Rogers Communications (NYSE:RCI) topped second quarter earnings expectations, driven by higher service revenue, adjusted EBITDA growth and improved capital efficiency, while advancing plans to acquire the remaining minority stake in Maple Leaf Sports & Entertainment (MLSE).
The company reported total revenue of C$5.62 billion, ahead of consensus estimates of C$5.55 billion.
Adjusted earnings per share came in at C$1.15, exceeding analyst expectations of C$1.13.
Total service revenue increased 8% year-over-year to C$5.1 billion, while adjusted EBITDA rose 3% to C$2.4 billion. Free cash flow increased 6% to C$1 billion, supported by a decline in capital intensity to 12.4%, the company’s lowest level since the first quarter of 2008.
“We’re excited to bring together Canada's premier communications company with one of the world's premier sports and entertainment organizations and unlock long-term value for our shareholders,” Rogers CEO Tony Staffieri said in the company’s earnings release.
Wireless service revenue was stable during the quarter, while adjusted EBITDA increased 1% and adjusted EBITDA margin expanded 70 basis points to 66%. Rogers added 40,000 mobile phone net additions, including 22,000 postpaid additions, with postpaid mobile phone churn of 0.94% and mobile phone average revenue per user of C$54.25.
The company’s cable business also reported growth, with service revenue and adjusted EBITDA each increasing 1%. Cable adjusted EBITDA margin improved 10 basis points to 58%, while retail Internet net additions totaled 17,000.
Rogers’ sports and media segment generated revenue of C$1.2 billion, up 53% year-over-year, with organic sports and media revenue excluding the impact of MLSE rising 13%. Adjusted EBITDA for the segment improved by C$61 million to C$69 million.
Rogers reaffirmed its 2026 outlook, which calls for total service revenue growth of 3% to 5%, adjusted EBITDA growth of 1% to 3%, capital expenditures of C$2.5 billion to C$2.7 billion, and free cash flow of C$4.1 billion to C$4.3 billion.
The company said its agreement to purchase the remaining 25% minority stake in MLSE is expected to close in the fourth quarter. Following completion, Rogers plans to offer investors a minority stake in its consolidated sports and media holdings as part of its strategy to unlock value from the assets.
Shares of Rogers were down 1.3% at C$48 post-earnings.