Quebecor Inc.

Stand by for the Quebecois, Inc.' 's financial results for the fourth quarter and full year 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. To withdraw your question, press star 2. Thank you. Thank you.

Thank you. © transcript Emily Beynon

Please stand by the Quebecois, Inc.' 's financial results for the fourth quarter and full year 2025 conference call. The call will begin shortly. As a reminder, you may queue up to ask a question anytime during the call by pressing star 1. To withdraw your question, press star 2. Thank you. Thank you. . . . . . .

Thank you. Thank you.

Good day, everyone, and thank you for standing by. Welcome to the Quebecorps, Inc.' 's financial results for the fourth quarter and four-year 2025 conference call. I would now like to introduce Hugues Simard, Chief Financial Officer of Quebecorps, Inc. Please go ahead.

Thank you. Ladies and gentlemen, welcome to this Quebecorps conference call. My name is Hugues Simard. I'm the CFO. And joining me to discuss our financial and operating results for the fourth quarter and the full year of 2025 is Pierre-Claude 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 the 27th of April of this year. 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 regulatory authorities. Let me now turn the floor to Pierre Gaulle.

Merci, Hugues, and good morning, everyone.

So, I guess that, you know, you will understand that we're very pleased. And I would say, and actually also very proud to review Quebecois operational and financial performance for the fourth quarter and the full year of 2025. All our sectors of activity performed exceptionally well in the last quarter of the year. Our locomotive, the telecom segment, delivered with is unquestionably the strongest quarter since the acquisition of Freedom MOBA. This performance reflects the disciplined execution of our growth initiatives rigorous cost management, and a sustained commitment to providing innovative, high performance, and reliable services at competitive prices to our customers. In our media segment, even adjusting for a favorable retroactive royalty adjustment, we manage an impressive turnaround and return to profitability in our broadcasting operations, resetting the stage and laying a solid base to be able to keep adapting to the ever-challenging revenue environment as we still and always believe in our unsurpassed ability to inform and entertain Quebecers for our unique array of information, sports, and entertainment offerings. Our financial results speak for themselves with a free cash flow up 21.9% in Q4 and 27.3% for 2025. EBITDA, excluding the impact of stock-based compensation and a retroactive royalty agreement in media, is up 7.6% in Q4 and 4.7% for the year. Adjusted net income is up 21.2% in Q4 and 17.8% for 2025, and our leverage ratio is down to 2.95 times, the lowest by far of the top four telecoms in Canada. All in all, a pretty good performance yet again. I will now review our operational results, starting with our telecom segment, where we continue to capitalize on the favorable dynamics we created with the Freedom Acquisition April 2023. Since then, our strategy has been clear and consistent to deliver richer, higher quality services at everyday best prices. Period.

Clear and simple. And you know what? It works. This positioning, which is quite different from our competitors,

are strengthening our competitiveness, increase our market share, and firmly establish Videotron as the game-changing alternative Canadian consumers have been waiting for and are now flocking to. This positive momentum, already visible last year, continued throughout 2025. We ended the year with the industry highest loading, best service revenue growth, and top EBITDA growth of 2% for the year and 4.2% for the fourth quarter, our strongest quarterly adjusted EBITDA growth since 2019. We improved total services revenue for a third consecutive quarter, our best quarterly growth of the year at 3.5%. This was driven primarily by our best mobile service revenue performance in more than five years with a $39.9 million or 9.5% increase. These results reflect robust subscriber addition of 311,000 net new lines in 2025 and 73,900 in Q4 alone. A testament to the effectiveness of our disciplined multi-brand pricing strategy, considering the ongoing South Canadian market growth. Customers continue to respond positively to our value proposition, as demonstrated by sustained churn improvements, market share gains, and steady ARPU growth across all brands. Speaking of ARPU, our consolidated mobile ARPU turned positive for the first time since the Freedom acquisition reaching $35.23 in Q4, an increase of $0.48 or 1.4% year over year, and improving sequentially for a third consecutive quarter. Our ability to mitigate the dilutive impact of our fees and freedom prepaids while delivering excellent customer experience was key to this turnaround. Even in an increasingly competitive and sometimes unpredictable environment, We maintain pricing discipline and resisted industry-wide unsustainable promotional tactics.

We remain focused on the long-term, high-quality services, Operator?

Please continue.

We thought there was a bug on the telecom line. Okay, I continue.

Sorry about this. Furthermore, we have yet to reach our full potential in the western provinces where our market share is still low, but where we are actively improving and building up our network. Our track record demonstrate that discipline growth is possible without ARPU dilution, unlike competitors relying on aggressive and confusing promotional program like EPP, where the E as long loss is significant.

Turning to wireline.

