Ongoing positive year-over-year revenue and adjusted EBITDA performance in Canada, along with a re-acceleration of Canadian Internet subscriber growthNew TV streaming solution launched for the U.S.Entering the third year of our transformation program, focused on revenue generation opportunities and cost efficienciesIntroducing fiscal 2027 financial guidelinesIncreasing quarterly dividend by 2% to $1.007 per share, representing our 23rd consecutive year of dividend growth

MONTREAL, Oct. 28, 2026 /CNW/ — Today, Cogeco Inc. (TSX: CGO) (“Cogeco” or the “Corporation”) announced its financial results for the fourth quarter ended August 31, 2026 and is issuing its fiscal 2027 financial guidelines.

“Our Canadian business continued to perform in the quarter, with a re-acceleration of our Internet subscriber growth and year-on-year adjusted EBITDA growth for a fourth consecutive quarter”, said Frédéric Perron, President and CEO. “We are particularly pleased with our wireless and oxio sales, and see promising growth potential in both areas”, continued Mr. Perron.

“In the U.S., we continue to operate in a challenging competitive environment, resulting in elevated customer losses in the quarter. To help offset these headwinds, we are focusing on several initiatives to improve our performance in the U.S., including wireless, our new welo digital brand, a new TV streaming product and new sales channels.

“At Cogeco Media, we are pleased with our strong radio audience engagement which reached 4.6 million listeners per week.

“Building on the good progress made in our transformation program, the third year will focus on revenue generation and cost efficiencies, supported by AI and digital initiatives.”

Consolidated financial highlights

Operating results

For the fourth quarter of fiscal 2026 ended on August 31, 2026:

Revenue decreased by 2.4% to $713.9 million. On a constant currency basis(1), revenue decreased by 3.3% due to a decline in the American telecommunications segment and in the media activities, offset in part by revenue growth in the Canadian telecommunications segment, as explained below:American telecommunications’ revenue decreased by 4.6%, or 6.6% in constant currency, mainly due to a lower subscriber base compared to the previous year, and to a higher proportion of customers subscribing to Internet-only services, as well as a competitive environment.Revenue in the media activities decreased by 18.9%, as the traditional radio advertising market remains challenging.Canadian telecommunications’ revenue increased by 0.6%, mainly resulting from the cumulative effect of high-speed Internet service additions over the past year, offset in part by a decline in video and wireline phone service subscribers, as an increasing proportion of customers subscribe to Internet-only services, as well as a competitive environment.Adjusted EBITDA decreased by 4.1% to $342.3 million. On a constant currency basis, adjusted EBITDA decreased by 5.0%, mainly due to lower revenue in the American telecommunications segment, offset in part by cost reduction initiatives and operating efficiencies across the Corporation as a result of its ongoing three-year transformation program.American telecommunications’ adjusted EBITDA decreased by 7.7%, or 9.6% in constant currency.Canadian telecommunications’ adjusted EBITDA increased by 3.3%(4), or 3.4%(4) in constant currency.Profit for the period amounted to $81.5 million, of which $18.0 million, or $1.87 per diluted share, was attributable to owners of the Corporation compared to $76.2 million, $16.5 million, and $1.71 per diluted share, respectively, in the comparable period of fiscal 2025. The increases in profit for the period and profit attributable to owners of the Corporation resulted mainly from lower depreciation and amortization expense, financial expense, and restructuring costs related to the Corporation’s transformation initiatives, partly offset by lower adjusted EBITDA, higher income tax expense, and non-cash pre-tax impairment charges of $5.2 million in connection with asset write-offs following a change in strategy.Excluding the non-cash impairment charges and certain other elements, adjusted profit attributable to owners of the Corporation(2) was $19.6 million, or $2.04 per diluted share(2), a decrease compared to $20.5 million, or $2.12 per diluted share, last year.Net capital expenditures were $162.9 million, an increase of 4.5% compared to $155.9 million in the same period of the prior year. In constant currency, net capital expenditures(1) were $161.3 million, an increase of 3.5% compared to last year, mainly due to higher capital spending related to customer premise equipment, partly offset by the timing of certain initiatives, both in the Canadian telecommunications segment, while net capital expenditures in the American telecommunications segment remained stable.Net capital expenditures in connection with network expansion projects were $26.8 million, or $26.7 million in constant currency(1), compared to $57.8 million in the same period of the prior year. Excluding network expansion projects, net capital expenditures were $136.1 million, an increase of 38.8% compared to $98.1 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects(1) were $134.6 million, an increase of 37.3% compared to last year.Acquisition of property, plant and equipment increased by 2.4% to $163.1 million, mainly resulting from higher capital spending.Free cash flow decreased by 3.1%, or 3.6% in constant currency, and amounted to $98.4 million, or $97.9 million in constant currency(1), mainly due to lower adjusted EBITDA, higher net capital expenditures, and higher current income taxes, partly offset by lower acquisition, integration, restructuring and other costs, mostly due to lower restructuring costs related to the Corporation’s transformation initiatives, lower financial expense, and higher proceeds from disposals of property, plant and equipment. Free cash flow, excluding network expansion projects, decreased by 21.4%, or 21.9% in constant currency, and amounted to $125.2 million, or $124.6 million in constant currency.Cash flows from operating activities increased by 35.5% to $361.3 million, mostly due to higher cash inflows from working capital, primarily due to the timing of payments made to suppliers and the collection of trade and other receivables.At its October 28, 2026 meeting, the Board of Directors of Cogeco declared a quarterly dividend of $1.007 per share, an increase of 2.0% compared to $0.987 per share last year.

