Rogers Communication NYSE: RCI reported what management described as a “solid” first quarter of 2026, highlighting service revenue and adjusted EBITDA growth, margin expansion, sharply lower capital spending, and stronger free cash flow. Executives also emphasized a major shift in the company’s 2026 capital allocation plans amid what they called a low-growth and heavily promotional competitive environment, alongside ongoing efforts to “surface” the value of its sports and media assets.
Quarterly performance: revenue and EBITDA up, margins expanded
President and CEO Tony Staffieri said the company delivered higher service revenue and adjusted EBITDA in the quarter, with “free cash flow accelerated and debt leverage further reduced.” He also pointed to “industry-leading margins in both wireless and cable,” and said the media business posted strong revenue growth and a “significant improvement in EBITDA.”
Chief Financial Officer Glenn Brandt provided consolidated figures, reporting total service revenue increased 10% year-over-year to CAD 4.9 billion, while adjusted EBITDA rose 5% to CAD 2.4 billion. Capital expenditures declined to CAD 0.8 billion, down 17%, and capital intensity improved 500 basis points to 14.7%. Brandt said free cash flow increased by CAD 0.2 billion, up 32% from a year earlier.
On the balance sheet, Brandt said leverage was 3.8x at March 31, down from 3.9x at year-end. He added that liquidity totaled CAD 6 billion, including CAD 1.4 billion of cash and equivalents and CAD 4.6 billion of available credit facilities. During the quarter, Rogers issued an aggregate CAD 2.3 billion of subordinated notes, which Brandt said helped strengthen liquidity and the balance sheet.
Wireless: promotional pressure, but net adds were positive
Staffieri said the first quarter is typically seasonally quiet for wireless, but the market saw “aggressive wireless promotional activity from competitors, driven by supply rather than demand.” He said Rogers “did not lead on pricing aggression,” instead emphasizing network differentiation and bundled value propositions such as “the best 5G Plus network,” multi-line value, Rogers Satellite coverage, rewards tied to the Rogers Red Mastercard, and “Beyond the Seat” sports and entertainment access.
As promotions intensified later in the quarter, Staffieri said the company “participate[d] selectively” and, when matching on price, saw its “brand and value proposition resonated strongly.” Rogers ended the quarter with 33,000 net adds, while wireless margins improved by 40 basis points to 65%, and service revenue was stable, he said.
Brandt said wireless adjusted EBITDA was up 1% year-over-year on cost efficiencies. He reported 33,000 total mobile phone net additions, including 28,000 postpaid net adds, which he said was up 17,000 year-over-year and above initial expectations. He also disclosed mobile phone ARPU of CAD 55.60, down about CAD 1.30 or 2.4%, and postpaid mobile phone churn of 1.22%, up 21 basis points.
Looking ahead, Staffieri told an analyst that Rogers still sees organic wireless volume growth of about 2% to 2.5%, largely from penetration gains, but said expectations for ARPU growth have weakened. He also said the company continued to see promotional pricing in certain segments after quarter-end that it viewed as “irrational and below cost metrics by any measure.”
Cable: positive internet net adds and 58% margin
In cable, Staffieri said Rogers delivered positive internet loading and continued margin expansion. The company posted 7,000 retail internet net additions. Cable service revenue and adjusted EBITDA both rose 1%, and after adjusting for the prior-year sale of data centers, Staffieri said both were up 2% organically. Cable margins improved by 30 basis points to 58%.
In response to a question about broadband competition and satellite, Staffieri said the market is maturing and customers are focused on “reliable internet and secure internet.” He said Rogers’ fixed wireless access/5G home internet offering was “working well” in consumer and especially small business segments. On satellite broadband, he said Rogers was not seeing “anything significant in terms of change,” describing it as “largely a rural play” with limitations, and said Rogers’ product remained “a very good competitive advantage over satellite.”
Sports and media: revenue near CAD 1 billion, monetization plans reiterated
Rogers’ Sports & Media results reflected the consolidation of MLSE, executives said. Staffieri reported Q1 revenue was up 82% to “just under CAD 1 billion.” He said adjusted EBITDA was at break-even due largely to the timing of rights fees, but represented a CAD 60 million year-over-year improvement.
