BCE Q2 2025 Earnings Report

BCE EPS Results

• Actual EPS: $0.46
• Consensus EPS: $0.52
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: $0.78

BCE Revenue Results

• Actual Revenue: $4.47 billion
• Expected Revenue: $5.91 billion
• Beat/Miss: Missed by -$1.44 billion
• YoY Revenue Growth: +1.30%

BCE Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 8:00AM ET

BCE (NYSE:BCE) Inc., a communications company, provides wireless, wireline, Internet, and television (TV) services to residential, business, and wholesale customers in Canada. The company operates through two segments, Bell Communication and Technology Services, and Bell Media. The Bell Communication and Technology Services segment provides wireless products and services including mobile data and voice plans and devices; wireline products and services comprising data, including internet access, internet protocol television, cloud-based services, and business solutions, as well as voice, and other communication services and products; and satellite TV and connectivity services for residential, small and medium-sized business, government, and large enterprise customers. This segment also buys and sells local telephone, long distance, and data and other services from or to resellers and other carriers; and operates consumer electronics retail stores. The Bell Media segment provides conventional TV, specialty TV, pay TV, streaming services, digital media services, radio broadcasting services, and out-of-home advertising services. BCE Inc. was founded in 1880 and is headquartered in Verdun, Canada.

BCE Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: BCE completed its acquisition of Ziply Fiber, adding 1.4 million fiber passings and becoming the third largest fiber Internet provider in North America, expanding its unregulated U.S. footprint.
• Positive Sentiment: Q2 consolidated revenue grew 1.3% led by Internet (+3%) and wireless subscriber gains, with 94,479 net postpaid adds and improved postpaid churn to 1.06%, marking the first annual improvement in nearly three years.
• Positive Sentiment: Bell Business Markets delivered record quarter revenue growth across core connectivity, cybersecurity, Ateco managed services, and Bell AI Fabric, driving momentum in enterprise AI-powered solutions and unregulated EBITDA streams.
• Neutral Sentiment: Adjusted EPS fell 19.2% in Q2 due to non-cash FX hedge losses, higher interest and depreciation, while free cash flow rose 5% and CapEx was cut by $215 million, reflecting disciplined capital allocation.
• Neutral Sentiment: BCE updated 2025 guidance to revenue and adjusted EBITDA of +0–2%, adjusted EPS of –13–10%, capital intensity around 15%, and free cash flow of 6–11%, factoring in five months of Ziply Fiber results.

Presentation

[Operator]

Good morning, ladies and gentlemen. Welcome to the BCE Q2 twenty twenty five Results Conference Call. I would now like to turn the meeting over to Chris Summers. Please go ahead, Mr. Summers.

[Executive]

Thank you, Matthew. Good morning, everyone, and thank you for joining our call. With me here today are Mirko Bibic, BCE's President and CEO and our CFO, Curtis Millen. You can find all our Q2 disclosure documents on the Investor Relations page of the bce.ca website, which we posted earlier this morning. Now before we begin, I'd like to draw your attention to our safe harbor statement on Slide two, reminding you that today's slide presentation and remarks made during the call will include forward looking information and therefore, are subject to risks and uncertainties.

[Executive]

Results could differ materially. We disclaim any obligation to update forward looking statements except as required by law. Please refer to our publicly filed documents for more details on assumptions and risks. With that out of the way, I'll turn the call over to Mirko.

[Mirko Bibic, President, CEO & Director at BCE]

Thanks, Chris, and good morning, everyone. So earlier this year, as you know, I shared the strategic plan and capital allocation strategy that will guide Bell in driving sustainable free cash flow growth and shareholder value in the near and long term. And I'm pleased to report that in q two, the Bell team made meaningful progress towards our objectives. Bell's unique and differentiated assets continue to work together to diversify our revenue streams and to drive overall performance. We remain deeply committed to executing our plan and its delivering results.

[Mirko Bibic, President, CEO & Director at BCE]

I'd now like to provide an update on our progress against each of our four focused strategic priorities, are putting the customer first, delivering the best fiber and wireless networks, leading an enterprise with AI powered solutions, and building a digital media and content powerhouse. Moreover, we'll continue to modernize and simplify how we do business and how we operate. Turning to slide four. For a hundred and forty five years, our purpose has been rooted in connection. We connect Canadians with each other.

[Mirko Bibic, President, CEO & Director at BCE]

We empower our enterprise clients to connect with our customers. Through consistent long term investments in core infrastructure, we've enabled Canadians to connect to the latest global technology innovations. Our objective is to put our customers at the heart of every interaction with us. We know their time is valuable, and that's why we're prioritizing self serve tools to help customers get the support they need whenever they need it. And I'm delighted to share some of our initiatives and the tangible results we've seen so far.

[Mirko Bibic, President, CEO & Director at BCE]

So let's turn to slide five. Our self install program started in Ontario and Quebec in 2020, enabling customers to install their Bell services on their own schedule. It's been a resounding success. Since 2022, more than 1,000,000 self installs have been performed, and over 90% of new residential customers are opting to do their own installation. It's more convenient for our customers and generates significant cost savings.

[Mirko Bibic, President, CEO & Director at BCE]

Our customers can use our AI powered virtual repair diagnostics tool to detect and resolve a wide range of technical issues without a support call or a technique technician visit. And since 2022, 1,200,000 calls have been eliminated as a result. And our AI powered virtual assistant has been rolled out nationally for online chat support with much more natural conversations with our customers. Again, saves times for our customers and improves productivity for Bell. Customer first initiatives like these materially improve customer satisfaction.

[Mirko Bibic, President, CEO & Director at BCE]

They lead to improved churn, higher customer lifetime value, and better financial performance. The next key priority area for us is to deliver the best fiber and wireless networks. Last Friday, we were delighted to announce the completion of our acquisition of Zipline Fiber, the leading fiber Internet provider in The US Pacific Northwest, and we did this several months ahead of schedule. I wanna thank the Bell and Zipline teams for their dedication and their perseverance in making this happen. We're pleased to welcome Zipline Fiber colleagues to the BC family, and we look forward to working together to accelerate and to expand their fiber build, reaching more communities and delivering the connectivity and service the Zipline Fiber customers deserve.

[Mirko Bibic, President, CEO & Director at BCE]

This acquisition expands Bell's fiber footprint by 1,400,000 locations, and it cements our position as the third largest fiber Internet provider in North America. This marks a key milestone in our fiber growth strategy and diversifies our fiber revenues in an unregulated geography. By combining Bell's deep fiber expertise with Zipline Fiber's experience management team, we're creating a powerful platform for material long term growth, scale, and geographic diversification that positions us to unlock significant value for our shareholders. Our strategic partnership with PSP Investments will support Zipline's fiber infrastructure in underserved markets in The US, and we'll do that in a financially disciplined way. The plan is to reach a total of 8,000,000 fiber passings in The US.

