Q2 2025 Rogers Communications Inc Earnings Call
Thank you for sending by. This is the conference operator. Welcome to the Rogers Communications second quarter, 2025 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded.
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Speaker Change: I would now like to turn the conference over to Paul Carpino, vice president of investor relations with Rogers Communications. Please go ahead Mr. Carpino.
Uh, thank you, uh, Galen and good morning everyone and thank you for joining us today, I'm here with our president and chief executive officer, Tony staffieri and our Chief Financial Officer. Glenn Brandt today is discussion will include estimates and other forward-looking information from which our actual results could differ. Please review the cautionary language in today's earnings report and in our 2024, annual report regarding the various factors assumptions and risks that could cause our actual results to differ.
Tony Staffieri: With that, let me turn it over to Tony to begin.
Tony Staffieri: Thank you, Paul, and good morning, everyone.
Tony Staffieri: 22 was a significant quarter for Rogers, we delivered on major financial and strategic initiatives, and we delivered strong operating results in the second quarter, we continued to execute with discipline in our core businesses. And we maintained a consistent disciplined approach in a highly competitive market.
Tony Staffieri: We delivered positive revenue, and Evita growth in our wireless cable. And media businesses, importantly, we return to revenue growth in cable.
We made significant progress on our de-levering plans by completing. The 7 billion dollar Equity investment for a minority stake in parts of our wireless network.
Tony Staffieri: And we became majority owner of mlsc, with a 75% controlling interest.
Rogers together with mlsc is now 1 of the most prestigious Sports and media, companies globally with terrific long-term growth potential.
With the inclusion of mls's financial results in our media segment going forward. We estimate that for the full calendar year. Media Revenue will be 3.9 billion and Evita 250 million.
Tony Staffieri: We also estimate the value of our Sports and media Assets. Now exceeding 15 billion dollars and we see significant opportunity to unlock this unrecognized value for shareholders. But to be clear, while we remain bullish on Sports, we remain squarely focused on our wireless and cable businesses.
Tony Staffieri: We ended the second quarter at 3.6 times. Leverage bringing our leverage, very close to where we were prior to the shot deal.
We accomplished this 9 months ahead of our initial plan.
Tony Staffieri: Our success in the second quarter. Clearly clearly demonstrates, our focus on investing in growth while maintaining an investment grade balance sheet.
Tony Staffieri: Positive operating and financial results in wireless cable and media.
Consolidated service revenue and adjusted. Evita both grew 2%.
We also posted strong margins and delivered, strong free, cash flow.
Tony Staffieri: In wireless service revenue and adjusted Evita each grew 1%.
Tony Staffieri: and while mobile markets, continue to experience lower growth, we remain disciplined with 61,000 total subscribers, net additions, including 35,000 postpaid,
Tony Staffieri: In cable, we continue to see improved performance cable, service revenue and adjusted. Evita were up 1% and 3% respectively.
Tony Staffieri: These are solid results in a challenging environment. We have successfully returned to growth in cable,
Tony Staffieri: This was supported by another quarter of strong retail internet, net additions of 26,000.
Media Revenue was up, 10% driven by expanded media content and strong viewership on Sportsnet during the hockey playoffs.
Tony Staffieri: I'm pleased with our efforts to deliver in our Core Business, while making meaningful progress on longer term strategic initiatives.
Tony Staffieri: We also continue to invest in the future, 2025 marks, 40 Years of wireless service in Canada.
Tony Staffieri: Last week, Rogers launched satellite to mobile texting, the first and only wireless provider to offer this groundbreaking new service to all Canadians.
Tony Staffieri: This is the next Frontier in Wireless connectivity, which is critical for a country as vast as Canada.
Tony Staffieri: Text messaging, including text to 911, is now available across millions of square kilometers. A huge swath of Canada, not covered by traditional wireless networks. It's a simple easy service that automatically connects with your existing phone.
This means people can text friends and family or text 911 in an emergency.
With Roger, satellite Rogers. Now covers over 2 and a half times more territory than any other Canadian wireless carrier.
Tony Staffieri: We're starting with the Beta Trial for all Canadians at no cost and like other carriers globally, we will expand to support apps data, invoice, including 911 voice services.
Tony Staffieri: Since launching the service 1 week ago, we've seen a terrific response from Canadians.
Tony Staffieri: In another Canadian. First we also started deployment of 5G Advanced Network Technology. This quarter Rogers was also ranked Canada's most, reliable 5G Plus network by unlike.
Tony Staffieri: In residential, we're seeing great traction with Rogers Xfinity, as we roll out our road map and introduce new features and Innovations.
Tony Staffieri: Rogers was the first Canadian internet provider to start rolling out Wi-Fi, 7 nationally starting in Calgary and Atlantic Canada.
Tony Staffieri: We have Canada's most reliable internet and now, we're leading the market to bring even better more reliable Wi-Fi, to more devices with the latest generation of Wi-Fi technology.
Tony Staffieri: Reliability matters most to our customers and we're pleased to be the most reliable across our wireless and W line Networks.
Speaker Change: Before I hand things over to Glenn, I want to take a step back for a moment.
Speaker Change: Rogers is a proud Canadian company with a record of investing in Canada to connect and entertain Canadians, dating back 65 years.
Speaker Change: Last month, the crtc issued, a decision that allows the 3 largest providers to continue operating as resellers on the networks of their competitors outside, their existing wiring footprint.
Speaker Change: The crtc ignored, the views of almost the entire industry, including small and Regional providers.
Speaker Change: The federal government is now reviewing the decision. The crtc policy effectively provides subsidized access to. Well, capitalized corporations to use our balance sheet and Capitol
Speaker Change: Its stifle is real competition based on real invested Capital that drives investment jobs and a thriving economy.