2025 marked a clear stabilization. Wireline services revenues improved quarter after quarter. ending the year with the lowest decline in more than two years. Internet revenues grow 1.7%, supported by 3,700 net additions in the quarter. Television services also delivered strong momentum, with a 50% improvement in subscriber retention as compared to Q4 2024. This progress reflects disciplined pricing, avoiding over-aggressive offers in our more expensive sales channels, all supported by unmatched customer experience. New services, including Freedom on Internet and Fizz TV, are still in the early stages and represent only a small portion of the overall contribution, offering significant further upside for 2026. In parallel, The expansion of our LX-based internet and TV services into new regions of Quebec will complement our wireless footprint and enhance cross-selling opportunities. Our ÉdicoPlus platform also reached an important milestone, surpassing half a million subscribers earlier in the year. It continued to gain traction within the French-speaking community across Canada, adding nearly 60,000 subscribers in 2025, including 20,000 Q4 alone. Its original French-language catalog, supported by renewed investment in local content creation and enhanced user experience, are clearly resonating among OTT platform users. Focus on customer experience is not a new strategic priority for us. Ever since we completely overhauled the duotone after we acquired it in 2000, customer focus has been at the heart of all our plans and initiatives. We have been the undisputed leader in client experience in Quebec for more than 15 years, arguably the most important contributing factor to our success. In 2025, we continue to increase our advantage over our competitors in that respect with several more distinctions. Just recently, Videotron, Fizz, and Freedom Mobile all set out again in Léger January 2026 WOW Index, undeniably demonstrating their unwavering commitment to exceptional customer experience. The survey once again ranked Videotron as the top telecom provider in Quebec for in-store experience for a third consecutive year, while Fizz held its position as a Canadian leader in online experience for the seventh consecutive year, and Freedom maintained its podium with its third place for online expectations. I'm sorry, online experience. These remarkable results clearly demonstrate our relentless efforts to always exceed customers' expectations, both in traditional settings and on digital platforms. We are constantly optimizing our sales channels to bring the best value proposition that fit our customers' true needs while maintaining the industry's lowest cost of acquisition with a healthier mix that our competitors oddly enough, tend to offer more aggressive deals in retail, the most expensive sales channel. Even more remarkable is the outstanding performance of Videotron, Fizz, and Freedom reflected in 2025 annual report recently released by the Commission for Complaints for Telecom Television Services, the CCTS. while total complaints about Canadian telecom provider rose by another 17%. Our brands, once again, delivered superior customer satisfaction. In its first appearance in the report as a nationwide service provider, our group of brands was in a class of its own, with stable numbers despite significant subscriber-based growth, while the other major national carriers experienced high complaints increases. Specifically, the Vidotron brand maintained its leadership with a 6.6 reduction, our fourth consecutive annual decline in complaints. Moreover, Québec Office de la Protection du Consommateur did not list Videotron among its main sources of customer complaints in 2025, contrary to some of our key competitors. I could go on and on, but I think these results are collectively a testament to our effectiveness of our strategy rooted in transparency, respect, and consistent execution, all of which contribute to maintain our churn levels among the industry's best. Also contributing to our growth as well as to our customers' long-standing satisfaction and lower churn are the multiple ongoing technology improvements we are making to our networks. On the wireless side, we are happy to see good take-up rates on higher speed tiers using both our HFC and fiber footprints. In wireless, we are experiencing accelerating growth in our IoT business, with much more to come in the near future. Meanwhile, biz rollout 5G services late last year, covering over 22 million Canadians in Quebec, Ontario, Alberta, and British Columbia, with faster speeds for streaming and gaming on compatible plans. Fizz also launched a new modem providing better speed and reliability, which is resonating strongly with our community. Overall, 2025 was a defining year for our telecom segment. The strength of our mobile business, bolstered by the freedom acquisition combined with disciplined pricing, effective brand positioning, and optimized customer acquisition costs generated our best mobile service margin growth in more than five years. While mobile RPU now growing, while revenues, wireline revenue stabilizing and market share continuing to rise, particularly in regions where significant potential remains, we're starting 2026 with a strong momentum and unshakable confidence in our ability to sustain discipline and profitable growth.

Turning to the media segment.

TVR reported adjusted EBITDA of $50 million in 2025, an increase of $39 million compared to 2024. This improvement reflects a favorable retroactive royalty adjustment for specialty channels recorded in the fourth quarter. as well as a significant cost saving from the various restructuring initiatives we have put in place over the last 18 months to offset the decline in advertising and subscription revenues affecting the entire private television industry. The royalty adjustment is not a gain, but rather a significant revenue shortfall that penalized Stadia for years. This non-recurring adjustment enable us to repay part of the accumulated deficit, but does not change the fundamental situation. Despite its performance in 2025, TVA still has cumulative net losses attributable to shareholders of 61 million, due mainly to falling subscriber numbers and advertising revenues in the conventional television business. Faced with these systemic declines that are threatening TDL financial position, we have acted responsibly and implemented a series of restructuring measures over the years, including significant workflow reduction and decentralization of TDL media teams, studios, and newsrooms to improve efficiency. All these efforts have yielded significant savings, But given the decline in revenues to the market domination by the web giants and the unreasonable regulatory burden under which we operate, we must and will continue our optimized efforts and will maintain budgetary discipline. We will continue to fight to keep a strong private broadcaster to make sure our French audience will continue to get diversity of entertainment and information, not letting Radio-Canada be the only broadcaster. On the positive side, despite these major structural challenges, audiences continue to choose our channels while we are maintaining Our market share dominance with a 41.8% market share in 2025, up 1.1 point for 2024. I will now let Hugues review our detailed financial results.

