TELUS Corporation

Good day, everyone. Welcome to the TELUS 2025 Q3 earnings conference call. I would like to introduce your speaker, Robert Mitchell.

Please go ahead. Good morning, everyone. Thank you for joining us today. Our third quarter 2025 results news release, MD&A financial statements, and detailed supplemental investor information were posted on our website earlier this morning. On our call today, we'll begin with remarks by Darren and Doug. For the Q&A portion, we will be joined by Zainal, Naveen, Jason, Tobias, Hesham, Briefly prepared remarks, slides, and answers to questions contain forward-looking 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 in our third quarter 2025 and our annual 2024 MD&A. With that, over to you, Darren.

Thank you, Ravi. And hello, everyone. In the third quarter of 2025, TELUS delivered another period of strong customer growth and financial performance, powered by our team's relentless focus on operational excellence. Our results showcase the compelling value of our comprehensive bundled services across mobile and home solutions, and we're doing that in a complementary fashion with the strategic rollout of TELUS pure fiber connectivity to homes and businesses nationwide. We're delivering far more than connectivity. We're empowering Canadians with transformative digital experiences, including AI-powered smart home energy solutions, including cutting-edge tech-enabled healthcare and well-being services, and as well, comprehensive security offerings at the dispositions of our clients. These offerings are revolutionizing productivity and enhancing quality of life for our customers. Indeed, this quarter we achieved an industry-best 288,000 total mobile and fixed customer additions. Our close to 21 million customer connections reflects an industry-leading 5% growth as compared to the same period a year ago. Furthermore, our sustained focus on delivering exceptional client experiences continues to drive leading customer loyalty metrics. This was demonstrated by our industry-best post-paid mobile phone churn of 0.91% this quarter as we progress through our 12th consecutive year below the 1% level, truly a hallmark of this organization and our culture. Looking at our financial results, we achieved solid and resilient T-TECH EBITDA growth of 3%. In mobile, we drove healthy phone net additions of 82,000 and leading connected device net additions of 169,000. These results were supported by our ongoing focus on profitable margin-accretive customer growth. This is once again evidenced by our consistent industry-leading customer lifetime revenue underpinned by our industry-best term result, which remains Clearly, the hallmark of the TELUS organization and the financial results that we derive from it. Let's turn now and take a look at Wireline. TELUS delivered another quarter of industry-leading total fixed customer additions. Indeed, we have consistently delivered positive Wireline net additions every year since the third quarter of 2010. This is a remarkable 15-year track record in that regard. This included an industry-best 40,000 internet net additions underpinned by our leading pure fiber offerings. A consistent strategy of leveraging our superior and growing portfolio of bundled products and services on a national basis continues to differentiate us from the competition in a way that is relevant to customers. Turning to TELUS Health. We continue to execute against our global growth strategy, generating revenue and adjusted EBITDA growth of 18 and 24%, respectively. Moreover, we've now extended our reach to over 160 million lives covered on a worldwide basis. This global scale of our TELUS health footprint stems from a variety of factors. including smart, targeted, strategic investments. It comes from continuous product innovation with a digital and AI thesis. It comes from broadening our sales channels with strong cross-selling execution that is paying off for us. And it comes from disciplined cost optimization through technology integration and synergy realizations. Importantly, these factors are all solidly anchored in our customers' first promise. Our LifeWorks integration has now delivered $417 million in combined annualized synergies, $329 million from cost efficiencies, and $88 million from successful cross-selling strategies. Notably, this is nearly three times above our initial target of $150 million that we set when we first acquired Lifeworks in September of 2022. Across our B2B portfolio, we have a potent story of differentiation and diversification. We are the market leader in Canada in respect of IoT, private wireless networking, and 5G solutions. Moreover, we have a leading cybersecurity practice that is at the forefront of how AI is changing the cyber threat and cyber protection landscape. Over the years, through a thoughtful and cohesive data-centric strategy, we have significantly and successfully built high-value, diversified lines of business. These global business verticals include TELUS Health, TELUS Agriculture and Consumer Goods, and of course, TELUS Digital. This has enabled business resiliency through the diversified portfolio approach whilst providing global scale and diverse sources of revenue and EBITDA. Notably, at the end of October, we completed the acquisition of TELUS Digital, making a significant upward move on our data and AI competency set, and