Quebecor Inc.

Please stand by for the Curbacore, Inc.' 's financial results for the third quarter 2025 conference call. The call will begin shortly. As a reminder, you make you up to ask a question anytime during the call by pressing star 1 and to withdraw your question by pressing star 2. Thank you. © transcript Emily Beynon © transcript Emily Beynon

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Good day, everyone, and thank you for standing by. Welcome to the Quebecois, Inc. Financial Results for the Third Quarter 2025 Conference Call. I would now like to introduce Hugues Simard, Chief Financial Officer of Quebecois, Inc. Please go ahead.

Ladies and gentlemen, welcome to this Quebecois Conference Call. My name is Hugues Simard. I'm the CFO. And joining me to discuss our financial and operating results for the third quarter of 2025 is Pierre-Carles Péladeau, our President and Chief Executive Officer. Anyone unable to attend the conference call will be able to access the recorded version by logging on to the webcast available on Quebecor's website until January the 5th. As usual, I also want to inform you that certain statements made on the call today may be considered forward-looking. and we would refer you to the risk factors outlined in today's press release and reports filed by the corporation with the regulatory authorities. Let me now turn the floor to Pierre-Cal. Merci, and good morning, everyone.

So, more than 15 years ago, recognizing a huge opportunity in Quebec and across Canada, Quebecor set out on a growth strategy based on world. First, launching as an MVNO, then building our own network and further acquiring Freedom Mobile. We have never wavered in our resolve or direction. We invested wisely and established ourselves as a better alternative to the big three, a solid market disruptor with the best growth momentum and the strongest balance sheet in the Canadian telecom industry. As proof that our strategy is paying off, we continue to outperform our competitors, and I'm proud to report our strongest quality wireless service revenue growth since the acquisition of Freedom Mobile, as well as an impressive loading performance of 114,000 net addition in the quarter, with more than 323,000 new lines year over year, despite a generally softer market. Collectively, Vidotron, Freedom, and Fizz now have over 4,328,000 mobile active lines, a significant milestone achieved in quite a short time in a competitive market. Each of our three brands continue to improve its performance quarter after quarter, resonating more and more with Canadians across the country with innovative and affordable product and service. We have created a healthy, competitive environment, giving Canadians more choice, lower prices, and a better experience, all the while improving our profitability growing cash flow and continuing to reduce our leverage to maintain the lowest ratio in the Canadian telecom industry. We will spare no effort as we press on with our strategy of sustainable, profitable wireless market share growth. I will now review our operational results, starting with our telecom segment. So our telecom segment continues to deliver strong operational and financial results, both in wireless and broadband, reflecting the disciplined execution of our growth initiatives, the strength of our brand portfolio, and our commitment to provide innovative and reliable services to our customers. Our service revenues are up for a second consecutive quarter at 2%, to by 6.4% increase in mobile and 1.1% in internet. Our mobile service revenue grew by 27 million in the quarter, surpassing our Q2 performance and our best since we completed the integration cycle of Freedom Mobile results. This result from our adding 323,000 new net line over the last year, despite a Canadian market affected by lower immigration levels and organic growth, but also from our effective pricing strategy with a balanced and cohesive positioning of our brand. Our consolidated mobile ARP will continue to improve its performance, recording its best since the acquisition of Freedom Mobile, which bode well for the next few quarters, despite a market that remains unpredictable and highly competitive, especially in Quebec, where discounting is comparatively, and in our view, irrationally heavy. At this point, we expect current market conditions to continue through the upcoming holiday season's promotional period, but we intend to maintain our disciplined approach, focusing on the quality of our products while continuing to rapidly improve our network. Specifically on R2, we are very pleased with our second sequential quarterly increase, reaching 35.05 compared to 34.76 last quarter. a $0.29 gain in the three months. Our year-over-year performance continued to improve with a $0.66 decrease this quarter compared to a drop of $2.30 in Q2 as compared to the same period last year. Our effective mitigation of the dilutive impact of the prepaid services of FIS and Freedom was an important contributor. As you will have noticed, we adjusted our wireless subscriber base by 51,000 to eliminate zero revenue accounts, which translated into an approximately $0.40 ARPU pickup. To be completely transparent and contrary to our competitors, we adjusted our ARPU numbers retroactively. With our ever-improving network quality and stellar customer service, more and more Canadians enjoy the richness and peace of mind of our plans, which continues to strengthen our market position and share. Freedom's marketing plans are honest and transparent, without any fake employee purchase programs, new customers only, or B2B offers. We have been upfront with all Canadians since day