Thank you, Pierre-Claude. On a consolidated basis in the fourth quarter of 2025, Quebec recorded revenues of $1.5 billion. of $47 million or 3% from last year. EBITDA reached $610 million, an increase of $21 million or 4%, or $44 million or 8% increase when excluding both the unfavorable impact of a $67 million rise in share-based compensation expense across all of the corporation segments and also the favorable impact of $44 million related to the retroactive application of a royalty agreement for specialty channels in the media segments. Cash flows from operating activities increased $130 million to $522 million, up 33% compared to the same quarter last year. In our telecom segment, telecom total revenues grew 1.5%, or $19 million, marking a second consecutive quarter of year-over-year revenue growth. This performance was driven by mobile service revenues, which were up 9.5%, our strongest increase of the year, supported by sustained subscriber growth, improving mobile ARPU, and steady ARPU progression across all wireline services. With rigorous cost management, adjusted EBITDA reached $590 million in the quarter, up $24 million, or 4%, representing our best annual EBITDA growth since 2019. As a result, adjusted EBITDA margin improved 1.2 percentage points to 45.9% up from 44.7% last year. Telecom capex spending, excluding spectrum licenses, increased by $55 million for the full year and $44 million in Q4, reflecting favorable impact of governmental credits recorded in Q4 of last year, and also our continued 5G and 5G Plus network expansion and wireline equipment investments. Accordingly, adjusted cash flows from operations declined $7 million year-over-year and $20 million to the quarter. As anticipated, 2025 was a higher investment year to ensure network expansion remains aligned with our growth ambitions. Our media segment reported revenues of $239 million in Q4, an increase of 23% or $44 million year-over-year. and generated an EBITDA of $54 million, representing an improvement of $39 million, largely driven by the favorable impact of retroactive agreements that we've spoken about before. Our sports and entertainment segment revenues decreased by 16% to $58 million in Q4, and EBITDA was also down to $1.5 million. Quebec reported a net income attributable to shareholders of $212 million in the quarter, or $0.93 per share, compared to a net income of $178 million, or $0.76 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 $226 million, or 99 cents per share, compared to an adjusted net income of $187 million, or 80 cents per share, last year. For the full year, Quebecor's revenues were up by 0.7% to $5.7 billion, and EBITDA was up by 1.1% to $2.4 billion. Or excluding the unfavorable impact of the $111 million increase in ShareBears compensation expense across all of our segments, we would have been up 4.7% driven by the song growth, obviously, in the share price of 2025. I'm also including in that adjustment the favorable $26 million impact related to the retroactive media adjustment for the full year. EBITDA from our telecom segment grew 4%, an improvement of $84 million over last year, excluding the impact of stock-based compensation. As of the end of the quarter, Quebecor's net debt-to-EBITDA ratio decreased to 2.95 times, still the lowest by quite some margin of all of our telecom competitors in Canada. On November 20th of last year, 2025, Videotron issued $800 million of senior notes yielding 3.95%, marking the lowest seven-year credit spread ever achieved in the Canadian telecommunications sector. The net proceeds combined with cash on hand were used for the redemption of Videotron's 5.125% senior notes, which were maturing on April 15th, 2027. Our balance sheet remains very strong with available liquidity of over $1.6 billion at the end of the fourth quarter will form up the U.S. 500 million increase in the revolving credit facility, which happened on January 28th of this year, 2026. In 2025, we purchased and canceled 5.3 million Class B shares for a total investment of $218 million. Finally, in light of these results and following our plan to distribute between 30 and 50% of our free cash flows, I'm happy to report that Quebec Horse Board of Directors declared yesterday a quarterly dividend of $0.40 per share for both Class A and Class B shares, up from $0.35 per share, or an increase of 14%. We thank you for your attention and will 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 touchtone phone. You will hear a prompt that your hand has been raised. And should you wish to decline from the process, please press star followed by two. And if you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. Thank you. And your first question will be from Sebastiano Petty at JP Morgan. Please go ahead.

Hi, thank you for picking the question. I just want to see... Pierre Collin, if you could unpack maybe expectations around capital returns. I think Yugi touched on increasing the dividend by 14% to 40 cents a share in line with your policies. But how should we think about your commitment to maintaining three turns of leverage as the underlying EBITDA growth seems to be accelerating in the business and operating leverage is coming through? And then a follow-up question. I mean, what are the pros and cons, or how is the team evaluating potential U.S. listing or some way to maybe unlock, you know, improve the float in shares? That's, you know, a question, kind of concern that, you know, we hear from some shareholders given the limited float and liquidity.

Thank you. Thank you, Sebastiano. Well, you know, we...