[Mirko Bibic, President, CEO & Director at BCE]

Ziply's been outperforming our expectations with the team driving very strong customer acquisition and penetration on its fiber network. These metrics will get even better as we go forward as we capture the incremental synergies and growth opportunity from the PSP partnership. Curtis will share some of our expectations for Zipply's 2025 financial and operational performance when he speaks next. In Canada, this quarter, we delivered 27,000 new FTTH customers, a strong result amidst the slowdown in our Canadian fiber build and pricing reflective of the significant value we deliver to customers. This contributed to Internet revenue growth of 3%.

[Mirko Bibic, President, CEO & Director at BCE]

We continue to capture the majority of new growth in the areas where we have fiber. Fiber is a superior service offering, and it resonates with customers. Fiber continues to drive higher multiproduct penetration, contributing to an 8% increase in households subscribing to mobility and Internet service bundles where we have fiber. In wireless, our relative performance has improved meaningfully. We added 94,479 new net mobile phone subscribers in q two.

[Mirko Bibic, President, CEO & Director at BCE]

This demonstrates our execution upside on gross activations and customer retention. Notably, postpaid churn improved 12 basis points to 1.06percent, marking the first quarter of year over year improvement in nearly three years. It's a clear highlight in the quarter, and it's a direct result of customer service improvements, increased product intensity, and effective real time retention offers. We added 44,547 new net postpaid wireless subscribers this quarter, and all were on our main Bell brand. This is consistent with our operating strategy to focus on better quality, profitable, and margin accretive subscriber acquisition.

[Mirko Bibic, President, CEO & Director at BCE]

Prepaid net adds were relatively steady versus last year at 49,932 as our strategy to better address the value and newcomer market with our Lucky Mobile brand continues to hunt. Q2 marked the third straight quarter of year over year ARPU improvement with a decline of 0.7%. Our result this quarter reflected sustained competitive pricing pressure and lower roaming due in part to decreased travel to The US. These factors were partly offset by nonrecurring revenues from the G7 Summit. We've regained operating momentum in wireless with a focus on best networks, customer experience, product intensity, and churn reduction.

[Mirko Bibic, President, CEO & Director at BCE]

We expect to continue to capture our fair share of subscriber additions and to strengthen our financial performance going forward. Turning to slide six now. It's great to discuss the enterprise growth strategy that we've been thoughtfully building out over the past couple of years. Our strategy in you know, basically, in summary, our strategy is based on reinventing our core services and our core service delivery and leading the country in AI powered technology solutions. So I'll start first with the the reinvention of our core services and service delivery.

[Mirko Bibic, President, CEO & Director at BCE]

Everybody knows we're the largest provider of core connectivity and communication services to enterprises in Canada. We're modernizing what we're doing by developing unified communication as a service and network as a service, and we're leveraging our partnerships with Zoom, ServiceNow, and Salesforce among others. We expect this modernization to move core enterprise services towards positive growth. Importantly, and we've talked about this several times, we've also brought in our suite of offerings in ways that are adjacent, unregulated, and complementary to our core services with AI powered technology solutions. These offerings are driving strong growth, and we expect that momentum to continue.

[Mirko Bibic, President, CEO & Director at BCE]

One key element of that is to lead in cybersecurity. Bell already had a robust security business, and this was enhanced with our acquisition of Stratagem last year. The combination of Stratagem's fully automated cloud based AI powered security operation center and the Bell Network platform is a unique and compelling offering for our customers. Another key element is Ateco, which we launched in May with a focused specialization in five major platforms used globally, ServiceNow, Salesforce, AWS, Azure, and Google Cloud. Ateco is also focused, as we've talked about before, on four industry verticals where we have deep customer relationships, and those are financial institutions, utilities, public sector, and TMT.

[Mirko Bibic, President, CEO & Director at BCE]

And the final key component of the BBM growth strategy is Bell AI Fabric, and it's about being the, you know, the backbone of Canada's AI ecosystem. And Bell ai Fabric is essentially comprised of four layers. There's the hardware infrastructure layer, which includes Canada's largest sovereign AI data centers on the largest fiber network. There's a software infrastructure layer, which includes LLMs customized four bell to offer unique capabilities for the Canadian market. There's advisory tech and professional services led by Ateco and the application layer of consumer and business AI applications.

[Mirko Bibic, President, CEO & Director at BCE]

I'll share more on Bell's significant opportunity and AI service offerings in a few minutes. But you put all those together, we've got a unique set of interrelated assets and expertise that cannot be replicated in Canada. And the common glue to all this is the highly trusted Bell brand, our superior networks, and our deep, long standing enterprise relationships. The strategy is highly differentiated, and it's delivering results right now as you can see. This is in stark contrast to North American peers who've seen significantly higher rates of decline for their enterprise businesses.

[Mirko Bibic, President, CEO & Director at BCE]

I'll move over to slide seven. Still more on BBM, Bell Business Markets. It delivered a record quarter of revenue growth driven by net positive contributions from all four growth vectors I just talked about. Core connectivity and communication services, which represents the largest portion of BBM revenues, those stabilized in q two and showed modest growth. As expected, Ateco and our cybersecurity business are growing rapidly, and so is AI Fabric.

[Mirko Bibic, President, CEO & Director at BCE]

And as I mentioned, Bell has always connected Canadians to technology at scale. It's a core skill. The next generation of large scale technology infrastructure is sovereign AI compute. It will deeply transform Canada the way the telephone and Internet did. We're uniquely placed to build and to manage this infrastructure in Canada for Canada.

[Mirko Bibic, President, CEO & Director at BCE]

As I mentioned, our ambition is become is to become the backbone of Canada's AI economy just as we've been the foundation of the country's communications infrastructure for the past hundred forty five years. Bell AI Fabric will deliver high performance, sovereign, and environmentally responsible AI computing services to Canadian businesses, researchers, and public institutions. Just wanna emphasize, this is not a standard colocation business. Bell AI Fabric is going to encompass purpose built AI data centers with a cluster of high impact AI services attached to them. They'll feature cutting edge enterprise grade AI technology enabling faster, more efficient processing tailored for large language models and AI workloads.

[Mirko Bibic, President, CEO & Director at BCE]

Since announcing our first AI fabric facility in Kamloops in June, in partnership with Grok, we've seen strong interest from potential partners looking to work with us. You saw that recently when we announced a partnership with Coher, a global leader in large language models, who will join us to provide full stack sovereign AI solutions for government enterprise customers across Canada, accelerating adoption and driving innovation in our Canadian economy. We're gonna enable the creation of truly end to end sovereign AI bundled solutions. AI Fabric, again, represents a meaningful future unregulated re and EBITDA stream, a new free cash flow vertical for Bell's enterprise business. Demand for Canadian AI data centers is projected to grow at an annual rate exceeding 20%.