one, offering them better services at everyday best prices. Canadians have clearly embraced our approach, as evidenced by our significant turn in improvement, ARPU, and market share growth. An internal survey even reveals that the global satisfaction score of Freedom customers approaches that of Videotron. We are very proud to have successfully transposed the key contributors of our great success in our own market to the other regions of Canada. In terms of nuance, as I alluded to at the beginning of my address, We delivered 114,000 new netlines to our mobile customer base in the third quarter, a strong growth considering the softer market this year. This performance is also attributable to our effective retention strategy, which kept our consolidated churn among top of the industry. and thus helped to defend Vidéotron's solid market position in Quebec and to continue to improve freedom of performance. In Waterline, our service revenues continued to improve as we recorded for a second consecutive quarter, our lowest decline in year-over-year. Fueled by Internet revenue growth of $3.3 million and net additions of $10,500 in the quarter, these results are very encouraging as we are only still scratching the surface of the opportunity with new services like Freedom on Internet and Fizz TV. We are also counting on the expansion of our ELIX technology-based Internet and television services in new territories. where they will complement our wireless services already available. Since the end of the second quarter of 2025, Videotron has announced the expanded coverage of more than 180,000 new households in Drummondville, Magog, Rimouski, Saint-Hyacinthe-Trois-Rivières, Salaberry-de-Valleyfield, and Huntingdon, as well as many cities in the Saguenay-Lac-Saint-Jean region. Customers will now be able to benefit from a full complement of telecommunication services in competitive packages. We intend to enter these new markets with a disciplined pricing strategy in line with our pricing elsewhere in Quebec, counting on state-of-the-art ELIX solutions and our second-to-none client experience to make ourselves a strong partner contenders in this territory. In addition to our wireless footprint, we are also expanding our wireless coverage and services areas in the Haute-Mauricie region in partnership with ECATEL and with the support of the Quebec government. This will significantly improve mobile communication in this region of Quebec, making it possible for more than 10,000 residents to subscribe to videotron mobile services and enhancing connectivity along several highways. Videomobile is also continuing to increase its service coverage, now in the Ontario region of Chatham-Kent, where the residents of this large and growing region can now access our fast and reliable wireless network. These expansions reflect our continued progress in delivering on our ongoing commitment to always give our customers more with state-of-the-art advanced technology. This is but one reason why Vidéotron was ranked as Quebecers' preferred telecommunication provider in a recent Léger survey. Vidéotron stands out for its remarkable results, confirming its position as an undisputed leader in customer service among telecommunication providers in Quebec, while being recognized as the most reliable and trustworthy telecommunication company in Quebec. Turning now to our media segment. TBR Group. generated EBITDA of $18.5 million in the third quarter of 2025, an increase of $6 million compared to the same period in 2024. This favorable variance is primarily attributable to the impact of streamlining initiatives undertaken over the past two years, as well as certain favorable non-recurring retroactive adjustments. These measures are helping but are in no way sufficient to mitigate the impact of the structural crisis threatening the sustainability of Quebec television industry, particularly due to the accelerated decline in advertising revenues compounded by the negative impact on the absence of foreign blockbusters in male studios. Having acted recently and responsibly over the years by implementing numerous measures and a number of major restructuring plans to address the crisis, DVR Group has done its part. It is high time for our governments to take the necessary action on their end. After countless advocacy efforts, hearings, and meetings, with successive CRTC chairpersons, Canadian heritage ministers, and Quebec culture ministers over the years, we can only repeat yet again that we urgently need real action and long-term solutions to protect our industry. It was particularly disappointing that the federal government in its budget deposited this Tuesday Completely ignore our industry and turn a blind eye to the crisis that is hitting television broadcasting so hard. There is no tax credit for television journalism, no tax incentive for advertising in Quebec and Canadian media, and no information about when the digital services tax already paid by private broadcaster will be refunded. Furthermore, CBC Radio Canada annual funding has been increased by $150 million without any requirement to eliminate advertising on its platform and to curb its unfair commercial competition with Canada private television broadcasters. Regrettably, this new government has missed an opportunity to support an industry facing ever-growing challenges and job losses at an alarming rate. Regarding the Quebec government, we reiterate that it must quickly introduce concrete measures to implement the recommendations in the report of its Task Force of the Future of Quebec Audiovisual Industry, filed in October 2025. I will now let Hugues review our detailed financial results.