The policy, basically, out of our board of directors conversation and discussion is to use the free cash flow that we're generating on a yearly basis and to split it. It's quite simple. At the end of the day, I guess that it's not rocket science. It's reducing our debt. There's no such as large transactions or acquisitions, which is what is around the market right now, but this can change, but right now, this is what we're seeing. So the split is between reducing debt, paying dividends, and buying back stock, and this is what we've been doing for the last two years. Despite the freedom acquisition, which cash-wise was not a big demand, so we've been able to maintain this And I think that the market reward the company for this policy, and we can expect, and I would ask maybe to give them the exact percentage of payout. But we said that, you know, we were going to have a bracket in terms of payout between 20 and 30 and 50. And we're at 35 now. So we're 35. We've always been, you know, on the low side of the bracket. And I think it will remain that way other than, you know, special situations that could take place. But we're not seeing it for the moment. But that can change. And I guess that's been always opportunistic in life, you know, for the last decades. So if something was to happen, you know, we'll be ready to be there. and participate. For the U.S. listing, you know, I guess that we never really had the chance to think about it. I would thank you, you know, to bring it, and we'll try to find out, you know, what could be the advantages of it. Obviously, the flow is of importance, adding a diversity of shareholders also. How this will deal with the exchange rate, you know, These kind of things are not something that we should avoid. And since we're not the 51st state in the U.S. Yes. No, we should not joke around. Sorry about that. Then, you know, we'll look at it certainly, you know.

Real quick, just following up on the leverage point. I mean, you're at 2.95 now. Should we, you know, you just issued paper at a pretty, you know, attractive yield. is there any reason to think that you'd let it drift lower from the 295 exiting 2025? Or is this, you know, more or less, you know, hugging three turns is the way that we should kind of think about how you and Pierre-Carl, you know, plan to kind of run the business, you know, obviously excluding, you know, anything inorganic or other opportunities that may avail themselves.

Yeah, again, we'll see, Sebastiano. But something I think is of importance, and we – We've been working very hard for two, three years because we thought that maybe, you know, we're not sure that we were treated fairly regarding our credit rate. So we've been fighting to have our investment grade status, which obviously brings significant advantages. Hugues talked, you know, about the last issue we did, which is, you know, the lowest of the industry. And, you know, we don't have to play with our balance sheet issuing, you know, very expensive hybrid instruments. We have clear classical debt for which, you know, we've been seeing as you look at the more details regarding our interest expenses, you know, they're down significantly. And at the end of the day, this is more money on our free cash flow for shareholders, either on a purchase or on a buyback purchase or on a dividend basis. And if we were to be able to continue to be able to get an even better ratio, I don't think this is something that doesn't work, you know, the exercise.

Thank you both.

Thank you. Next question will be from Mahar Yagi at Scotiabank.

Please go ahead.

Merci d'avoir pris mon appel et mes questions. I just wanted to ask you, after a period of relative rational pricing in the second half of last year, we have seen some aggressive discounting early this year. I'm more concerned about investor perception, about how that could affect interest to invest in the Canadian telecom sector Based on feedback we've received, do you think the market could get more rational if all players move to reporting net accounts additions and ARPA instead of reporting subscriber loading and ARPU, pushing you guys to focus more on convergence efforts and away from just adding low-calorie subscribers? You know, T-Mobile is doing that in the U.S., starting in Q1. What do you think about just the general concept of moving in that direction?

Well, you're probably right, but, you know, it is what it is. I mean, you know, we... I remember we started in 2000, and we were releasing on a quarterly basis how many... Subscribers we will get on a quarterly basis. And I remember that very well. I thought that was a little bit crazy, but it is what it is. So we all knew that at the end of the quarter, to get better subscriber numbers, the industry was giving away cable subscriptions. And a month later or a month and a half later, finding out that the customers were not paying, you know, they were disconnecting them. I guess this is really stupid, but it is certainly, you know, this is something that we stopped doing. But we were forced to continue to release our subscriber numbers. And then, you know, the cable, we have other services, you know, wireline telephony, internet customers, and then, you know, wireless customers. And we just can copy and paste, you know, the practices that I guess probably also the analysts were looking for. So I don't know. Other what to say. Maybe they got better ideas than I have. Yeah.

No, I don't have any other ideas. I mean, it's a bit counterintuitive, you know, that you guys would be asking for less disclosure than we already give out. But I certainly see where you're going with this. And maybe just the last point that I would make on this is that we, you know, honestly for us, as you know, even though we have been having the highest growth for quite some time, and certainly intend to continue to have the highest growth, we don't manage based on net ads and have not. And I think you can see from our actions over the past quarters that we focus on profitable growth, not just growth at any price. And should there be an industry move towards not reporting net ads, you know, we'd certainly go along with it. We're good students. Yeah, we're good students. And we're certainly not remunerated in any way based on growth as opposed to maybe some other people. I don't know. So we'd be certainly fine with that. But I guess you're going to have to continue your – evangelization with the rest of the industry, and we'll follow suit with pleasure. Thank you.

Work in progress.