[Mirko Bibic, President, CEO & Director at BCE]

This growth is distinct from the surging demand for compute, inferencing, large language models, and other AI driven solutions, which also continues to accelerate across industries. So given our strategic advantages, we're well positioned to capture significant share of the AI opportunity. We have national fiber connectivity, owned or leased land in key locations, access to a significant amount of low cost power and cooling, and deep customer relationships. And we can provide the full stack of services that a customer would need. We have the scale and the right to win in this business.

[Mirko Bibic, President, CEO & Director at BCE]

Again, it's real and delivering results right now at manageable investments at at manageable investment levels fully reflected in our leverage and capital intensity targets. Now turning to media. Digital was up 9% over last year and now makes up 43% of total media revenues. Driving this performance was Crave, which grew direct streaming subscribers by 72% over last year, as well as continued growth in products such as Connected TV, Crave with ads, and fast channels. Investments to sustain the strategic shift are continuing with a major expansion of Crave to offer CTV and entertainment content, news, select sports, and a larger kids collection.

[Mirko Bibic, President, CEO & Director at BCE]

We've got new streaming bundle offers that include Disney plus Crave and TSN for the Canadian market and integration of the Bell marketing platform into the trade desk, providing advertisers with seamless access to Bell's premium first party data and custom audience building capabilities. Bell Media has delivered a strong first half, and it's because of our digital pivot and our focus on flagship franchises, and it's paying off after five years of dedicated effort and investment. While we expect Bell Media to generate positive revenue and EBITDA for the full year, segment results may be somewhat uneven due to industry dynamics and near term macroeconomic headwinds that may impact advertiser demand in the second half of this year. That said, our goal remains unchanged for Bell Media to consistently deliver annual revenue and EBITDA growth while contributing meaningful free cash flow to BCD. Slide eight provides a summary of the q two metrics I have already covered.

[Mirko Bibic, President, CEO & Director at BCE]

So before I turn it over to Curtis, I should say that obviously we're disappointed with the decision of the federal government last night to decline to alter the CRTC's decision to expand mandatory wholesale access. At this stage, we urge the government and the CRTC to ensure that network builders are fully compensated for the significant build cost and investment risk they take in building. And I also wanna emphasize that the Bell team remains sharply focused on executing our strategic plan and delivering value for customers and shareholders. We're building made in Canada tech services champions with Ateco and Bell Cyber. We're building the backbone of the AI ecosystem with Bell AI Fabric.

[Mirko Bibic, President, CEO & Director at BCE]

We continue to invest significantly in Canadian content as Canada's digital media and content leader. These are the types of major investments BCE continues to make in Canada to connect Canadians with each other, with their customers, and with technology. We will generate growth through our customer first initiatives, our renewed momentum in wireless, our momentum in enterprise, and now significant growth in the unregulated US fiber market. And therefore, I'm pleased to announce that BCE will host an Investor Day on October 14 in Toronto, where we'll showcase how the elements of our strategy come together in a highly differentiated way to create long term shareholder value. And we'll share additional details shortly with all of you. And as we look to the future, I wanna reiterate our unwavering focus on disciplined execution, financial resilience, and value creation, and I wanna thank the Bell team for their hard work and for delivering results for our customers and our shareholders. And with that, over to you, Curtis.

[Curtis Millen, EVP & CFO at BCE]

Thank you, Mirko, and good morning, everyone. I'll begin on slide 10 with VC's consolidated financial results. In the second quarter, we returned a total positive revenue growth, delivering a solid one dot 3% increase.

[Curtis Millen, EVP & CFO at BCE]

This is the direct result of our successful fiber strategy, our ability to attract and retain premium wireless subscribers, and drive greater cross sell penetration of mobility and Internet households, continued digital media growth, and our momentum in enterprise as our AI powered technology solutions are driving rapid growth. EBITDA EBITDA was down dot 9% due to higher cost of goods sold associated with significant growth in product revenue. Net earnings and statutory EPS were up over last year due to lower asset impairment charges as well as a noncash loss recorded in '24 on BC's share of an obligation to repurchase the minority interest in a joint venture equity investment at fair value. Adjusted EPS was down 19 dot 2%, reflecting some noncash mark to market losses on FX hedges and options, higher interest expense, and lower year over year tax adjustments. Consistent with our plan to reduce capital spending by approximately $500,000,000 in 2025, CapEx was down 215,000,000 in q two, bringing year to date CapEx savings of $488,000,000.

[Curtis Millen, EVP & CFO at BCE]

We have also delivered a solid 5% increase in free cash flow in the second quarter. Turning to Bell CTS on slide 11. Financial performance of Bell business markets was a clear highlight this quarter. After putting the building blocks in place over the past few years, momentum is building with strong demand for a unique and differentiated suite of enterprise services. The BBM team drove significant year over year growth in revenues in the second quarter.

[Curtis Millen, EVP & CFO at BCE]

And although already pointed out by Mirko, it bears repeating that all four elements of Bell business markets contributed to this result. This includes modest growth in core connectivity and communication services, which represents the largest portion of BBM revenues, rapid growth in both the tech owned managed services and our cybersecurity business, and the introduction of Bell AI fab fabric with our first facility launched in June. Under this AI data center agreement, we recognize revenue and EBITDA upon delivery with annual cash flow to be realized over the coming years. Internet revenue was up 3%, a solid result showing we're striking a healthy balance between subscriber growth and disciplined pricing supported by fiber. Greater sales of mobility mobile devices from higher upgrade volumes and contracted activations also contributed to higher revenues on the product side in q two.

[Curtis Millen, EVP & CFO at BCE]

Wireless service revenue was down about 3%. This represents a second straight quarter of improvement in the year over year rate of decline. Our result this quarter reflected competitive pricing pressures that were partially offset by nonrecurring revenue related to the g seven. Despite a 1% increase in total CTS revenues, q two EBITDA declined by one dot 6% primarily due to a three dot 2% rise in operating costs. This increase was driven by higher cost of goods sold, reflecting significant growth in product revenues this quarter.

[Curtis Millen, EVP & CFO at BCE]

Turning to Bell Media on slide 12. Continued digital momentum and solid overall financial performance marked by fifth consecutive quarter of revenue and EBITDA growth. Total q two revenue was up approximately 4%. This result was driven by an eight dot 1% increase in sub revenue on the back of continued strong Craven Sports d to c streaming growth. The f one Canadian Grand Prix and our acquisition of Sphere Abacus also contributed to higher revenue this quarter.