Speaker Change: Canada needs to incent and reward companies that make big bold bets. That's how Rogers was built. And now the federal government has a decision to make
Speaker Change: Let me be clear if the current policy remains in place, it will force Rogers to cut Capital programs and with it. Network construction jobs billions of dollars in network investment in our sector are at risk.
Speaker Change: Economic resiliency competitiveness and affordable access to Next Generation Technologies.
Speaker Change: The crtc decision does the opposite.
Speaker Change: As a company with a 65-year record of investing in Canada, we asked the federal government to lead and direct the crtc to do the right thing for Canada and for our economy.
Thank you. And let me now turn the call over to Glenn to take you through the quarter in more detail.
Glenn: Thank you, Tony and good morning everyone. Thank you for joining us.
Glenn: We are proud to report that Roger's second quarter results. Reflect continued, leading operational and financial performance.
Glenn: Combined with transformative programs on our major strategic initiatives of de-levering, our balance sheet and moving forward on consolidating and monetizing our Sports assets.
Glenn: Most critically though, we have, once again, delivered disciplined leading financial and operating performance across all of our core businesses in a highly competitive Marketplace.
Glenn: In Wireless, we continue to deliver service revenue and debit to growth combined with industry-leading margins, solid market, share, and lower churn.
Glenn: Wireless service revenue and adjusted Abita each grew 1% year-over-year driven primarily by subscriber editions, customer base management.
Glenn: And lower churn over the last 12 months.
Glenn: Our wireless margin is up 10 basis, points compared to the prior year at just over 65%.
Glenn: Reflecting our sustained emphasis on driving efficiencies while balancing moderating subscriber and service Revenue growth
Glenn: In the quarter, Rogers delivered, a combined 61,000, net new wireless subscribers.
Glenn: Down from 162,000 last year, again, reflecting the moderating market size associated with reduced immigration.
Glenn: Importantly. Sure, and improved, once more to 1%, reflecting continued Improvement around base management.
Glenn: Blended mobile phone. Rpu of 55.45 is down 3% from the prior year reflecting continued, competitive intensity, but also affected by lower outbound roaming, Revenue driven in part by reduced travel to the US.
Glenn: Also affecting arpu this quarter, we have reversed or added back in the remaining prior year base adjustments for approximately 100,000 subscribers who have been retained and transitioned off discontinued plans.
Glenn: Moving to our Cable Business, Service revenue is up 1% in the quarter, primarily reflecting steady retail internet subscriber growth and disciplined customer base management.
Glenn: Including moderating losses of video subscribers.
Glenn: Modest price increases introduced in the quarter have also contributed
cable adjusted Abita is up 3% year-over-year driven by the flow through of 1% service Revenue growth
Glenn: Combined with a 3% decrease in operating costs from our our ongoing cost efficiency initiatives.
Glenn: We delivered this increase even as we continue to invest in our advertising and marketing Investments around our new Xfinity platform.
As a result cable, margins are just over 58%.
A very substantial 150 basis, point increase from the prior year.
Glenn: Internet, net additions of 26,000 are level with the prior year and our performance Coast to Coast remains solid in a highly competitive market across all regions.
finally, in Roger Sports and media, we delivered very strong Revenue growth and improved debt
Glenn: Revenue is up 10% to just over 800 million dollars for the quarter.
Driven in part by Sportsnet success with the NHL playoffs.
Glenn: Combined with higher Toronto, Blue Jays Revenue.
And a very competitive division leading to Toronto Blue Jays team is carrying that success into the third quarter.
Glenn: Additionally, media saw higher year-over-year Revenue growth associated with the launch of the Warner Brothers Discovery Suite of channels.
Glenn: And finally media, Evita was up 5 million dollars. Year-over-year.
Glenn: In costs were up 9% reflecting higher programming costs.
Glenn: Most notably, including those related to the launch of the Warner Brothers Discovery Suite of channels.
Glenn: On a Consolidated level service revenue and adjusted Abita each group by 2% respectively year-over-year.
Glenn: To lower Capital intensity while still investing in our Network infrastructure and growth markets continued in the second quarter.
Glenn: Capital expenditures were down. 800 were 831 million down 17% from 1 billion in the prior year.
Glenn: And Consolidated Capital intensity is down, 370 basis points to 16% for the second quarter.
Glenn: Free cash flow of 925 million is up a very substantial 39% year-over-year.
Glenn: By the higher adjusted Abita lower Capital, intensity, and lower interest paid.
Glenn: Turning to the balance sheet at quarter end.
Glenn: We have delivered very significant de-levering while maintaining strong liquidity to fund our operating and strategic Capital priorities.
Glenn: We ended the second quarter with just under 12 billion dollars of available liquidity compared to 4.8 billion dollars at December 31, 2024
Glenn: This included 7 billion dollars in cash and cash equivalents and 4.8 billion dollars available under our bank and other credit facilities.
Glenn: The very substantial increase in our liquidity was driven by the late quarter. Closing of our previously announced 7 billion Equity investment, led by Blackstone and backed, by Leading Canadian institutional investors.
Glenn: We expect to distribute approximately 0.4 billion dollars annually to the Blackstone Le fund over the first 5 years of investment.
Glenn: Reflecting an effective cost to Rogers of roughly 6 and a quarter percent over that period.
Glenn: With a substantial offset to that amount driven by the lower interest expense resulting from the debt repayments.
Glenn: These distributions and the lower interest expense both commence from July 2025.
Glenn: And will be fully reflected in our third quarter reporting.
We have also benefited from organic delivering in the quarter from available free cash flow growth.
Glenn: As a result, our debt. Leverage improved to just over 3 and a half times.
Glenn: Roughly a full turn Improvement since year end and essentially returning Rogers to our prevailing leverage prior to acquiring Shaw.