Just quickly, maybe it's worth to mention to you that your compensation is not based on units. It's not based on RTU. It's not based on EBITDA. It's based on free cash flow. Free cash flow. I'll

generate you know out of your business all right great thank you thank you for that feedback very helpful and uh maybe just a follow-up question regarding 2026 um you know generally you give not like a specific guidance number but some general sense of where you could land on on free cash flow and maybe a directional view on CapEx. Can you share with us your expectations going into 2026 here, please?

Sure. For 2026, as I think I've said before, a while back, we were looking, and we're still on that track, looking at gradual measured increases in CapEx year after year. And as we've done in 2025, you see we've increased CapEx by 77 million. And it is certainly our intention to continue to invest in our networks. And you can expect, you know, another gradual and measured increase of, you know, I'm not going to give you the number, but, you know, roughly equal to what we've been experiencing in 2025, which would make sense. to continue to ensure that the performance and reliability of our networks and our customer experience remains high. So that's in terms of CapEx. You also were looking at... What was your first question again?

Free cash flow. I mean, you know, last year you gave us kind of a billion-dollar free cash flow work, you know, working forward to, you know, what would be a number for 2026?

Yeah, well, you know, it's... for 2025, we generated, we had said we'd generate a billion dollars. We generated a billion one. We're reporting free cash flow, a billion, an increase of, you know, of a billion, or not an increase, a billion four free cash flow. But there's, you know, if you look at it, there's about 300 million of working cap increase coming from, you know, a number, three main areas, mostly the The stock-based compensation, which, as you know, the increase is very high, but being non-cash, it comes back in the working cap at the end. Also, we have translated more than $100 million of accounts receivable into cash, and also And don't forget, we had talked about this in the past, that we last year, I think more than a year ago, switched our approach in Wireline from selling the boxes to renting the boxes or leasing the boxes, which obviously had an impact, the first impact of increasing CapEx. but also it allowed us to lower our accounts receivable. So we got a bit of help there. So on an ongoing basis, we'd be looking at a billion one, possibly more of free cash flow for this year, depending on obviously the top line. I would point to the fact that no matter what happens on the top line, as we can't predict the future in terms of you know, competitive environment and all that. Our margin, you should look at our margin improvements over the past few quarters that we've been able to flow through increasing amounts of cash down to the bottom line. And we certainly intend and see that we can continue to do that. We can always do better. You know, people always ask us on OPEX and on operating markets, Or are you in wireline? Are you, you know, is there more? You know, there's always more. There's always more. Wireless is a bit different because we're still investing, obviously, in new brands and expanding brands. But there's always more. We can always do better in OPEX, and we certainly intend to do so. So I would certainly expect a growing cash flow in 2026.

Merci beaucoup.

Bye.

Thanks. Next question, please.

Next question is from Matthew Griffiths at Bank of America.

Great. Thanks for taking my question. I was wondering if you could share maybe the work you're doing to expand your network in Manitoba. Obviously, half the population is in one city. Is this going to be Anything you can share. I'm not sure what you feel comfortable with, but it would be helpful on timeline and what we could expect and how much of the increase maybe in CapEx is associated with that being an additional work stream versus replacing other work streams that have fallen off. And then is there any reason for us to expect the inflection to positive ARPU to to continue or reverse in the coming year. If you could share some expectations around that, it would be helpful.

Thanks. Thank you, Matthew. So on Manitoba, you will probably remember that, you know, we acquired Spectrum even before, you know, the Freedom acquisition because we were considering that that would be an interesting market. And in fact, you know, we built an even stronger spectrum base added to then, you know, all of the systems that we acquired with Freedom being able to operate, you know, quickly. So we started there and I would say that, you know, the logic is basically the same than elsewhere. And in fact, it's been also the same that as an example, we use in the region there where We started as a TPIA, and once we've been building a significant customer base, then it was a very profitable way to move and build our own network. The difference with wireless is that we have obligation in front of ISED for deployment. So, obviously, we will respect that, but we have time in front of us. And something that we need also to consider is the roaming prices. They've been fluctuating significantly for the last two years. Roaming is obviously for incumbent operators, not what it used to be. I guess not only in Canada, but everywhere in the world. So there's some pressure there. And I would say that the roaming environment is favorable to MVNOs. other than at the end of the day, you know, building your own net. So we will follow the same strategy and moving forward time to time in our CAPEX program, including Manitoba as an operational base also. I asked Hugues to answer the second piece of your question.

Yes, Matt. On ARPU, we've got momentum. You see it. We were obviously starting from a lower base in our competition, so we have turned positive, contrary to the others. And, you know, the silly answer is obviously to tell you it really depends on the competitive environment going forward. Should it stay, how would I call it, irrationally or unpredictably, maybe is a better word, competitive, then perhaps are we looking at stability of our ROQ going forward. But you know what? My gut feeling is that we've got momentum there and we can take some heat on that. Depending on what happens, we're certainly in a better position than our competition on this. I'm confident that cooler heads will prevail and that we will be able to continue growing ARPU going forward. We've got a good momentum going, and don't forget that there's a machine. Inertia, the concept of inertia, it takes a while to get going, but it takes a while to stop. So we're quite confident on ARPU.