[Curtis Millen, EVP & CFO at BCE]

Despite strong digital video ad growth in the quarter, total advertising revenue was down three dot 1% due to continued weakness in traditional broadcast TV advertiser demand for non sports program and the previously announced divestiture of 45 radio stations, of which the majority were completed during the quarter. Consistent with the increase in revenue, media EBITDA was up 7.8%, driving a 1.1 increase in margin to 27.9%, really strong performance by Bell Media with growth across revenue, EBITDA, and margins. Turning to slide 13. Balance sheet remains quite well positioned with 3,800,000,000.0 of available liquidity and a strong solvency surplus of 4,100,000,000.0 for all BC defined benefit pension plans. Our reported net debt leverage ratio at the '2 was approximately three dot five times adjusted EBITDA.

[Curtis Millen, EVP & CFO at BCE]

This does not reflect our acquisition of Ziply Fiber, which closed on August 1 and was funded with the 4 dot 2,000,000,000 in net sale proceeds from MLSE received at the July together with cash on hand. We are assuming 2 dot 6,000,000,000 of incremental Zipline fiber net debt that has been rolled over and remains outstanding. We are targeting a year end 2025 net debt leverage ratio of approximately approximately three dot eight times, reflecting the impacts of the MLSE sale and Ziply Fiber acquisition. On a pro form a basis, adjusted to include twelve months of Ziply Fiber EBITDA, our net debt leverage ratio would be approximately three dot seven times. In addition, our review of noncore assets continues to progress.

[Curtis Millen, EVP & CFO at BCE]

I'm pleased to report that we've entered into an agreement to sell our home security and monitored alarm assets with the transaction expected to close later this year. In line with our capital allocation priorities, proceeds from this divestiture will be reused to reduce our leverage ratio and strengthen our balance sheet. Moving to slide 14. Zipline Fiber will operate as a separate business unit with results reported separately beginning in q three twenty twenty five. In the meantime, to assist investors with their financial modeling, I will share some of our expectations for Zipline Fiber's 2025 financial and operating performance.

[Curtis Millen, EVP & CFO at BCE]

As you will see, Zimply Fiber continues to deliver consistently strong results driven by the strength of its fiber to the prem platform. During the interim period, performance remained robust with both revenue and EBITDA tracking ahead of our expectations we set at the time of announcement. Last quarter, we called out their impressive EBITDA growth of 17% in 2024. This is projected to accelerate to 20% plus in 2025, driven by continued operational execution and significant growth runway. Ziply Fiber continues to grow its subscriber base, now providing high speed Internet to approximately 440,000 retail subscribers, 85% of which are on pure fiber service.

[Curtis Millen, EVP & CFO at BCE]

Zipline fiber's more mature tenured markets have already reached 40% penetration. That compares with an average penetration of 23% in locations built in the last few years. So there's still meaningful growth ahead on the current footprint, particularly when you consider that over 40% of the fiber locations were built in the last four years. Our acquisition of Zipline fiber is an important part of our plan to generate sustained core business, top line, and EBITDA growth at an attractive return on capital. Lastly, turning to our updated financial guidance targets for 2025 as summarized on slide 15.

[Curtis Millen, EVP & CFO at BCE]

With the inclusion of Ziply Fiber in our operating results for five months this year, we are increasing both BC's consolidated revenue and adjusted EBITDA guidance for full year 2025 to a range of zero to 2%. Our adjusted EPS guidance for 2025 is being revised to a range of minus 13 to minus 10% from the previous range of minus 13 to minus eight. This is to reflect higher depreciation and amortization as well as increased interest expense assumptions related to the Ziply Fiber acquisitions. This revised range does not reflect any purchase price allocation for Ziply Fiber as valuation has not yet been completed. Given Ziply Fiber's planned CapEx spending to execute its in footprint fiber build out for the remaining five months of the year, our expectation for BC capital intensity increases to approximately 15% in 2025 from 14% previously.

[Curtis Millen, EVP & CFO at BCE]

As a reminder to investors, our previously announced partnership with PSP Investments, which is on track to close later this year, significantly reduces the capital investment by BC and Ziply Fiber and improves free cash flow during the network build phase. As a result, our US fiber build out can be accelerated, and we continue to expect to maintain pro form a combined company capital intensity at around 14 and a half percent. We would also expect our capital intensity to further decrease following Ziply Fibers build out of approximately 500,000 fiber locations in its copper footprint by year end 2028. As a result, we are adjusting our free cash flow guidance for 2025 to a range of 6% to 11%. And I'll also qualify that our guidance ranges do not reflect the pending divestiture of NorthWest Town.

[Curtis Millen, EVP & CFO at BCE]

I'll now hand the call back to Chris and the operator to begin q and a.

[Executive]

Thank you, Curtis. And before we start, to keep the call as efficient as possible, please limit yourself to just one question and a brief follow-up so With that, Matthew, we are ready to take our first question.

[Operator]

Thank you.

[Operator]

The first question is from Stephanie Pierce from CIBC World Markets. Please go ahead.

[Stephanie Price, Equity Research Analyst - Software & Services at CIBC World Markets]

Good morning. I'm hoping you can unpack guidance a little bit more just in terms of your initial estimates of Zipline, any adjustments to your thoughts, and anything outside of Zipline that's included in the revised guidance? Thank you.

[Curtis Millen, EVP & CFO at BCE]

Hi, Stephanie. Thanks for the call. So on the Zipply side of it, so as is in the presentation, Zipply, both on the revenue and the EBITDA side, continue to outperform our investment case and outperform what we the financials provided in November. So that continues to be a a very good operating, performance story. And in terms of revised guidance, so I'd say the revised guidance reflects our current view of the combined company performance.

[Curtis Millen, EVP & CFO at BCE]

Right? So this is reported both the existing business and overlaid with the Ziply performance, but it's not a straight a plus b.

[Stephanie Price, Equity Research Analyst - Software & Services at CIBC World Markets]

Okay. Thank you very much. And maybe maybe just a follow-up just on the free cash flow side and and maybe can some comments on on the free cash flow ramp typically expected for 2025.

[Curtis Millen, EVP & CFO at BCE]

Yeah. So in in somewhat odds with what I just said, Stephanie, on the free cash flow side, we are very happy with our Canadian free cash flow performance and midpoint of guidance in on the free cash flow metric, actually, is simply a Canadian expectation overlay with Zipply Fiber.

[Stephanie Price, Equity Research Analyst - Software & Services at CIBC World Markets]

Perfect. Thank you very much.

[Operator]

Thank you. Our next question is from Jerome Zubre from Desjardins Securities. Please go ahead.

[Jérome Dubreuil, VP & Research Analyst - Telecom, Media & Technology at Desjardins Group]

Hey, good morning. Thanks for taking my question. Also, thanks for the guidance update. I'm interested in the kind of longer term free cash profile that Zipline brings. So if you can please discuss the free cash flow profile evolution in the coming years because we're seeing the free cash headwind this year.