Merci, Pierre-Calme. On a consolidated basis in the third quarter of 2025, Quebecor recorded revenues of $1.4 billion, up 1%, EBITDA of $628 million, up 34 million, or 6%, resulting from improvements across all of the corporation's business segments. Cash flows from operating activities increased $36 million to $582 million, or 7% compared to the same quarter last year. In our telecom segment, total revenues grew by 1% or $13 million, a first favorable variance since Q1 of last year when we completed the integration cycle of Freedom Mobile results. This positive delivery is largely attributable to our strongest mobile service revenue growth of 6.4%, fueled by significant customer growth, but also by the favorable improvement of our mobile RPU in the last quarter, resulting from strategic market positioning of our multiple brands and our pricing strategies. This quarter, mobile revenues were offset by our lowest wireline services revenue declines in more than a year, resulting from our effective strategies in mitigating the impact of organic declines of these services. Combined with rigorous cost management initiatives, our EBITDA reached $602.5 million dollars, increasing by 16.6 million, or 2.8%, our highest EBITDA growth since Q1 2024. As a result, our EBITDA margin improved by 0.8%, ending at 49.5%, compared to 48.7% of the same period last year. The income capex spending was up by $13 million in the quarter, regulating the timing difference explained in Q2 for wireless equipment deliveries required for our 5G and 5G Plus network expansions, and subscriber equipment rentals. Even with that regulation, we still anticipate higher investment levels in the last quarter to stay on track with our objectives, mainly expanding and improving our mobile network. Accounting for these investments, our quarterly adjusted cash flows from operations increased $3 million, or almost 1%, due to our solid epitography. Our media segment recorded revenues of $152 million or 2% decrease and EBITDA of $23 million, a $9 million favorable variance compared to the same quarter last year. Our sports and entertainment segment revenues increased by 7% to $68 million and EBITDA was up by 28% to $15 million. We reported a net income attributable to shareholders of $236 million in the quarter or $1.03 per share compared to a net income of $189 million or $0.81 per share reported in the same quarter last year. Adjusted net income excluding unusual items and losses on valuation of financial instruments came in at $242 million or $1.05 per share compared to an adjusted net income of $192 million or $0.82 per share same quarter last year. For the first nine months, Quebecor's revenues were down by 0.3% to $4.1 billion, and EBITDA was up by $4 million to $1.8 billion, partly impacted by a $44 million increase in stock-based compensation charges. Excluding this factor, EBITDA would have increased by $48 million, or 3%. EBITDA from our telecom segment grew 2%, an improvement of $38 million over last year, excluding the impact of stock-based compensation. At the end of the quarter, Quebecor's net debt to EBITDA ratio decreased to 3.03 times, still the lowest of all our telecom competitors in Canada. We remain committed to further deleveraging in the coming quarters and intend to continue operating in this low three range consistent with our current financial strategy. Our balance sheet remains very strong with available liquidity of over a billion dollars at the end of the third quarter. I would also like to highlight the success of our recent refinancing, where Videotron issued $800 million of senior notes, yielding 3.95%. The high demand from investors was very strong, with a book more than three times oversubscribed, and we were able to negotiate very favorable conditions, most notably the lowest seven-year credit spread seen in the Canadian telecommunications sector. a convincing testament to the strength of our financial foundation, our discipline management, and our growth prospects. The net proceeds will be used for the redemption of our, or Videotron's rather, 5.125% senior notes maturing on April 15, 2027. During the first nine months of the year, we also purchased and canceled 3.7 million Class B shares for a total investment of $140 million.

