Q4 2025 Cogeco Communications Inc Earnings Call

Speaker #1: Your Patrick . Good morning everyone . For Cogeco Communications , the fourth quarter marked the end of year one of our three . Year transformation program focused on synergies , digital analytics , network expansion , and wireless .

Speaker #1: Much , but anything you can share would be interesting .

Speaker #1: We added 10,800 homes , during the quarter , mainly through fiber to the home under a network expansion program , including those related to the Ontario subsidized program in the US , breeze lines revenue declined by 9.2% in constant currency due to the cumulative decline in the subscriber base over the prior year .

Speaker #1: And we're pleased to report that we're on track . Year one was pardoned , mainly focused on OpEx and CapEx synergies , and we delivered on those targets .

Speaker #1: As you can see by our 110 basis points year on year , improvement in adjusted EBITDA margin and our $38 million year on year increase in free cash flow in constant currency .

Speaker #1: A smaller rate increase in versus the prior year , along with a competitive pricing environment . The 6300 decline in internet subscribers was an improvement over the previous quarter , while internet subscriber additions in Ohio recorded their first ever positive growth of 1300 new subscribers .

Speaker #1: It's worth mentioning that the CapEx efficiency enabling our growth in free cash flow comes mainly from maintenance synergies . As we're continuing to make important investments in growing and enhancing our networks .

Speaker #1: Adjusted EBITDA declined by 7.9% in constant currency due to lower revenue , offset in part by lower operating expenses driven by cost reduction initiatives and operating efficiencies .

Speaker #1: A recent report by Ookla for example . Noted a significant increase in our Canadian upload speeds as a result of our ongoing network upgrade initiative .

Speaker #1: Note that last year's comparative Q4 period was the highest EBITDA level of all quarters . For that year , largely due to the reorganization of our operating entities .

Speaker #1: And in the U.S., we've upgraded over 35,000 of our cable doors to fiber during the fiscal year. In addition to adding nearly 50,000 new homes fast across our North American footprint.

Speaker #1: Now , turning to our consolidated numbers for Cogeco Communication at the consolidated level , revenue in constant currency declined by 5.3% and adjusted EBITDA declined by 3.3% .

Speaker #1: Years two and three of our transformation will now add more emphasis on our top line performance . As per our original plan . This will include additional investments in growing previously under-developed sales and marketing channels in the US .

Speaker #1: This result is mainly due to the revenue pressure in the US , partially offset by strong execution on operating efficiencies , as well as customer growth in Canada .

Speaker #1: In the context of the evolving competitive environment . As well as scaling wireless in Canada . By lower operating expenses resulting from a cost reduction initiatives and operating efficiencies .

Speaker #1: Diluted earnings per share declined by 6.2% in reported currency , mainly due to lower EBITDA and higher financial and restructuring costs . Capital intensity was up 20 , was up at 21.8% versus 20.4% last year .

Speaker #1: Free cash flow in constant currency decreased by 27.4% in the quarter , but was up by 7.9% for the full year . Our net debt to adjusted EBITDA ratio was 3.1 turned at the end of the quarter , unchanged from the level reported in Q3 .

Speaker #1: We have increased our dividend by 7% , having declared a quarterly dividend of 98.7 cents per share . And as for invention , with anticipated strong free cash flow in fiscal 26 New .

Adjusted EBITDA is anticipated to decrease between zero and 2% versus last year as we continue to face revenue pressures in the U S and are investing in new sales and marketing capabilities, especially in the U S. As part of our three year transformation program.

All while generating additional operational efficiencies.

We will also incur some costs related to our Canadian wireless operations, including some it costs recognized in adjusted EBITDA, starting in fiscal 'twenty, six and I'll get back to this in a second.

Turning to our capital expenditures, we are expecting to spend between $560 million and $600 million, including a $100 million to $140 million in growth oriented network expansions.

<unk> and the capital intensity of between 19, and 21% or 15 and 17% excluding those network expansion projects.

Free cash flow and free cash flow, excluding network expansions are expected to increase between zero and 10% compared to fiscal 'twenty five.

Our full year current tax rate is forecast to be 11, 5%.

In terms of segments and important item to note is that beginning in Q1 of fiscal 'twenty six Canadian mobility, which had been included in our corporate segment. During the startup phase will now be recorded in our Canadian segment, given the recent full scale launch of the product.

This reclassification will have no impact on the consolidated level and comparative segments for the prior year.

And we will also adjust basically the results for the prior year for that in addition, our it costs related to Canadian mobility, which were recognized below the EBITDA line as cloud computing costs in fiscal 'twenty five during the implementation period will be recognized as opex within the Canadian.

Segment, starting in Q1 as those systems are now in operation.

So overall, we expect the fiscal 'twenty six Canadian segment's adjusted EBITDA to be impacted by about $20 million versus what we reported in fiscal 'twenty five.

Of that $11 million is simply the reclassification from corporate Opex to the Canadian business and the balance is moving from below the EBITDA line to Opex. That's basically the it systems I was relating to.

We nevertheless expect the Canadian operations growth to largely absorbed additional costs in fiscal 'twenty six.

Through customer growth and operational efficiencies.

As it relates to Q1, we expect consolidated revenue and adjusted EBITDA to decline in the mid single digit range in constant currency.

We don't expect a material sequential improvement in our year over year adjusted EBITDA trends starting in the second quarter as we benefit from already quantified cost savings rate increases and improving U S customer trends.

More specifically in the U S. We expect the Q1 year on year adjusted EBITDA variation to be slightly better than the Q4 variation that we just reported followed by solid gradual improvements as we benefit from easier year on year comps. In addition to the aforementioned factors.

At the consolidated level in Q1 with our restructuring program largely completed we do not expect material acquisition integration and restructuring costs in the quarter.

And we expect our financial expense to about to be about $10 million less than in the prior quarter and Q4.

While our depreciation and amortization expense should be about 4 million lower than in Q4.

Finally, I'd Cogeco, Inc. We have issued the same financial guidelines as Cogeco communications with the exception of net capital expenditures and now Fred and I will be happy to take your questions.

Thank you, ladies and gentlemen, well now begin the question and answer session did you do you have a question. Please press star followed by the one on your Touchtone phone, you'll hear a prompt that you had or some range should you wish to decline from the polling process. Please press star followed by the two if you are using a speaker phone. Please lift the handset before pressing any Keith one moment.

Thanks for your first question.

Your first question comes from Arab Linda Cutler Apache with Canaccord Genuity. Your line is now open.

Good morning, Thanks for taking my question.

Just wanted to pick up.

On the sort of the comments around the it spend in wireless.

More broadly given that you've launched now and it's deployed across the footprint.

Are you able to sort of update us on sort of the total.

Packed on Canadian EBITDA or the expectation that's built into fiscal.

2026.

I know, Bob you talked about the $90 million incremental piece my team, but more broadly given sort of the pricing changes you've done just wanted to see how much of a drag it could create in the first half or even for the full year maybe stop there.

Sure.

Good morning, So yes, so just the reclassification of some opex from corporate to see to our Canadian business and moving some it costs from below the line to above the other online will create pressure of about $20 million or Canadian numbers, obviously, it doesn't change anything.

Especially for free cash flow if you look at the full company, it's a REIT to reclassifications.

Yes, we've analyzed it and we see them materially lower churn in the U S. From customers also taking wireless from US now we have to be cautious because some of that is simply self selection, so customers, who like us better less likely to churn are more likely to buy wireless anyways.

The churn differences so pronounced that we believe at present time that theres, a benefit above and beyond our self selection is it relates to churn benefit from wireless.

Okay. Thank you for it and then lastly, just a bigger picture question on the <unk>.

26 guide.

I don't think you've talked about what Q1 would be like.

Is it fair to suggest that our guidance still assumes a close to mid single digit decline in the U S. As far as EBITDA is concerned and then a little bit of catch up in Canada or is it low single digits, but the geographies.

Yes.

Frédéric Perron: Next year we have an opportunity to do rate increases in some segments that were not captured before. It doesn't mean we'll do very large rate increases, but there are some segments that were previously not fully exploited, and therefore we do see a bit of revenue upside from that starting in the second and third quarter.

Operator: Thank you. I'll pause the line.

Next year, we have an opportunity to do rate increases in some segments that we're not captured before. So it doesn't mean, we'll do very large rate increases, but there are some segments that were previously, not fully exploited and therefore, uh, we do see a bit of Revenue upside from that starting in the second and third quarter.

Thank you. I'll pause the line.

[Company Representative]: Your next question comes from Vince Valentini with TD Bank. Your line is now open.

[Analyst 1]: Hey, thanks guys. Thanks for the extra detail on the wireless Canadian impact. Can I ask one other item on that? You seem like you had a very strong start out of the gates. As you even say, you slowed down your marketing and pricing efforts as a result of that. Given all the customers you had out of the gates taking a free line for a year, you still have to pay the wholesale fees on that. Is that not a potential incremental drag on your EBITDA in the Canadian segment in 2026 as well?

Your next question comes from Vince. Valentini with TD Bank, your line is now open.

Hey thanks guys. Thanks for the extra detail on on the wireless. Canadian net. Uh, impact. Can I ask 1 other item on that is

Patrice Ouimet: Yeah, by the way, we have different types of products, so we do have paying customers as well. This is linked also with them being customers with Internet and maybe other products as well. The numbers are still small. We're starting. When you compare it to the size of our business in Canada, it's factored in in our guidance. I wouldn't say it's a lot. We have a bit more marketing costs we're doing obviously as we launch, but not that material.

Seemed like you had a very strong start out of the gates, as you even say, you you slowed down your your marketing and pricing efforts as a result of that. Given all the customers you had out of the gates, taking a free line for a year, you still have to pay the wholesale fees on that. Is that not a potential incremental, drag on your your IBA dine in the Canadian segment in 2026 as well.

Yeah, it it's uh, well, by the way, we we had different types of products. Uh, so we we do, uh, we do have, uh, paying customers as well. Um, but and and again, this is linked, also with, uh, with them being, uh, uh, customers that with internet and maybe other products as well. Um, but the numbers are still small, right? We're starting when you compare it to the size of our business and, uh, in Canada.

Frédéric Perron: Yeah, Vince, the launch promotion was something that was budgeted and is in our forecast. We thought it was an efficient way of getting started. We consider it almost a marketing investment. As you've said, we've already pulled back, and at this time, the free line for a year is only available on our talk and text plan without data, which very few customers take.

[Analyst 1]: Okay, thanks. Sticking with Canada and the more disciplined pricing environment you're seeing, does that not open up some opportunities for rate increases on your platform? I know you don't like to talk about them before they're announced to your customers, but is there any broad sense you can give us as to what you've baked into your guidance for ARPU growth in Canada?

It uh, it's factored in at our guidance but I wouldn't say it's uh it's a lot. We have a bit more marketing cost. We're doing obviously as we launched uh but not that material. Yeah. Vince the um the launch promotion was something that that was budgeted and is in our forecast. We thought it was a an efficient way of getting started, so we can consider it almost a marketing investment. But uh, as you've said, we've already pulled back and at this time, the free line for a year is only available on our talk and text plan that without data which very few customers take.

okay, thanks sticking with Canada and the more disciplined pricing environment you're seeing, does that not open up some opportunities for rate increases on your platform and

Patrice Ouimet: Yeah, I think we'll stick with our policy of not talking about it in advance, but I would say generally we do have some price increases that are reasonable in our different products, especially for video and Internet. Normally we put out guidance like this. We do have an expectation when they obviously don't cover the full year and they're put through during the year. We did have some recently that will impact the full year, but it varies by product.

I know you don't like talked about them before, they're announced to your customers. But is there any broad sense? You can give us as to what you've baked into your guidance for, for our growth in Canada.