[Jérome Dubreuil, VP & Research Analyst - Telecom, Media & Technology at Desjardins Group]

But from my understanding, you have a bigger CapEx only in the first two years, and then there's a significant change in the CapEx profile with the infra cost structure taken over. So if you can discuss maybe what what is in the coming years, is there an inflection in free cash profile from Ziply? Thanks.

[Curtis Millen, EVP & CFO at BCE]

Hi, Jerome. Thanks for the question. So you're right. A a few stepping stones, building blocks to that question. Again, the EBITDA performance as Ziply through the interim period has been very strong.

[Curtis Millen, EVP & CFO at BCE]

Growth in 2024 was 17%, expected to be north of 20% in 2025. So continued EBITDA growth, which ultimately falls to free cash flow. And you're right. Given the PSP partnership is fiber build partnership, what it allows us to do is once we're through the 500,000 fiber locations built in the Ziply copper footprint, the vast, vast majority of fiber build will be done through the PSP the partnership with PSP, which means CapEx at Ziply that we consolidate is largely kind of nearly all gonna be success driven and and a much lower number, dollar wise. So so you're right that we do continue to expect, free cash flow growth and and, frankly, accelerated once the PSP partnership is up and running, which we believe is gonna happen by the end of this year.

[Jérome Dubreuil, VP & Research Analyst - Telecom, Media & Technology at Desjardins Group]

Thank you.

[Operator]

Thank you. Our next question is from Aravinda Galappatthige from Canaccord Genuity. Please go ahead.

[Aravinda Galappatthige, MD - Institutional Equity Research at Canaccord Genuity Inc]

Good morning. Thanks for taking my question. I wanted to dig in a little bit into Bell AI Fabric. Mokum, maybe you can just talk a little bit about the sort of the longer term revenue opportunity here. I know in one of the press releases, you've indicated a $9,000,000,000 TAM.

[Aravinda Galappatthige, MD - Institutional Equity Research at Canaccord Genuity Inc]

I'm not sure how broad that sort of estimate is. How should sort of investors think about sort of the medium term opportunity here from a revenue perspective and then obviously the free cash flow element as well?

[Mirko Bibic, President, CEO & Director at BCE]

Yes. So the, and as I said in my opening remarks, thanks, Aravinda, we're, we're going to execute on the enterprise growth strategy at very manageable investment levels, we expect to generate significant IRRs on that strategy. And, you know, the the growth the TAM is large and, you know, the growth rates market growth rates are quite significant, and we're poised to compete and lead. And it's not just AI fabric. It's it's the way every element of the BBM strategy work in unison.

[Mirko Bibic, President, CEO & Director at BCE]

So it starts with, you know, having the best network connectivity and, having, you know, the the ability to deliver purpose built AI data centers fast. And, you know, in in in this environment, the time to power and the time to construction are a massive competitive advantage, and you saw that. We were able to deliver, a data center in June, and there are more to come on stream. And you'll see some interesting announcements in in the weeks to come that show you the continued momentum in Bell AI Fabric. But but when we have the best networking, the access to the power and the cooling, the land in the building, the ability to stand up the facilities fast, it just spins the service revenue potential as well because now we have a tech co that goes in there and provides, you know, AI and technology and systems integration advisory services.

[Mirko Bibic, President, CEO & Director at BCE]

We have the partnership with Cohere where we can provide access to that software layer. And then, of course, we wrap everything in with, cybersecurity services. So it's a powerful foundation for long term growth, and it's a powerful recipe for our customers. And it's a a significant opportunity to drive product intensity in the enterprise space because of that integration between all elements of the of the strategy, are working in in harmony. Team's done an amazing job putting this together over, you know, eighteen months, and you're starting to see the results.

[Aravinda Galappatthige, MD - Institutional Equity Research at Canaccord Genuity Inc]

Thanks, Mirko. And, just a quick follow-up before I hand the line on, asset divestitures. I mean, saw a tower monetization transaction with TELUS recently. Beyond the $7,000,000,000 that you've sort of earmarked, how should we think of sort of the potential there beyond fiscal twenty twenty five to to further sort of strengthen the balance sheet? Thanks.

[Mirko Bibic, President, CEO & Director at BCE]

Thanks. So we don't have any updates to share at this time with respect to to something like a potential tower sale or monetization of of infrastructure. You know, earlier this year in in February, we announced what our priorities were going to be at least in the near term, and and the focus for us has been to execute against, each of those. And, you know, for example, close Zipply, get the PSP partnership done, get churned down. We indicated that we were gonna have a couple of, noncore asset sales, and and Curtis mentioned one on the on the home monitoring and alarm. So that's been the priority to date.

[Mirko Bibic, President, CEO & Director at BCE]

But, clearly, you know, we view our infrastructure as potentially a valuable source of capital, and we fully recognize the strategic value of a lot of our infrastructure. That could be towers. It could be, AI fabric. It could be other things. And, as we've kinda demonstrated to investors with our US expansion plans, we'll consider and certainly execute on partnerships that help us achieve our long term goals and that help us drive shareholder value.

[Mirko Bibic, President, CEO & Director at BCE]

So it's a long way to say, Aravinda, that we're gonna remain open to exploring opportunities and, under the right conditions going forward.

[Aravinda Galappatthige, MD - Institutional Equity Research at Canaccord Genuity Inc]

Thank you.

[Operator]

Thank you. Our next question is from Tim Casey from BMO Capital Markets. Please go ahead.

[Tim Casey, Equity Research - Telecom, Cable & Media Sectors at BMO Capital Markets]

Thanks. Good morning. Your wireless metrics were encouraging this quarter. Could you, Marco, just talk a little bit about the market dynamics that drove that for BCE in Q2 and your assessment of, I know it's early days in back to school, but what you're seeing in Q3. And then just as a quick follow-up, just on the regulatory side, Merko, is are all your avenues of appeal exhausted with respect to the cabinet decision last night, or should we anticipate that you'll try and seek other avenues there? Thank you.

[Mirko Bibic, President, CEO & Director at BCE]

Thanks, thanks, Tim. Look. On on wireless, really pleased with, with, the performance that we delivered. And if you look on a first half of the year basis, you can see that, over the course of of the first six months of the year, we certainly captured our fair share of gross ads and, and net ads, and and and that's the goal. You know, again, it's it's all elements of the strategy, working together in harmony to deliver those results and particularly a big, big focus on putting the customer first, and and that has allowed our churn to to come down dramatically.

[Mirko Bibic, President, CEO & Director at BCE]

And there's more upside to come on churn execution, And the team is laser focused on that. A couple of other elements, I think we we all know, we see it across the industry, that market growth is still growing, but not growing as fast as in years past. But we're we're still able to in particular as a result of the drop off in, in newcomer growth. But, you know, we weren't as exposed to the newcomer segment, as others, and and there's still opportunity there for us. So that would have been one factor.