Glenn: and with that we have achieved our Shaw delivering Target of 3 and a half times approximately 9 months ahead of our initial 3 year Target,
Glenn: Originally expected to be completed by the second quarter of 2026.
We remain firmly committed to maintaining our investment grade balance sheet while investing in growth in our core markets.
Glenn: With the integration and de-levering of the shaw transaction nearing completion.
Glenn: Our Focus now turns to the long-term capital funding of the additional 37.5% ownership stake in mlsc, which closed effective July 1.
Glenn: The 4.7 billion dollar purchase price was primarily, funded from bank credit facilities together with cash on hand.
Glenn: And we are now the largest owner and controlling shareholder of mlsc.
With a 75% controlling interest.
As Tony has highlighted.
Maple Leaf sports and entertainment operates. A world-class collection of Toronto, sports teams and entertainment assets and is 1 of the largest and most significant Sports ownership or organizations in the world.
Glenn: Starting with our third quarter report.
Glenn: Mls's Financial results will be Consolidated in with our media reporting segment.
Glenn: To help clarify the impact, from this transaction. Our press release this morning includes full year 2025 Consolidated, ProForm of view of the total scale of Roger Sports and media operations.
Glenn: On this basis, we estimate Roger's proforma, calendar 2025 Sports and media, revenue and adjusted. Evita would have been approximately 3.9 billion and 0.3 billion respectively had. We Consolidated mlsc with our Sports and media business from January 1st,
Our Focus now is on 2 key items in our Sports and media strategy.
Glenn: Delivering our balance sheet following the mlsc purchase.
Glenn: As we look to monetize and surface the very substantial unrecognized market, value of our Sports and media assets.
Glenn: Currently not at all. Reflected in Roger stock price.
Glenn: We will provide updates on our progress as appropriate.
Glenn: Finally moving to guidance, we have updated our 2025 Outlook to reflect the consolidation of mlsc from July 1st as well as the completion of the equity investment for the remaining 6 months of 2025.
Glenn: Total Service revenue is now expected to grow by 3% to 5% versus our prior Outlook of 0% to 3%.
Glenn: Adjusted Abita is unchanged at 0 to 3%.
Glenn: Which reflects the seasonality of mlsc results in the second half of the Year versus the first half.
Glenn: As noted a moment ago.
Glenn: The full calendar year, impact will be a creative to ebita in 2026.
Glenn: We expect Capital expenditures for 2025 to be at the very low end of our guidance range of 3.8, billion, to 4 billion dollars,
Glenn: And finally, we anticipate free cash flow of 3 billion to 3.2 billion dollars unchanged. And this includes the distributions of the equity investment transaction.
Glenn: Overall Q2 represents a significant quarter of progress on our commitments.
Glenn: Delivering strong, and consistent financial and operating performance across each of our businesses.
Glenn: Combined, with substantially reduced leverage at just over 3 and a half times.
Glenn: We have transformed and strengthened, our balance sheet with leverage restored, back to where we were prior to our investment in the Roger Shah transaction.
And we now have full control of a leading world-class collection of sports and entertainment Holdings.
Glenn: Our focus and priority. Now turns to the long-term capital structure in monetization of those highly valuable Assets in our Roger share price.
Glenn: We Believe Rogers has the best team in our sector.
Glenn: And the best set of assets for near-term Value creation.
Tony Staffieri: I want to join Tony and thanking, our team of dedicated employees for their tremendous efforts, and commitment to serving our customers and driving our long-term strategy and success.
Tony Staffieri: And with that Galen may we please commence with the questions and answers. Thank you.
Galen: Certain certainly.
Speaker Change: We'll now begin the question and answer session to join the question queue. You may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speaker-phone, please pick up your handset before pressing any keys to withdraw your question. Please press star then to
Speaker Change: Our first question is from Drew. Mcgreen with RBC. Please go ahead.
Drew Mcgreen: Yeah. Thanks very much and good morning. Um, first starting with you 1 just on the updated 2025 guidance. Uh, certainly we'll get the question. Um, I'm assuming there's really no change to the core Telecom Outlook, uh, in that guidance. Other than obviously hitting the lower end of the, the capex range.
Drew Mcgreen: I think that's right. Drew we've, uh, we're pleased with, uh, with where we are organically. In the year, we're showing a return to growth for cable, um, continued growth within Wireless. But they're within, you know, when you when you roll them up, uh, as well as success within media. We, uh, we are within the range is initially given the update really is for the inclusion of mlsc.
Drew Mcgreen: Okay, so thank you, and then just 2 others for me on the, um, on mlsc. So appreciate the, uh, the proforma.
Speaker Change: 2025 uh figures and obviously um the seasonality and you're confirming. Eva Doug creation for 2026. Can you at a high level? I I'm assuming we're not going to get mlsc guidance here and it's it's probably somewhat fluctuates year to year but how how how normal quote unquote do you see mls's 2025 performance? You know as we kind of try and model this going forward and and then second um Switching gears to Wireless on network Revenue growth. Um just I think about 0.6% in Q2. How does that?
Speaker Change: Friend, uh, for Rogers, as we get into the back, half, and into 2026. Thank you, sure. I'll, I'll start with the first question on mlsc. Um,
Speaker Change: The combined Rogers, Sports and media operations, including the consolidation of mlsc.
Speaker Change: The, the ProForm indication we've given for 25 is a, that's a, you know, that's a, a clean aggregation of where we are this year. Doesn't include anything, you know, aggressive in terms of synergies or anything like that, which you've seen us perform on synergies. Um,
but, uh, you know, that is just a straight aggregation of the businesses. It's a, it's a clean aggregation group.