Yeah, so I I think we'll stick with our policy of not talking about it in advance, but I would say, generally we do have some price increases that we, that are reasonable, uh, in our different products, uh, especially for, uh, video and internet. Um, so normally we would, we put out guidance like this. We do have an expectation when they, obviously, they don't cover the full year. Uh, and um, as they're put through during the year, we did have some in, uh, recently

Frédéric Perron: I'll just add beyond the rate increases that we do, obviously a reality of our business for the past many years is that new customers come in at a lower ARPU than existing customers, but with a more rational pricing environment, we're seeing the ARPU of new customers ticking up a bit in recent months. There's also the stickiness at the end of promotions, which has the possibility to increase as customers are not presented with as aggressive offers from competition.

Uh, that will uh impact the full year but uh, it varies by product.

[Analyst 1]: Okay, I'm going to switch to the U.S. You added, correct me if I heard this right, you added 35,000 new fiber-to-the-home passings just in fiscal 2025.

And I'll just add beyond the rate increases that we do obviously a reality of our business for the past many years is that new customers come in at our lower RPO and existing customers but with a more rational pricing environment is we're seeing uh drpu of C Doug new customers picking up a bit in recent months. There's also the stickiness at the end of promotion which has the possibility to to increase uh as customers are not presented with as aggressive uh offers from competition.

Okay.

As long as you switch to the US, you added, correct me. If I heard this, right, you added 35,000. New fiber, to the home passings in 20 in just in fiscal 2025.

Frédéric Perron: The comment that I made in my section of the introduction is that we have upgraded 35,000 doors from cable to fiber.

[Analyst 1]: Right. That's not a total, that's the incremental in the fiscal year.

The, the comment that I made, uh, in my section of the introduction is that we have upgraded, uh, 35,000 doors from, uh, from cable to fiber.

Frédéric Perron: Correct.

Right? So, but that was, that's not a total. That's the incremental in the fiscal year.

[Analyst 1]: Can you give us any sense as to what the total fiber passings are now? Secondly, to get that extra 35,000, was that using the new technology that you sort of talked to us about last November?

Correct.

Frédéric Perron: The second part of the question, the answer is yes. That is why you still see good capex from us.

So, 2 2 questions on that. Can you give us any senses to what the total fiber passing are now? And and secondly, to get that extra 35,000? Was that using the new technology that you? You sort of talked to us about last November,

Patrice Ouimet: Yeah. We'll continue this in fiscal 2026. Our program to selectively upgrade certain areas in the U.S. with fiber-to-the-home, as it is a good cost benefit to us with this new technology. It doesn't apply everywhere, but there are some areas where it does a lot of sense. This will continue this year and probably a little bit in fiscal 2027. Again, we can absorb this in our CapEx envelope. Overall, to your question, we don't disclose specifically our fiber component. As you know, most of our network is fiber, but the last mile obviously is we're still predominantly on coax, and it's generally more efficient to upgrade the coax than do an overbuild as we're doing selectively in the U.S. I would say overall, between the network expansions that we're doing, those are generally in fiber-to-the-home.

The second part of the question, the answer is yes. And that's why you still see a good capex from us.

Yeah, and you will uh we'll continue this in fiscal 26. So our program to selectively upgrade certain areas in the US with fiber to the home.

Patrice Ouimet: We've been doing this for more than 10 years, and the selective upgrades, it's still a small portion of our network that is fully fiber-to-the-home. Again, as we upgrade coax, we're able to deliver in many regions actually two gigs even on coax by doing minor. We're not even on DOCSIS 4 yet, and we offer two gigs in several regions in Canada. The future will be a mix of fiber-to-the-home, upgrades of coax, and there's different ways of upgrading that. Eventually, we'll have the Access 4 as well. We did not rush it as we're able to generally have much faster, faster speeds than what customers want. The cost benefit is better for us to do it this way.

Technology. It doesn't apply everywhere, but there's some areas where there's a lot of sense. Uh, this will continue, uh, this year and probably a little bit in fiscal 27. Um, again, we can absorb this in our capex envelope overall, to your question, we don't disclose specifically our fiber, uh, component as, you know, most of our network is fiber. But the last mile obviously is, uh, we're still predominantly on coax, um, and it's generally more efficient to upgrade the coax than do, uh, an overbuild as we're doing selectively in the US. So I would say overall between the network expansions that we're doing. Those are generally in fiber, to the home. We've been doing this for more than 10 years and the selective upgrades, it's still, um, a small portion of our Network that is fully, uh, fiber to the home. Um, but again, as we up upgrade coax, we're able to deliver, um, in many regions, actually, 2 gigs, uh, even on coax, uh, by doing minor. We're not even on Doc.

[Analyst 1]: Sorry, I'm going to ask one more on this because I don't think it's well understood by people, the cost per home passed when you did those 35,000 because of that new, more efficient technology. Can you give us an update on what the average cost was per home in terms of the CapEx?

For yet. And so we offer to gigs in several regions in Canada. So, this would say, the future will be a mix of fiber to the home, uh, upgrades of coax and there's different ways of upgrading that eventually. We'll have the access for as well, but we did not rush it as we're able to generally have much faster speeds than what customers want. So the the cost benefit is is better for us to to do it this way.

Sorry. Sorry. I'm gonna ask 1 more in this because I, I don't think it's well understood by people. The the cost.

Patrice Ouimet: Yeah, it varies by region, but I would say it's generally probably around $400 or so. There are some that are less expensive than this and some more. It's not just one number, and the more dense it is and depending on how the structure of the network is, it is. It is fairly effective. When you look at this versus doing your traditional fiber-to-the-home with the traditional method, you know the numbers for competitors. Generally, this is a lot higher. This is what we do in network expansion as well. When you look also at going through the coax route all the way to DOCSIS 4 with high splits, you can get to these numbers easily as well over time with the CPE changes. That, I would say, is probably a good average to use.

Per home passed when you did those 35,000 because of that new more efficient technology. Can you give us an update on on what the average cost was per home to in terms of the capex?

[Analyst 1]: Troy, Patrice, we're talking about the U.S. segment. When you say $400, are you talking U.S. $400?

Yeah, it it varies by region, but I would say it's generally, uh, it's it's um, probably around 400 dollars or so. Um, but really there's a there's some that are less expensive than this and some more. So there's a it's not a just a 1 number. Um, and the more dense it is and depending on how the structure of the network, is it is, um, yeah. So it is fairly effective when you look at this versus doing the traditional, um, fiber to the home, with the traditional method, you know, the numbers for competitors. So generally this is a lot higher. This is what we do in network extensions as well. And um, and when you look also at going through the coax route, all the way to doxis 4 with high splits, you can get to these numbers easily as well over time with the CPE changes. So um so yeah so that that I would say is probably a good average to use.

Patrice Ouimet: Yes, it is U.S. dollars.

Troy Patrice when you, we're talking about the US segments, and you say 400, are you talking 400 US dollars?

[Analyst 1]: Okay. Last, just free cash flow. I'm sure others are asked about this too, but just in general sense, I want to make sure included your guide, excluding rural projects, you're guiding to like $625 million to $690 million of free cash flow this fiscal year. You're saying you can only do $600 million in fiscal 2027. Is that because you found new expansion projects so that that bucket of capex doesn't go to zero? Are you deliberately telegraphing that other items within free cash flow are going to go negative, like whether it's EBITDA or cash taxes or interest or something else?

Yes, it is US Dollars. Yeah, okay.

Patrice Ouimet: No. The other question you could have asked is whether the 600 is actually too low a number. I would say 600 we think is a good number to use. Obviously, we'll see where we are a year from now when we provide guidance for fiscal 2027, but that's still our plan right now. Within our expansion numbers we have these bigger projects that are generally subsidized. There's still a lot going on in Ontario this year which will finish in 2027. There shouldn't be that much CapEx in fiscal 2027 related to that. That being said, we are generally building in territory as well. There's always new construction, new neighborhoods, new streets. This will continue eventually. We will not break it down as we're going to be done with the bigger project. You'll just see one number. It will not be meaningful to split it out.

And last, um, just just free cash flow. I'm sure others are asking about this too, but just in general, since I want to make sure you include your your guy excluding rural projects, you're going to like 625 million to 690 million of of free cash flow, this fiscal year and you're saying, you can only do 600 million in fiscal 2027 is that because you found new expansion projects. So that, that, that bucket of capex doesn't go to zero? Or are you deliberately telegraphing that other items within free cash flow are going to are going to go negative like whether it's Eva or cash tax taxes or interest or something else.

No, uh, or or, or the other question that you, you could have asked, is whether the 600 is actually, too low a number. Uh, but I would say, um, 600 we think, is a, is a good number to use. Obviously, we'll see where we are here from now. When we provide guidance for fiscal 27, but that's still our plan right now within our extension, uh, numbers. We have these bigger projects that are generally subsidized. Uh, so there's still a lot going on in Ontario this year, which will finish in 27. There shouldn't be that much capex in fiscal 27 related to that, that being said,

Patrice Ouimet: I would say these will continue. Also, the other component is as we've built in many areas and we're loading customers, we are adding CPEs for these customers. We have to obviously invest there. Sometimes depending on how we built the network, sometimes we have to install service lines as well. Basically the drops we put from the street to the house, for some of the projects it's pre-installed and for some of them it's not. It's really when customers want to connect, we pass this drop. I would say these CapEx will continue in the future.

Frédéric Perron: It is not telegraphing an EBITDA pressure or any other pressure. No.

Operator: Yes.

[Analyst 1]: Appreciate the color, guys. Thank you.

Pre-installed. And for some of them, it's not. It's really when customers, uh, want to connect, we passed this drop. So I would say these capex will continue in the future. So it's not telegraphing in a bit that pressure or any other pressure. Yes.

[Company Representative]: Your next question comes from Jerome Dubreuil with Desjardins. Your line is now open.

Appreciate the color, guys. Thank you.

Your next question comes from your line is now open.

[Analyst 2]: Thanks for taking my question. First one for me. I'd like you, if possible, to give a little bit more detail on the turnaround you expect on the top line where we're at mid single digit declines in the quarter, but you're expecting an improvement if I look at the guidance. Maybe more granularity on this. Is it from wireless? Was there a tough comp or maybe an assumption of improvement in competition?

Thanks for taking my question. Uh, first 1 for me. Um I'd like I'd like you if possible to give a little bit more detail on the the turnaround you expect on the top line. You know, where we're at Mid single digit declines in the quarter but but you're, you're expecting an improvement uh, if I look at the guidance. So maybe more granularity on this is a from, from Wireless. Was there a top comp, or or maybe an assumption of improvement in competition?

Patrice Ouimet: Yes. Good morning, Jevon. You're talking at a consolidated level, right?

[Analyst 2]: Yes.

Yeah, so uh good morning Shon. So you're talking at the Consolidated level, right?

Patrice Ouimet: Okay, great. Yeah. I would say if we look at our Canadian business, we've been adding a lot of customers. As you know, we are still planning to continue to grow the Canadian business. This translates into additional revenue. We have visibility on basically on our current client base, customer base. We also know when we have new customers, often on promotions, some that roll off promotions as well. This is all factored in, and based on this we'll eventually have some price increases as well. I would say the key driver in Canada is really the additional subscribers we're able to load down that we were not doing as much of, let's say, two years ago. That should produce better numbers on the top line in Canada than what we've seen in the past year. In the U.S., I would say similar story on the subscribers.

Yes.

Okay, great. Um yeah. So I would say if we look at our Canadian business, we've been adding a lot of customers. As you know, we are still planning to continue to grow the the Canadian business. Uh, so this translates into additional Revenue. Um, we have the visibility on uh, basically are in our current client base, uh, customer base. We uh, we also know when we have, uh, uh, when we have new customers

Patrice Ouimet: It's just that we're starting from a negative number. We do see some improvements from what we reported on in Q4, but we're already well into Q1 right now. We are seeing benefits, and we've put a lot of new tactics to play and go to market, and many of them are working well. I would say this is the key element we're seeing for next year. We're still planning to see a negative number in the U.S. in terms of year on year. We still have video cord cutting and home phone cord cutting like the whole industry, but still an improvement overall.