[Mirko Bibic, President, CEO & Director at BCE]

Churn would be another factor. And, of course, we're kinda happy as we look into the beginnings of q three and going forward. I think we've got quite pleased with the the pricing structure that we see with tiered pricing and better differentiation between, which between brands, which allows us certainly to have kinda pricing that's appropriately reflective of the value that we provide to customers both on the service side and the hardware pricing side. And so we so, you know, so we'd like to shift to tiered pricing. It allows us to separate, you know, the the the value prop of the different brands.

[Mirko Bibic, President, CEO & Director at BCE]

It allows us to add more value to the customer who is on the higher service rate plans, and then we're able to differentiate even further with content quality of service and other value drivers. So I'd say, you know, this this you know? And our distribution our position on distribution has always been strong. So you put all those elements together, and and you see the results that we delivered in wireless. And then on the regulatory side, I think I'll I'll leave it at what I said in my opening remarks.

[Mirko Bibic, President, CEO & Director at BCE]

I mean, obviously, disappointed. We don't think it's the right decision. But now the focus is on ensuring that all of us who build networks in Canada get fully compensated for the significant costs of building and for the, you know, investment risk taken when we build. And, you know, that's what, that's what we're gonna focus on right now. And and, obviously, at at the macro level, continue to focus on driving growth in the various diversified revenue growth streams that we have.

[Mirko Bibic, President, CEO & Director at BCE]

You know, we're diversified geographically, and we're diversified in terms of the things we are investing in beyond network, and we spent a lot of time unpacking those media, you know, the various elements of the enterprise strategy and, and the customer initiatives.

[Tim Casey, Equity Research - Telecom, Cable & Media Sectors at BMO Capital Markets]

Thank you.

[Operator]

Thank you. Our next question is from Mayor Yaghi from Scotiabank. Please go ahead.

[Maher Yaghi, Managing Director at Scotiabank]

Great. Good morning and thanks for taking my question. I wanted to maybe just dig a little bit deeper into wireless. So the improvement in churn metrics, how sustainable are those? And are they coming dependent on a lot of handset financing efforts on your part to improve those churn metrics?

[Maher Yaghi, Managing Director at Scotiabank]

And second, on ARPU, again, in wireless, the improvement in the year on year decline, how should we think about those improvements? Can they be continued to improve as we go into the second half? From here, you mentioned there are some onetime offs that helped the year on year decline in Q2. Curtis, maybe you can peel off a little bit here and see what could be sustained. And lastly, you mentioned in your slides that about 40% of new Internet activations are coming with bundled wireless services.

[Maher Yaghi, Managing Director at Scotiabank]

How much of your base is actually bundled? Or, you know, in another way, how much of that kind of push into bundling can be extended to your existing Internet subscriber base to help, grow your wireless business even further? Thank you.

[Mirko Bibic, President, CEO & Director at BCE]

Thanks, Mayor, for the question. On, on ARPU, when you exclude the, impact of the of the onetime items and particularly the the lift from, from g seven, our ARPU decline was, you know, closer to in line with previous quarters, but still industry leading. So, you know, that's that's still quite positive. And, you know, pace of ARPU improvement is gonna largely depend on pricing stability in the second half of the of the year. The back book continues to transition into the new pricing environment. I'd say the new pricing environment right now as I'm speaking to all of you is is better than it than it has been in, in months, in months past.

[Mirko Bibic, President, CEO & Director at BCE]

So assuming pricing remains stable, we expect to see kind of positive ARPU movement within the next, three to five orders. So that that bodes well and and so far, so good as we as we see some signs of pricing stabilization in in the beginning of, of q three, three, and that's encouraging particularly as we head into the the busy back to school season. On on, you know, Internet, I would I'll turn it over to to Curtis to answer that one. I would say, you know, the focus certainly for us is going to be, to penetrate, you know, the fiber plant that's already been built. There's lots of upside there because we have built a significant amount of new fiber pass passings in the last three years that that's not yet at full run rate in terms of, penetration equilibrium. So we have, upside there for sure.

[Curtis Millen, EVP & CFO at BCE]

And then, Meyer, it's Curtis. When I was going through the rest of your questions, the one that I had was so on the handset product margin, you know, it's a positive product margin, and it's actually increased quarter over quarter and year over year.

[Mirko Bibic, President, CEO & Director at BCE]

And and on churn reduction, I got pile on here. On on the churn reduction, it's it's a multifaceted approach to churn reduction. So, you know, the, the the retention activities that, that we've put in place, which kinda to to which Curtis' answer relates, there's the broad customer service improvements. There's leaning into our distribution. So, you know, as I mentioned to Tim, it's multifaceted.

[Maher Yaghi, Managing Director at Scotiabank]

Okay. And and just a follow-up, Curtis, you mentioned that the new guidance is a reflection of an updated view about your existing business plus Dipley. But maybe can you help us understand just to get a glimpse of how you're viewing your existing business now versus the beginning when you gave that guidance into wireless and wireline? Have they have the view improved or stayed the same or became a little bit less positive by segment? Just to help understand how you're viewing the business now versus the beginning of the year. Yes.

[Curtis Millen, EVP & CFO at BCE]

Thanks, Maher. Probably can't provide all the detail you want on that. But when you when you you have a moment to run through the math, you'll see, if you look at midpoint of guidance relative to what it was and you kind of overlay what we've announced in terms of Zipline, you'll see revenue midpoint is increased. EBITDA is slightly decreased in line with consensus, and free cash flow is simply reflective where midpoint is is kind of still the right place to be, just overlaying, Ziply fiber impact.

[Maher Yaghi, Managing Director at Scotiabank]

Okay. Great. Thank you.

[Operator]

Thank you. Our next question is from Vince Valentini from TD Cowen. Please go ahead.

[Vince Valentini, Managing Director at TD Cowen]

Hey, thanks very much. Curtis, can you just walk down exactly the $335,000,000 U. S, we can all do fivetwelve of that and apply an exchange rate. Is that just simply what's added for Zipline in the last five months and the rest of the delta is changes in your Canadian guidance? Or is there some sort of accounting adjustment or integration or restructuring costs or anything else that would create that not being a straight line from $3.35 US to whatever is in your numbers.

[Curtis Millen, EVP & CFO at BCE]

Yeah. Vince, you're on the right track. I mean, it's not ever gonna be just exact five twelve, but you're on the right track. And it does reflect impact of our consolidated view. And, again, we've said the underlying business at Zipline continues to outperform.

[Curtis Millen, EVP & CFO at BCE]

So I saw your your note earlier. It's not a Zipline fiber EBITDA impact. Zipline EBITDA is actually doing better than than our investment case.