Maybe can I just ask two quick follow-ups? One is just a clarification on your CapEx, Hugh. With the $70 million more or less increase year over year, that's basically for the telecom segment. Am I correct? Yes, that's correct.

Well, I think it's pretty much both, but it's very close to both. Yeah, we increased by 70 from memories about 77, which was pretty much all in telecom, to be honest.

And the other thing I wanted to touch on, if I could just briefly, is that you mentioned or in your MD&A, it mentions how like lower third party Internet sales kind of was a negative for your Internet sales. revenue this quarter. And I just was wondering if you could share any more detail on that, because obviously the fear of that growing across the industry is prevalent within the market, but you're reporting that for you it's declining. So any color would be helpful.

I'm sorry, Matt. I'm not sure what you're referring to. Our internet revenues are actually increasing.

Yes, exactly. But within that, I think you report, if you sell to a third party, so if someone else resells your network, that those revenues that you get from the third party get included in your internet revenue. And I think that your materials mentioned that that is declining. So the amount that third parties are selling of your network is going down. Oh, I see. So maybe there's, Maybe there's nothing to share there, but if there is something you're seeing within the market and as it affects you, that would be interesting to hear.

Honestly, there's nothing material in what Bell or others are reselling for us. Honestly, Matt, it's honestly insignificant or immaterial, honestly. It's not what's driving the change and the positive revenue situation in internet and wireline, no.

Well, maybe I'm wrong, but maybe I should not think loudly, but, you know, on the Internet side, now, don't forget that, you know, a lot of TPIAs were bought by Bell. So, then, you know, they move customers that we have as TPIAs. They were TPIAs to us. So, they move those customers on their network, but, you know, at a cost which was completely crazy. So, yes, there's always a cost to acquire customers, but certainly there are some that are much more expensive than others. And on that, I guess that they went on a very expensive way. And since this trend is over because the customers have already moved, then our TPIA base is more stable now.

Exactly.

Perfect.

Thank you so much for the answers, guys. Thank you, Matt.

Next question will be from David McFadgen at ATP Car Mart. Please go ahead.

Oh, yeah. Hi. Yeah, a couple of questions. So we saw, you know, you guys benefited from big working capital inflow for 2026. I'm just wondering if you can hold that or do you think that there's going to be a reversal in 2026?

Not a reversal. I mean, some of the – well, it depends. As I said, the three main contributors are basically stock-based compensation. So who knows? If our stock keeps climbing, maybe there will be. But I think it would be fair to say that that's probably not going to hit us as much in 2026. And the rest I would also assume on the receivables that that would quiet down. So my answer to you would be more certainly no reversal, but probably a lot less impact from working cap in 2026. Okay.

Okay. And then just on the cap back, so I was wondering if you could share with us, you know, Where are you going to be spending that capex? What are the priorities? Is it going to be focused on Ontario, the wireless network in Ontario, or are you going to really be moving to really improve Think.West, just to provide some color there?

Well, I would say, David, that we're pretty fair with all our segments of the business. And never think, you know, never forget that, you know, wireless and wireless are well-embrigaded between each other. You need backhaul, and backhaul is good for all sorts of services from the Internet to the wireless. Geographically, we will continue to improve our network. It's been done on an economical basis. As much as we have customers in a certain area and where we have spectrum, it will be profitable for us to build and avoid roaming prices, even if Roaming prices is lower, but it's still roaming. It's something catch out of the company where once you build, you're there for, I'm not going to say forever, but certainly for a very long time. This is how intensive and telecom industry works. We're not reinventing the wheel. It's been like this forever, and we follow the rules and the lessons of profitable growth.

Okay. All right. Thank you. Thank you, David.

Next question. Next question is from Stephanie Price at CIBC. Please go ahead.

Good morning. I wanted to circle back on internet. It was good to see another quarter of growth in wireline. Just hoping you can talk a bit about the competitive environment in internet and the pricing environment you're seeing in Quebec here. How sustainable do you think the current level of growth is?

I will... I, Stephanie, will... I will certainly have comments on this. I'll start by saying that, and you will remember, we very often said, and you know that because it's been like this forever, I would say, that prices in Quebec, so in our incumbent footprint, have been always much lower than anywhere else in Canada. And we've been seeing Because, well, I would say it's understandable. Bell was losing significant amount of customers. We've been able to experience significant growth on wireline. Obviously, on the internet side, we grew significantly. And I guess that Bell management and board of directors thought that this is unsustainable business, and then therefore, They need to invest in fiber. Once they invested, they decided that they need, you know, to get customers, which is a good idea, I would say. And from there, they decided that, you know, they will lower the prices. They will come very aggressively against Videotron. And for certain years, they were successful. The last numbers we've been seeing show that this doesn't exist anymore. And we've been seeing probably a more mature thinking from their perspective. And we always said that we're not going to go there. We're not going to follow. And yes, we lost subscribers. We lost customers. But the equation was we were more ready to lose a certain amount of customers instead of seeing a repricing strategy on our number. So we decided that we'll follow this rule. And I would say that probably, you know, we were right. So we look forward to being in a more normal kind of situation. And we will continue to, and this is certainly also, as I mentioned to my speech in my report, number one, customer satisfaction. Yes, it's about price, but not only on prices. And I think that the market recognized that. Not the market, I mean the customer. The customer's market experienced this. And this is why we've been experiencing a much lower decline than other cable providers in North America, in the U.S., obviously, and certainly also in in certain cable operators in Canada.