Uh, often on promotions, some of those are roll-off promotions as well. So this is all, uh, factored in. Based on this, um, we will eventually have some price increases as well. But I would say the key driver in Canada is really the additional, uh, subscribers we're able to, uh, to load on that we were not doing as much of, uh, let's say, two years ago. And, um, that should, uh, that should produce better numbers on the top line in Canada than what we've seen, um, in the past year. In the US, uh, I would say a similar story on the subscribers. Um, it's just that we're starting from a negative number. We do see some improvements from what we reported on in Q4, but, uh, we're already well into Q1 right now. So, we are seeing benefits and we've put a lot of new tactics to play and go to market, and many of them are working well. So, uh, I would say this is the, uh,

Frédéric Perron: I'll only add, Jerome, first on the Canadian side. We've been adding subs at a good pace for many quarters now. The pressure in the past was ARPU, and what we're seeing now with a slightly better pricing environment is we're seeing a bit of upside on ARPU, as we were talking about before with VINs, the ARPU of new customers, the ARPU at promo expiry, and the possibility for rate increases. It doesn't take much of an ARPU improvement, given the strong sub loadings, to benefit the revenue overall. In the U.S., we've touched on it earlier, but we had done a materially lower rate increase over the past year, and now the elephant's going through the stake, and we expect better progression in the U.S., especially going to the second quarter.

The key element that we're seeing, uh, for next year, uh, we're still planning to see a negative number in the US. Uh, in terms of year of year on year we we still have video cord cutting and and home phone cord cutting like the whole industry but still an improvement. Uh overall. Yeah, only add your home. Uh, first on the Canadian side, we've been adding uh, uh, Subs at a good pace for many quarters now. But the pressure in the past was rpu and what we're seeing now with a slightly better pricing environment,

Is we're seeing a bit of upside on arpu as we were talking about before with uh with Vinz, the ARP of new customers, the arpu at promo expiry and the possibility to for rate increases and it doesn't take much of an arpu improvement. Given the the strong sub loadings, uh, to benefit the revenue overall. Uh, and then it in the US we've touched on it earlier, but we've done a, we had done a materially lower rate, increase over the past year and now the elephant's going through the stake, and we expect uh better progression in the US, especially second going through the the the second quarter.

[Analyst 2]: Great. Merci. Second one for me. Just continuing on Vincent's line of question on the DOCSIS to fiber-to-the-home upgrade, coax, I should say, to fiber-to-the-home. Is this something you plan to do across your whole footprint? You kind of alluded to the fact that it could be more efficient to do that than taking the DOCSIS roadmap. Or is this something you really use as a tactic to maybe counter the fiber deployments?

Frédéric Perron: Thanks for the question, Jerome. Maybe starting at a higher level, when you look at our total capex envelope, so much of it is maintenance, the majority is business as usual maintenance. When you see us reducing our capex, that is where the reduction in the efficiency is coming from. Our growth-related capex, which is everything you're talking about now, continues whether it's expanding our network to new rural areas or upgrading our network in the various ways that you're mentioning. As it relates to network upgrades, we're doing a lot of mid splits in Canada in particular, we're really improving. It's now over 90% of our doors have a download speed of one gig and sometimes two gig, and we're also really improving the upload speeds as noted by Ookla, for example.

Okay, great. Um see. Second 1 for me, uh, just continuing on the Vince's line of question on the uh, docs is to to fiber to the home, upgrade the coax, I should say to the fiber to the home. Uh, is this something you, you plan to do across your, your whole footprint? You can have alluded to, to the fact that it could be more efficient to do that than taking the docs, this road map, or is this something you really use as a tactic to, to maybe counter the the fibre deployments?

Thanks for the question, Jerome and maybe starting at a at a higher level.

Frédéric Perron: In the U.S., we have this capital efficient way of upgrading our coax network to fiber, for example, the 35,000 doors that we've done last year, and our forecast for the coming year also implies that we will continue with both sets of programs that I was talking about for the U.S. and Canada. It's a mix depending on the region, mid splits, even sometimes some high splits in some regions, plus this capital efficient upgrade of coax to fiber.

Patrice Ouimet: Yeah, definitely that's the plan. As you know us, we've always over the years tried to be very capital efficient and always provide a lot more than what customers are requiring from us in terms of speeds and capacity, and doing it in a capital efficient way rather than overinvesting in a network that would not necessarily be used. It is in the U.S. More specifically to your question on competition, for sure in some regions it does help to upgrade to fiber, but obviously we only do it if it makes sense financially when you take a multi-year view of the otherwise upgrades we would need to do in these particular regions.

Canada in particular that were really improving. It's now over 90% of our doors. Have a download speed of 1 gig and sometimes 2 gig, and we're also really improving the upload speeds as noted by UCLA, for example. And then in the US, we have this Capital efficient way of upgrading our coax Network to fiber. For example, the 35,000 doors that we've done at last year and our forecast for the coming year, uh, also implies that we will continue with both sets of programs that I was talking about, uh, for the US and Canada. Uh, so it's a mix depending on the region midsplit. Even sometimes on high splits in some regions, plus this Capital efficient, uh, upgrade of of coax to fiber.

That's yeah. And I, yeah, I definitely that's the plan. And as, you know, us, uh, uh, we've always over the years trying to be very Capital efficient, and always provide, uh, a lot more than what customers are requiring from us in terms of speeds and capacity and, and doing it in the capital efficient way, rather than over investing in the network. That would not necessarily be used, so it is. Um, and it in the US more specifically to your question on competition, for sure, in some regions, it does help to, uh, to

Frédéric Perron: Yeah, our U.S. competitive dynamics are getting predictable, much more predictable by state, by market in terms of who's likely to do some upgrades in our competitors who may be tempted to overbuild. We have pretty granular projections at a market by market level, and we're using that to inform where we will upgrade that market to fiber, for example, as a protective measure. For instance.

Upgrade to fiber. Uh, but obviously, we only do it if it makes sense. Financially, when you take a, a multi-year view of the otherwise upgrades, we would need to do in these particular regions. Yeah, the, uh, R Us. Competitive Dynamics are getting predictable much more predictable by state, by market, in terms of who's likely to do some upgrades in our competitors who may be tempted to overbuild. So, we, we have pretty granular projections at a market by market level. And we're using that to inform where we will upgrade that market to fiber, for example, as a protective measure, for instance,

[Company Representative]: Your next question comes from Matthew Griffith with Bank of America. Your line is now open.

that's super cool.

Operator: Hi, good morning. Thanks for taking the questions. In the second year of your transformation program, I think you've mentioned that you're going to see some more investments to sustain or to move you towards a path to sustainable growth. Not to be too mythic or anything, but is that growth at the revenue level or are you talking growth on free cash flow level? Maybe you can elaborate on the investment. What are you spending money on that you think is going to generate the growth, the sustainable growth going forward? When do you expect that to materialize? If it's top line, if it's obviously free cash flow, it's somewhat baked in already.

Your next question comes from Matthew Griffith with Bank of America. Your line is now open.

Hi, good morning. Thanks for taking the questions. So, um, in the second year of your transformation program, um, I think you've mentioned that, you're going to see some more Investments to sustain, or to, you know, move you towards a class to sustainable growth and, um, you know, not to be too nitpicky or anything. But is that growth like at the revenue level? Or are you talking growth on free, cash flow level and maybe you can elaborate on like the Investments? Like what what are you sending money on that you think is going to, you know, generate the, the growth, the sustainable growth going forward. And when will that? And when do you expect,

back to materialize, if its top line, if it's obviously free cash flow, it's

Frédéric Perron: Yeah, hi Matt, it's Fred. I'll start with the last part of the question. Whatever investments we're making are fully baked into our guidance. There are many things we do that are not so material at the EBITDA or capex level. We've already talked a lot about our capex investments anyways in upgrading our networks, so I'm not going to repeat that. At the EBITDA level, a lot of what we're doing is not material. Investments in AI analytics pricing are not that expensive. The two that are material are growing certain sales channels in the U.S., which were underdeveloped. You do need to make an investment in staff and commissions on things like that as well as wireless in Canada. Again, that's baked into the guidance for the coming year as it relates to which growth we want. Certainly, we've already been delivering a growth in subs in Canada.

Um, somewhat baked in already.

Frédéric Perron: We think ARPU has better upside than in the past. Therefore, I think revenue growth in Canada, and I'm not going to give a super precise time period here, but revenue growth in Canada is certainly within reach. In the U.S., it's about continuing our stabilization of our sub losses. We think that continued sub growth in Ohio is realistic as it relates to the rest of the footprint. We're on track to diminishing those losses, and we expect lower losses in the next quarter as well. Overall, in terms of top line for the U.S., we'll have to see. It remains a challenging market, but we certainly don't expect the same challenging top line performance as what we've seen in the past year.

Yeah. Uh, hi Matt. It's Fred. Uh, I'll start with the the last part of the question. Uh, what are investments? We're making, we're making are fully baked in, uh, to our guidance. Uh, there are many things we do, uh, that are not so material at the ebida capex level. Well, we've already talked a lot about our capex investments anyways, uh, in upgrading our our networks. So, I'm not going to repeat that, but at the level, a lot of what we're doing is not Material, uh, investments in Ai and analytics, uh, pricing are not that expensive. The 2 that are material are growing certain sales channels in the US which were underdeveloped. Uh you do need to make an investment in in staff and commissions on things like that as well as Wireless uh in Canada. But again that's baked into the guidance for the coming year uh as it relates to which growth we want uh, certainly we've already been delivering a growth in Subs in Canada. Uh, we think arpu uh,

Has better upside than in the past. So therefore, I think Revenue growth in Canada, and I'm not going to give a super precise time period here. But Revenue growth in Canada is certainly, uh, Within Reach, uh, in the US. Uh, it's about, uh, continuing our stabilization of our sub losses. Uh, we think that continues sub growth

Operator: Okay, that's helpful. On margins, obviously the business is benefiting from the natural mix shift away from video and towards Internet. Can you help us understand how much your cost reduction program is contributing to the margin improvement in addition to the natural mix shift that you're seeing?

Okay, that's helpful. And then on on margins you obviously the business is benefiting from the natural, mix shift away from uh video and so on and towards internet. Um but can you help us understand? Like how much your cost Reduction Program is contributing to the margin Improvement? In addition to the natural mix shifts that you're you're seeing

Patrice Ouimet: Yeah, it's a good question. I'm not sure I have the exact answer for you right now on this call, but I would say it's a mix of two. You're right. There is a mix shift towards more Internet, which does increase the % as we look at the competitive nature of the industry. There's also the ARPU that plays into it. I would say the best way to look at it is to look at our OpEx that does include some video costs in what we report publicly, but you can see that it's been shrinking. We can perhaps take it offline and try to give you a little more information on this. I would say it's really a mix of the two because our cost reductions are quite material actually in what we've been doing in the past year.

Operator: Okay, that'd be helpful. Maybe just one quick one if I could sneak it in. In the past you've talked about evaluating whether or not it makes sense to kind of divest some small systems throughout your U.S. footprint. Has that filed and closed at this stage, or is that still something that is potentially out there?

Uh, yeah, it's a good question. I'm not sure. I have the exact answer for you right now, on this call. But, um, I would say it's a mix of 2. You're right. There is a mix shift towards more internet, which does increase the, uh, um, the uh, the percentage, um, as uh, as we look at the competitive nature of the industry, there's also the rpu that plays into it. Um, and so I I would say the, the best way to look at it is to look at our Opex, um, that uh does include some video costs uh, in what we report publicly. But you can see that it's been shrinking, we can perhaps, uh, take it offline and try to give you a little more, uh, information on this. But I would say it's a, it's really a mix of the 2 because our cost reductions are quite material actually in what we've been doing in the past year.