this marks a significant milestone in the strategic evolution of our organization. We expect this integration to generate approximately $150 million to $200 million in annualized cash synergies, and will deliver the $150 million within the 2026 financial year. And that will be driven predominantly through operational efficiencies. Let's make sure we can do here what we did on the LifeWorks synergy realization front. The synergies coming from the privatization of TELUS Digital include accelerated digital and AI transformation. They include smart business simplification strategies, and they include strategic cross-promotion of our industry-leading product portfolio and services. This will further strengthen our financial performance and yield significant shareholder value creation. Our well-established AI enabling capabilities across TELUS will continue to be an integral part of our business and increasingly critical to our success. These capabilities are driving maturely better outcomes within our organization, and in turn, TELUS can be leveraged as an innovation lab as a product creator as a testimonial to commercialize these capabilities to support our external customers on their own ai journey to win in their respective markets indeed the opportunity at telus is substantial combined across telus our AI enabling capabilities are approaching $800 million in revenue in 2025. This is expected to increase to approximately $2 billion by 2028, representing an annualized growth rate north of 30%. Notably, this is composed of solely external client revenue, and it excludes other parts of our global B2B portfolio, such as health and agriculture and consumer goods. Supporting this growth are 4,000 dedicated professionals and AI engineers delivering digital products and solutions that help clients transform their businesses and to do that transformation at scale. One component of this growth is our September launch of Canada's first sovereign AI factory. This firmly establishes TELUS's leadership position in this space, as we have ready, today, the infrastructure and compute ecosystem to help Canadian businesses broadly deploy AI. We are the first North American service provider to become an official NVIDIA Cloud partner, utilizing our state-of-the-art data centers to support customers and partners, such as OpenText, League, EY, Accenture, and Railtown, to name but a few, who immediately benefit from our sovereign AI compute solutions. TELUS is providing the secure, sovereign foundation our country needs to create made-in-Canada solutions to accelerate growth and to advance our competitiveness in the global digital economy for generations to come. To wrap up, our Q3 performance reflects the strength of our core operations and the power of our differentiated strategies. The reliability of our results demonstrates our team's dedication to delivering superior customer experiences across our industry-leading wireless and pure fiber broadband infrastructure and technology. Our substantial network investments enable positive social and economic outcomes for Canadian communities nationwide, whilst continuously enhancing our operational performance, our financial results, and our customer satisfaction. Moreover, these network investments are powering Canada's digital sovereignty through our pioneering and leading AI infrastructure and technology. And as we look ahead, we are positioned for sustained success, underpinned by ongoing EBITDA expansion and disciplined capital deployment, that together generate substantial free cash flow growth for our organization and our investors. A strong financial foundation supports our industry-leading dividend growth program, where today we increased our quarterly dividend at a moderated rate of 4% to $41.84. This is reflective of our ongoing commitment to delivering sustainable shareholder returns. Furthermore, we continue to progress considerable deleveraging initiatives. Notably, we remain on track to achieve our leverage target of three times by 2027, whilst at the same time stepping down and, importantly, eliminating our discount dividend reinvestment plan. In September, we closed our transaction with La Caisse, establishing Tarion as Canada's largest dedicated wireless tower operator. This unique partnership will enhance wireless connectivity for Canadians whilst unlocking significant value for TELUS shareholders by strengthening our balance sheet, accelerating our deleveraging program, and providing another growth factor for TELUS to leverage. The team is working hard to quickly operationalize Tarion, which already has 3,000 wireless sites across the country. Moreover, it's begun construction of its first multi-carrier tower in Nanaimo, BC, with more planned in the months to come. Finally, in closing, with Remembrance Day approaching, I would like to offer, on behalf of the entire TELUS organization, my heartfelt gratitude to our veterans here in Canada and around the globe. These brave individuals, including my own father Desmond, who served with the Royal Canadian Navy in the Second World War, demonstrate immense courage to preserve the rights and freedoms of all Canadians. I hope you join me in wearing a poppy as we pay tribute to those who serve and who continue to serve so that we and our future generations can enjoy a better life. And on that note, I'll turn the call over to Uncle Doug.