So I don't know, Hugues, if you have things to add. I think you've touched on the major points. Just to add a couple of things, Stephanie. We are indeed, as Pierre-Claude said, continuing to see intense activity in Quebec and wireline, but more disciplined, as he said. And anyway, there's nothing that leads us to believe that that can continue. We seem to be... in an environment that is more rational, and we certainly expect it to continue. Another point, we're also seeing an increasing adoption of higher speeds, which is playing to our advantage, and we certainly see that continuing as well. So in terms of a revenue perspective, we feel that we've turned a bit of a corner and are prudently positive for the rest of the year.

Okay, great to hear. And just to follow up, just on Spectrum, so Kubeco is rolling out its 3800 Spectrum, and you didn't receive any Spectrum in the recent residual Spectrum auction. Just curious how you're thinking about Spectrum requirements and the Spectrum rollout at this point.

Well, you know, as you know, we just saw there was an auction recently. We participated, obviously. And probably, you know, another sign of discipline there. We're not lacking spectrum. So, yes, we participated a bit, and the result is that we don't require anything. We'll have more details in the near future when ISED will release all the numbers. But our preliminary... understanding is, you know, the prices for Spectrum was quite expensive, was quite high. And we've been seeing where some of our competitors were lacking Spectrum, probably, you know, a more aggressive perspective to acquire it. We don't feel any prejudice there. And for the next auction, we'll see. We don't know when it will happen, but... We're certainly going to be there as we've been there for the last 15 years now, even more than that. Yeah.

Something to add, Craig?

No, no. On Spectrum, as Pierre-Claude said, we're pretty comfortable with our Spectrum position and we'll continue to participate, but not at crazy prices. And if prices do get crazy, then we just... you know, we'll stay on the sidelines, so.

Great. Thank you very much.

Thank you, Stephanie.

Next question is from Jérôme Dubreuil at Desjardins.

Bonjour. Oui, bonjour. Merci de prendre mes questions. A few questions today. First one, you launched a fixed wireless service in Ontario towards the end of last year. I'm wondering if this is something you're really leaning into at this time, if you have significant capacity to offer there, or it's just maybe something to, I don't know, to keep competition in check.

Well, Jérôme, very interesting question.

In fact, you know, and shortly we'll go in Barcelona next week, you know, that the World Mobile Congress, we will continue to talk with our vendors, finding out, you know, what we can expect in terms of technology. But you're right to say that, you know, we already launched it. In fact, you know, we've been having conversation with our vendors for many years as of now. We'll continue to go there. We experienced it. Is wireless, is fixed wireless right now able to replace what Barline is able to provide? The answer would be no. Will this remain always true forever? Will it be true in three, in five, in seven years? This we don't know, but the thing that we know is that technology is always improved. And the technology in Ireland also, so it's going to go in parallel. We've been, I'm not going to say in a trial mode, but this is certainly something that we need to look at. And the best experience is providing services to customers to figuring out where we should position ourselves in the future.

That's great. Good context. Second question for me is, I know you're not providing wireless EBITDA or wireless margins anymore, but maybe directionally, has there been a material change in the trend there? Just looking if the recent growth that we've been seeing in wireless has come to any change in the margin profile.

No, Jérôme, we are, as you saw, our service revenue increased 9.5%. The higher keeps increasing more every quarter. We are continuing to generate increasing margin. We are, you know, that being said, we are obviously continuing to invest. I mean, we do have, you know, branding and advertising expenses and some operating expenses in wireless that... But I think directionally from our revenue position, I think there's not been any major margin changes. So we keep increasing our margin in both wireless. I know that's your question, but I'll take the opportunity to underline once again that we're continuing to increase our margins in wireline as well due to our favorable revenue situation as well.

Thank you very much.

Our last question is from Vince Valentini at TD Cowan. Please go ahead.

Hey, thanks very much. I can't promise it's your last question, but it's your last questionnaire. I want to start with wireless sub-ads. I know and I heard you repeat it again today, Hugh, that you're not running the business based on a subscriber volume target. You're running it based on optimizing free cash flow. But we all know it seems like a very weak market, almost no population growth in Canada. And throughout Q1, there's been signals that the market is extremely slow. Is it fair to say that if you don't get back to 310,000 sub-ads for this year, that's acceptable as long as your share of industry net ads is still best in class?