Frédéric Perron: Yeah, Matt, at present time it's closed. We've looked at a few options. There were interesting possibilities, but not interesting enough. We judged at the time to strip out an asset because carve outs are always challenging and could be a distraction for the organization in the midst of a big transformation. Who knows? We always keep options open in the future.

Okay, I need to be helpful and then maybe just 1 quick 1. Uh, if I could sneak it in in the past, you've talked about the evaluating whether or not it makes sense to kind of uh divest some small systems. Throughout your us footprint, has that filed and closed at this stage or is that still something that is potentially out there?

Operator: Thanks a lot for the answers. I appreciate it.

Yeah, Matt at present time, it's closed. Uh, the we've we've looked at a few options, there were interesting possibilities but not interesting enough. We judge at the time to to strip out an asset because carve outs are always uh challenging and could be a distraction for the organization in the midst of a big transformation, but who knows? We always keep options open in in in the future.

Frédéric Perron: Thank you.

Thanks a lot for the answers. I appreciate it.

[Company Representative]: Your next question comes from Maher Yaghi with Scotiabank. Your line is now open.

Thank you.

Your next question comes from mayor. Yagi with Scotia Bank. Your line is now open

[Analyst 3]: Merci d'avoir. My question. I just wanted to maybe just dial on the homes passed increase in Canada. In the last two years you've added approximately 70,000 to 75,000 new homes passed, and a lot of it is fiber as I understand it. Can you just give us a perspective on the strength that you're seeing in your Internet subscriber gains in Canada, how much they're coming from these fiber edge outs and new homes passed versus Oxio versus Cogeco-branded Internet resale out of territory? Just to understand maybe the return characteristics of these fiber rollouts that you're doing. Thank you.

Uh, so I just wanted to maybe just dial in on the home's past increase in Canada. I mean, in the last two years, you've added approximately 775,000 new homes passed.

Uh so and a lot of it is fiber as I understand it. So um,

Frédéric Perron: Hi, my heart, it's Fred. A few things here. First off, yes, most expansions that we do in both Canada and the U.S. are on fiber. As it relates to the return on those investments, they're quite good, in line with what Patrice has quoted in the past. We do exceed 50% penetration of those new builds because they're rural areas with high demand. As it relates to contribution to our net growth, it varies quarter by quarter between network expansion, Oxio, and the legacy business. All I can say is that for this past Q4, it was mostly, first of all, it was mostly on our own network and less as a reseller that the growth came from. It was actually mostly from legacy areas. In the fourth quarter, network expansion was not the largest contributor to the growth.

Can you, you know, just, uh, give us a perspective on the strengths that you're seeing in your internet subscriber, gains in Canada? How much they're coming from, uh, these fiber, uh, Edge outs and, uh, new homes, past versus axio, versus Coo out of territory, um, just to understand, maybe the the return, uh, characteristics of these fiber, uh, rollouts that you're doing. Thank you.

Hi. My heart is Fred, uh, a few things here, uh, first off, uh, yes. Uh, all, uh, most expansions that we do, uh, in both Canada and the US are on fiber, uh, as it relates to the return on those Investments, they're quite good, uh, in line with what Patrick has quoted in the past, and we do exceed 50% penetration of those new builds because they're, they're rural areas, uh, with high demand, uh, as it relates to contribution, to, to our net, uh, growth, it varies quarter by quarter between Network expansion, axial, and the Legacy business. Uh, all I can say, is that for this past Q4 uh it was mostly. First of all, it was mostly on our own network and less as a reseller.

Frédéric Perron: As we continue to build in Ontario in fiscal 2026 and going into fiscal 2027 as well, we do expect that network expansion will be a more material contributor to our sub growth.

[Analyst 3]: Okay, thank you. Just to follow up, the launch of Cogeco service under the Cogeco brand outside of your home territory, oxio, as you've indicated in the past, has been good success to capture out-of-market Internet subscribers. Maybe can you talk a little bit about the objective of launching Cogeco-branded service outside of your home territory in addition to oxio that was already there?

That the growth came from and it was actually mostly from Legacy areas. So in the fourth quarter Network expansion, was not the largest uh, contributor to the growth. Now as we continue to build in Ontario and fiscal 26 and going into fiscal 27 as well. Uh we do expect that Network expansion will expansion will be a more material contributor to our sub growth.

Okay, thank you. Uh, and uh, just to follow up. Um,

You know, uh the launch of co uh, service under the Cogeco, brand outside of your home territory.

I you know good success to capture out of Market um Internet subscribers. So maybe can you talk a little bit about uh,

Frédéric Perron: Sure. First, at a higher level, Internet resale in Canada between the different players is a fact of life and it's been a fact of life for quite some time. The two of the big three that we don't already compete with on an infrastructure basis are already reselling our network in Quebec and Ontario and have been doing so for quite some time. I would say it doesn't appear to be material neither for our growth as a reseller nor for our churn at present time. There seems to be more noise than anything else around all this on your question. More specifically, our strategic intent by opening up Cogeco as a reseller across Quebec is purely optionality in a world where the resale dynamics continue to evolve. As I said, they're not material at present time.

The objective of launching Cogeco branded service outside of your home territory. In addition to axio, that was already there.

Sure. First at a, at a higher level uh internet resale in Canada. Uh between the different players is a fact of life and it's been a factor of life for quite some time. Uh the 2 of The Big 3 that we can that we don't already compete with on an infrastructure basis are already uh reselling our Network in Quebec and Ontario and have been doing so for for quite some time. Uh, I would say it doesn't appear to be uh, material, uh, neither uh, for our growth. Uh, as a reseller nor for our churn at present time. So there seems to be more noise than anything else around all this. Uh, on your question more specifically, uh, our strategic intent by opening up kosher CO as a reseller across. Quebec is purely optionality. Uh, in the world where uh, the resale Dynamics, continue to evolve

Frédéric Perron: We have nothing to lose from opening up another few million doors on the Cogeco brand. We, as a smaller company, benefit from asymmetry in this whole game whereby we just covered 2 million homes in Canada and there are 15 million homes. We get an asymmetric advantage. So far it's not much more than optionality. However, if for whatever reason we decide to push harder on this now, the systems are activated and it's pretty quick for us to push harder.

[Analyst 3]: Okay, can you disclose how many, you mentioned that you saw some good success with wireless, with the wireless launch in Canada. Can you share some KPIs on that?

As I said, they're not Material at present time but we have nothing to lose from opening up another few million doors uh on the kosha co brand. We as a smaller company we benefit from asymmetry uh and this whole game whereby we discover 2 million homes in Canada and there are 15 million homes. So uh, we get an asymmetric Advantage, uh, but so far it it's not much more than optionality. However, if for whatever reason, uh, we decide to push harder on this. Now, the systems are activated and it's pretty quick for us to push harder.

Okay. Uh can you disclose how many you mentioned that the you know you saw some good success with wireless with the wireless launched in Canada? Can you share some? Some some some kpis on that.

Patrice Ouimet: Yeah. Mayor, we are not disclosing yet at this point. As you know, we're starting from nothing, so it's still a small base, very happy with so far. I mean it takes time to have critical mass. Over time we do expect at one point to disclose the mobile subs, but it's not something we're planning to do for sure this year and we'll see in the future. It's obviously important to make sure we don't release non-material information that can be used by competition. That's where we are at this point.

Yeah, so uh mayor, we uh, are not disclosing yet at this point. As, you know, we're starting from uh, from nothing. So it's, uh, it's still a small base. Very happy with so far, but I mean, it takes time to have critical mass. So over time, uh, we do expect that 1 point to disclose the uh, the mobile Subs. But um, it's not something we're planning to do for sure this year and uh, we'll see uh, in the future. Um, it's obviously important to uh, make sure we uh, don't release non-material information, uh, that can have, uh, can be used by competition.

Frédéric Perron: I'll only say that the strong demand that we're getting, even though it's still going to take time to scale to Patrice's point, at least it's indicating to us that there's a way for us to run that business without it being a drag at an individual customer level. For example, we could already pull back on some of our intro promotions. I think at a unitary customer level, it's good news. Okay.

And so uh, so that's where we are at this point. Yeah. I only say that

The strong demand that we're getting.

[Analyst 3]: Maybe just to double down on this, the pullback on the promotion kind of came at the same time as Rogers launched fixed wireless access in your territory. Were the two related, why you pulled back on wireless promotion?

Even though it's going to still going to take time to scale to Patricia's point. At least it's it indicating to us that there's a way for us to run that business. Uh, without it being a drag at an individual customer level. Uh, for example, we could always already pull back on some of our intro promotions. Uh, so I think at a unitary customer level, it's, it's a good use.

Okay. And, and maybe just on on to to, to double down on on this, um, you know, the pullback on on

Frédéric Perron: Absolutely not. We achieved the objectives that we wanted to achieve, and that's how we run the business.

Promotion, it kind of, you know, um, came at the same time as Roger's launch of fixed wireless in your territory. Were the two related? Why did you pull back on wireless?

Promotion. No, no.

[Analyst 3]: I'm trying to square the decision to pull back from offering one year service on wireless as a promotion to existing customers in Canada with the U.S. strategy where it's still going on. It's been a year or so, less than maybe a year that you launched it, you're still offering free lines. Can you maybe just compare for us why it's still going on in the U.S. and not in Canada?

Absolutely not uh we we achieved the sub objectives that that we wanted to achieve and and that's that's how we run the business.

So, I'm trying to square, uh, the decision to pull back from offering, um, you know, 1 year, service on wireless as a promotion to existing customers in Canada with the US strategy where it's still going on, uh, and it's been, you know, a year or so less than maybe a year that you launched it.

Uh, you still offering free lines. So can you maybe just compare for us? Why?

Frédéric Perron: It's purely a function of competitive dynamics and pricing dynamics in the market. Maher, the other players are doing it too in the U.S., the other cable players in particular. That's what we have to do to be in the game at present time south of the border.

It's not, you know, it's still going on in the US and and not in Canada.

[Analyst 3]: Okay, thank you very much.

Frédéric Perron: Thanks.

It's fairly a function of a competitive Dynamics and pricing Dynamics in the market, uh, Maher. Uh, the other players are doing it to, uh, in the US, the other cable players in particular. So that's, that's what we have to do to be in the game at present time, South of the Border, okay? Thank you very much.

[Company Representative]: Your next question comes from Stephanie Price with CIBC. Your line is now open.

Thanks.

[Analyst 4]: Hi there, it's Sam Schmidt on for Stephanie Price. I wanted to ask a question. Around Ohio, the net additions turned positive in the quarter, and U.S. subscriber losses also improved sequentially. Can you help unpack what changed there in terms of your strategy as well as in the competitive environment both for Ohio and the U.S. more broadly? Thanks.

Stephanie Price with CIBC your line is now open.

Frédéric Perron: Sure. Good to meet you. I'll start with Ohio and then I'll talk about U.S. competitive dynamics more broadly. In Ohio, Ohio is, and I think we've disclosed this, the percentage of our doors coming from Ohio. It's roughly 40% of our total U.S. doors that are in Ohio and our penetration is quite low. It's been some time where we see a lot of upside for us in that market and we're starting to execute against that upside. There were some sales channels which were not as developed in the states. We're starting to develop the channels. We keep optimizing our pricing as well. Over time we think there are several quarters of growth in Ohio for us as we get closer over the years to what we believe is our fair share. U.S.

Hi there, it's Sam Schmidt on for Stephanie Price. Um I wanted to ask a question around Ohio, being at editions turn positive in the quarter and US subscriber loss is also improved sequentially. Can you help unpack what changed there in terms of your strategy as well as in the competitive environment? Both for Ohio and the us more? Broadly? Thanks

Sure, uh, good to meet you. Uh, I'll start with Ohio and then I'll talk about the US competitive Dynamics, more broadly, uh, in Ohio, Ohio. Ohio is, and I think we've disclosed this percentage of our doors coming from Ohio. It it's roughly, 40% of our total us doors, uh, that are in Ohio and our penetration is quite low. Uh, so it's, it's been some time where we see a lot of upside for us in that market. And we're starting to execute against that upside. So, there were some sales channels, uh, which were not, uh, uh, as developed, uh, in the states. So, we're starting to develop the channels. Uh, we keep optimizing our pricing as well. And, and over time, we think there are several quarters of growth in Ohio for us as we get closer over the years, to what we believe is our is our fair share.