Speaker Change: and then on wireless Revenue growth, um,
Speaker Change: We've uh, you know, with the the 1% growth that we've reported um that reflects the competitive environment we operate in, we're pleased that we're still, you know, um uh driving growth uh, across the business. We are still leaning in on cost efficiencies throughout our organization. I think through the second half. I expect that some of the price, uh, initiatives that we've undertaken in the year. They will continue on through the second half as well as continuing to manage. Um, you know, the customer base with with up uplifting and upscaling. Uh, customers through uh, premium service plans will continue to work, those efforts uh, through the the second half of the year.
Speaker Change: Okay, I'll leave it there. Thank you.
Speaker Change: Thank you. Uh thanks Drew. And just a reminder, if we could have uh just 1 question and 1 follow-up just so we can get through as many questions as we can. Thanks, next question, gayen.
The next question is from aravinda.
Morning. Thanks for taking my questions, um, with respect to, uh, you know, the, the monetization of your sports assets, which you alluded to in private. Paul's, is there any update in terms of how those discussions or thoughts are are
Speaker Change: Uh, trending. I mean, I know there's a number of, uh, possibilities number of routes. You can take, is there anything, um, incremental that you can set up provide here? Um, and I'll I'll just, uh, I'll I'll I'll I'll wait for the, uh, the answer and come back with the, uh, the follow up.
Speaker Change: Erinda. Thanks for the question. Um on Sports and media. It's clear that there is significant underlying value and um we are squarely focused as we put the assets together, I mean we've been very consistent on. This is monetizing it um to strengthen continue to strengthen our balance sheet. Um and the second part of our task is to surface, the value for shareholders, we continue to work through uh the various options and the good news is
Speaker Change: Um, we have very good options in front of us and uh, we're not in a position uh, today to share what those plans are. Um, but uh, to be clear, uh we know what the task is and uh, we're focused on those and at the right time. Um we'll share, obviously not only what we're doing, uh but the timing related to that. Uh, but right now it's premature
Speaker Change: Thanks and, uh, a quick follow-up on, uh, Cable ibida number. Obviously, you, you produced 3%, epidural done on on fairly flat revenues. Um, you know, the sub Trends seem to be holding up really well, especially in some sort of the market backdrop. Um, any kind of commentary around sort of the sustainability here. Uh and maybe also just touch a little bit on the cost reductions that you're seeing there. Thanks.
Urban: Urban I'll start with. Uh, I assume your comment related to both revenue and uh, Evita and cost. And so I'll start with the revenue piece and Glenn will speak to some of the efficiency initiatives, uh, that are driving, uh, fairly strong epidote growth in cable.
Urban: You're on the revenue side, just put it back in context. Uh,
Urban: Uh, not too long ago. This business was declining at, uh, 4% year-on-year rate and, uh, there are a number of things. We said we would do, and we've executed on that, and the team's done, just a terrific job in moving us to slightly positive growth in cable, and in particular, in service Revenue, uh, with respect to cable, and that's really been on, uh, the back of a few key initiatives, that we see. Um, continue 1 is the size of the market.
Urban: Uh, continues to grow, uh, the size of our Footprints. So notwithstanding the slowdown in home, builds and construction. There's still quite a bit in the pipeline. And so if you're to look at, uh, homes passed in the second quarter, it's close to 3% a year on year.
Urban: Like what we're seeing there um and that's been 1 of the contributors and we continue to see that we do expect towards the back half of the year and into the first part of next year, a Slowdown in the number of homes passed. Uh, but you can expect us to continue to perform strongly in subscriber market. Share.
Urban: The second relates to the expansion into, um, new territories with our 5G home, internet product, uh, riding on our 5G plus, uh, wireless network that continues to perform, um, strongly. And, um, we now have the ability to have our Xfinity products, uh, on that platform. Um, and so it's been a terrific opportunity for us to enter new territories. Um, uh, almost 7 million homes passed, uh, with a bundled offering um, particularly where we are already have solid uh Wireless market share.
Urban: We focused on.
Moving customers, um, to higher tiers. Uh, we have a terrific
Network coverage performance in terms of speeds, um, and reliability that I've talked about in the opening comments. Um, and that's resonating well, uh, with consumers. And so we see them continually moving up, uh, to higher tiers, uh, and that's helping us, um, with the, uh, Revenue side of things as well.
Urban: In small and mid business. We continue to expand our presence nationally and that's an opportunity that continues to be uh, and deliver uh, growth for us. Um, as part of, uh, as part of cable. And then finally, when you look to the actual product set and we always look to you know, all of the 4 PS Beyond just price um in our value proposition. But as we expand the suite of products, things like storm, ready our home monitoring product um all of those are contributing to a value proposition.
Urban: Particularly, when you combine it with the Xfinity video platform, um, that leads the marketplace and that's resonating, uh, with consumers. And in some cases, small businesses as well. And so it's all those factors.
Urban: That continue to give us confidence um, that we have uh, a Cable business uh, that will continue for this year to post stable to modest growth. Uh, but set sets us up well, um, for the following few years.
Urban: And then, the only thing I would add to all of that on the, on the cost efficiency side are vendors. There's no, there is no magic bullet here. It's it really is just attention to detail across the board on our costs. Um, starting with trying to, uh, to wring out some of the customer care costs with, uh, with focusing on improved, customer service, improved Network, reliability. Um, you know, it's the it's the, the day-to-day
Urban: Block and tackle the board. That's driving the cost efficiencies. And then the flow through with a 1% Revenue growth
Urban: Thank you.
Speaker Change: And thanks Orinda. Next question, gayen
Speaker Change: The next question is from Bata Levy with UBS. Please go ahead.
Great. Thank you. Um, can you talk a little bit more about the competitive environment in Wireless? I think you mentioned, we've seen some price UPS recently are there any early signs for back to school season and maybe any changes you're seeing in loadings? Uh as you lacked last year's impact from lower integration. Thank you.