Fiscal 2027 financial guidelines

Cogeco is issuing its fiscal 2027 financial guidelines, as presented below. As we enter the third year of our transformation program, we will focus on revenue generation and cost efficiencies, supported by AI and digital initiatives.

On a constant currency basis, the Corporation expects fiscal 2027 revenue to decrease by a low to mid single digit percentage, reflecting a combination of growth in the Canadian customer base, offset by pricing pressures and subscriber losses in the U.S. due to a highly competitive and promotional market. On a constant currency basis, fiscal 2027 adjusted EBITDA is expected to decrease by a mid to high single digit percentage, due to lower revenue, partly offset by transformation-driven cost efficiencies.

We expect a lower level of capital expenditures than the previous year, ranging from $430 to $480 million. The reduction results from operational efficiencies and the near completion of many network expansion and upgrade projects.

On a constant currency basis, free cash flow is expected to be between $505 and $555 million, due to lower adjusted EBITDA, higher financial expense and current income tax, partly offset by lower net capital expenditures.

The following table outlines the Corporation’s fiscal 2027 financial guidelines ranges compared to fiscal 2026 actual results, on a constant currency and consolidated basis:

These financial guidelines, including the various assumptions underlying them, contain forward-looking statements concerning the business outlook for Cogeco, and should be read in conjunction with the “Forward-looking statements” section of this press release.

The Corporation presents its fiscal 2027 financial guidelines on a constant currency basis and believes this presentation enables an improved understanding of the Corporation’s underlying financial performance, undistorted by the effects of changes in foreign currency rates. Measures on a constant currency basis are considered non-IFRS Accounting Standards measures and ratios, and do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore, may not be comparable to similar measures presented by other companies. The financial guidelines exclude the impact from possible business acquisitions and/or disposals, and do not take into consideration unusual adjustments that could result from regulatory environment changes (including changes to Internet wholesale rates), and/or unforeseeable legal matters or non-recurring items. Financial expense assumptions do not take into consideration any potential impact of gains/losses on debt modification and/or extinguishment, including on repurchase of debt, if any, as those would be excluded from our free cash flow definition.