We thank you for your attention and we'll now open the lines for your questions. Thank you, sir.

Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will hear a prompt that your hand has been raised. And should you wish to decline from the polling process, please press star followed by two. And if using your speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star 1 now, should you have any questions. First, we will hear from Mahari Yagi at Scotiabank. Please go ahead.

Merci d'avoir pris mes questions. I would like to first ask you, you know, the strong performance in wireless. You mentioned that it came from lower churn and also improved gross loading. Can you maybe... dissect a little bit more what drove that strong performance in the quarter. Q3 usually is a strong quarter for freedom, but how are you thinking about Q4 so far, and which markets, which sub-markets in wireless you still haven't been able to gain market share from that you think over time could provide you more growth down the line?

Thanks, Maya. So in wireless, yeah, I mean, as you said yourself, the Q3 and the back-to-school period has historically been a very strong quarter for us. These are the target markets that particularly resonate well with us. And we, again, even though organically and in terms of immigration and all the things we've talked about, the market is a little softer, we've been able to maintain our performance. And why have we been able to maintain our performance? It is because we are increasingly resonating with other cohorts. Whereas, you know, the freedom of the past used to be very strong with first-time buyers and immigrants and people looking for a deal or the cheapest deal. We are now able to attract and retain customers that are willing to, that want a bit more, that want better performance. We have an increasing number of FindG Plus customers because we have been expanding our the access to 5G Plus to many more of our customers. Fizz is also continuing to perform increasingly well, quarter after quarter, which should not be a surprise because you will remember us telling you that Fizz was created with very specific objectives in mind, and that was to to go after and to target the younger, more urban, more digital savvy generations, which are representing the future. And I think we are showing that we're better than our competitors at reaching out to these people, to these customers. You know, in terms of going forward in the following quarters, I think you will see if you look back that we are very, not stable, but very consistent in our penetration, in our growth. We are continuing to retain our customers more longer, so it turns down. Our RPU is going up. So, you know, this is really the story in this month. Look at our wireless service revenues, $27 million more in the quarter. which flows down to the margin with considering our very disciplined cost containment. That's basically how I would call the story of the wireless story of the quarter, which bodes, as Pierre-Claude said in his note, bodes very well for the historically competitive Q4, where we intend to continue to perform very well.

That's a pretty good answer.

It's a very good story for sure. Very good story. Maybe just one.

Just one thing, man. We all know that when Freedom was under the previous ownership, for whatever reason, I mean, historically, the weakness was the network, the quality of the network. And I think it's important to mention that we are investing in the network. And we've been always, we do it all as an enterprise culture, considering that we need to deliver the best product in our available customers. So we inherit a good brand and certainly also some very good people this organization but now you know I think that you know we we've been doing what is appropriate yet to to improve our our product by investing in in the network we will continue to do so and we will continue to do it on a disciplined basis as we've been doing you know obviously in Quebec for the last

Yes, thank you.

And maybe just a touch on the improvement in the cable segment revenue growth rate with the pricing that you passed last December starting to really kick in. But, you know, I'm trying to gauge that with Pierre Cal's, you know, your prepared remarks. You specifically called out the very... aggressive pricing competition happening in Montreal and Quebec in general on the combo plans, very low prices. Is it easy to pass another price increase this year like you did last year amidst the competition that we're seeing right now in the marketplace?