Speaker Change: Thank you. Thank you. Um, there's 2 parts to it. I'll start with the second piece, which is, um, your question on loading. It's probably worth sort of giving you our perspective on size of the market, you know. Certainly our expectation is in Q2, um, the size of the net add Market is lower than last year, as a result of um, largely the factors we've talked about on previous calls, uh, which is the new to Canada category as we enter the back half, we'll start to lap, um, the introduction of some of the government policies that slowed that rate of growth. Um, we had previously indicated that we expected for the full year, the wireless Market to grow about 3%. Um, we're still looking in on
Speaker Change: Growth against that backdrop. We're pleased with our performance in subscriber market, share. Uh and so as we look to the back half of the year, you can expect us to continue uh, to perform well on the subscriber front and continuing growing subscribers.
Speaker Change: The second piece of it relates to arpu and that really gets at your question in terms of competitive intensity and the second quarter and particularly as we let off on the third quarter. Um, we've been really trying to B, uh, simplify our value proposition. We launched our simplified tears, um, with, uh, a better differentiation of the value proposition in each of them and it's early days, uh, since the launch of that in June, um, but it's resonating with the customers and we like the, um,
Speaker Change: Uh, the base management moves as well as the new acquisition moves that we're seeing in the marketplace. Um,
Speaker Change: We've reduced the level of promotional activity as well. Um, as we look to other factors that uh uh that prop up, the value proposition, including most recently, the launch of satellite. And so there are a number of other things that seem to resonate uh with customers that continue to help us improve our our approved profile um while still um obtaining uh strong share. Churn reduction has been a big factor in that in terms of overall uh, subscriber net.
Speaker Change: Ads and there's a number of factors for that as we continue to improve uh, things for the customer.
Speaker Change: And give them Less Reason uh to think about switching to uh competitor.
Speaker Change: Great. Thank you.
Thank you batcha. Uh, next question, gayen,
Speaker Change: The next question is from Stephanie Price with CIBC please. Go ahead.
Stephanie Price: Hi, good morning.
Stephanie Price: Curious, how you're thinking about Wireless roaming here. Uh, you mentioned it uh as a headwind, to service Revenue in the quarter and Roger, did recently announced a new suite of travel passes. So curious about the percentage of service Revenue that's coming from roaming here and and how you kind of think about the evolution of that roaming offering
Roger Shah: Uh, thank you Stephanie. I think the uh, um,
The reference really was to the in quarter, substantial decline in travel. I expect travel through the summer months as we as we complete the third quarter, um, we'll pick up there is still a, uh, a decline in travel for Canadians to the US but much of that has been displaced by international travel as well as as just travel within Canada. Um, on the international travel those roaming passes early days. But those are uh those are helping to uh to compete better with some of the uh uh competitive offerings from uh available both from Canadian operators, as well as uh International.
Roger Shah: Uh Sims that uh we find the passes are serving to be very convenient for customers. Um
Roger Shah: To, uh, to keep their number to keep their, uh, their their contact. But, uh, uh, manage the cost of roaming so early days. We expect it to be constructive and just part of the, uh, ongoing um, detail and managing our poo and service Revenue, growth and meeting customer needs, nothing more to add than that.
Speaker Change: Great, thank you. And then on the cable side, hoping we could dig a little bit more into the out of footprint expansion here and and fixed Wireless specifically just curious how much this is contributing to growth in the near term and how you think about the opportunity out of footprint longer term.
Roger Shah: Stephanie.
Roger Shah: Um, we're not disclosing, um, the split between what I would call in footprint versus out of footprint. Um, but what I can tell you is that the product is resonating, uh, extremely well, uh, across the country, including places where we do have wire line. Uh, and in some use cases, it makes sense for consumers, and small businesses, uh, to look to, um, the flexibility and the mobility of the 5G. Hi product. Um, as I said, the capability of the product continues to expand Network, slicing has been a significant contributor to um, expand uh, the use case and the Rel
Roger Shah: About its ability to penetrate those new markets, particularly on a bundle basis.
Speaker Change: Uh, next question. Gayen
Speaker Change: the next question is from Vince Valentini with TV Colin, please go ahead. Hey, thanks very much. Uh, hopefully these first 2 are just quick clarifications as opposed to uh being Paul's question list but you're giving us um mlse proforma and adding it into your revenue and ebit. Uh, so that means you'll consolidate the debt as well. Glenn, is there any material that we should be thinking about being added in Q3?
Speaker Change: No. The, in fact that it's generally offset by cash depending upon the seasonality and where you are in the year but no nothing, you know, even at its peak, it's it's inconsequential.
Vince Valentini: Perfect. Second the the 400 million Blackstone minority interest payments should be perfectly clear when we see your free cash flow in Q3, that's going to be above the line of free cash flow. We're not going to find another minority interest line with 100 million going out. The door below for your definition of free, cash flow.
Vince Valentini: We will, we will make it very clear. Um, it'll either be, you know, embedded in that number or made apparent in that number calculation. We will make sure it's very transparent advance for not hiding any of that in a nutshell. It's, it's roughly 0.4 billion dollars of, um, of distributions out and then the offsetting interest saving
Vince Valentini: Savings.
Vince Valentini: Net, it's about 50 million. A quarter of uh, of distributions over the interest, net interest savings, including the tax impact.
Vince Valentini: Running through the year, uh, roughly evenly through the year. So, um, you know, 0.4 billion of savings and roughly point or of, uh, distributions and roughly half of that in net savings on interest expense, net of the tax loss of the tax shelter, is that clear?
Speaker Change: Not really. I mean the interest savings are clearly going to be in your definition of free cash flow because interest is there the distribution. The distributions will be as well.
