• Continued positive year-on-year revenue and adjusted EBITDA performance in Canada

• Wireless business continues to grow in both countries

• Fourth consecutive quarter of positive Ohio Internet subscriber growth

• Expanded welo, Breezeline's U.S. digital challenger brand, to cover all of our Ohio footprint

• Fiscal 2026 financial guidelines as issued on April 9^th(EQNX::nobreakspace)re-confirmed

MONTR(EQNX::Eacute)AL, July 15, 2026 /CNW/ - Today, Cogeco Communications Inc. (TSX: CCA) ("Cogeco Communications" or the "Corporation") announced its financial results for the third quarter ended May(EQNX::nobreakspace)31, 2026.

"Our Canadian performance remained strong in Q3, with positive year-on-year growth in adjusted EBITDA for a third consecutive quarter," stated Fr(EQNX::eacute)d(EQNX::eacute)ric Perron, President and CEO. "Our wireless sales remain ahead of plan, and we are seeing a clear churn benefit from fixed-mobile convergence, which will become more meaningful as we continue to scale up.

"In the U.S., we experienced a further intensification of the competitive environment, resulting in our financials not improving as fast as expected, despite executing well on our turnaround efforts," continued Mr. Perron. "We are planning an optimization of capital investments going into next fiscal year, which will facilitate free cash flow generation."

Consolidated financial highlights

Operating results

For the third quarter of fiscal 2026 ended on May(EQNX::nobreakspace)31, 2026:

• Revenue decreased by 4.7% to $696.7 million. On a constant currency basis⁽¹⁾, revenue decreased by 3.6% due to a decline in the American telecommunications segment, offset in part by revenue growth in the Canadian telecommunications segment, as explained below:
  
  
  • American telecommunications' revenue decreased by 10.1%, or 7.8% 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 pricing environment.
    
    
  • Canadian telecommunications' revenue increased by 0.5%, 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(EQNX::nobreakspace)wireline phone service subscribers, as an increasing proportion of customers subscribe to Internet-only services, as well as a competitive pricing environment.

• Adjusted EBITDA decreased by 3.0% to $351.5 million. On a constant currency basis, adjusted EBITDA decreased by 2.0%, 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 our ongoing three-year transformation program.
  
  
  • American telecommunications' adjusted EBITDA decreased by 10.0%, or 7.8% in constant currency.
    
    
  • Canadian telecommunications' adjusted EBITDA increased by 3.9%⁽⁴⁾, or 3.7%⁽⁴⁾(EQNX::nobreakspace)in constant currency.

• As previously announced, as competitive pressures intensified in the U.S. during the third quarter of fiscal 2026, the Corporation recognized non-cash pre-tax impairment charges amounting to $2.2 billion, or US$1.6 billion ($1.8 billion, or US$1.3 billion, net of deferred income taxes), within its American telecommunications segment, during the third quarter of fiscal 2026.

• Loss for the period amounted to $1.7 billion, of which $1.4 billion, or $32.28 per diluted share, was attributable to owners of the Corporation compared to a profit of $73.3 million, $69.9 million, and $1.64 per diluted share, respectively, in the comparable period of fiscal 2025. The decreases in profit for the period and profit attributable to owners of the Corporation resulted mainly from the non-cash pre-tax impairment charges recognized during the quarter, as well as lower adjusted EBITDA, partly offset by lower depreciation and amortization expense and financial expense.
  
  
  • Excluding the non-cash impairment charges and certain other elements, adjusted profit attributable to owners of the Corporation⁽²⁾(EQNX::nobreakspace)was $99.7 million, or $2.35 per diluted share⁽²⁾, an increase compared to $77.2 million, or $1.82 per diluted share, last year.

• Net capital expenditures were $120.9 million, a decrease of 3.7% compared to $125.5(EQNX::nobreakspace)million in the same period of the prior year. In constant currency, net capital expenditures⁽¹⁾ were $122.3 million, a decrease of 2.5% compared to last year, mainly due to lower capital spending related to customer premise equipment in the American telecommunications segment, partly offset by higher spending in the Canadian telecommunications segment, mainly due to the timing of certain initiatives.
  
  
  • Net capital expenditures in connection with network expansion projects were $21.6 million, or $21.7 million in constant currency⁽¹⁾, compared to $13.3(EQNX::nobreakspace)million in the same period of the prior year. Excluding network expansion projects, net capital expenditures were $99.3(EQNX::nobreakspace)million, a decrease of 11.5% compared to $112.2(EQNX::nobreakspace)million in the same period of the prior year. In constant currency, net capital expenditures, excluding network expansion projects⁽¹⁾ were $100.5(EQNX::nobreakspace)million, a decrease of 10.4% compared to last year.
    
    
  • Capital intensity was 17.3% compared to 17.2% last year. Excluding network expansion projects, capital intensity was 14.2% compared to 15.4% in the same period of the prior year.

• Acquisition of property, plant and equipment decreased by 3.9% to $121.0 million, mainly resulting from lower spending.

• Free cash flow increased by 17.6%, or 18.4% in constant currency, and amounted to $169.2 million, or $170.4 million in constant currency⁽¹⁾, mainly due to lower financial expense, as well as lower acquisition, integration, restructuring and other costs, in part due to lower restructuring costs related to the Corporation's transformation initiatives. Free cash flow, excluding network expansion projects, increased by 21.4%, or 22.2% in constant currency, and amounted to $190.8 million, or $192.1 million in constant currency.

• Cash flows from operating activities decreased by 20.2% to $319.9 million, mostly due to the timing of payments made to suppliers and the collection of trade and other receivables and to higher income taxes paid, partly offset by lower interest paid.

• Cogeco Communications maintains its fiscal 2026 financial guidelines as issued on April 9, 2026. However, the assumed current income tax expense is now expected to be approximately $25(EQNX::nobreakspace)million (compared to a current effective income tax rate of approximately 8.5%, or $40 million, under the previous financial guidelines). We do not expect this revised assumption to have a significant impact on Cogeco Communications' financial guidelines as previously issued. These financial guidelines, including the various assumptions underlying them, contain forward-looking statements concerning the business outlook for Cogeco Communications, and should be read in conjunction with the "Forward-looking statements" section of this press release.

• At its July(EQNX::nobreakspace)15, 2026 meeting, the Board of Directors of Cogeco Communications declared a quarterly dividend of $0.987 per share, an increase of 7.0% compared to $0.922 per share in the comparable quarter of fiscal 2025.

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Financial highlights

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