Frédéric Perron: competitive dynamics in general, last quarter we said that we saw an uptick in competitive dynamics or competitive intensity in the U.S. in three of our states. At present time, it's more two of those states; one of them, one of the three, has eased back down. Of the two that remain, we have room to believe that one will ease back down of those two as well over the coming months. We also see, interestingly, that fixed wireless access (FWA) is not impacting us as a company as much as it was two, three years ago. We rigorously track churn destination of our customers leaving us by state, and FWA is actually relatively low down the list at this time. You could only speculate why that is. We do know that some of the FWA players are now focusing more on the B2B segment where we're not as present.

Uh, us competitive dynamics, uh, in general.

Frédéric Perron: Even though two of the three FWA players are reaccelerating their sales, sometimes it's in the B2B segment. Otherwise, maybe they've tapped out in their relevant customer segments in our markets. Not exactly sure. The bottom line is FWA is not impacting us as much as before. We still see intense promotions more generally from some of the national wireline players. You net all of that out. I'd say the U.S. competitive environment remains intense but has not worsened from the previous quarter. There may be some slight improvement coming over the next couple of quarters, yet to be seen.

Last quarter. We said that we saw an uptick in competitive Dynamics, or or competitive intensity in the US in 3 of our states. I would say, our present time at present time. It's more 2 of those States. Uh, 1 of them, 1 of the 3 has eased back down, uh, of the 2 that remain. We, we have room to believe that 1 will ease back down of those 2 as well over the coming months. Uh, we also see interestingly, that fwa is not impacting us as a company as much as it was 2. 3 years ago, we rigorously track churn destination of our customers leaving us by state and fwa is actually relatively low down the list at this time that you can only speculate why. That is uh, we do know that some of the fwa players are now focusing more on the B2B segment uh where we're we're not as present.

So even though two of the three FW8 players are reacor their sales. Sometimes it's in the B2B segment; otherwise, maybe they've tapped out in their relevant customer segments in our markets. Not exactly sure. But the bottom line is FW8 is not impacting us as much as before. We still see intense promotions more generally from some of the national.

You know, Wireline players, so your net all of that out. Uh, you would I'd say uh the US uh, competitive environment remains intense but has not worsened from the previous quarter. And there may be some slight Improvement coming over the next couple of quarters yet to be seen.

[Analyst 4]: Thank you, that's helpful. Maybe just one on the Canadian competitive market. Outside of your network expansion, are you seeing increased competition from competitors as they look to build out a footprint through third-party Internet access or fixed wireless access? I'll pass the line. Thank you.

Frédéric Perron: Thank you. It's really not very material for us. Neither TPIA nor FWA in Canada. As I mentioned in an earlier question, TPIA competition has been happening for a long time and it's not really impacting us. FWA is more recent, but it tends to be focused in Quebec, which is one third of our Canadian footprint. We're not really feeling it, as you can see in our strong sub results in Canada. On the positive side, there's been a real material pullback in promotional activity in the core wireline business that more than offsets in a positive way the minor noise that we see in TPIA and FWA.

Um thank you. That's helpful. And then maybe just 1 on the Canadian competitive market. Um, outside of your network expansion, are you seeing increased competition from competitors? As they look to build out a footprint through um tpia or fixed Wireless and then I'll pass the line. Thank you.

[Analyst 4]: Great, thank you very much.

Thank you. Uh, it it's really not, uh, very material for us. Uh, neither tpia nor fwa in Canada. As I mentioned in an earlier question. Uh, tpia competition has been happening for, uh, a long time and it's not really impacting us. Fwa is more recent, but it tends to be focused in Quebec, which is 1, 1, 1 1 third of our Canadian footprint and we're not really feeling it. As you can see in our in our strong sub results, uh, in Canada. And then on the positive side there's been a real material, pull back in promotional activity, uh, in the core water line business. That that more than offsets in a positive way. Uh, the minor noise that we see in tpia and F

Great, thank you very much.

[Company Representative]: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Drew McReynolds with RBC. Your line is now open.

Ladies and gentlemen, as a reminder, should you have a question please? Press star 1.

[Analyst 5]: Yeah, thanks very much. Good morning. Two for me, maybe for you, Patrice. In terms of the reinvestment levels that you make in the business as part of the transformation program embedded into fiscal 2026 guidance, do your reinvestments in the business stay stable? Are you absorbing a sequential increase or likewise, does the reinvestment level begin to ease as part of the transformation program going forward? Secondly, I think there's some language about $100 million in capex spent on longer term growth opportunities over 5 years. Just wondering at a high level what kind of growth opportunities you'd be looking to take advantage of with that level of investment. Thank you.

Your next question comes from Drew mccrann with RBC. Your line is now open.

Yeah, thanks very much. Good morning 2 for me. Um,

maybe for you Patrice, uh, in terms of the reinvestment levels that you make in the business as part of the

A stable. Are you absorbing a sequential increase? Um or likewise um does the reinvestment level begin to ease as part of the transformation program uh going forward and then secondly um I think there's some language about 100 million in Capac spent on

Patrice Ouimet: Great. Good morning. On the transformation program, I would say when we look at better utilizing different go to market tactics and optimizing our sales channels, we are increasing, and that's embedded in our guidance, we are increasing the use of those channels. Obviously, there's costs related to that, and obviously that translates into new customers and new revenue. We'll see going forward as we're successful with it. The payback on these investments is very good. You have to look at the lifetime of a customer. From what we're seeing, they're good. I would say we've allocated some dollars in our guidance for this.

Longer term growth opportunities over 5 years, just, just wondering at a high level, what kind of growth opportunities? Uh you know, you'd be looking to to take advantage of with that that level of investment. Thank you.

Frédéric Perron: Yeah. Drew, an example would be what we were talking about earlier in the previous question in Ohio, where we can really grow share to get closer to our fair share. We are making the investment in achieving that, and it's starting to yield some benefit. That investment is increasing but will pay back. Another example is wireless, as Patrice explained earlier.

Hey Greg. Good morning. So on the transformation program I would say, when we look at uh better utilizing different, uh, go to markets tactics and optimizing our sales channels. Uh, we are increasing and that's embedded in our, um, in our guidance. We are increasing the use of, of those channels. Obviously there's costs related to that and obviously, that translates into new customers and, and new Revenue. Um, we'll see going forward as, as we're successful with it. Obviously, the payback on these Investments is very good. You have to look at the, the lifetime of the customer. Uh, but so far from what we're seeing, they're good. But I would say, um, we've, we've, uh, We've allocated some dollars on our guidance for this. Yeah, Andrew. An example, would be what we were talking about earlier in the previous question in Ohio, where we can really grow share to get closer to our sales.

Patrice Ouimet: On the second question on $100 million, actually it's something we've had. We put it in the annual report, but we've had it for a few years. Basically, we have mentioned a few years ago that we might invest and it's not CapEx, actually those would be investments in smaller companies to produce growth later on. More in startup mode. It's not something we've done so far, but it's not new disclosure. If you go back to last year, we'll see if we do some. I do not expect it to be CapEx. No impact on free cash flow or anything. It would be more an investment on the balance sheet.

Fair share. So we're making the investment in achieving that and it's starting to yield some benefit. So there's so that investment is increasing but we'll pay back. The other example is Wireless as as pets explained earlier.

[Analyst 5]: Okay, thank you for that clarification. Maybe one last one, and I may have missed this in terms of the rate of network or footprint expansion expected in fiscal 2026 relative to the 50,000 in fiscal 2025. Do you have that for us?

Yeah, and on the, uh, second question on the 100% we've had, uh, we, we put it in the annual report, but we've had it for a few years. Uh, it's basically, we have mentioned, a few years ago that we might invest and it's not capex. Actually that those would be investments in smaller companies, uh, to produce uh, growth later on. Uh, so more in startup mode. Um, it's not something we've done so far but it's not new disclosure actually if you go back to last year. Uh so we'll see if we do some uh I do not expect it to be capex and no impact on free cash flow or anything. It would be more an investment on the balance sheet.

Patrice Ouimet: Yeah, it would probably be similar. I would say Canada because we're going to be, it's a mix of what we're doing in Ontario and also as I said earlier, what we're doing in footprints on new neighborhoods and new streets. We'll probably be around 40,000 addition in Canada. U.S. will be lower. We have less of these bigger programs, so probably closer to 10,000 new homes.

Okay, thank you for that clarification. Then maybe 1 last 1, um, and and I may have missed this in terms of the rate of um, Network or footprint expansion, you expect in fiscal 2026, relative to the 50,000 and then fiscal 2025 um, to, to have that Force.

[Analyst 5]: In the U.S. Okay, great. Thanks very much.

Yeah. Um it would probably be similar. So I would say um Canada because we're going to be um it's a mix of what we're doing in Ontario and also as I said earlier what we're doing in Footprints a new neighborhoods and new streets, we will probably be around in around 40,000 Edition in Canada. Uh us will be lower. We have less of these bigger programs so probably closer to uh 10,000 new homes in the US.

Okay, great. Thanks very much.

[Company Representative]: There are no further questions at this time. I will now turn the call over to Patrice Ouimet for closing remarks.

Patrice Ouimet: All right. We're right on time. Thank you everyone for these questions and happy to take additional questions if you want to talk to us before our next scheduled call for the Q1 results. Thank you. Have a good day.

Thank you for the questions at this time. I will now turn the call over to POTUS me up for closing remarks.

[Company Representative]: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

All right, so we're right on time. So thank you everyone for, uh, these questions and happy to take additional questions. If you want to, uh, talk to us in before, our next scheduled call for the q1 results. Thank you. Have a good day.

Welcome to Cogeco, Inc, and Cogeco Communications, Inc. Q4, 2025 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Pepsis, We met Chief Financial Officer could you Cool, Inc. And could you Cook Communications Inc. Please go ahead Mr Ouimet.

Frédéric Perron: Thank you.

[Analyst 3]: It.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating. In sa you, please disconnect your lines,

Thank you operator, so good morning, everyone welcome to our fourth quarter conference call. So as usual before we begin the call I'd like to remind listeners that today's discussion will include estimates and other forward looking information. We ask that you review the cautionary language in the press releases and annual report issued yesterday regarding the various risks assumptions and uncertain.

<unk> that could cause our actual results to differ.

But with that I'll pass the line to <unk> for opening remarks.

Thank you Beth and good morning, everyone.

For critical communications the fourth quarter marked the end of year one of our three year transformation program focused on the synergies digital analytics network expansion and wireless and we're pleased to report that we're on track.

Year, one was mainly focused on opex and Capex synergies and we delivered on those targets as you can see by our 110 basis points year on year improvement in adjusted EBITDA margin and our $38 million year on year increase in free cash flow and constant currency.

It's worth mentioning that the capex efficiency, enabling our growth in free cash flow comes mainly from maintenance synergies as we're continuing to make important investments in growing and enhancing our networks.

A recent report by Uccle for example noted a significant increase in our Canadian upload speeds as a result of our ongoing network upgrade initiative.

And in the U S. We've upgraded over 35000 of our cable doors to fiber during the fiscal year. In addition to adding nearly 50000, new homes fast across our North American footprint.

<unk> two and three of our transformation will now add more emphasis on our topline performance.

As per our original plan.

This will include additional investments in growing previously underdeveloped sales and marketing channels in the U S. In the context of the evolving competitive environment as well as scaling wireless in Canada.

When we met last quarter, we said that we were expecting strong continued Canadian customer growth combined with some improvements in our U S subscriber metrics and we're pleased to be delivering on that expectation.

We just had our best Canadian Internet customer growth in 13 years.