Speaker Change: It will be perfect. That's that's what we need to know. That's, that's great. Um, and then just call this more of a question is, um, you mentioned synergies on mlsc? Uh, are the synergies just naturally rogers's more efficient owner than the prior Consortium of owners or does the synergies only come if you merge
Speaker Change: you know, mlsc with the blue jays and and
Speaker Change: get rid of some redundant costs or or benefits of scale or or or something, and therefore you implying, that that is can happen sometime soon to put those 2 organizations together, even though you only own 75%,
Speaker Change: What I'm what I'm intending to convey is, it's a straight aggregation today. Um,
Speaker Change: Once we own, we will be able to drive revenue and cost synergies like we did with in, you know, the shaw transaction. Um, and look to find efficiencies they they perhaps do that already. Um, I expect that as we roll in the Toronto Blue Jays Roger center with Scotia Bank Arena, and the other venues within mlsc, and the sports teams within mlsc, we will find revenue and cost synergies. But that is not part of the pro forming that we are providing for 2025. So that's really all it was attending to convey it's a straight aggregation right now. Great, thank you, thank you. Yeah, thanks, thanks. Uh, next question, gayen
Tim Casey: The next question is from, Tim Casey, with CML, please go ahead.
Thank you, just following up on that. Um, Tony. I I know you, uh, are going to give us any details in terms of the options, you're pursuing. But can you give us, um, an outline of timing? So, when should investors expect
Tim Casey: More clarity. Is this something that you think you'd be able to outline this calendar or is that more a kind of a 2026 story and and maybe it you know it actually actually happens in 2027 is there anything you can just sort of provide some guide rails for us on timing of of when you'll be have more wholesome disclosure on on the plan?
Speaker Change: the short answer Tim is um uh and you're not going to like this but it really is um,
Tim Casey: uh,
Tim Casey: Uh, quite a bit of interest. Um, as you would expect as you've seen sales of, uh, interest in some of the sports teams, recently, uh, it's clear that, uh, the demand the interest in the asset is there, um, and values continue to increase. And so, uh, we're toggling with, um, the substantiv of the asset, the fact that it's growing, um, with us managing our balance sheet at the same time. And, uh, so we're being very thoughtful about how and when, um, uh, I wouldn't at the outside. Um, I I wouldn't, uh, say that, uh, this is a necessarily A 2027, I think. Um, something in the midterm is what you should expect, um, to get clarity on, um, but there's not much more in terms of timing, uh, and and the what uh, that we can expand on right now.
Speaker Change: All right, so when you say it's not necessarily 2027 like it, it could go later than that.
Speaker Change: Or did you mean?
Speaker Change: That's a little far out the opposite Tim that could be sooner than that. We've got a year and a half before we get to the end of 26 and uh this is a priority for us but we need to get it right.
Speaker Change: I appreciate that. Thank you.
Speaker Change: Thanks again. Thanks Tim. Uh, next question. Gayen,
Speaker Change: The next question is for mayor, yagi with Scotia Bank. Please go ahead.
Gayen: Great. Thank you, and congratulations on closing, both deals in a quarter. Um wanted to ask you uh Glenn uh just on a pro forma basis uh forward-looking leverage ratios. Uh what would you say it is currently including the transaction that you closed on uh, Blackstone and mlsc, please?
Gayen: So if if we factor in the 4.7 billion dollars that we paid to to pick up BCE, you you go from, you know, roughly 3 and a half times or just over 3 and a half times. And it is just over to um uh about 4 times when you factor in that 4.7 billion investment uh and consolidate the uh uh the full year rebate to impact from mlsc. Um,
Tony Staffieri: Going forward there will be organic reduction in leverage through uh the balance of this year um as well as as uh you know working over the next uh uh short to medium term. As Tony has said working on the the long-term uh capital structure for Rogers Sports and media including mlsc. So you know long
Tony Staffieri: Long term. I'm not going to start guiding for that. Um, but expect to see continued emphasis on driving, um, the uh, the delivering just through organic growth, we've seen, uh, um, as part of that in July, uh, we had a, a bond tender program. That's, uh, 3 pay from the proceeds of the Blackstone deal, uh, 3.1 billion face amount of, uh, Securities long-term and they were trading below par, um, we would not ordinarily, have taken those, uh, Securities, uh, repaid them early. But we don't need that portion of our debt long term because of the Blackstone funding. And so, we took that 3.1 billion down at a cash cost of roughly, um, 2.85 billion dollars, saving a quarter billion dollars of of debt um that that effectively disappeared.
Tony Staffieri: From our balance sheet as a result of that repayment. Um,
Tony Staffieri: We are. And I'm I'm lowest to raise it because it's been a long time, uh, coming. But we are still working on, uh, real estate and uh, and other, you know, um, uh, Surplus assets and I expect, we'll have proceeds from those over the next half year. Um and so all of that together with the organ organic growth, we're still working on the details to de-lever.
Tony Staffieri: and uh, that remains an emphasis
Vince Valentini: Into an environment where, you know, uh, there's some more stability in the price in general. Uh, so just to put this in context uh the the 3% decline in our food that you had in the quarter does that how much of that is impacted by the reclassification, on a prospective basis of your 96,000 postpaid subscribers? And second of all is as we look into 2026 uh Tony how how do you feel about the pace of improvement in our poo? Thank you.