[Vince Valentini, Managing Director at TD Cowen]

Okay. No. That's totally fine. Just wanna make sure I understand where the moving piece is. So if I take the $3.35 US relative to, correct me if I'm wrong, 7,600,000,000.0 total enterprise value, by the time the deal closed.

[Vince Valentini, Managing Director at TD Cowen]

I mean, that's 16 and a half times, EBITDAs, which you paid. I assume that's pre synergies, but is is there something wrong with that math?

[Curtis Millen, EVP & CFO at BCE]

Well, a few things, Vince. One, I wouldn't look at closing that debt. Right? Transaction values are done on the announcement. We've accelerated fiber build and their subscriber acquisition in the interim period, which is a positive for us.

[Curtis Millen, EVP & CFO at BCE]

So, ultimately, the the transaction multiple would be based on the 2025 EBITDA. So multiple has actually gone down since we announced. And then a couple of other things, which impossible to see, but in terms of our ability to hedge US dollars, between announcement and closing, we've probably picked up a $100,000,000 of value that we hadn't seen before. And then, of course, their big beautiful bill has a NPV benefit on the tax side of the world. So, again, NPV positive, you know, changing changing depreciation and a few other things, which ultimately saves tax dollars, cash tax when they're a cash taxpayer, which is NPV that we hadn't seen at time of announcement, but wouldn't be reflected in in EBITDA closing.

[Curtis Millen, EVP & CFO at BCE]

So we're we're still pretty comfortable. And the way we would look at it, multiple has come down over time as EBITDA performance has gone up and adjustments to net transaction value have have come to our side as well.

[Vince Valentini, Managing Director at TD Cowen]

Thanks. And I'll I'll just keep it at one less than mayor, but one last quick one. Alarm proceeds from that proposed transaction, you didn't disclose it. Is it that mean it's not material?

[Curtis Millen, EVP & CFO at BCE]

No. It's in, it's in the disclosure. It's $90,000,000 guaranteed with $80,000,000, conditional. So 80,000,000 earn out.

[Vince Valentini, Managing Director at TD Cowen]

The $1.70 potential? Correct. Okay. Thank you.

[Operator]

Thank you. Our next question is from Sebastiano Petti from JPMorgan. Please go ahead.

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

Hi. Thank you for taking the question. I guess, congratulations on closing the Zipline transaction. But just thinking about Mirko and Curtis, The US opportunity, obviously, with PSP, you know, closing later in the year. Have your view about organic growth within the market and trying to, you know, scale up the PSP, you know, passings, organically through a build relative to perhaps, you know, some tuck ins or smaller deals like that changed at all, you know, over the course of the last couple of months?

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

Did Stall, you know, any update on that relative to perhaps initial expectations? And then if you could just perhaps help us think about the converged opportunity. Obviously, lots of focus on that in the Canadian market, you guys gave out some great statistics today. But how you're perhaps thinking about that evolving over time within Zipply and within the perhaps JV construct. Is that something we'll come back to further down the road or is that something we'll see maybe some movement on more near term? Thank you.

[Mirko Bibic, President, CEO & Director at BCE]

Thanks, Sebastiano. Look. The the when we talk about Ziply here, The US fiber market's very attractive and and which is the reason why, why we're so pleased to have closed the deal last Friday. US fiber deployment lags Canada. We know that.

[Mirko Bibic, President, CEO & Director at BCE]

Only 50% or so of homes in The US have fiber. So it was a way of saying that the opportunity is pretty significant there as we start executing, the fiber build, you know, completing the the the, you know, the copper overbuild for Zipline in its core ILEC market and activating at the same time a bit later this year, the the the build engine with the PSP. So there's, you know, that's the focus right now, which get the build continue the build engine of Zipline fiber in its own right. And as Curtis mentioned, they accelerated the their build in the last twelve months, compared to what they had been doing. So off to a very good start there, and you can see it in the results.

[Mirko Bibic, President, CEO & Director at BCE]

And we're we're getting organized with PSP later this year to start activating the build engine there as well. So both will be performing together. It's not sequential. It's not like we're gonna start building with PSP once we finish the 500,000 copper lines and Ziply Fibers ILEC footprint, we're gonna be running both more or less at the same time. And I think I've said in the past as well, if there are opportunities that, allow us to, you know, efficiently and if cost effectively execute on the 8,000,000 fiber passants plan with the with some accretive acquisitions.

[Mirko Bibic, President, CEO & Director at BCE]

We'll take a look at it, and we'll take a look at it in in conjunction with PSP. So that remains the the high level approach. There's no specific details to share on on that point. And on, you know, the the convergence side of it, it it remains the case that cons customers, whether or not they're in Canada or The US, consistently will choose the superior broadband product above all else. So Simply Fiber today doesn't have a mobility offering, and and the numbers on page 14 of our slide deck speak speak for themselves as as it relates to their performance.

[Mirko Bibic, President, CEO & Director at BCE]

That said, again, I'll reiterate when the time comes to offer a bundled service, we we will be ready. And, again, on that, there's, there's nothing to share this morning.

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

Thank you. And maybe one quick, I think, a stab at it. But in terms of enterprise service revenue, is there any way to perhaps unpack maybe what that is in terms of, you know, contribution at a CTS level? Just so as we kinda think about the, you know, some of the growth drivers within BBM and maybe how that perhaps, impacts the consolidated segment. Thank you.

[Curtis Millen, EVP & CFO at BCE]

Yeah. Hi. Thanks, Sebastiano. So as Mirko said, it's it's positive revenue growth across the, the four, and I'd say it's low double digit revenue growth across, across BBM. So we're we're we're quite happy with Okay.

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

Thank you so much.

[Curtis Millen, EVP & CFO at BCE]

With the momentum we've we've kind of built up here over the last eighteen months. It's it's really starting to perform.

[Sebastiano Petti, Senior Research Analyst at JP Morgan]

Thank you.

[Operator]

Thank you. Our next question is from Drew McReynolds from RBC Capital Markets. Please go ahead.

[Drew McReynolds, MD - Global Research, Telecommunications & Media at RBC Capital Markets]

Yes, thanks very much. Maybe a follow-up there, Curtis, on the Bell business market. So obviously, great to see all the moving parts pick up here. Where where does where do these kind of three or four revenue streams kind of fit in into the segmented disclosure? Like, you know, obviously, we see product revenue.

[Drew McReynolds, MD - Global Research, Telecommunications & Media at RBC Capital Markets]

You know, what what fits into the wireless or wireline data side? Can you can you help us kind of size that up a little bit?

[Curtis Millen, EVP & CFO at BCE]

Yeah. Thanks for the the question, Drew. So, you know, I think that the new item because the the other items kinda work through generally the Ateco side of the world, and cybersecurity, it's service revenue for the most part. I mean, we will sell equipment, which will hit our product revenue. But, again, those are those are managed services, majority businesses.

