Rogers Communications (TSX: RCI.B) reported its Q1 2025 earnings, toplined by a slight revenue jump to $4.98 billion from $4.90 billion a year earlier, largely driven by media gains rather than core telecommunications.
Wireless service revenue—traditionally Rogers’ growth engine—eked out a 2% rise to $2.03 billion, while Cable revenue fell 1% to $1.94 billion. Notably, Wireless ARPU dropped to $56.94 from $58.06, and postpaid net additions cratered to just 11,000 from 98,000 in Q1 2024, an 89% drop.
Media revenue surged 24% to $596 million, buoyed by Blue Jays-related earnings and Warner Bros. Discovery channel launches. Adjusted EBITDA losses for the segment narrowed to $67 million from $103 million.
Operating costs rose 1.3% to $2.72 billion, while finance costs remained unchanged at $579 million despite higher borrowings.
Net income increased 9% to $280 million, but adjusted net income rose only 1% to $543 million. Earnings per share on an adjusted diluted basis were flat at $0.99, suggesting minimal bottom-line momentum. Notably, depreciation and amortization continue to account for nearly half of adjusted EBITDA—highlighting capital intensity in Rogers’ model.
Adjusted EBITDA climbed to $2.25 billion from $2.21 billion, yielding a consolidated margin of 45.3%, up just 10 basis points.
Free cash flow remained flat at $586 million—unchanged from Q1 2024—despite a 10% jump in cash from operations to $1.30 billion. Capital expenditures dropped 8% to $978 million, mainly due to a 70% cut in Media spending following the completion of the Rogers Centre renovation.
Meanwhile, Rogers is banking on its recently announced $7 billion equity transaction with Blackstone to meaningfully reduce leverage. The minority equity deal effectively offloads 49.9% of a new wireless infrastructure subsidiary to reduce debt. The company projects a post-deal debt leverage ratio of 3.6x, down from 4.3x currently and 5.2x post-Shaw acquisition.
The transaction includes a guaranteed 7% annual return to Blackstone and $49 million in transaction-related costs.
Effective tax rate rose to 26.3% from 23.6%, with cash taxes more than doubling to $188 million. Despite this, Rogers maintained its quarterly dividend at $0.50 and eliminated the discount on shares issued under its dividend reinvestment plan.
The company reaffirmed its full-year 2025 outlook, projecting continued growth in total service revenue and adjusted EBITDA, while maintaining its previously established ranges for capital expenditures and free cash flow.
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