Vince Valentini: Start with, um, the last part. Um,
You know, as we look to, uh, there's a couple of things we look at marijuana is, um, the value proposition particularly for us on the rogers's Brandon, uh, continuing to focus on that. And we're pleased with, um, the growth ads as well as the base management tactics. Uh, that we've employed to continue to, uh, move that in in the right direction. Um, we've made a number of pricing adjustments over the last month, um, as I said earlier to simplify strengthen and stabilize, uh, pricing for us. And uh, and hopefully for the industry, and um, it's only been about a month. And as we head into back to school, we sort of kick off the busy period. Um, we'll need to uh, assess the the market dynamics. But as I said earlier, uh, what we're seeing is, um, less of
Focus, uh, of the industry on volume, just given the reality of where the industry is at, um, and more on, uh, focused on getting pricing and the value proposition, right? Um, and so, as we look to the things we're doing to make, uh, the value proposition of our higher tiers on the Rogers brand, more compelling. Um, we like, the, the volume shift that, uh, we are seeing. And so, uh, we're seeing good opportunity to, um, continue to strengthen our poop in the back half and certainly into next year, we touched on roaming. And obviously that's been a headwind. Um, roaming has, um,
Vince Valentini: Been somewhat deflationary in the sense that as Glenn, uh, mentioned earlier, uh, there are alternative solutions for roaming. And so part of our approach in that is, um, how do we balance off pricing with, uh, volume. And we're hoping some of the more recent tra tactics that we put in place. Um, give reason for our customers. Uh, once they travel to the US or elsewhere, um, to actually continue to use, um, the most convenient alternative they have, um, and make that, uh, affordable for them, uh, and convenient for them. And so we expect volumes on the roaming front to pick up, um, and reverse the trend that we've seen over the last little while, um, and so that will, uh, continue to help as well.
Vince Valentini: With the launch of satellite. Um, while it's very new, uh, We've priced it so that the, um, value proposition for that, uh, particular add-on feature, um, is uh, is easy and compelling and and we hope that uh um and expect uh, that that will get uh widespread um uh attraction and add-on uh, to the plans. Um, I'll pause there, there are a number of other initiatives. We continue to work on and that you'll see us, uh, launched in the marketplace. But I would say overall lading up to, um, a continued focus on strengthening our poo. Um,
Vince Valentini: Combined with uh strong subscriber leadership. Um and that will continue to propel overall Wireless growth.
And then mayor on your question, on the, on the base adjustments, really, the reference there on the roughly 100,000 subscribers that we've, we've, um, uh, restored back into the customer base. Those are now reflected back in all the, the calculations. It's now a clean calculation. So, over the last several quarters you, uh, you would have been running your calculations with, I think, uh, generally running around, uh, a 1% bump in our reported churn, uh, impact. Um, from those basic adjustments are reporting is now perfectly clean. There's, there's no noise from uh, uh, from the removal of any of those bases.
Speaker Change: Investments, thank you very much.
Speaker Change: Great. Thank you, mayor. Uh, next question, gayen
The next question is from Jerome do with the Jardin, please go ahead.
Regards to to upcoming regulatory decisions. Uh, but still there, there might be some some potential for, for cable capex. For Duncan in the life of the uh, the advancing integration of the of the shaw assets. Um, any chance you can discuss about uh, the potential for for where cable capex could stand uh in a couple of years. Uh maybe like what what's done at a recent uh, industry event. Thank you.
Jerome: Jerome. Um,
Jerome: similar to before, where I indicated, I wasn't going to guide for 26. I won't guide for 2 years out either, but we've been clear. Um,
Tony Staffieri: In in all of our commentary from, uh, approaching and and then post-closing of the Roger Shah transaction that, um, we do, uh, intend to drive lower Capital, intensity within, uh, cable. You're starting to see the effect of of those efforts through, you know, calling down our Capital, spend to the, uh, the very low end of guidance in this year. Um, I expect those, you know, those efforts to continue as we um, as we prioritize our investment and uh uh still driving growth, uh, still investing in infrastructure. And that's why, you know, uh you heard in Tony's comments, how important it is that uh uh, that the regulatory environment remains supportive of that.
Tony Staffieri: But uh, Our intention is to continue to invest in growth, but that the capital intensity will lighten. I'm not going to give you a specific number. Um, other than to acknowledge that, uh, the cable Capital intensity in particular is, uh, is higher than it needs to be pleased with uh, with the progress through the second quarter on uh, overall Consolidated intensity. But uh, we still have more more work to do there in the in the coming years.
Speaker Change: Okay, thank you. Thank you. All right, thanks Jerome. Uh, next question Galen
Galen: The next question is from Matthew Griffith with Bank of America. Please go ahead.
Hi, good morning, thanks for taking the question. Um, so first on Mobility, um, I I multi-line discounts, aren't, you know, necessarily new, but I think they're more generous than they have been in the past and I was just curious to get your thoughts if you can share them on. You know, how you think that might impact, um, our approval going forward and, uh, how it might impact service Revenue maybe in the different direction. Um, going forward, if they happen to be, uh, positive and have good. Um,
Galen: Train reduction kind of attributes and then secondly, synergies related to the mlsc deal have come up a number of times.
Speaker Change: Is there anything you can share on what near-term expectations or near-term? Timelines could be for Synergy realization whether it be on the cost side initially first. Uh, that we could expect you to execute on. Um, would be helpful. Thank you so much.
Speaker Change: Actually the question. I'll, uh, I'll start with the uh, first 1. Um, we launched. Um, you know what I would call um, a robust multi-line strategy and it's not dissimilar to what you saw in the US market several years ago. Uh, if we were to look at, um, lines per account. Um, we're relatively under penetrated here in Canada, and as we look to some of the market dynamics, particularly in the 30- to 40 dollar price points. What we do know is that many of those um a significant uh portion of those uh are second third and fourth lines. Um and so what we've done is focused on uh, tiering so that there are multi-line discounts. And so you should think about while, uh, in aggregate, uh, certainly that's dilutive to arpu. It is uh, incremental service revenue and so, uh, it's just something that we think makes sense.
Um, to the extent that we can get the right price points and make third and fourth line, very competitive in the 30-40 range. Um, then um, then we think it's uh, it's a good strategy. Um, and so you should expect and 1 of the things we'll talk to um, in future. Quarters is, uh, average number of lines per account and, uh, see how that evolves. It's still early days. Um, but, uh, transparently that's the, uh, the rationale and the tactic for that.
