Cogeco Communications Inc.

Good day, and welcome to Cogeco. Welcome to Cogeco, Inc., and Cogeco Communications, Inc. Q4 2025 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Petkus Wemip, Chief Financial Officer of Cogeco, Inc., and Cogeco Communications, Inc. Please go ahead, Mr. Wemip.

Thank you, Operator. So, good morning, everyone. Welcome to our fourth quarter conference call. So as usual, before we begin the call, I'd like to remind listeners that today's discussion will include estimates and other forward-looking information. We ask that you review the cautionary language in the press releases and annual report issued yesterday regarding the various risks, assumptions, and uncertainties that could cause our actual results to differ. So with that, I'll pass the line to Fred Perrault for opening remarks.

Thank you, Patrice. Good morning, everyone. For Cogeco Communications, the fourth quarter marked the end of year one of our three-year transformation program, focused on synergies, digital, analytics, network expansion, and wireless, and we're pleased to report that we're on track. Year one was mainly focused on OpEx and CapEx synergies, and we delivered on those targets. as you can see by our 110 basis points year-on-year improvement in adjusted EBITDA margin and our $38 million year-on-year increase in free cash flow in constant currency. It's worth mentioning that the capex efficiency enabling our growth in free cash flow comes mainly from maintenance synergies, as we're continuing to make important investments in growing and enhancing our networks. A recent report by Ookla, for example, noted a significant increase in our Canadian upload speeds as a result of our ongoing network upgrade initiative. And in the U.S., we've upgraded over 35,000 of our cable doors to fiber during the fiscal year, in addition to adding nearly 50,000 new homes fast across our North American footprint. Years two and three of our transformation will now add more emphasis on our top line performance as per our original plan. This will include additional investments in growing previously underdeveloped sales and marketing channels in the U.S. in the context of the evolving competitive environment, as well as scaling wireless in Canada. When we met last quarter, we said that we were expecting strong, continued Canadian customer growth combined with some improvements in our U.S. subscriber metrics, and we're pleased to be delivering on that expectation. We just had our best Canadian Internet customer growth in 13 years. This growth was driven mostly by market share gains in our legacy footprint on our own network. The completion of new rural expansion programs in Ontario has yet to accelerate through fiscal 26 and 27, providing a new additional lever for us in the future. We've seen a reduction in competitor promotional activity in the quarter, which has more than offset some minor noise around FWA and wholesale, including our own deployment as a reseller under the Cogico brand across Quebec. So it's fair to say that on balance, Our Canadian competitive environment is evolving in a constructive manner at present time. Our launch of a Canadian wireless service is going ahead of plan, and October marked the deployment of this new service across most of our wireline operating footprint. Our positive early sales results on wireless have already enabled us to start pulling back on some of our initial introductory offers. On the US side, our year on year financials were impacted by ARPU pressures, the cumulative impact of customer losses in the prior quarters, a difficult comparative period last year, and a smaller rate increase this year than in the previous year. This resulted in a year on year decline in adjusted EBITDA, which was in line with what we had indicated to you last quarter. That being said, Our additional sales and marketing activities are working. Our subscriber trends are now improving, and we're delivering on our long-stated goal of growing the Ohio customer base during the quarter. In fact, it's the first time since we acquired the Ohio business four years ago that we achieved customer growth in that state. We expect continued improvements in our U.S. subscriber metrics over the coming quarters. On October 8, we launched a completely revamped pricing strategy for the US. This new approach gives more value, predictability, and transparency to our customers, including full price protection for the first two years. This is just one of many tactics that we're deploying to be more aggressive and more innovative in our US go-to-market. Today, we're also publishing our consolidated guidance for the new fiscal year for CCA and CGO more broadly, which offers a continued growth in free cash flow in constant currency, despite competition-driven top-line pressures. Our adjusted EBITDA guidance of 0% to minus 2% year-on-year reflects additional investments in scaling previously underdeveloped sales and marketing channels in the U.S. and growing our Canadian wireless business, as previously explained. We believe these investments present attractive upside for us and are confident that investors will get disproportionate returns from them over time. We're still planning to grow our free cash flow to $600 million next year in fiscal 2027, which is a good base for further dividend growth as we're announcing today, as well as further the leveraging. Finally, turning over to Cogico Media, While competitive dynamics in the radio advertising market remain, Q4 revenue increased year on year, lifted by strength in our digital advertising solutions and continued listener engagement. On that, I'll turn it over to Patrice for more details on our results and guidance. Patrice.