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

Explicit Guidance:

• CapEx: Fourth-quarter capital expenditures are expected to "pickup" relative to previous quarters to align with full-year guidance; timing adjustments in infrastructure investments will drive this increase.
• Capital Allocation Strategy: Debt repayment is the priority for the remaining $100 million term loan (maturing April 2027). Dividends were increased last quarter and will be "revisited next year." Stock buyback programs have been renewed for the foreseeable future.
• Margins: Management targets "continuous improvement" in EBITDA margins, citing a commitment to maintaining industry-leading margins even as the wireless business expands into Western Canada.
• Revenue Growth: No specific numerical guidance provided for future quarters, but the company projects "durable performance" and a "long runway" for growth in subscriber additions and ARPU.

Business-Segment Outlook:

• Telecom (Wireless):
  • Western Canada: Expansion in British Columbia and Alberta is ongoing; the company aims to transition customers from roaming to its own network as conditions improve. Management acknowledges a "small position" (single-digit market share) with "huge opportunity" to grow.
  • Market Share: Goal to continue gaining share in Ontario, Quebec, and Western Canada. Wireless service revenue share is currently ~8% of the industry, up from ~7% a year ago.
  • ARPU: ARPU growth is expected to be "sustainable" and continue increasing year-over-year without raising prices for existing customers; growth will be driven by customers migrating to richer plans.
  • Subscriber Base: Momentum on net additions is expected to accelerate, maintaining a strategy of adding over 50% of industry net adds in competitive environments.
• Telecom (Internet/Wireline):
  • Quebec: Internet revenue growth is expected to remain positive (3% in Q3) as the market recovers; a healthy trend is anticipated for the coming quarters.
  • Cable: The decline in traditional cable services is stabilizing, with declines reducing from -4% two years ago to -1% currently, expected to continue improving.
  • Western Expansion: Internet expansion into Western markets is part of the national footprint strategy, though specific revenue targets are not quantified.
• Media:
  • Sports Rights: Secured an NHL supply agreement through the 2037-2038 season, reinforcing the position of TVA Sports as the premier destination for French-language hockey, expected to drive subscription revenue.
  • Advertising: Cautious outlook on industry-wide advertising trends; performance will rely on cost discipline and subscription stability.

Market and Competitive Outlook:

• Competitive Dynamics: Management anticipates competitors (the "Big Three") may face pressure to reverse price hikes due to customer dissatisfaction, noting that incumbents are "facing fights against the regulator" and implementing "successive rounds of price increases."
• Pricing Strategy: Commitment to maintaining an "everyday value-driven pricing strategy" and avoiding surprise rate hikes to differentiate from competitors.
• Market Saturation: Acknowledges "sluggish market" conditions and slowing penetration growth nationally, but argues the runway for share gain remains significant.
• Brand Positioning: Freedom Mobile and Fizz are expected to continue gaining brand recognition in Western Canada, particularly Fizz in BC where digital brands are in higher demand.

Macro / Industry Outlook:

• Regulation: Awareness of federal government interest in Non-Terrestrial Networks (NTN) and potential MVNO arrangements; the company remains open to new technologies but emphasizes spectrum efficiency and regulatory compliance.
• Economic Environment: No specific macroeconomic forecasts provided; focus is on resilience and "profitable growth" despite potential headwinds.
• Technology Trends: 5G and 5G Plus expansion is viewed as a "network differentiation" driver for long-term growth; the company rejects "rushing" to 5G for monetization without clear customer value, favoring a disciplined rollout.

Strategic Initiatives:

• Network Expansion: Continued deployment of Freedom Mobile's 5G/5G Plus network in Ontario, Alberta, and BC; aiming to provide "better known" brands and own infrastructure rather than relying on roaming.
• Cost Optimization: Ongoing investment in AI to drive efficiencies and reduce the cost base; management expects "AI to continue driving efficiencies in the years ahead."
• M&A/Partnerships: Recent acquisition of SIE (Sierra Leone/IT services) viewed as a strategic asset for future revenue growth and value creation; management expects continued positive returns from this asset.
• Capacity Additions: Expansion of wireless service areas in Quebec (Abitibi-Témiscamingue, North Quebec, Saguenay-Lac-Saint-Jean) to serve 25,000+ residents.
• Capital Allocation: Prioritization of debt repayment ($100m remaining) and maintaining liquidity; potential for accelerated network CapEx is under review by the Board following year-end results.

Risks and Headwinds to Outlook:

• Western Expansion Costs: Network build-out in BC and Alberta faces challenges regarding manpower, expertise, and terrain, potentially slowing the transition from roaming to owned infrastructure.
• Competitive Response: Risk that incumbents may be forced to respond to Quebecor's pricing advantage, potentially triggering a price war or industry-wide margin compression.
• Regulatory Changes: Uncertainty regarding future MVNO rules, NTN (Satellite) integration, and potential CRTC fee structures.
• Advertising Trends: Continued weakness in the general advertising market remains a headwind for the media segment.
• Cost Discipline Dependency: Future margin targets rely heavily on the ability to maintain strict cost control and operational leverage.

Management Tone on the Future:

• Confidence: High confidence in the "sustainable" nature of ARPU growth and subscriber acquisition, describing results as "outstanding" and momentum as "accelerating."
• Discipline: Strong emphasis on "disciplined execution," "rigorous management," and avoiding "stupid" capital spending despite having ample liquidity.
• Strategic Conviction: Firm belief in the "everyday low price" model and transparency as a long-term differentiator, rejecting short-term price hikes despite industry norms.
• Long-term Horizon: Focuses on a "long runway" for growth rather than short-term gains; views current market share levels as a starting point for significant future expansion.

Miscellaneous:

• Stock-Based Compensation: A $31 million year-over-year impact (negative to EBITDA growth) due to increased SBC expenses; excluding this, EBITDA growth would be 10% year-to-date.
• Liquidity: Maintains a "best-in-class balance sheet" with over $900 million in available liquidity.
• Shareholder Returns: $238 million invested in share buybacks in the first nine months of 2026; program renewed for future periods.