This growth was driven mostly by market share gains in our legacy footprint on our own network.

The completion of new rural expansion programs in Ontario has yet to accelerate through fiscal 'twenty, six and 27, providing a new additional lever for us in the future.

We've seen a reduction in competitor promotional activity in the quarter, which has more than offset some minor noise around <unk> and wholesale.

Including our own deployment as a reseller under the <unk> brand across Quebec.

So it is fair to say that on balance our Canadian competitive environment is evolving in a constructive manner at present time.

Our launch of the Canadian Wireless service is going ahead of plan and.

In October marked the deployment of this new service across most of our wireline operating footprint.

Our positive early sales results on wireless have already enabled us to start pulling back on some of our initial introductory offers.

On the U S side, our year on year financials were impacted by ARPA pressures, the accumulative impact of customer losses in the prior quarters.

A difficult comparative period last year, and a smaller rate increase this year than in the previous year.

This resulted in a year on year decline in adjusted EBITDA, which was in line with what we had indicated to you last quarter.

That being said, our additional sales and marketing activities are working.

Our subscriber trends are now improving and we are delivering on our long stated goal of growing beyond the Ohio customer base during the quarter.

In fact, it's the first time since we acquired the Ohio business four years ago that we achieved customer growth in that state.

We expect continued improvements in our U S subscriber metrics over the coming quarters.

On October eight we launched a completely revamped pricing strategy for the U S.

This new approach gives them more value predictability and transparency to our customers, including full price protection for the first two years.

This is just one of many tactics that we're deploying to be more aggressive and more innovative in our U S go to market.

Okay.

Today, We're also publishing our consolidated guidance for the new fiscal year for our CCA and CGM more broadly.

<unk> offers a continued growth in free cash flow and constant currency despite competition driven topline pressures.

Our adjusted EBITDA guidance is zero percent minus 2% year on year reflects additional investments in scaling previously underdeveloped sales and marketing channels in the U S and growing our Canadian wireless business.

As previously explained.

We believe these investments presents attractive upside for us and are confident that investors will get disproportionate returns from them over time.

We're still planning to grow our free cash flow to $600 million next year in fiscal 2027, which is a good base for further dividend growth as we are announcing today as well as further deleveraging.

Finally, turning over to Cogeco media, while competitive dynamics in the radio advertising market remained Q4 revenue increase year on year lifted by strength in our digital advertising solutions and continued listener engagement.

On that I'll turn it over to <unk> for more details on our results and guidance. Thank.

Thank you Fred.

In Canada physical connections revenue declined by one 5% in the fourth quarter, mainly due to lower revenue per customer from fewer video and wireline phone service subscribers, partially offset by growth in our internet subscriber base, which added 17000, new customers during the quarter.

Adjusted EBITDA declined by one 4% in constant currency due to the lower revenue being partially offset by lower operating expenses, resulting from our cost reduction initiatives and operating efficiencies.

We added 10800 homes passed during the quarter, mainly through fiber to the home under our network expansion program, including those related to the Ontario subsidized program.

In the U S. <unk> revenue declined by nine 2% in constant currency due to the cumulative decline in the subscriber base over the prior year, a smaller rate increase versus the prior year, along with a competitive pricing environment.

The 6300.

The decline in Internet subscribers with an improvement over the previous quarter.

Our internet subscriber additions in Ohio recorded their first ever positive growth of 1300, new subscribers.

Adjusted EBITDA declined by seven 9% in constant currency due to lower revenue offset in part by lower operating expenses driven by cost reduction initiatives and operating efficiencies.

Note that last years comparative Q4 period was the highest EBITDA level of all quarters for that year, largely due to the reorganization of our operating entities.

Now turning to our consolidated numbers for Cogeco communication.

At the consolidated level revenue in constant currency declined by five 3% and adjusted EBITDA declined by three 3%.

This result is mainly due to the revenue pressure in the U S, partially offset by strong execution on operating efficiencies as well as customer growth in Canada.

Diluted earnings per share declined by six 2% in reported currency, mainly due to lower EBITDA and higher financial and restructuring costs.

Capital intensity was up 20 was up 21, 8% versus 24% last year.

Free cash flow and constant currency decreased by 27, 4% in the quarter, but was up by seven 9% for the full year.

Our net debt to adjusted EBITDA ratio was $3 one turn at the end of the quarter unchanged from the level reported in Q3.

We have increased our dividend by 7%, having declared a quarterly dividend of $98 seven per share and as Brent mentioned with anticipated strong free cash flow in fiscal 'twenty six 'twenty seven we expect to continue to increase dividends meaningfully in the future.

At clinical Inc. Our revenue in constant currency decreased by 5% and adjusted EBITDA declined by three 9% with growth in radio partially offsetting revenue declines at Cogeco Communications.

Media operations revenue increased by eight 5% driven by growth in digital advertising revenue.

We have also increased the dividend in oncology growing by 7% in lockstep with that at Cogeco Communications.

Okay.

But as I will discuss our fiscal 'twenty guidance, which we are introducing today.

On a constant currency and consolidated basis, Cogeco communication and expects revenue to decrease between one and 3% compared to the prior year as growth in Canada is offset by competitive pressures in the U S.

Adjusted EBITDA is anticipated to decrease between zero and 2% versus last year as we continue to face revenue pressures in the U S and are investing in new sales and marketing capabilities, especially in the U S. As part of our three year transformation program.

All while generating additional operational efficiencies.

We will also incur some costs related to our Canadian wireless operations, including some it costs recognized in adjusted EBITDA, starting in fiscal 'twenty, six and I'll get back to this in a second.

Turning to our capital expenditures, we are expecting to spend between $560 million and $600 million, including a $100 million to $140 million in growth oriented network expansions.

Resulting in the capital intensity of between 19% and 21% or 15%, 17%, excluding those network expansion projects.

Free cash flow and free cash flow, excluding network expansions are expected to increase between zero and 10% compared to fiscal 'twenty five.

Our full year current tax rate is forecast to be 11, 5%.

In terms of segments unimportant item to note is that beginning in Q1 and fiscal 'twenty six Canadian mobility, which had been included in our corporate segment. During the startup phase we will now be recorded in our Canadian segment, given the recent full scale launch of the product.

This reclassification will have no impact on the consolidated level and comparative segments for the prior year.

And we will also adjust basically the results for the prior year for that in addition, our it costs related to Canadian mobility, which were recognized below the EBITDA line as cloud computing costs in fiscal 'twenty five during the implementation period will be recognized as opex within the Canadian.

Segment, starting in Q1 as those systems are now in operation.

So overall, we expect the fiscal 'twenty six Canadian segment's adjusted EBITDA to be impacted by about $20 million versus what we reported in fiscal 'twenty five.

Of that 11 million is simply the reclassification from corporate Opex to the Canadian business and the balance is moving from below the EBITDA line to Opex. That's basically the it systems that was relating to.

We nevertheless expect the Canadian operations growth to largely absorbed additional costs in fiscal 2006 through customer growth and operational efficiencies.

As it relates to Q1, we expect consolidated revenue and adjusted EBITDA to decline in the mid single digit range in constant currency we.

We don't expect a material sequential improvement in our year over year adjusted EBITDA trends starting in the second quarter as we benefit from already quantified cost savings rate increases and improving U S customer trends.

Specifically in the U S. We expect the Q1 year on year adjusted EBITDA variation to be slightly better than the Q4 variation that we just reported.

Follow up by solid gradual improvements as we benefit from easier year on year comps. In addition to the aforementioned factors.

At the consolidated level in Q1 with our restructuring program largely completed we do not expect material acquisition integration and restructuring cost in the quarter.

And we expect our financial expense to about to be about $10 million less than in the prior quarter and Q4.

While our depreciation and amortization expense should be about $4 million lower than in Q4.

Finally at Cogeco, Inc. We have issued the same financial guidelines as clinical communications with the exception of net capital expenditures and now Fred and I will be happy to take your questions.

Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone, you'll hear a prompt that you had has been raised should you wish to decline from the polling process. Please press star followed by the two if you are using a speaker phone. Please lift the handset before pressing any keys one moment. Please for you.

First question.

Your first question comes from Arab Linda <unk> <unk> with Canaccord Genuity. Your line is now open.

Good morning, Thanks for taking my question.

I just wanted to pick up.

On the sort of the comments around the it spending in wireless.

More broadly given that you've launched now and it's deployed across the footprint.

Are you able to sort of update us on sort of the total impact on Canadian EBITDA or the expectation that's built into fiscal two.

2026.

I know about that you talked about the $9 million incremental piece of <unk>, but more broadly given sort of the pricing changes you've done just wanted to see how much of a drag it could create in the first half or even for the full year maybe stop there.

Sure.

Good morning, So yes, so just the reclassification of some opex from corporate to to our Canadian business and moving some it costs from below the line to above the other than online will create pressure of about $20 million on our Canadian numbers, obviously, it doesn't change anything.

Especially for free cash flow if you look at the full company, it's a REIT to retail applications.

One would basically show the comparative values that will be adjusted in the prior year. That's basically what we're moving from corporate to our Canadian business. The other one will not be.

<unk> return.

In the past basically as a this is moving forward and thats the it cost that being said as it were.

Saying earlier, we are expecting growth in our Canadian business otherwise at the at the EBITDA line. So we should normally be able to absorb this to your wider question on if I got your question right.

<unk> mobility mobility does for US obviously, we're starting from a basically a very small number so I wouldn't say that the numbers will be meaningful in terms of.

In terms of the benefits in the year, because obviously, we're starting from a small base.

But we do see benefits and we've been very successful with the launch so far and we see a lot of interest from our customers and again to remind you. The goal with the mobility is primarily to bundle services for our customers.

Or non customers garner neighbors of our customers in the regions that we serve it can be used in acquisition. It can be used in retention as well.

Thanks, Patrice and then.

Maybe just turning to the U S and the wireless.

<unk>.

<unk> experienced so far is there anything any feedback you can provide.

Sure in terms of.

How the churn.

Files have been impacted by a wireless launch I realize it's early so perhaps it's it's.

It's not much but anything you can share it would be interesting.

Hi, Aragon that its Fred.

Yes, we've analyzed it and we see a materially lower churn in the U S. From customers also taking wireless from US now we have to be cautious because some of that is simply sell selection, so customers, who like us better less likely to churn are more likely to buy a wireless anyways.

The churn differences so pronounced that we believe at present time that theres, a benefit above and beyond.

Self selection is it relates to churn benefit from wireless.

Okay. Thank you Fred and then lastly, just a bigger picture question on the fiscal 'twenty six guide.

I don't think you've talked about what Q1 would be like.

Is it fair to suggest that the guidance still assumes a close to mid single digit decline in the U S. As far as EBITDA is concerned and then a little bit of catch up in Canada or is it low single digits.

<unk> geographies.

Yes.

Yeah, I haven't commented really on what we expect for the full year, but I could say a four point.

What we're assuming in the U S for the full year at the EBITDA level, obviously in constant currency.

We should do better than your assumption of mid single digit.

Given that we see a better.

A good improvement in the customer situation, because we did lose a lot of customers in the prior year and were expecting to do a lot better there.

We've implemented a lot of tactics as well too.

To achieve this and also to manage how.

How we price.

Our products, how we handle it in retention and our program. Our three year transformation program is continuing and we have further cost improvements that we are planning to bank on.

We talked about the chatbot before we've changed our phone systems as well automated phone systems that now have AI components.

These are just examples but there's other other elements as well in our programs that work again in the year. The other thing I would say about the U S. R. L.

As we've done lower rate increase over the past year than we had in prior year in an effort to derisk.

<unk>.

That obviously you can see in our Q4 results in the U S and Youll see in our Q1 results a little bit as well, but as we go into the next year.

We have an opportunity to do rate increases in some segments that were not captured before so it doesn't mean, we'll do very large rate increases, but there are some segments that were previously not fully exploited and therefore, we do see a bit of revenue upside from that starting in the second and third quarter.

