TELUS Corporation

Good day, everyone. Welcome to the TELUS 2025 Q2 Earnings Conference Call. I would like to introduce your speaker, Mr. Robert Mitchell. Please go ahead.

Hello, everyone. Thank you for joining us today. Our second quarter 2025 results, news release, MD&A, financial statements, and detailed supplemental investor information were posted to our website earlier this morning. On our call today, we will begin with remarks by Darren and Doug. For the Q&A portion, we will be joined by Zainal, Naveen, and Tobias. Briefly, prepared remarks, slides, and answers to questions contained forward with the statements. Actual results could vary from these statements. The assumptions on which they're based and the material risks that could cause them to differ are outlined in our public filings with securities commissions in Canada and the U.S., including our second quarter 2025 and our annual 2024 MD&A. With that, over to you, Darren.

Thank you, Mitchie, and hello, everyone. In the second quarter, our team's commitment to operational excellence empowered TELUS to deliver another quarter of industry-leading customer growth and strong financial performance. These results demonstrate the strength of our leading portfolio of bundle offerings across mobile and home, and the strategic expansion of TELUS pure fiber connectivity to homes and businesses, inclusive of Ontario and Quebec. We're delivering much more than just affordable internet, We're providing Canadians with differentiated and unique competitive services, including AI-fueled smart home energy management, next-generation healthcare, affordable innovative security, and exciting entertainment solutions. Our investment in Canada will be augmented by our recently announced $2 billion investment to expand broadband services in Ontario and Quebec. This will allow Telus to prudently progress national scale through smart broadband network builds and drive product innovation, competition, investment, and affordability in Canada. The CRTC's wholesale fiber decision mirrors the access granted to Eastern-based companies in the West, and as well the wholesale access that TELUS is providing to cable companies on our broadband wireless network in Ontario and Quebec. Relative to our peers, TELA stands out as the company committing to bold future-focused infrastructure investments, reflecting our confidence in the Canadian market over the longer term and our strategy of bundling wireless and wireline broadband services. Importantly, our track record aligns with the federal government's goals of unlocking private investment, building one Canadian economy by removing interprovincial barriers, addressing cost-of-living challenges for families diversifying Canada's economy through driving innovation of Canadian IP, and ensuring Canada is on the leading edge of AI, digital innovation, and smart sustainability. Turning back to our strong second quarter performance, we achieved total mobile and fixed customer growth of 198,000 in the quarter. This was driven by mobile phone and connected device additions of 167,000, alongside fixed customer additions of 31,000. The dedication of our team in delivering customer service excellence contributed to continued strong loyalty results once again this quarter. Notably, post-paid mobile phone churn was 0.9%, consistent with Q2 of last year, as we realized our 12th consecutive year below the 1% level. Looking at our financial results, we achieved solid and resilient T-TECH EBITDA growth, including TELUS help, of 4%, which is consistent with our Q1 results. In mobile, we drove phone net additions of 55,000 and connected device net additions of 112,000. These results were supported by our ongoing focus on economic margin accretive customer growth. This is evidenced by our consistent industry-leading lifetime revenue underpinned by our industry-best churn result, which of course is the hallmark of our organization. Let's turn now and take a look at our wireline business. Telus delivered another quarter of industry-leading total fixed customer additions. Indeed, we were the only company within the industry to deliver positive net additions within the wireline sector. This included 27,000 internet net additions alongside industry-best fixed data services revenue growth of some 3%. This is underpinned by our leading pure fiber offering and our consistent strategy of leveraging our superior portfolio of bundled products and services on a national basis that differentiate us meaningfully from the competition in a way that matters to customers. Furthermore, Telus Health continues to demonstrate strong operating momentum globally, achieving operating revenue and adjusted EBITDA growth of 16% and 29% respectively. And Doug will comment shortly on what the EBITDA growth looks like on a normalized basis and how consistent that growth has been historically. Moreover, the team drove a very strong year-over-year increase in global lives covered to almost 160 million, inclusive of workplace options, alongside continued organic growth expansion. These results were fueled by product enhancements, expanding sales channels, including cross-selling, and effective cost management through technology and synergy optimization. Our team's deeply rooted dedication to putting customers