Quebecor Inc. reports third quarter 2026 consolidated results - DEFI TECHNOLOGIES INC

Financial Performance:

• Consolidated revenue increased 4% YoY to $1.45 billion; EBITDA rose 13% YoY to $707 million ($79 million increase), excluding stock-based compensation (SBC), EBITDA grew 7%.
• Net income attributable to shareholders reached $296 million ($1.33/share), up 26% from $236 million a year prior.
• Cash flow from operations increased 15% YoY to $530 million; adjusted EBITDA for Telecom reached a record $648 million with margins expanding to 51% (up 160 bps).
• Wireless service revenue grew 10% to $492 million; Internet revenue grew 3% to $555 million.
• Net debt reduced by over $220 million, lowering net debt-to-EBITDA ratio to 2.69x (industry lowest); liquidity stands at >$900 million.
• Repaid $300 million in term loans related to the Freedom Mobile acquisition; 3.9 million Class B shares repurchased ($238 million YTD).
• Adjusted cash flow from operations in Telecom rose 7.9% to $475 million despite CapEx increases.

Guidance and Future Outlook:

• Management expresses high confidence in Q4 and the holiday season, citing strong momentum in Freedom Mobile's national expansion and Videotron's G2O3 leadership.
• Outlook remains positive for Internet revenue growth in Quebec, driven by improved service value and bundling.
• Long-term goal involves maintaining a best-in-class balance sheet while continuing disciplined network investments to drive differentiation.
• Cost discipline is expected to generate operating leverage, benefiting shareholders as business expands.
• SBC impact for the quarter was a $31 million year-over-year decrease (favorable); full-year SBC charges increased $55 million, but underlying EBITDA growth remains strong (approx. 10% excluding SBC).

Business Segments and Product Lines:

• Telecom: Added 100,700 new mobile lines (best quarterly growth in history); ARPU increased to $36.08 (+$1.03 YoY) driven by customers upgrading plans without price hikes for existing customers.
• Wireless Brands: All three brands (Videotron, Freedom Mobile, Fizz) contributed to growth; Freedom Mobile expanded 5G/5G+ coverage to 500,000+ additional Canadians in Ontario, Alberta, and BC.
• Internet: Added 8,600 broadband customers; Internet revenue grew 3% in a mature market.
• Media: Adjusted EBITDA reached $40 million (+$16 million YoY) due to cost reductions and TVA SPA subscription growth.
• Sports & Entertainment: Revenues declined $4 million to $65 million; EBITDA down $0.9 million to $14 million.
• New Agreements: Secured a 12-year NHL broadcast rights agreement with Rogers extending through 2037-2038; signed new TVA SPA affiliation.

Market and Competitive Landscape:

• Quebecor gained market share in a sector where industry-wide net additions reportedly declined 30-40%; company estimates net add share approaching 50-52%.
• Competitive advantage highlighted by "everyday low price" strategy; while "Big Three" raised rates, Quebecor maintained pricing, driving customer migration.
• Wireless service revenue market share grew from ~7% to nearly 8% in the last 12 months, indicating significant runway in Western Canada (single-digit share currently) and Ontario.
• Competitors face regulatory challenges (CRTC fights, fee disputes) which Quebecor attributes to their struggles, contrasting with its transparency and customer-focused approach.

Risks and Challenges:

• Western Canada (Alberta/BC) network build-out faces logistical challenges regarding manpower and expertise compared to Quebec/Ontario, potentially limiting expansion speed.
• Potential future competitive retaliation if incumbents adjust pricing strategies in response to Quebecor's growth.
• Industry-wide structural decline in traditional wireline services (offset by Internet growth).
• Regulatory environment and spectrum scarcity regarding potential non-terrestrial networks (e.g., SpaceX) remain uncertain.
• Advertising revenue softness continues to pressure the media segment, though partially offset by subscription growth.

Management Commentary and Tone:

• Tone is confident, proud, and disciplined; management emphasizes "resilient and profitable growth."
• Strong emphasis on the "volume and value" thesis, asserting that growth and ARPU increase simultaneously without price hikes for existing customers.
• CFO Hugues Samard highlighted the "best-in-class balance sheet" and strict cost management as core drivers of margin expansion.
• CEO Pierre-Charles Péladeau framed the strategy as a long-term play on customer trust and transparency, dismissing the need for short-term pricing adjustments.

Analyst Questions and Answers:

• Western Canada Expansion: Confirmed single-digit market share in the West represents a "huge opportunity"; expansion is ongoing but requires careful network build-out due to terrain and labor challenges.
• Capital Allocation: No change to strategy anticipated; focus on maintaining debt paydown (only $100M of specific acquisition tranche left), dividends, and stock buybacks; Q4 CapEx expected to rise slightly to align with annual guidance.
• Subscriber Growth Drivers: Attributed to a combination of gross additions, retention, and the "everyday low price" value proposition; competitors are seen as self-sabotaging via price hikes.
• EBITDA Margins: Management confirmed confidence in maintaining high operating margins (51%) even as they invest in network expansion, citing continuous OPEX optimization.
• SpaceX/MVNO: No definitive yes/no on MVNOs with SpaceX; stated they monitor non-terrestrial networks and regulatory shifts but have not made a decision as it is too early.
• Stock-Based Compensation: Clarified that the $31M YoE impact on EBITDA reflects the difference in SBC charges between Q3 2026 and Q3 2025.

Other Key Points:

• 5G Plus network access was granted to all Freedom Mobile customers on all plans at no extra cost to build trust.
• Videotron expanded wireless coverage to Abitibi-Témiscamingue, North Quebec, and Saguenay-Lac-Saint-Jean.
• "Other revenue" in Telecom surged 36% YoY, primarily driven by the inclusion of ATR (Advertising, Tech, and other revenue) and SVOD revenues previously categorized differently.
• The company has repaid the last tranche of the Freedom Mobile acquisition debt ahead of schedule ($200M in Q3, $100M post-quarter end).