Thank you.

<unk> lives.

Your next question comes from Vince Valentini with TD Bank. Your line is now open.

Hey, Thanks, guys. Thanks for the extra detail on the wireless Canadian net impact can I ask one other item on that is.

<unk> seemed like you had a very strong start out of the gates as you even say you slow down your new marketing and pricing efforts as a result of that.

Given all of the customers you had out of the gates, taking a free line for a year you still have to pay the wholesale fees on that.

Not a potential incremental drag on your your EBITDA in the Canadian segment in 2026 as well.

Yeah, It's oh by the way we have different types of products. So we do we do have a paying customers as well.

But and again this is linked also with.

With them being our customers with internet than maybe other products as well.

But the numbers are still small right. We're starting when you compare it to the size of our business and are in Canada.

It's factored into our guidance, but I wouldn't say, it's a it's a lot we have a bit more marketing costs. We're doing obviously as we launched.

But not that material.

<unk>.

The launch promotion was something that was budgeted and is in our forecast. We thought it was an efficient way of getting started so we consider it almost a marketing investment, but as you've said we've already pulled back and at this time the free line for a year is only available on our talk and text plan.

Without data, which very few customers take.

Okay, Thanks, sticking with Canada and be more disciplined pricing environment, you're seeing.

Does that not open up some opportunities for rate increases on your platform.

You don't like to talk about them before they are announced to your customers, but is there any broad sense you can give us as to what you baked into your guidance for for ARPA growth in Canada.

Yeah. So I think we'll stick with our policy of not talking about it in advance, but I would say generally we do have some price increases that we that are reasonable.

Different products, especially for our video and Internet.

So normally we would we put out guidance like this we do have an expectation when they obviously they don't cover the full year.

And they're put through during the year, we did have some in the recently that will impact the full year, but it varies by product.

And I'll just add beyond the rate increases that we do obviously a reality of our business for the past many years is that new customers come in at or lower our pud in existing customers, but with a more rational pricing environment as we're seeing <unk> customers new customers picking up a bit.

In recent months Theres also the stickiness at the end of promotions, which has the possibility to to increase as customers are not presented with as aggressive offers from competition.

Okay.

Let me switch to U S.

You added correct me if I heard this right you added 35000, new fiber to the home passing in gist.

In fiscal 2025.

Yeah.

The the comment that I made.

In my section of the introduction is that we have upgraded.

35000 doors from from cable to fiber.

But that was that's not a total that's the incremental in the fiscal year.

Correct.

So two.

Two questions on that can you give us any sense as to what the total fiber packings are now and secondly to get that extra 35000 was that using the new technology that you sort of talk to us about last November.

The second part of the question. The answer is yes, and Thats why you still see a good capex how much.

Yes.

We will continue this in fiscal 'twenty six our program to selectively upgrade certain areas in the U S with fiber to the home.

It is a good comp benefit to us with this new technology. It doesn't apply everywhere, but there are some areas where it does a lot of sense. This will continue this year and probably a little bit in fiscal 'twenty seven.

Again, we can absorb this in our Capex envelope overall to your question, we don't disclose specifically our fibre component as you know most of our network is fiber, but the last mile. Obviously as we're still predominantly on the coax.

And it's generally more efficient to upgrade the coax then do an overbuild is we're doing selectively in the U S. So I would say overall between the network expansions that we're doing those are generally in fiber to the home we've been doing this for more than 10 years.

And the selective upgrades it's still.

Small portion of our network that is fully a fiber to the home.

But again as we upgrade coax were able to deliver.

In many regions actually two gigs even on coax by doing minor, we're not even non DOCSIS for yet and so we offer two gigs in several regions in Canada for this I would say the future will be a mix of our fiber to the home.

Upgrades of coax and there's different ways of upgrading that eventually will have docs as far as well, but we did not Russia as we're able to generally have much faster speeds than what customers want so the cost benefit is better for us to to do it this way.

Alright, sorry, I can ask one more on that.

I don't think it's well understood by people.

The cost.

Her home passed when you did those 35000 because of that new more efficient technology can you give us an update on what the average cost per home.

Terms of the Capex.

Yeah, it varies by region, but I would say it's generally.

It's.

Probably around $400 or so.

But really there is a there are some that are less expensive than this in some more so there is a it's not just one number.

And the more dense it is on depending on how the structure of the network is it is yeah. So it is fairly effective when you look at this versus doing it through a traditional <unk>.

Fiber to the home with the traditional method.

Number is for competitors. So generally this is a lot higher this is what we do in network expansion as well.

And and when you look also at going through the coax routes all the way to DOCSIS four with high splits you can get to these numbers easily as well over time with the CPE changes. So so yeah. So.

I would say, it's probably a good average to use.

Troy Patrice when you.

We're talking about the U S segment, when you say 400, or you talking 400 U S dollars.

Yes, it is U S dollars okay.

And then last just free cash flow I'm sure others are asked about this too, but just general sense I want to make sure I'm quoting here.

Excluding rural projects Youre guiding to like 625 million to $690 million.

Free cash flow this fiscal year and you are saying you can only do 600 million.

Fiscal 2027 is that because you found new expansion projects, so that that that bucket of Capex doesn't go to zero or are you deliberately telegraphing that other items within free cash flow are going to are going to go negative like whether it's EBITDA or cash taxes or interest or something else.

No.

Are the other question you could've asked is whether the 600 is actually a lower number.

But I would say 600, we think is a good number to use obviously, we'll see where we are a year from now when we provide guidance for fiscal 'twenty seven, but that's still our plan right now within our expansion numbers. We have these bigger projects that are generally subsidized.

There's still a lot going on in Ontario, This year, which will finish in 2007, there shouldnt be that much capex in fiscal 2007 related to that that being said we are generally building in territory as well so theres always new construction you neighborhoods new streets. So this will continue.

Eventually we will not break it down as we're going to be done with the bigger projects. So youll just see one number.

It will not be meaningful to split it out but I would say these will continue and also the other component is as we've built in many areas and we're reloading customers.

Adding cps for these customers. So we have to obviously invest in there and sometimes depending on how we built the network, sometimes we have to install service lines as well with the drops we put from the street to the house.

Some of the projects, it's pretty installment for some of them. It's not it's really when customers want to connect we pass this dropped so I would say these capex will continue in the future. So it's not telegraphing, an EBITDA pressure or any other pressure yes.

The color guys. Thank you.

Yeah.

Your next question comes from Jack Atkins Gray with Deutsche Bank. Your line is now open.

There was also a moment thanks for taking my question first one for me.

Good luck to you if possible to give a little bit more detail on the turnaround you expect on the top line you know where were at mid single digit declines in the quarter, but you're you're expecting an improvement.

If I look at the guidance so maybe more granularity on this from from wireless was there a tough comp or maybe an assumption of improvement in competition.

Yes, so good morning, everyone.

Youre talking of the consolidated level right.

Yes.

Okay great.

Yeah. So I would say if we look at our Canadian business, we've been adding a lot of customers. As you know we are still planning to continue to grow the Canadian business. So this translates into additional revenue.

We have the visibility on the basically are in our current client base customer base. We are we also know when we have when we have new customers often on promotion some of that on a roll off promotions as well. So this is all a.

Factored in and based on this.

We'll eventually have some price increases as well, but I would say the key driver in Canada is really the additional subscribers, we're able to to low down that we were not doing as much of let's say two years ago.

That should that should produce better numbers on the top line in Canada than what we've seen in.

In the past year.

And then the U S. I would say similar story on the subscribers.

Just like we're starting from a negative number we do see some improvements from what we reported on in Q4, but we're already well into Q1 right. Now. So we are seeing benefits and we've put a lot of new tactics to play and go to market and many of them are working well so I would say this.

Is the are the key element, we're seeing for next year.

So planning to see a negative number in the U S. In terms of your year on year, and we still have video cord cutting and home phone cord cutting like the whole industry, but still an improvement overall, yeah I'll only add Jerome a first on the Canadian side, we've been adding subs.

Subs at a good pace for many quarters now, but the pressure in the past was our pool and what we're seeing now with a slightly better pricing environment.

We're seeing a bit of upside on <unk> as we were talking about before with.

With Vince the ARPA of new customers, the RPI promos expiry and the possibility for rate increases and it doesn't take much of an <unk> improvement given the strong sub loadings to.

To benefit our revenue overall.

Then in the U S. We've touched on it earlier, but we've done that we had done a materially lower rate increase over the past year and now the allison's going through the snake and we expect a better progression in the U S, especially going through that.

Second quarter.

Okay great.

Second one for me.

Just continuing on the vintages on a question on the.

DOCSIS two to fiber to the home upgrade the coax I should say to do fiber to the home.

Is this something you you plan to do across your whole footprint, you kind of alluded to the fact that it could be more efficient to do that then taking the DOCSIS road map or if there's something you really use as a tactic to maybe counter or the fiber deployments.

Thanks for the question Jerome and maybe starting at a at a higher level.

When you look at our total Capex envelope.

So much of it is maintenance.

The majority is business as usual and maintenance. So when you see us reducing our capex that is where the reduction in the efficiency is coming from.

Our growth related Capex, which is everything you're talking about now continues whether it's expanding our network to new rural areas or upgrading our network and the various ways that you are mentioning so as it relates to network upgrades.

We're doing a lot of mid splits in Canada in particular that we're really improving it's now over 90% of our doors have a download speeds of one gig and sometimes two gig and we're also really improving the upload speeds.

As noted by Old Club for example, and then in the U S. We have this capital efficient way of upgrading our coax network to fiber.

For example, the 35000 doors that we've done at last year and our forecast for the coming year also implies that we will continue with both sets of programs that I was talking about for the U S and Canada.

So it's a mix depending on the region mid split even sometimes on high splits in some regions plus this capital efficient.

<unk> collects the fiber.

Yeah.

Yes.

Definitely that's the plan and as you know us.

We've always over the years trying to be very capital efficient and always provide.

A lot more than what customers are requiring from us in terms of speeds and capacity and doing it in a capital efficient way rather than over investing in the network that would not necessarily be used so it is.

And in the U S more specifically to your question on competition for sure in some regions it doesn't help to to upgrade to fiber.

But obviously, we only do it if it makes sense financially when you take a multiyear view of the.

Otherwise upgrades, we would need to do in these particular regions.

Our U S competitive dynamics are getting predictable much more predictable by state by market in terms of who's likely to do some upgrades and our competitors who may be tempted to overbuild. So we have.

Granular projections at a market by market level, and we're using that to inform where we will upgrade that market to fiber for example, as.

As a protective measure.

For instance.

Absolutely.

Your next question comes from Matthew Griffiths with Bank of America. Your line is now open.

Hi, good morning, Thanks for taking the question.

In the second year of your transformation program.

I think you've mentioned that you're going to see.

Investments to sustain our tenant.

Move you towards a path to sustainable growth and.

You know not to be too nitpicky or anything but is that growth at the revenue level or are you talking growth on free cash flow level and maybe you can elaborate on like the investments like what what are you spending money on that you think it's going to generate the growth with sustainable growth going.

Forward and when you go back and when do you expect that to materialize if its topline if it's obviously free cash flow.

Somewhat baked in already.

Yeah, Hi, Matt This is Fred I'll start with the last part of the question.

Whatever investments, we're making we're making are fully baked in to our guidance that there are many things we do.

That are not so material at the EBITDAR capex level, while we've already talked a lot about our capex investments anyways and upgrading our networks, so I'm not going to repeat that at the EBITDA level a lot of what we're doing is not material.

<unk> and AI analytics at pricing are not that expensive. The two that are material are growing certain sales channels in the U S which were underdeveloped.

You need to make an investment in staff and commissions on things like that as well as wireless in Canada, but again, that's baked into the guidance for the coming year.

As it relates to which growth we want.

Certainly we've already been delivering a growth in subs in Canada.

We think our pool.

