TELUS NYSE: TU reported first-quarter 2026 results marked by continued customer additions, stable profitability and higher free cash flow, while management emphasized cost controls, asset monetization and growth in health, digital and artificial intelligence-related businesses.
On the company’s earnings call, TELUS said it generated 262,000 total customer additions in the quarter, including 12,000 mobile phone net additions, 229,000 connected device net additions and approximately 21,000 Internet customer net additions. Management said the connected device result was a first-quarter record for TELUS and its second-highest quarterly result ever.
Doug French, EVP and CFO of TELUS, said consolidated service revenue increased 1% year over year, while adjusted EBITDA was stable. Cash from operations exceeded CAD 1 billion, and free cash flow on a comparable basis was CAD 583 million, up 19% from a year earlier.
French said the quarter reflected “discipline with focus on operational execution and vigorous cost management” amid a competitive telecom market. TELUS also reported that network revenue increased 1%, supported by sequential improvement in ARPU trends.
Telecom Business Focuses on Bundling, Margins and Cost Efficiency
Management said TELUS continues to rely on its bundled mobile and home strategy, which it said supports lower churn, higher revenue per household and differentiated service offerings. The company pointed to its PureFibre and 5G+ networks as key assets supporting customer growth.
In its fixed business, TELUS said fixed data service revenue rose 1% in the quarter, driven by residential Internet subscriber base growth and higher revenue per customer. French said business fixed data continued to reflect revenue variability from customer contract changes, partly offset by growth in small and medium business.
TELUS also said it is no longer reporting TV, security and automation, and residential subscribers in its reported subscriber base, with French saying the change reflects a focus on product intensity and the company’s core mobility and Internet strategy.
TTech adjusted EBITDA was stable, while adjusted EBITDA margin expanded 80 basis points to 44.4%. French attributed the margin performance to cost efficiency programs, synergies from the privatization of TELUS Digital and AI enablement.
TELUS Health Posts Double-Digit Growth as Strategic Review Advances
TELUS Health delivered 11% growth in both service revenue and adjusted EBITDA. Management said this marked the 15th consecutive quarter of double-digit adjusted EBITDA growth since TELUS acquired LifeWorks in the third quarter of 2022.
The company said annualized LifeWorks synergies reached CAD 431 million, exceeding its CAD 427 million target and nearly tripling its original CAD 150 million commitment. TELUS said TELUS Health is generating more than CAD 2 billion in annual revenue and is targeting EBITDA of more than CAD 400 million in 2026, along with more than CAD 200 million of “simple free cash flow.”
TELUS said TELUS Health now covers nearly 170 million lives globally. Management also said its review of strategic partnership opportunities for TELUS Health is progressing, including potential strategic investors in areas such as retirement benefit solutions.
Darren, who delivered opening remarks on the call, said TELUS had received more than 75 inbound inquiries from interested parties before launching the formal marketing process. He said a confidential information memorandum is being distributed to qualified parties, with proceeds from any strategic partnerships expected to support deleveraging.
TELUS Digital and AI Strategy Remain Central Themes
TELUS Digital’s operating revenue was lower to start the year, which French said reflected unfavorable foreign exchange impacts and lower volumes from certain technology clients. However, he said that in U.S. dollars and including inter-segment revenue, TELUS Digital revenue grew 3%. Adjusted EBITDA for the segment increased 2%, with margin expanding 20 basis points to 10%.
Management said TELUS Digital continues to play a central role in TELUS’ AI strategy, including customer experience automation and internal efficiency initiatives. Tobias Dengel, President of TELUS Digital, said every piece of work TELUS Digital does for TELUS is now supported by AI, citing contact centers as a major use case.
Dengel said AI tools are helping agents respond to customer issues, improve first-call resolution and support new team members. He also cited client examples including a 25% reduction in average handle time for a U.S. telecom client and improvements in customer satisfaction and quality metrics for technology clients.
TELUS said its AI-enabling capabilities delivered 22% revenue growth in the first quarter. The company also said its sovereign AI factory in Rimouski, launched in September 2025, is sold out. Management said TELUS is expanding compute inventory in Rimouski and expects a second facility in Kamloops, British Columbia, to come online “in fairly short order.”
Free Cash Flow, Deleveraging and Asset Monetization in Focus
TELUS reaffirmed its 2026 free cash flow target of approximately CAD 2.45 billion. French said the company is “striving to be within the mid to lower end” of its consolidated service revenue and adjusted EBITDA guidance range, citing market pressures early in the year but pointing to expected improvement in the second half.
The company reported a net debt-to-EBITDA ratio of 3.5 times as of March 31, down from 3.9 times a year earlier. French said TELUS remains confident in reaching 3.3 times or lower by the end of 2026 and 3.0 times or better by the end of 2027.
Management also highlighted a broader asset monetization program targeting CAD 7 billion of assets, including TELUS Health opportunities. TELUS said its PureFibre network is valued at approximately CAD 20 billion based on comparable U.S. fiber infrastructure valuations.
The company said its copper-to-fiber transition is creating real estate opportunities, including a portfolio of 70 sites with an estimated CAD 4 billion in total value, including CAD 600 million from commercial assets. French said commercial opportunities and some residential assets could be nearer-term, while the remaining portfolio would likely unfold over two to five years.
TELUS said it maintained its dividend at the current level and reduced its dividend reinvestment plan discount to 1.75% from 2% in the first quarter. Management said further reductions are planned through 2026 and into 2027, with full removal expected by the end of 2027 if not earlier, depending on monetization progress.
Leadership Changes Highlighted on Call
The call also included comments on leadership transitions. Darren thanked French, who is retiring at the end of June, for his 30-year career at TELUS. French, in turn, congratulated Darren on his retirement and said TELUS had evolved from a regional telecom company into a national telecom and global business spanning health, agriculture and digital operations.
TELUS said Gopi Chande will become CFO effective July 1. Darren said Chande brings CFO experience from TELUS Digital and nearly three decades of strategic financial leadership.
About TELUS NYSE: TU
TELUS Corporation NYSE: TU is a Canadian telecommunications and technology company headquartered in Vancouver, British Columbia. It delivers a broad portfolio of consumer and business communications services across Canada, including mobile wireless, fixed-line voice, broadband internet, and television. TELUS also provides a range of enterprise services such as cloud and IT solutions, managed network services, cybersecurity and Internet of Things (IoT) offerings for business customers.
Beyond core connectivity, TELUS has expanded into health and digital services.
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