• Ongoing positive year-over-year revenue and adjusted EBITDA performance in Canada, along with a re-acceleration of Canadian Internet subscriber growth
• New TV streaming solution launched for the U.S.
• Entering the third year of our transformation program, focused on revenue generation opportunities and cost efficiencies
• Introducing fiscal 2027 financial guidelines
• Increasing quarterly dividend by 2% to $1.007 per share, representing our 23^rd consecutive year of dividend growth

MONTREAL, Oct. 28, 2026 /CNW/ -- Today, Cogeco Inc. (TSX: CGO) ("Cogeco" or the "Corporation") announced its financial results for the fourth quarter ended August 31, 2026 and is issuing its fiscal 2027 financial guidelines.

"Our Canadian business continued to perform in the quarter, with a re-acceleration of our Internet subscriber growth and year-on-year adjusted EBITDA growth for a fourth consecutive quarter", said Frédéric Perron, President and CEO. "We are particularly pleased with our wireless and oxio sales, and see promising growth potential in both areas", continued Mr. Perron.

"In the U.S., we continue to operate in a challenging competitive environment, resulting in elevated customer losses in the quarter. To help offset these headwinds, we are focusing on several initiatives to improve our performance in the U.S., including wireless, our new welo digital brand, a new TV streaming product and new sales channels.

"At Cogeco Media, we are pleased with our strong radio audience engagement which reached 4.6 million listeners per week.

"Building on the good progress made in our transformation program, the third year will focus on revenue generation and cost efficiencies, supported by AI and digital initiatives."

Consolidated financial highlights

Operating results

For the fourth quarter of fiscal 2026 ended on August 31, 2026:

• Revenue decreased by 2.4% to $713.9 million. On a constant currency basis⁽¹⁾, revenue decreased by 3.3% due to a decline in the American telecommunications segment and in the media activities, offset in part by revenue growth in the Canadian telecommunications segment, as explained below:
  • American telecommunications' revenue decreased by 4.6%, or 6.6% in constant currency, mainly due to a lower subscriber base compared to the previous year, and to a higher proportion of customers subscribing to Internet-only services, as well as a competitive environment.
  • Revenue in the media activities decreased by 18.9%, as the traditional radio advertising market remains challenging.
  • Canadian telecommunications' revenue increased by 0.6%, mainly resulting from the cumulative effect of high-speed Internet service additions over the past year, offset in part by a decline in video and wireline phone service subscribers, as an increasing proportion of customers subscribe to Internet-only services, as well as a competitive environment.
• Adjusted EBITDA decreased by 4.1% to $342.3 million. On a constant currency basis, adjusted EBITDA decreased by 5.0%, mainly due to lower revenue in the American telecommunications segment, offset in part by cost reduction initiatives and operating efficiencies across the Corporation as a result of its ongoing three-year transformation program.
  • American telecommunications' adjusted EBITDA decreased by 7.7%, or 9.6% in constant currency.
  • Canadian telecommunications' adjusted EBITDA increased by 3.3%⁽⁴⁾, or 3.4%⁽⁴⁾ in constant currency.
• Profit for the period amounted to $81.5 million, of which $18.0 million, or $1.87 per diluted share, was attributable to owners of the Corporation compared to $76.2 million, $16.5 million, and $1.71 per diluted share, respectively, in the comparable period of fiscal 2025. The increases in profit for the period and profit attributable to owners of the Corporation resulted mainly from lower depreciation and amortization expense, financial expense, and restructuring costs related to the Corporation's transformation initiatives, partly offset by lower adjusted EBITDA, higher income tax expense, and non-cash pre-tax impairment charges of $5.2 million in connection with asset write-offs following a change in strategy.
  • Excluding the non-cash impairment charges and certain other elements, adjusted profit attributable to owners of the Corporation⁽²⁾ was $19.6 million, or $2.04 per diluted share⁽²⁾, a decrease compared to $20.5 million, or $2.12 per diluted share, last year.
• Net capital expenditures were $162.9 million, an increase of 4.5% compared to $155.9 million in the same period of the prior year. In constant currency, net capital expenditures⁽¹⁾ were $161.3 million, an increase of 3.5% compared to last year, mainly due to higher capital spending related to customer premise equipment, partly offset by the timing of certain initiatives, both in the Canadian telecommunications segment, while net capital expenditures in the American telecommunications segment remained stable.
  • Net capital expenditures in connection with network expansion projects were $26.8 million, or $26.7 million in constant currency⁽¹⁾, compared to $57.8 million in the same period of the prior year. Excluding network expansion projects, net capital expenditures were $136.1 million, an increase of 38.8% compared to $98.1 million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects⁽¹⁾ were $134.6 million, an increase of 37.3% compared to last year.
• Acquisition of property, plant and equipment increased by 2.4% to $163.1 million, mainly resulting from higher capital spending.
• Free cash flow decreased by 3.1%, or 3.6% in constant currency, and amounted to $98.4 million, or $97.9 million in constant currency⁽¹⁾, mainly due to lower adjusted EBITDA, higher net capital expenditures, and higher current income taxes, partly offset by lower acquisition, integration, restructuring and other costs, mostly due to lower restructuring costs related to the Corporation's transformation initiatives, lower financial expense, and higher proceeds from disposals of property, plant and equipment. Free cash flow, excluding network expansion projects, decreased by 21.4%, or 21.9% in constant currency, and amounted to $125.2 million, or $124.6 million in constant currency.
• Cash flows from operating activities increased by 35.5% to $361.3 million, mostly due to higher cash inflows from working capital, primarily due to the timing of payments made to suppliers and the collection of trade and other receivables.
• At its October 28, 2026 meeting, the Board of Directors of Cogeco declared a quarterly dividend of $1.007 per share, an increase of 2.0% compared to $0.987 per share last year.