first serves That's the foundation for this success, and we're building on it. Since acquiring Lightworks, we've realized $400 million in combined annualized synergies. You may recollect that our original target in this regard was $150 to $200 million. This $400 million includes $322 million from cost efficiencies and $78 million from successful cross-selling strategies that are continuing to grow markedly. We remain on track to meet our goal of $427 million by the end of 2025, and we will augment this maturely with workplace options global synergies that are on the come. We are excited to accelerate TELUS Health's growth momentum through 2025 and well beyond on the path to very interesting and productive monetization strategies. The consistency of our results reflects our team's passion for delivering superior customer experiences over our world-leading wireless and pure fiber networks. Our significant broadband network investments drive extensive socioeconomic benefits for Canadians in communities from coast to coast. At the same time, they are enabling continued advancement in our operational, financial, and customer experience performance. Looking ahead, our financial position and our operational outlook remain strong, supported by continued EBITDA growth and stable capital expenditures, resulting in a meaningful free cash flow expansion on a chronic basis prospectively. This will be enhanced by significant value creation in our growth businesses and a multiplicity of asset monetization opportunities. In this regard, today we announced a definitive agreement with the CASE, who will acquire 49.9% interest in our newly formed Canadian Wireless Tower Infrastructure Operator, Tarion. This initiative will monetize our world-class tower infrastructure portfolio, creating long-term value and strengthening TELUS's financial flexibility. Indeed, this allows us to accelerate balance sheet deleveraging, and progress towards achieving our target ratio of three times net debt to EBITDA by 2027, whilst turning off our discounted dividend reinvestment program on a progressive basis over the same time period. Strategically, Kerrien will focus on building new towers for TELUS, who will be its largest customer from the start, whilst also developing partnerships to expand tower access across the industry and further monetize this valuable asset. We are working with a Canadian partner in La Caisse to support broad national wireless access for the benefit of consumers and small businesses across the country. This move also aligns with TELUS's commitment to infrastructure sharing. leveraging smart partnerships to extend the reach of our technology while continuing to lead in network quality and services. Just as we are providing mandated wholesale access through the regulatory MVNO framework on our broadband wireless network across both our traditional operating territory and our expansion territories, and also enabling competitors to access our fiber infrastructure under the CRTC's pro-competition wholesale framework. We are now extending that to our wireless infrastructure across Canada. This will enable broader use of our wireless tower real estate to maximize its utility for Canadians. Indeed, having a single company focused on tower expansion will positively impact all wireless providers' ability to deploy acquired spectrum to enhance coverage, capacity, and service improvements for their customers. Again, it's good for competition, it's good for investment, and competition and investment are synergistic. Importantly, our new tower initiative mirrors our position on internet wholesale. specifically that fair access to infrastructure can foster meaningful competition, affordability, and consumer choice, while incentivizing private investment along the way. I would like to thank Eros Wittes-Pedotto, my longtime colleague, and TELUS, former Executive Vice President of Technology Strategy, for assuming the CEO role of Terrians. I expect that he is going to deliver an excellent performance in this assignment. My sincere thanks as well to the TELUS and the KIT team for working diligently and innovatively to bring this important initiative to fruition. Finally, reflecting our TELUS team's longstanding commitment to putting our customers and our community first, in June, the TELUS Friendly Future Foundation held its second annual gala. Notably, the foundation raised more than $2.6 million in sponsorships, cash donations, and in-kind contributions to support the foundation's student bursary fund. This was also complemented over and above the $2.6 million with our partnership with CIBC in this regard to expand the student bursary fund still further. Since its launch in 2023, the TELUS Friendly Future Foundation has provided over $4 million in TELUS student bursaries, helping more than 1,000 students from underserved communities reach their dream of post-secondary education, whilst also effecting meaningful change within their communities through volunteerism. In closing, I'd like to express my gratitude to our team at TELUS for their efforts their resiliency and their grit in executing on our consistent winning strategy to meet or exceed the commitments that we have to all of our stakeholders. And on that note, let me turn the call over to Uncle Doug.