Has better upside than in the past. So therefore, I think revenue growth in Canada, and I am not going to get Super precise at time period here, but revenue growth in Canada, certainly within reach in the U S. It's about continuing our stabilization of our sub losses that we think that continues.

Sub growth in Ohio.

Is realistic as it relates to the rest of the footprint, we're on track to diminishing those losses.

And we expect the lower losses in the next quarter as well.

Overall in terms of top line for the U S. We'll have to see it remains a challenging market, but we certainly don't expect the same challenging.

Our topline performance is what we've seen in the past year.

Okay. That's helpful and then on margins, you're obviously the business is benefiting from a.

Natural mix shift away from <unk>.

Video and so on and towards Internet.

But can you help us understand like how much of your cost reduction program that is contributing to the margin improvement.

In addition to the natural mix shift that you're seeing.

Yeah. It's a good question I'm not sure I have the exact answer for you right now on this call, but I would say, it's a mix of two youre right. There is a mix shift towards more internet, which does increase the.

The the percentage.

As a as we look at the competitive nature of the industry. There is also the <unk> that plays into it.

And so I would say the best way to look at it is to look at our Opex.

That.

Does it include some video class in what we report publicly but you can see that it's been shrinking we can perhaps take it offline and try to give you a little more.

Information on this but I would say, it's a it's really a mix of the two because our cost reductions are quite material actually and what we've been doing in the past year.

Okay.

And then maybe just one quick one if I could.

In the past you've talked about.

Evaluating whether or not it makes sense to kind of divest some small systems throughout your U S footprint has that filed and closed at this stage or is that still something that is potentially out there.

Yeah, Matt at present time, it's closed.

We've looked at a few options there were interesting possibilities, but not interesting enough. We judge that the time to to strip out an asset because carve outs are always challenging and could be a distraction for the organization in the midst of a big transformation, but who knows we always keep options.

And in the future.

Thanks, a lot for the answers I appreciate it.

Okay.

Your next question comes from Maher Yaghi with Scotia Bank. Your line is now open.

Okay.

Hey, Mike It's Joe.

Just wanted to maybe just.

On the home spots increase in Canada, I mean in the last two years.

I did approximately 70 75000, new homes passed.

So and a lot of the fiber as I understand it so.

Can you.

Just give us a perspective on the strength that youre seeing in your internet subscriber gains in Canada, how much.

<unk> com these fiber.

Edge outs, and new homes passed versus OXXO versus closer to call out of territory.

Just to understand maybe the return.

Characteristics of these fiber.

Rollouts that you're doing thank you.

Hi, I heard it's Fred.

A few things here first off yes, Oh, most expansions that we do in both Canada and the U S are on fiber.

As it relates to the return on those investments they are quite good in line with what Patrick has quoted in the past and we do exceed 50% penetration of those new builds because they're rural areas.

With high demand.

As it relates to contribution to our net growth it varies quarter by quarter between network expansion at <unk> and the legacy business at all I can say is that for this past Q4.

It was mostly a first of all it was mostly on our own network and less as a reseller that the growth came from and it was actually mostly from legacy areas. So in the fourth quarter network expansion was not the largest contributor to the growth now as we continue to build in Ontario in fiscal 'twenty six and going.

Into fiscal 'twenty seven as well.

We do expect that network expense expansion will be a more material contributor to our sub growth.

Okay. Thank you.

And just a follow up.

Uh huh.

The launch of Cogeco service under the Quizzical brands outside of just pure home territory.

I I.

Oxy was.

As you indicated in the past has been good success to capture out of markets.

Internet subscribers.

So maybe can you talk a little bit about the.

The objective of <unk>.

Launching kosher Cobranded service outside of your home territory. In addition to <unk> that was already there.

Sure first at a higher level Internet resale in Canada.

Between the different players as a fact of life and it's been a fact of life for quite some time.

The two of the big three that we can be that we don't already compete with on an infrastructure basis are already reselling our network in Quebec, and Ontario had been doing so for for quite some time.

I wouldn't say it doesn't appear to be.

Material.

Neither.

For our growth as a reseller nor for our churn at present time, so there seems to be more noise than anything else around all of this.

On your question more specifically.

Our strategic intent by opening up Cogeco has a reseller across Quebec is purely optionality.

In a world where their resale dynamics continue to evolve as I said theyre not material at present time, but we have nothing to lose from opening up another few million doors.

On the critical brand.

We as a smaller company we benefit from asymmetry.

This whole game, whereby we just cover 2 million homes in Canada, and there are 15 million homes. So we get an asymmetric advantage.

But so far it's not much more than optionality.

However, if for whatever reason.

We decided to push harder on this now the systems are activated and it's pretty quick for us to push harder.

Okay can.

Can you disclose how many you mentioned that you know you saw some good success with wireless the wireless launch in Canada can you share some some some keep your eyes on that.

Okay.

Yeah. So.

We are not disclosing at this point, but as you know we're starting from a friend nothing so it's a it's still a small base very happy with so far but I mean, it takes time to have critical mass. So over time, we do expect that want to disclose the mobile subs, but it's.

It's not something we're planning to do for sure this year and we will see in the future.

It's obviously important to make sure we are doing.

<unk> released nonmaterial information.

That can have can be used by our competition. So us. So that's where we are at this point now I'll only say that.

The strong demand that we're getting even though it's still going to take time to scale to a path to this point at least is indicating to us that there is a way for us to run that business.

Without it being a drag at an individual customer level.

For example, we could always already pulled back on some of our internal promotions.

So I think at a unitary customer level, it's been used.

Okay, and then maybe just on to.

<unk> doubled down on this.

The pullback on the promotion it kind of.

You know team.

Team at the same time Rogers launched fixed wireless in your territory.

Where the two relate to why you pulled back on wireless.

Absolutely not.

We achieved a sub objectives that we wanted to achieve and that's that's how we run the business.

So I'm trying to square.

The decision to pull back from offering.

You know one year of service on wireless as a promotion to existing customers in Canada with the.

The U S strategy, where its still going on and it's been.

A year or so less than maybe a year. That's your lunch that are you still offering free lines. So can you maybe just compare for us why.

It's still going on and you have some and not in Canada.

It's purely a function of competitive dynamics and pricing dynamics in the market.

The other players are doing it too.

In the U S. The other cable players in particular, so that's that's why we have to do to be in the game at present time south of the border.

Okay. Thank you very much.

Thanks.

Your next question comes from Stephanie price with CIBC. Your line is now open.

Hi, there, it's Sam Schmidt on for Stephanie price I wanted to ask a question around Ohio being net additions turned positive in the quarter.

And U S subscriber losses also improved sequentially can you help unpack what changed there in terms of your strategy as well as on the competitive environment, both for Ohio, and the U S more broadly thanks.

Sure good to meet you and I'll start with Ohio, and then I'll talk about U S competitive dynamics more broadly.

Ohio, Ohio is and I think we've disclosed this percentage of our doors coming from Ohio, It's roughly 40% of our total U S doors.

That are in Ohio, and our penetration is quite low.

It's been some time, where we see a lot of upside for us in that market and we're starting to execute against that upside. So there were some sales channels, which were not as.

As developed in the states. So we're starting to develop the channels, we keep optimizing our pricing as well and over time. We think there are several quarters of growth in Ohio for us as we get closer over the years to what we believe is our fair share.

U S competitive dynamics in general.

Last quarter, we said that we saw an uptick in competitive dynamics or competitive intensity in the U S and three of our states.

I'd say our present time at present time, it's more two of those states are one of them one of the three has eased back down.

Of the two that remain we have room to believe that one will ease back down of those two as well over the coming months.

We also see interestingly that <unk> is not impacting us as a company as much as it was two three years ago.

We rigorously track churn destination of our customers, leaving us by state and <unk> is actually relatively low down the list at this time.

You could only speculate why that is we do know that some of the <unk> players are now focusing more on the <unk> segment.

Where we're not as present, so even though two of the three <unk> players or re accelerating their sales sometimes it's in the <unk> segment.

Otherwise, maybe they've tapped out.

And a relevant customer segments in our markets not exactly sure but the bottom line is <unk> is not impacting us as much as before we still see intense promotions more generally from some of the national wireline players. So you net all of that out I'd say.

The U S competitive environment remains intense but has not worsened from the previous quarter and there may be some slight improvements coming over the next couple of quarters yet to be seen.

Yeah.

Thank you that's helpful. And then maybe just one on the Canadian competitive market outside of your network expansion are you seeing increased competition from competitors as they look to build out our footprint through a tpa or fixed wireless and then I'll pass the line. Thank you.

Thank you it's really not.

Very material for us.

Neither <unk>, nor <unk> in Canada as I mentioned in an earlier question TPI competition has been happening for a long time, and it's not really impacting us <unk> is more recent but it tends to be focused in Quebec, which is one third of our.

Canadian footprint and we're not really feeling it as you can see in our in our strong sub results.

In Canada, and then on the positive side, there has been a real material pullback in promotional activity.

In the core wireline business that that more than offsets in a positive way the minor noise that we see in TPI and ethically way.

Great. Thank you very much.

Ladies and gentlemen, as a reminder, should you have a question. Please press star one.

Your next question comes from drew Mcreynolds with RBC. Your line is now open.

Yes, thanks very much good morning, two for me.

Maybe for you per tree side in terms of the reinvestment levels that you make in the business as part of the.

Transformation program.

Embedded into fiscal 'twenty to 'twenty six guidance.

Do your Reinvestments in the business stay stable are you absorbing.

The sequential increase.

Or likewise.

Investment level begin to ease as part of the transformation program going forward.

Secondly, I think there's some language about $100 million in Capex spent on.

Longer term growth opportunities over five years, just wondering at a high level.

What kind of growth opportunities.

You'd be looking to take advantage of it that that level of investment. Thank you.

Hey, great. Good morning, so on the transformation program I would say when we look at a better utilizing different go to market tactics and optimizing our sales channels, we are increasing and that's it.

Embedded in our in our guidance, we are increasing the use of those channels. Obviously, there is cost related to that and obviously that translates into new customers and new revenue.

We will see going forward.

Assessable with it obviously the payback on these investments is very good you have to look at the lifetime of the customer.

So far from what we're seeing there are good but I would say, we've we've allocated some dollars in our guidance for this year and drew an example would be what we were talking about earlier in the previous question in Ohio, where we can really grow share to get closer to our fair share. So we're making the investment.

In achieving that and it's starting to yield some benefit. So there is so that investment is increasing but we will pay back. The other example is wireless.

As a as <unk> explained earlier.

And on the second question on the 100 million actually it's something we've had we put it in the annual report, but we've had it for a few years it's.

Basically we have mentioned a few years ago that we might invest in it's not capex actually that those would be investments in smaller companies too.

To produce growth later on.

So more in startup mode. Its.

It's not something we've done so far but it's not new disclosure actually if you go back to last year.

So we'll see if we do something I do not expect it to be capex or not no impact on free cash flow or anything it would be more in investments on the balance sheet.

Okay. Thank you for that clarification, and then maybe one last one.

And I made a business in terms of the rate of.

Network or footprint expansion.

In fiscal 2026 relative to the 50000.

In fiscal 2025.

Do you have that for us.

Yeah.

Be similar so I would say, Canada, because we're going to be it's a mix of what we're doing in Ontario, and also as I said earlier, what we're doing in footprint. So new neighborhoods in new streets, we'll probably be around the.

Around 40000 addition in Canada.

<unk> will be lower we have less of these bigger programs, so probably closer to a 10000 new homes in the U S.

Okay, great. Thanks very much.

There are no further questions at this time I will now turn the call over to Pat now for.

For closing remarks.

Alright, so we're right on time. So thank you everyone for these questions and I'm happy to take additional questions. If you want to talk to us and before our next scheduled call for the Q1 results. Thank you have a good day.

Ladies and gentlemen, this concludes your conference call for today, we thank you for participating in assay you. Please disconnect your lines.

Okay.