Fiscal 2027 financial guidelines

Cogeco is issuing its fiscal 2027 financial guidelines, as presented below. As we enter the third year of our transformation program, we will focus on revenue generation and cost efficiencies, supported by AI and digital initiatives.

On a constant currency basis, the Corporation expects fiscal 2027 revenue to decrease by a low to mid single digit percentage, reflecting a combination of growth in the Canadian customer base, offset by pricing pressures and subscriber losses in the U.S. due to a highly competitive and promotional market. On a constant currency basis, fiscal 2027 adjusted EBITDA is expected to decrease by a mid to high single digit percentage, due to lower revenue, partly offset by transformation-driven cost efficiencies.

We expect a lower level of capital expenditures than the previous year, ranging from $430 to $480 million. The reduction results from operational efficiencies and the near completion of many network expansion and upgrade projects.

On a constant currency basis, free cash flow is expected to be between $505 and $555 million, due to lower adjusted EBITDA, higher financial expense and current income tax, partly offset by lower net capital expenditures.

The following table outlines the Corporation's fiscal 2027 financial guidelines ranges compared to fiscal 2026 actual results, on a constant currency and consolidated basis:

These financial guidelines, including the various assumptions underlying them, contain forward-looking statements concerning the business outlook for Cogeco, and should be read in conjunction with the "Forward-looking statements" section of this press release.

The Corporation presents its fiscal 2027 financial guidelines on a constant currency basis and believes this presentation enables an improved understanding of the Corporation's underlying financial performance, undistorted by the effects of changes in foreign currency rates. Measures on a constant currency basis are considered non-IFRS Accounting Standards measures and ratios, and do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore, may not be comparable to similar measures presented by other companies. The financial guidelines exclude the impact from possible business acquisitions and/or disposals, and do not take into consideration unusual adjustments that could result from regulatory environment changes (including changes to Internet wholesale rates), and/or unforeseeable legal matters or non-recurring items. Financial expense assumptions do not take into consideration any potential impact of gains/losses on debt modification and/or extinguishment, including on repurchase of debt, if any, as those would be excluded from our free cash flow definition.

Financial highlights

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