Well, obviously, you can easily expect that you're going to have an answer for that, but I'll tell you, we're used to that. We've been always in the same kind of environment, so there's nothing new for us. What we're doing to make sure that we're for this situation is by being as much as disciplined as possible, watching our costs. We've always been in that kind of business, and we'll continue to do so. historically, pricing between Quebec and all the other areas in Canada for whatever product. It was the same for cable, it was the same for wireless, it had been lower. So our competitor, our main competitor, the blue guys, have been trying to get market share by adding lower prices than elsewhere they certainly in the past being able to benefit from from a higher margin elsewhere are they using this you know to compete even more aggressively in quebec it's not impossible but they can do whatever they want at the end of the day you know we're going to continue you know to be the preferred supplier of quebecers for many reasons one of which is that we're offering better customer service, and our products are of higher quality.

Okay, thank you. Please, a pleasure, Mike.

Next question will be from Stephanie Price at CIBC.

Please go ahead. Hi, it's Sam Schmidt on for Stephanie Price. I wanted to ask a question about ARPU. The declines have been improving sequentially for the last few quarters. How do you think about the timeline to a return to positive ARPU growth? And it was strong in this quarter. Any one-time items to call out there?

Thanks. I'm sorry, I missed your first thing. You're replacing Stephanie, right?

Yes, sorry, it's Sam Schmidt on for Stephanie Price. My first question was just around the ARPU declines that have been improving sequentially for the last few quarters and how you're thinking about a timeline to return to ARPU growth.

Yeah, you saw our performance. We're very confident. ARPU is turning the corner and I would expect that corner to be very, very soon.

That's helpful, thanks. And then just one more from me on mobile equipment revenues. How are you thinking about device financing heading into Black Friday?

With discipline?

How would I say? Continued, disciplined, reasonable offers. We've said this in the past, that Black Friday is a time of the year where we can easily go crazy and lose our shirt, as we say, on equipment or device subsidies. And we certainly do not intend to do that and to continue to be, as I said, disciplined and reasonable in our equipment offers for the rest of the year.

That's good color. Thanks. I'll pass the line.

Thank you. Next question will be from Matthew Griffiths at Bank of America. Please go ahead.

All right. Thank you for taking the question. Just on churn, firstly, if I could, it seems as though across the industry, everyone's reporting churn being lower this quarter on a year-over-year basis. I was wondering if you had any comments about how much of your churn benefit in the quarter is just kind of that halo effect of industry churn falling, or were there things that you were doing that you kind of can see that there's a, that would, would have been responsible on your side for reducing the churn. And then secondly, if you can make any comments on the kind of decision and how you evaluate the network expansion, um, question, uh, specifically you mentioned this quarter, um, you know, expanding the wireless network into the Chatham-Kent area. So if you could share kind of just how you evaluate it, you know, how many more opportunities you see for this going forward, it would just be helpful on our side. Thank you.

Matt, thanks for your question, Matt.