Brandt similarly said Sports & Media revenue increased 82%, “primarily driven by the consolidation of MLSE,” and also cited higher subscriber revenue from the launch of the “Warner Bros. Discovery suite of channels.” He said the mix and flow-through resulted in breakeven adjusted EBITDA, a CAD 63 million year-over-year improvement.
Management reiterated plans to complete the purchase of the remaining 25% minority interest in MLSE in the second half of 2026. Staffieri said that after closing, Rogers plans to combine its sports and media assets and “bring in external investors for a minority interest” in an entity it estimates would have a value “in excess of CAD 25 billion,” with proceeds used to pay down debt.
Asked about the basis for the valuation estimate, Staffieri said it is built from “publicly available information,” including Forbes and Sportico valuations for sports teams, plus valuations for businesses such as live entertainment and Rogers’ media assets including Sportsnet and Sportsnet+. He added that sports streaming valuations can carry “a significant value premium.”
When asked whether Rogers could wait longer to pursue a minority investment given rising sports franchise values, Brandt said the company remained committed to “surfacing the value” of the assets through a recapitalization and reiterated that the market value of those assets “currently are not part of the RCI share price.”
Capital spending cut drives a major free cash flow upgrade
The most significant update from the call was an overhaul to 2026 capital spending and free cash flow expectations. Staffieri said Rogers reduced planned capital spending by 30% versus last year, with updated 2026 CapEx guidance of CAD 2.5 billion to CAD 2.7 billion, implying capital intensity of about 12%. He said the company now expects 2026 free cash flow of CAD 4.1 billion to CAD 4.3 billion, an increase of roughly CAD 800 million from last year, and plans to use the added cash flow to accelerate debt reduction.
Brandt said the reduction reflects Rogers nearing the end of a major investment period, noting the company invested about CAD 12 billion in CapEx over the past three years across wireless and wireline networks and IT infrastructure. He also tied the lower run-rate to “slower growth opportunities” driven by aggressive discounting and a regulatory environment that “increasingly disincentivizes” capital investment.
In the Q&A, Brandt said the reductions are largely a “reprioritization” and “general lengthening of the delivery schedule,” with projects being pushed further out. He also said the company expects to sustain the lower investment level beyond 2026, though he did not provide specific numbers for later years. Brandt added that sustaining the lower capital intensity has the “potential capacity” to reduce leverage by an additional 40 to 50 basis points over the next four years.
On whether the change represents a deferral or a true cut, Brandt argued it is a long-term lower run-rate rather than a one-year pushout. Staffieri added that “deferral is one of three items” contributing to lower capital spending, saying: “First and foremost, there are projects we’re just canceling.” He said Rogers no longer sees “the economics in building in certain areas” due to regulatory policy, and also cited continued capital efficiency improvements and pacing projects to align with revenue.
Regulatory issues surfaced repeatedly. Staffieri told an analyst that policies allowing network access at “subsidized rates” without meaningful investment commitments create “false economics” and said the company wants policies that “encourage investment, reward investment, and incent companies like Rogers to continue to take risks.”
Brandt also indicated Rogers expects some restructuring costs during the year, calling them a “minor element” related to lower capital spend and also tied to planned synergies across the MLSE and sports and media transaction. He said many savings are expected to come from reduced third-party supplier costs and improved contract efficiencies, some of which he expects can be achieved without restructuring charges.
About Rogers Communication NYSE: RCI
Rogers Communications Inc is a Canadian integrated communications and media company headquartered in Toronto, Ontario. The company provides a broad range of telecommunications services to residential and business customers across Canada, including wireless voice and data services, cable television, high-speed internet, and home phone services. In the enterprise market it offers managed IT, data center and cloud solutions, networking and connectivity services targeted to small businesses, large enterprises and public sector clients.
In addition to connectivity services, Rogers operates a significant media portfolio that includes national and regional television and radio assets, sports broadcasting properties and other content businesses.
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