Financial highlights

Forward-looking statements

Certain statements contained in this press release constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Cogeco Inc.’s (“Cogeco” or the “Corporation”) future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as “may”; “will”; “should”; “expect”; “plan”; “anticipate”; “believe”; “intend”; “estimate”; “predict”; “potential”; “continue”; “foresee”; “ensure” or other similar expressions concerning matters that are not historical facts. Particularly, statements relating to the Corporation’s financial guidelines, future operating results and economic performance, objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions including expected growth, results of operations, purchase price allocation, tax rates, weighted average cost of capital, performance and business prospects and opportunities, which Cogeco believes are reasonable as of the current date. Refer in particular to the “Corporate objectives and strategy” section of the Corporation’s fiscal 2026 annual Management’s Discussion and Analysis (“MD&A”), and the “Fiscal 2027 financial guidelines” presented in the current press release for a discussion of certain key economic, market and operational assumptions we have made in preparing forward-looking statements. While management considers these assumptions to be reasonable based on information currently available to the Corporation, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what Cogeco currently expects. These factors include risks such as general market conditions, competitive risks (including changing competitive and technology ecosystems and disruptive competitive strategies adopted by our competitors), business risks, regulatory risks (including changes in laws or government policies and the impact of regulatory decisions, such as those of the Canadian Radio-television and Telecommunications Commission (“CRTC”) in Canada or of the Federal Communications Commission in the U.S.), tax risks, technology risks (including the evolution of technology, the rapid advancement of artificial intelligence technologies, and the threat of cybersecurity), financial risks (including the ability to execute debt refinancings, increasing interest rates and variations in currency), economic conditions (including inflation, trade tariffs, reduced consumer spending and increasing costs), talent management risks (including the highly competitive market for a limited pool of digitally skilled employees), human-caused and natural threats to the Corporation’s network (including increased frequency of extreme weather events, physical sabotage, and deliberate vandalism such as copper theft with the potential to disrupt operations), infrastructure and systems, sustainability and sustainability reporting risks, ethical behavior risks, ownership risks, litigation risks and public health and safety, many of which are beyond the Corporation’s control. Moreover, the Corporation’s radio operations are significantly exposed to advertising budgets from the retail industry, which can fluctuate due to increased competition and changing economic conditions. For more exhaustive information on these risks and uncertainties, the reader should refer to the “Uncertainties and main risk factors” section of the Corporation’s fiscal 2026 annual MD&A. These factors are not intended to represent a complete list of the factors that could affect Cogeco and future events and results may vary significantly from what management currently foresees. If the market value of our assets or if management’s estimates of forecasted results deteriorate, we may be required to recognize material non-cash charges relating to impairment of assets. The reader should not place undue importance on forward-looking information contained in this press release and the forward-looking statements contained in this press release represent Cogeco’s expectations as of the date of this press release (or as of the date they are otherwise stated to be made) and are subject to change after such date. While management may elect to do so, the Corporation is under no obligation (and expressly disclaims any such obligation) and does not undertake to update or alter this information at any particular time, whether as a result of new information, future events or otherwise, except as required by law.

All amounts are stated in Canadian dollars unless otherwise indicated. This press release should be read in conjunction with the MD&A included in the Corporation’s fiscal 2026 Annual Report, the Corporation’s consolidated financial statements and the notes thereto prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) for the year ended August 31, 2026.

Non-IFRS Accounting Standards and other financial measures

This press release includes references to non-IFRS Accounting Standards and other financial measures used by Cogeco. These financial measures are reviewed in assessing the performance of Cogeco and used in the decision-making process with regard to its business units.

Reconciliations between non-IFRS Accounting Standards and other financial measures to the most directly comparable IFRS Accounting Standards measures are provided below. Certain additional disclosures for non-IFRS Accounting Standards and other financial measures used in this press release have been incorporated by reference and can be found in the “Non-IFRS Accounting Standards and other financial measures” section of the Corporation’s MD&A for the three-month period and year ended August 31, 2026, available on SEDAR+ at www.sedarplus.ca. The following non-IFRS Accounting Standards measures are used as a component of Cogeco’s non-IFRS Accounting Standards ratios.

For the three-month period and year ended August 31, 2026, the average foreign exchange rates used for translation were 1.4015 USD/CAD and 1.3865 USD/CAD, respectively. Financial measures presented on a constant currency basis for the three-month period and year ended August 31, 2026 are translated at the average foreign exchange rate of the comparable periods of the prior year, which were 1.3722 USD/CAD and 1.3962 USD/CAD, respectively.

Constant currency basis and foreign exchange impact reconciliation

Consolidated

Canadian telecommunications segment

American telecommunications segment

Adjusted profit attributable to owners of the Corporation

Free cash flow and free cash flow, excluding network expansion projects reconciliations

Adjusted EBITDA reconciliation

Net capital expenditures and net capital expenditures, excluding network expansion projects reconciliations

Free cash flow, excluding network expansion projects reconciliations

Additional information

Additional information relating to the Corporation, including its Annual Information Form, is available on SEDAR+ at www.sedarplus.ca and on the Corporation’s website at corpo.cogeco.com.

About Cogeco Inc.

Cogeco Inc. is a North American leader in the telecommunications and media sectors. Through Cogeco Communications Inc., we provide world-class Internet, wireless, video and wireline phone services to 1.6 million residential and business subscribers in Canada and thirteen states in the United States. Through Cogeco Media, we operate 21 radio stations in Canada, primarily in the province of Québec, as well as a news agency. We take pride in our strong presence in the communities we serve and in our commitment to a sustainable future. Both Cogeco Inc.’s and Cogeco Communications Inc.’s subordinate voting shares are listed on the Toronto Stock Exchange (TSX: CGO and CCA).

For information:
Investors
Troy Crandall
Head, Investor Relations
Cogeco Inc.
Tel.: 514 764-4600
troy.crandall@cogeco.com 

Media
Isabelle Famery
Manager, External Communications
Cogeco Inc.
Tel.: 514 764-4600
media@cogeco.com 

SOURCE Cogeco Inc.