On churn first, probably a little bit of both, to be fair. Our churn, as you know, starts from very high with Freedom. the highest in the industry by far, and is now fairly equal to the lowest of the industry. And that was mostly due to the improvements to our network, its performance, its coverage, its reliability, roaming, packages, marketing agility. customer experience. I mean, it's a, who knows, bundling opportunities. There are so many factors that collectively contributed to this lowering or this decrease in our churn. Now that it has reached, as I said, a very competitive level, then obviously it becomes naturally a little bit more affected or more influenced by maybe more market-related metrics. And it is our goal to maintain that churn through the various improvements. I mean, we're nowhere done. I mean, it's not as if we're at the end of our plan here in terms of improving everything that I've talked about and going after different cohorts, as we said earlier. And as our experience keeps getting better with our customers, we're very confident on the churn level that we have not only reached the industry's best, but that we will maintain the industry's best. Of course, there are the investments that Pierre-Cal talked about that will continue. We're taking this very seriously. When we relaunched, when we bought and relaunched Freedom, we said very clearly that we went about very diligently about fixing all the pain points and making sure that the experience was quickly very much better. And we still have work to do. This is a never-ending work. and we certainly intend to, as Pierre-Claude said, continue to invest in our networks and also in our marketing agility to make sure that we continue to resonate with Canadian customers. As to the network expansion, these decisions are made on a... It's a bit of a... I would say it's a bit of a balance between going after strong and interesting regions and balancing it with the investments needed in these regions. So this is something we have a plan and we're continuing to be very diligent, very disciplined about our network expansions going forward. focusing on the MVNO areas where we're starting to resonate well, where we're building the business. You will remember us saying that, you know, we're not going to build and hope that people come. We will launch MVNOs and where it will make sense for us, we will prioritize network investments. And I think that's the good business way to do it. And that's still what we intend to continue to do.

All right. That's helpful. Thank you.

Next question will be from Jérôme Dubreuil at Desjardins. Please go ahead.

Hey, bonjour tout le monde. Thanks for taking my questions. The first one is on the free cash algorithm. You know, we're seeing a bit of growth, but also CapEx increases. So I'm wondering if you're seeing a potential for free cash growth in the coming year or if value is going to be created more through the leveraging and buybacks. Appreciate it was the share-based comp situation this year, but essentially will absolutely be the growth outpace CapEx growth in the next few years.

Thanks, Jérôme. Merci, Jérôme, pour ta question. I think you're seeing it in the numbers. We look at our performance in terms of generating margin, generating cash, which provides us with the opportunity to continue to invest in the network, which we had said we would. And I think you will remember, again, us saying from the beginning of the year or even last year that we were going to maintain very strong, stable cash flow, even though we were intending to invest more in our network. So, you know, in terms of buybacks, as you know, we flexed in the past on this and we will continue to do so. And dividends will be, we will continue, stay true to our dividend increase, reasonable increase. that we've had in the past. We're still in the soft, you know, not in the soft, in the best spots that we've announced between 30% and 50% of our payouts. So, you know, we feel pretty comfortable with our continued capability to generate cash, very strong cash flows that then give us the leeway to continue to invest in the network and eventually in the network builds.

I'm just going to push a little bit on the capital allocation point here. You know, you said in the preferred remarks that you were probably happy with leverage in the lower threes. It seems like you're getting real close to the destination here on the balance sheet side. So does that mean that we should be expecting a ramp up in the buybacks? Probably, or is that a fair assumption?

It's not an unfair assumption, but I wouldn't necessarily agree to it now, this morning.

I think that we should say it's a prerogative of the board of directors. Look at the sequence previously where we've been changing our balance sheet policies. I guess that would be a good example or a good illustration of what we can expect being the situation in the future.

Understood. Merci. Thank you.

Next question will be from Vince Valentini at TD Cowan. Please go ahead.

Hey, thanks very much. Let me spin that free cash flow question just more specifically to the near term. Hugh, you've done $1.06 billion of free cash flows for the first nine months of the year. In the fourth quarter of last year, you did over $300 million in free cash flow. Is there something material in terms of timing issues we should be thinking about for the fourth quarter, or you're going to smash through $1.2 or $1.3 billion of free cash flow for the year?

Hi, Vince. No, we've talked about this, I think, last quarter. There are some timing issues. Our CapEx did increase a little bit in Q3, as you've seen, but there still is some timing issues ahead of us in terms of CapEx, which you should expect to be higher in Q4. So I wouldn't... I wouldn't go all out in our expectations of us breaking the bank in terms of cash flow. It will be a very strong cash flow, and we will more than deliver what we had said we would deliver, Vince. But, yes, there definitely is going to be a catch-up in CapEx towards the end of the year, well, between now and the end of the year.