[Curtis Millen, EVP & CFO at BCE]

And on the Fabric AI side, which is the the newer business line, frankly, the answer to that is it depends. So it depends on the contract and the agreement partnership that we sign with third parties and customers whether or not they'll be accounted for as financing leases or operating leases, which will determine whether or not those revenues actually hit service revenue or product revenue. So it's not a it's not a one size fits all answer for you. Apologies for that. But the accounting follows the contract, and the contract can lead it to either be service or products.

[Curtis Millen, EVP & CFO at BCE]

So we'll try to help you along as we, continue to monetize and and sign more and more contracts that are in our funnel at this point.

[Drew McReynolds, MD - Global Research, Telecommunications & Media at RBC Capital Markets]

Okay. No. That's that's great. And, maybe a follow-up, for you, Mirko, just back to the TPIA file, and the rates needing to be kind of balanced. Just just wondering from your perspective, as we get kind of a finalized framework here in Canada, what's your updated thoughts with respect to further fiber to the home expansion, assuming you get rates that you're pleased with, do you see further fiber expansion opportunities from from a VC perspective? Thank you.

[Mirko Bibic, President, CEO & Director at BCE]

Well, we certainly have a fiber opportunity in Canada from, we're gonna be laser focused on penetrating what we've already built, and we're close to 8,000,000 homes and, you know, more fiber than everyone else. So that's gonna be the focus right now. I mean, already, you've seen quite unfortunately a a significant scaling back of our fiber build in the last eighteen months. It went not too long ago when we were having these conversations, we were aiming to, 9,000,000, fiber locations passed, and that's, you know, largely gonna plateau around the 8,000,000 mark. So that gives you a sense of the impact the decisions already had.

[Mirko Bibic, President, CEO & Director at BCE]

So, I mean, right now, again, the focus is decision's a decision. So I look at it from this perspective. We've got a lot of opportunity with fiber that's already been built that hasn't been penetrated. That would be one. Secondly, again, I I I would urge the federal government, the CRTC, to ensure that not just Bell, but all network builders get properly compensated, for what for what's being built and what is going to be built.

[Mirko Bibic, President, CEO & Director at BCE]

So that'd be the second point. And the third point is I take a big step back. You know, it's not we react to the signals around us. You know, the the rule has been in place. The TPIA rule has been in place since, I guess it was 2023.

[Mirko Bibic, President, CEO & Director at BCE]

If you look at our very tight four pillar strategy, they all work in unison, and they're allowing us to drive revenue growth in in diversified ways, diversified domains, and diversified geographies. So, you know, that's a very, very good thing for us.

[Drew McReynolds, MD - Global Research, Telecommunications & Media at RBC Capital Markets]

Got it. Understood. Thank you very much.

[Operator]

Thank you. Our next question is from Matthew Griffiths from Bank of America. Please go ahead.

[Matt Griffiths, Research Analyst at Bank of America Merrill Lynch]

Great. Thanks for taking the question. On the updated guidance for free cash flow, I know that includes obviously the contribution of Zipfleet, but does it also factor in the kind of bonus depreciation extension that was passed? And related to that, within the JV structure, will The U. S.

[Matt Griffiths, Research Analyst at Bank of America Merrill Lynch]

Operations on the CapEx side and the cash tax side continue to benefit from that extension of the bonus tax depreciation? And then one final question. I was wondering, Mirko, if you could set some expectations for what you're planning to communicate on the October 14 Investor Day, whether it includes kind of a longer term guidance, the way we often see things with Investor Days or if that you're planning some deeper dive into a certain segment of the business where we can potentially get some additional disclosure on numbers to match the kind of qualitative descriptions that we received, which just would be helpful to level set. Thank you.

[Mirko Bibic, President, CEO & Director at BCE]

You should should just come to October 14. You you

[Matt Griffiths, Research Analyst at Bank of America Merrill Lynch]

I will.

[Mirko Bibic, President, CEO & Director at BCE]

We'll so the the short answer to this, we'll we'll, we're we're you know, it's going to be, an investor day, so we'll be, you know, laser focused on, on sharing with you what, we believe matters, the most to, our investor base. And the agenda is going to be structured around, you know, the four strategic pillars of growth that I, that I've outlined time and again as well as you know, basically, we've got four strategic pillars, and all of that is supported by the business transformation program and the amazing Dell team. So that's what we'll be showcasing, all of those elements.

[Curtis Millen, EVP & CFO at BCE]

And then, Matt, your other question. So, in terms of the bonus depreciation, there's no impact in 2025. So I guess it would be reflected, but there's no there's no, benefit captured. I think that that cash benefit's gonna be captured over time for us, but not in 2025.

[Matt Griffiths, Research Analyst at Bank of America Merrill Lynch]

And and in terms of the JV structure, you're still gonna be able to benefit from those rules or the JV structure, and I just and this may be a silly question, but I'm just not sure how these type of structures can impact your ability to leverage kind of favorable tax legislation in a different country. So anything would It's a fair question, Matthew.

[Curtis Millen, EVP & CFO at BCE]

That that's the expectation. Right? The the entity that's gonna be spending the capital gets to benefit from the 100% bonus depreciation. So the expectation is still be able to benefit within that partnership.

[Matt Griffiths, Research Analyst at Bank of America Merrill Lynch]

Okay. Thank you.

[Operator]

Thank you. There are no further questions registered at this time. I would now like to turn the meeting over to mister Summers.

[Executive]

Thanks again, everyone, for your participation on the call this morning. Richard and I will be available throughout the day for follow-up questions or clarifications. Thanks, and have a great day.

[Mirko Bibic, President, CEO & Director at BCE]

Thank you, everyone.

[Curtis Millen, EVP & CFO at BCE]

Thanks, everyone.

[Operator]

Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.

Participants

Executives

• Mirko Bibic, President, CEO & Director
• Curtis Millen, EVP & CFO

Analysts

• Executive
• Stephanie Price, Equity Research Analyst - Software & Services at CIBC World Markets
• Jérome Dubreuil, VP & Research Analyst - Telecom, Media & Technology at Desjardins Group
• Aravinda Galappatthige, MD - Institutional Equity Research at Canaccord Genuity Inc
• Tim Casey, Equity Research - Telecom, Cable & Media Sectors at BMO Capital Markets
• Maher Yaghi, Managing Director at Scotiabank
• Vince Valentini, Managing Director at TD Cowen
• Sebastiano Petti, Senior Research Analyst at JP Morgan
• Drew McReynolds, MD - Global Research, Telecommunications & Media at RBC Capital Markets
• Matt Griffiths, Research Analyst at Bank of America Merrill Lynch