• Wireless Service Revenue: Increased by 2% in Q4 2024.
• Adjusted EBITDA: Grew by 6% in wireless and 9% on a consolidated level in Q4 2024.
• Wireless Margin: Reached 66%, up 250 basis points year over year.
• Net Postpaid and Prepaid Phone Additions: 95,000 in Q4 2024.
• Postpaid Mobile Phone Churn: Improved to 1.53%.
• Cable Revenue: Returned to slight year-over-year growth in Q4 2024.
• Cable Adjusted EBITDA: Increased by 5% year over year.
• Cable Margin: Achieved 59%, up 290 basis points from the previous year.
• Internet Net Additions: Up 30% year over year, reaching 26,000 in Q4 2024.
• Media Revenue: Increased by 10% in Q4 2024.
• Media Adjusted EBITDA: $53 million in Q4 2024, compared to $4 million last year.
• Free Cash Flow: Increased by 7% year over year to $0.9 billion in Q4 2024.
• Capital Expenditures: $1 billion in Q4 2024.
• Debt Leverage Ratio: Ended the year at 4.5 times.
• Available Liquidity: $4.8 billion at year-end 2024.

• Warning! GuruFocus has detected 6 Warning Signs with RCI.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rogers Communications Inc (NYSE:RCI) achieved industry-leading results in a highly competitive fourth quarter, with a combined 623,000 wireless and internet net additions.
• The company delivered the highest wireless and cable margins in the industry, with wireless service revenue up 2% and adjusted EBITDA growing by 6%.
• Rogers Communications Inc (NYSE:RCI) reported a 26% increase in free cash flow, demonstrating strong financial performance.
• The company made significant investments in network leadership, being awarded Canada's most reliable networks by independent testing agencies.
• Rogers Communications Inc (NYSE:RCI) is expanding its ownership in Maple Leaf Sports and Entertainment (MLSE) to a majority 75%, which is expected to deliver long-term growth and additional value.

Negative Points

• The wireless market size was down by an estimated 25% to 30% year-on-year in the fourth quarter, impacting net postpaid and prepaid phone subscriber additions.
• The advertising market was softer than anticipated, contributing to a lower-than-expected full-year consolidated service revenue growth.
• Rogers Communications Inc (NYSE:RCI) ended the year with a debt leverage ratio of 4.5 times, which was above the targeted level of 4.2 times.
• The company faces ongoing challenges with moderating wireless subscriber growth due to declining immigration and foreign student levels in Canada.
• There are uncertainties related to the completion of the structured equity investment and the acquisition of the additional stake in MLSE, which could impact the balance sheet.

Q & A Highlights

Q: Can you unpack your assumptions for 2025 service revenue growth, considering the moderating population growth environment? A: In 2024, the market size for net ads was down by 25% to 30% year-on-year. For 2025, we estimate market growth at about 3%, with continued penetration gains. We expect to over-index on market share in both wireless and cable, supported by solid ARPU performance. (Anthony Staffieri, CEO)

Q: Can you provide more color on the CapEx drivers this year, particularly regarding DOCSIS 4.0 upgrades? A: Our capital program focuses on network reliability and innovation. The DOCSIS 4.0 implementation will occur later this year, with the heavy lifting already underway. The investment is relatively modest, aimed at delivering superior internet quality. (Anthony Staffieri, CEO)

Q: How do you plan to manage the balance sheet if the structured equity financing proposal doesn't occur? A: We are committed to maintaining our investment-grade ratings and have several options available. Our focus remains on deleveraging and strengthening our balance sheet, with or without the structured equity investment. (Glenn Brandt, CFO)

Q: Can you discuss the timing and any potential issues with closing the MLSE transaction? A: The MLSE transaction requires league and CRTC approvals. The process is ongoing, and while slower than anticipated, we don't foresee any issues. Our intent is to close the transaction once approvals are received. (Anthony Staffieri, CEO)

Q: How are you addressing the economic outlook in your 2025 guidance? A: Our guidance reflects current economic conditions, including population growth and the decline in international students. We are confident in the Canadian economy's resilience and have factored these realities into our guidance. (Glenn Brandt, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.