But you definitely expect to have positive free cash flow in the fourth quarter?

Oh, for sure. For sure. Yes, yes.

Okay. Thank you. Second thing, your internet ads were a bit better than I expected. Is this in Quebec, in your core Videotron business, or are you starting to see some benefit from Freedom Internet and the rest of the country using TPIA?

Well, a little bit of both. It is in Quebec, but it is also in Freedom Home Internet is performing well. FIS Internet is performing well. So we are in a very competitive situation and an ever-increasing competitive situation in Quebec. But we've talked about the quality of our services and network. So we've been performing well. essentially everywhere in terms of broadband.

Okay. And last one, I don't know if there's any materiality to this, but as you know, I'm a happy customer. These roaming SIM cards that you guys have and people on other carriers are allowed to use them when they're traveling. How are you counting those? Are they being counted as a subscriber in the third quarter sub-ads?

No, no, no, they're not a sub. If you've turned on that SIM card, as I know for a fact that you were finally successful in doing this, after some help, you are not counted as a subscriber, no.

So that is actually, it is obviously service revenue, so it's going to be helping your ARPU even more even more than just the underlying trends in the business going forward. That's correct. Okay, awesome. That's all for me.

And by the way, it's high time that you do become a customer, Vince. We're counting on you.

I'm waiting for your Black Friday offer.

Thanks for your business, Vince.

Thank you. Next question will be from Arvinda Galapagos at Canaccord. Please go ahead.

Good morning. Thanks for taking my question. Just a couple of quick ones from me. Higa, you mentioned that one of the reasons for the success of freedom subtrend is because you're kind of going into other cohorts that the old freedom did not. I mean, should we translate that comment as speaking to sort of the prepaid-postpaid mix? Any comment around how that mix has changed as you sort of progressed with gains on the subscriber front. And then secondly, just a small follow-up, the wireless ARPU redefinition, can you just clarify what that was? Thank you.

As to your first question, Aravinda, you know, post-pays and prepays for us, we're continuing to perform well on both. We have... You know, we're a bit agnostic, to be honest, and have continued to work well. So on all the cores that I talked about, I think that was more of a general comment, applying to both post-paid and pre-paid. Not specifically a move from one to the other, but to be quite transparent, we're continuing to perform well on post-paid. And your second question, sorry, I've forgotten what it's to do with what?

The ARPU redefinition. I think it was just a small definition change of $0.40. Oh, yeah.

Yeah, it's about $0.40. We've restated it. But as those were $0 accounts, you'll see that it's almost consistently $0.40 over the last so many quarters that we've restated.

Okay. Okay. Got it. Okay. Thank you. Thank you.

Thank you. Next question will be from Drew McReynolds at RBC. Please go ahead.

Yeah. Excuse me. Thanks very much. So a couple for me. Maybe for you, Hugh, on the CapEx trajectory in telecom. You know, it looks like you're running a little hotter than the initial kind of $650 million or so of CapEx. Just wondering, and I think your commentary from Q4 would say, you know, you come on above that. Is there any kind of change overall to the kind of medium-term trajectory on CapEx from your perspective? And then just tied to that, we are seeing pretty efficient kind of cable CapEx intensity come down with some of your cable peers. Just wondering... your cable capex, how you expect that to trend again through the medium term?

Thanks, Drew. So, on medium term capex, both wireless and wireline, we will, as I said earlier, we will in Q4 be a little bit higher. that doesn't necessarily change our midterm. What we said about the midterm, that we are, and we've said this before, that we're continuing to invest and we're continuing to improve and ultimately expand as well our networks. And as such, you should expect a gradual capex increase over the medium term. Nothing, again, gradual, nothing, you know, no capex wall, as some of your colleagues unfortunately used the term in the past. I don't think there's anything to be worried about, but just very reasonable and very sensible investments in both of our wireline and wireless network going forward. So no change to our midterm capex trajectory.