Well, we will continue to serve as the market as best as possible. We all know that there are some factors that were there previously that are not there anymore. We know about the immigration factor. This is something that obviously we are not in a position to control. We control our destiny regarding services, regarding prices, regarding innovation. Again, I think it's worth to mention that we innovate. And one of the best examples, the more recent one, is that we've been offering Roam Beyond, not only in North America anymore, but worldwide. And again, sometimes we think innovation is original. This is original, but it's good experience and execution plans. And this is what we offer, and we will continue to work in this direction. Well, this ended, you know, with the same kind of result that we've been able to enjoy for the last year, for the last 12 months. As you know, we're not giving any guidances, but we consider that these have been the winning formula, and we'll continue to work on it. As I mentioned, it works. Why changing a winning formula?

Fair enough. Move on. Try to clarify a couple of things from earlier. One on CapEx. I'm not sure. I don't see 77. I see more like a 50 million increase in CapEx.

Yeah, it is 50. Yeah, it is 50. I just checked that. For answering the question, I think it was more 55 than 77. So I gave you the wrong number, but it is 55. You're right, Vince.

So using that $615 million number for telecom segment CapEx as a starting point, you don't want to give guidance, but I mean something in the same range of a year-over-year increase of $50 to $60 million off of that base is a reasonable expectation for us at this point?

Yeah, that's exactly what I was saying.

Okay. And to piece that back together with the free cash flow comment, and I think you answered it this way, but then at the end, you said something different. So I just want to make sure. You're not saying that you can do better than $1.4 billion of free cash flow in 2026. What you're saying is you can do better than $1.1 billion pre-working capital, and the pre-working capital is a bit Hard to determine, but unlikely to be as high as $300 billion again. Is that a fair way to characterize it?

That's exactly what I thought I said, and if I didn't, that's what I should have said.

No, maybe you did. Maybe it's just me wanting to be perfectly clear. And then just last little thing, and again, it's been asked. Somebody asked about the TPIA wholesale revenue that you receive. I just want to flip it around. Is there any... meaningful increase in the number of TPIA subs that you are taking advantage of by reselling other people's networks in the fourth quarter, that 3.7 thousand number? Were there a meaningful amount that were on other people's networks as opposed to your own?

Well, you're right, Vince. I guess that, you know, this is something that we didn't emphasize on, but, you know, it's open season. I mean, you know, For everyone. So, yes, it's true. We're gaining customers on other people's network, for which we combine our offer with wireless. So this combined offers brings, and I guess that we do at home, it's been a very strong brand. It's not because we don't operate as an internet or a cable subscriber provider that people don't know us. In fact, you know, they know many times they have a chalet, and so they are serviced in, let's say, Montreal, but they're not serviced in their chalet. But, you know, with another, now, you know, we're in a better situation to cover all their expectations. I think that, you know, just to end the question and say, We cannot say this is material. This is why we're not emphasizing on number of whites. That's all I want to make sure.

It's not like you added 20,000 TPIA and lost 17,000 on your own network. There's nothing like that going on.

No, absolutely not. I'll just point to another, I know you know that, Vince, but we're not selling at a loss on the TPIA front. We're doing this, obviously, as a wireless play, as a churn and as a wireless play, but we're not selling at a loss on the wireline front. So this is not something that we're, you know, we're not going crazy all out and replacing profitable TPIA customers with unprofitable ones. So I just wanted to make sure I added that to what Percal said.

Which means you're reselling cable networks, not reselling fiber networks for the most part, right?

Correct, yes. Perfect. We like HFC. We like HFC, yes.

Sorry for so many questions. Congrats on the results, guys.

Oh, but Vince, just before, I just, I can't help but not to underline, you know, in your note this morning, you said that over a billion dollars of cash flow is unlikely to excite investors. So can I ask you a question? What do you want me to say?

Well, you just did 1.4 billion. So that's why we're asking you. But I think we'll excite you.

I think you answered it. All right.

Keep it going.

Keep it going higher. Thank you. Thanks, Vince. I'd like to thank you all. Just, you know, the last word was, well, the last two words would say that I'm quite surprised that, you know, you didn't ask any questions regarding AI, which is, you know, seems to be the buzzword, you know, for the last few months. And we didn't address, you know, this also in our reports. But just to tell you that, you know, we were obviously you know, work on those issues and the issues of AI is for us the capacity, you know, to be even more efficient in our operation, to reduce our expenses. And in fact, you know, we've been doing AI for many, many years before it happened because for us, it means automation and automation always reduce our expenses. And we've been obviously implementing our automation processes for many years ago. And this is why, you know, we've been seeing our expenses going down and our operation more efficient for the last many years before. And just to tell you all, so obviously you guys watch equity, but there was a report this morning, which I thought it would be interesting because sometimes we don't talk enough about debt. But this gentleman by the name of Nicholas Kim of BMO on the debt side released a report, and obviously I like, you know, the title. It says, A Gold Medal Performance. So this is about the bonds, and it's worth reading it. So for all of you, we thank you for attending our conference call, and watch for our next water results and being with you again. Thank you very much, and have a nice day.

Thank you, sir. Ladies and gentlemen, this concludes the Quebecois Inc.' 's financial results for the fourth quarter and full year 2025 conference call. Thank you for participating and have a nice day.