Speaker Change: Talk about uh, synergies. Um, what I will tell you is we have a very good track record that you saw being executed in the shot transaction of identifying material synergies. We went into this transaction with a view that we could execute on very strong synergies across our, uh, Sports and media properties. And, uh, um,
Speaker Change: you know, certain things that need to happen, uh, before we can execute on those, but, um, the thinking the planning, uh, is underway and, um, at the right time is we, um, execute on. Those Andor are closer to executing on them, uh, we can be more specific, uh, but right now, um, you know, let's uh, put it in perspective, we just closed. Um, the BCE transaction and um, in in early Q3, and so we've uh, provided an initial view of what it means for this year, uh, to be helpful. Um, but uh, too soon to talk about um, specifics in terms of uh, outer periods uh and Synergy opportunities.
Speaker Change: And I have, I have nothing to add to that. I think uh I think Tony's captured at all. It's premature.
Speaker Change: Okay, that's helpful. I just I wanted to make sure we wouldn't be surprised the future quarters and it sounds like we won't. So I appreciate the caller. Thank you.
Speaker Change: All right, thanks Matt. Uh Galen, we have time for 2 more questions.
The next question is from David mcfadin with chrome Mark Securities. Please go ahead.
David McFadin: Thank you. Yeah, a couple questions. Um.
David McFadin: Really related to Roger satellite. I was wondering if you could, uh, give us some idea on the product road map. Like when you might be able to offer a voice and data and then, secondly, I was just wondering what your thoughts are on the ability of the incremental Revenue that you expect to drive from Roger satellite.
David McFadin: Like its potential to arrest the RP decline in Wireless.
David McFadin: Thanks.
Speaker Change: Thanks for the question, David. Um, I'll start with the first part in terms of the actual capability. Um, that'll be dependent on um,
Speaker Change: Uh, the satellite provider and the evolution of, uh, their satellite launches capacity. Um, but directionally think about it as, um, you know, sometime later in 2026, uh, could be sooner, uh, but that's sort of our estimate, um, as we work with our satellite Partners, uh, in terms of the technology and when, uh, voice and data, uh, could come on stream.
Speaker Change: Stream.
Um, and then the second part of your question relates to, you know, expected upside in Revenue, um, too early to predict. I mean, we went into this, um, we think the use case for Canadians is huge. Uh, We've um, launched it as a beta product right now. And um, not dissimilar to the way you've seen it launched in other parts of the world, um, and it's free and it's available to all Canadians. Um, and so once they sign up, um, uh, they can start using the service now, uh, in terms of texting and 9111 texting in October, um, it will move to a a pay for service. We priced it at $15, uh, per month but customers who, um, signed up for the beta period, um, it'll be ten dollars. So they'll receive a $5 discount, uh, for a year. Um, and as I said, it's uh, available to all Canadians, irrespective of, um,
Speaker Change: Which mobile provider uh they're on today. Um, we just think the significance of uh this technology. This is big uh for a vast country like Canada. Uh is something that more availability can only be better um for us and uh and for the nation and so time will tell uh, in terms of the take up rates, um, it's still, uh, we're only a week into it, but I will tell you, you know, for 1 week into it the sign up has been uh has been strong.
Speaker Change: and, and if I can just add a follow-up, um,
Speaker Change: can you give us, can you disclose to your, uh, partners are on this. Like, I thought it was primarily starlink are there, others?
Speaker Change: But as the industry in terms of satellite connectivity continues to evolve, you can expect Rogers to partner with whatever the best solution is and bring that to um, our customers and Canadians.
Speaker Change: Okay, all right. Thank you.
Speaker Change: Thanks David and 1 last question, please gayen.
Speaker Change: Certainly, our last question is from Patrick ho with Morgan Stanley? Please go ahead.
Speaker Change: Hey guys, thanks for squeezing me in uh just 2 questions for me. So on cable, I noticed that arpa was down 3% for the quarter. Could you help us unpack? What exactly drove this change within your different products, segments within cable and how we should think about this trending going forward? And then secondly uh, so some of your competitors have been getting into the data center space. Any plans for Rogers to expand its Core Business Beyond just traditional Wireless and cable.
Speaker Change: Uh, and into Data Centers to drive, further growth. Thank you.
Speaker Change: On, uh, on arpa. There's, there's nothing specific to call out. There's, you know, competitive forces ongoing. Um, we have, uh, modest price initiatives that, uh, that are helping to, uh, to restore the overall Revenue growth. Um, but it's, it's the traditional, you know, competitive forces combined with, uh, ongoing video trimming, um, uh of uh, video subscribers. We've
Speaker Change: Moderated that, but it continues to decline. Um, and so it's a it's a mix of of what you've seen historically within, uh, within the Core Business. Um, we have a data center business. Uh, no secret. We've been uh, looking at potentially, uh, uh, divesting that business, those, uh, considerations are ongoing. Um, there has been a, uh, uh, a number of, uh, reports in media of uh, uh, AI related and data center related Investments across the Telecom sector. Um, I'll just, uh, uh, you know, candidly and succinctly. Say, um, I have absolutely nothing to, uh, to add in that regard. Um, we, we continue to focus on our, uh, uh, our Network infrastructure, Wireless and Wireline. Um, our Media Sports and media, uh, business.
Speaker Change: They uh, they remain our, our core uh points of emphasis and and concentration.
Speaker Change: Thank you, Patrick, and thank you. Uh all for joining joining us. Uh IR is available for follow-ups as well. Uh have a great day.
Speaker Change: This brings to a close today's conference call, you may disconnect your lines, thank you for participating and have a pleasant day.
Speaker Change: Hold on. Sorry.