Okay, thanks for that clarification, crystal clear. Just in the MD&A, you alluded to some favorable kind of provisioning in Q3 within telecom. I'm assuming, you know, the 2.8% year-over-year telecom EBITDA gross X, the provisioning is still, you know, a reasonably good growth rate. Can you just comment on quantifying those favorable provisions?

I won't give you the number, obviously, Drew, but no, I think your statement is fair. Yeah, there was some provision adjustments, as we do in a number of quarters, in almost all quarters, as everybody does, but it's not material enough to impede or to change the conclusion on our increase in profitability for the core.

Okay, no, that's great. And last one for me, just the usual question. fixed wireless impact in Quebec, just, you know, how that's kind of contributing to the competitive environment, if at all. And that's it for me. Thank you.

To be honest, nothing significant. It is, and by that, don't misread us. We're not saying that this is It's something to be dismissed, as we said in the past. Fixed wireless, we're not saying it's not a thing. It may very well become a thing. And we are certainly, in our own shop, looking at opportunities for fixed wireless. But certainly, in answer to your question, so far the impact on us has been very limited in our home turf of Quebec. But we are definitely, and we've got the teams already lined up to start reflecting on how we will turn that into an opportunity for us in our various markets outside of Quebec.

Okay. Thanks very much.

And again, congrats on great wireless results. Thank you. Thank you, Drew.

Our last question will be from Tim Casey at BMO. Please go ahead.

Yeah, thanks for fitting me in. Hugh, just one modeling question and a couple others. Working capital is running very positive so far this year. Should we expect a reversal in Q4 or maybe into Q1 next year? And what's driving that? Is that cash management or is it just timing?

Hi, Tim. No, you should answer your question. There should not be, I don't see any material difference in Q4 or Q1 of next year in terms of working capital. It is, to be honest, it is something that we've been focusing on for the past year or so, a year and a half, where we recognized, I think, sometimes you have to be, you know, you have to question yourself on various occasions. And we weren't as efficient in managing our working capital as we should have been in the past. And we've tightened up a lot of things. And I think it's showing. But we certainly intend to continue to perform well on working cap. And I wouldn't expect, I mean, there's no bump either way that you should expect in the next four years, no.

Okay, thank you for that. Just two for me. On the 50,000 subs you removed out of the base, can you give us any color on why they were $0 subs? Was this an aggressive promotion from the relaunch of Freedom? Was it an enterprise deal? What was happening there that they were so poor ARPU? And second one, as you think about expanding out of Footprint, on wireline. Do you expect to retain similar type economics, maybe on a margin basis? Or should we assume that it will be dilutive to ARPU on the wireline side? Thank you.

Tim, to your first question, the $50,000 or $51,000 were zero-dollar accounts. It's basically people who had opened an account but never had a SIM card, mostly from before the acquisition, and who never really bought a package. So we had them as an account, but they weren't active and they weren't generating any revenue, so we just took them out. Okay. In terms of our out-of-footprint wireline, we, again, our intent is to remain very disciplined and very, I think that was your question. If I'm not answering the right question, we certainly, as we said in our notes today, we intend to, you know, whether it's out-of-footprint wireline or eventually fixed wireless, whatever, it is our intent to remain very disciplined. and I think if I may make the point right now, we have been, for quite some time, been very disciplined and very predictable in our approach. We say what we're going to do, and we do what we said we were going to do, which I don't think can be said for everybody in telecom in Canada, but we certainly, in terms of wireline, intend to continue to apply that philosophy, if I can call it that.

Thank you.

So we would like to thank you all for attending this conference call and expect the same for our next quarter that will be our year-end. So don't miss the Appleton game. Yeah, the Tiger, well, the Alouettes against the Tiger Cats on Saturday. And you should root for the Alouettes, right? Sure. Thank you very much and have a nice day, everyone.

Thank you. Ladies and gentlemen, this concludes the Quebecois Inc. financial results for the third quarter 2025 conference call. Thank you for your participation and have a good day.