless ARPU

Blended mobile phone ARPU decreased by just under 2%, attributed to competitive intensity and lower roaming revenue from reduced travel to the US. This decline presents a challenge in maintaining revenue per user in the wireless segment.

Forward-Looking Guidance

During the first quarter of 2025, Rogers Communications reported a 2% year-over-year growth in both service revenue and adjusted EBITDA, showcasing solid financial performance despite a competitive market and lower immigration rates. The company achieved notable margin improvements and continued its deleveraging efforts, reducing its leverage ratio to 3.6 times. Rogers emphasized its focus on disciplined execution, delivering efficiencies, and advancing its strategy to enhance the value of its sports assets. The company also completed a successful $4 billion hybrid securities offering and announced a $7 billion equity investment, expected to further strengthen its balance sheet.

In summary, Rogers Communications’ earnings call reflected a positive overall sentiment, with strong financial performance, network reliability, and progress in deleveraging efforts. Despite facing challenges in subscriber growth and revenue, the company demonstrated resilience and strategic focus, positioning itself for continued success in the competitive telecommunications market.