Rogers Communications (RCI) Q4 2025 earnings review
Media Surge Masks Core Telecom Stagnation; Capital Efficiency Drives Strong Cash Flow
Rogers reported strong headline growth in Q4 2025, with Total Service Revenue rising 16% to $5.3 billion. However, this growth was almost entirely derived from the newly consolidated Media segment (MLSE acquisition and Blue Jays postseason), which grew 126%. Core Wireless and Cable Service Revenue growth was effectively flat (0% YoY). Adjusted EBITDA grew 6%, supported by strong equipment margins and cost efficiencies. The company delivered full-year Free Cash Flow of $3.356 billion, exceeding the high end of its guidance range, driven by CapEx efficiency. For 2026, guidance forecasts accelerating total service revenue growth (3%-5%) but stable-to-decelerating Adjusted EBITDA growth (1%-3%).
🐂 Bull Case
Free Cash Flow (FCF) grew 16% YoY in Q4 and exceeded the full-year guidance range ($3.2B-$3.3B), primarily due to disciplined capital allocation. CapEx intensity fell to 15.1% in Q4, the lowest since Q2 2017. The 2026 outlook projects sustained FCF strength ($3.3B-$3.5B).
The Media segment delivered stellar 126% revenue growth. The Pro Forma Debt Leverage Ratio improved significantly to 3.9x, and management affirmed its intent to acquire the remaining 25% of MLSE in 2026, capitalizing on its primary source of topline growth.
Despite flat core revenue, Wireless Adjusted EBITDA margin expanded 40 bps to 66.8% and Cable margin expanded 30 bps to 59.3%, validating the effectiveness of ongoing cost efficiency programs.
🐻 Bear Case
Wireless Service Revenue and Cable Service Revenue were both flat (0% YoY) in Q4. This indicates that core pricing pressure and ARPU/ARPA declines are completely offsetting subscriber gains, making consolidated results heavily reliant on the volatile Media segment.
Postpaid Churn spiked dramatically to 1.43% in Q4, reversing a strong trend of base management (Q3 churn was 0.99%). This suggests significant competitive losses in the highly promotional holiday quarter, coinciding with a 46% YoY drop in postpaid net additions.
⚖️ Verdict: ⚪
Neutral. While financial discipline (CapEx/FCF) and the MLSE integration are clear strengths, the underlying stagnation of the core Wireless and Cable businesses due to persistent ARPU and ARPA declines is a major concern. Future growth relies heavily on successful integration and monetization of the Media segment.
Key Themes
Media Segment Becomes Primary Revenue Growth Engine
The Media segment's Q4 revenue grew 126% to $1.2 billion, primarily driven by the full consolidation of MLSE results (starting July 1, 2025) and the extended Toronto Blue Jays World Series run. Media Adjusted EBITDA surged over 300% to $221 million. The full-year 2026 guidance relies on this segment's momentum to drive consolidated service revenue growth of 3% to 5%.
Record Capital Efficiency Fuels Free Cash Flow
Capital expenditures (CapEx) fell 7% in Q4 and 8% for the full year 2025. Capital intensity dropped to 15.1% in Q4, the lowest level since Q2 2017. This discipline allowed FCF to grow 16% in Q4 and comfortably exceed its full-year FCF guidance, providing strong validation of the 'additional capital efficiency' strategy cited by management. The 2026 guidance implies this focus will continue.
Major Spike and Reversal in Wireless Churn
Wireless postpaid churn surged to 1.43% in Q4 2025, a significant reversal from the industry-low 0.99% recorded in Q3 2025. This deterioration suggests the company struggled to maintain subscriber stability during the highly promotional holiday season, despite management's stated focus on disciplined execution. This also coincides with a substantial deceleration in postpaid net additions, which fell 46% YoY to 37,000.
Persistent ARPU Pressure Offsetting Subscriber Gains
Wireless Mobile Phone ARPU declined $1.61 (3%) YoY to $56.43. This ongoing competitive intensity, which the release explicitly highlights, is the core reason Wireless service revenue was flat (0% YoY) despite solid full-year subscriber additions. This dynamic forces the segment to rely heavily on equipment margins and cost controls (which drove the 1% Adjusted EBITDA increase) to deliver profitability growth.
MLSE Transaction Finalization Impact
Net income for the twelve months ended December 31, 2025, included a $40 million reduction to the gain on revaluation of the existing investment in MLSE (Page 7). This reduction was a result of finalization adjustments to the preliminary purchase price allocation, indicating the complexity of integrating such large assets.
Non-Core Asset Monetization
The company completed the sale of its customer-facing data centre business for proceeds of $184 million, realizing a $69 million gain. This execution on divesting non-core assets supports the accelerated deleveraging timeline and contributed directly to the significant Net Income increase in Q4.
Other KPIs
Net Income increased 27% YoY, significantly outpacing Adjusted EBITDA growth (6%). The large variance is partially explained by the $69 million gain on the disposition of the customer-facing data centre business, which is excluded from Adjusted EBITDA, and lower tax expenses.
The margin expanded 40 basis points YoY, maintaining its industry-leading status. This was primarily achieved by optimizing equipment margins through a continued shift toward higher-value devices and disciplined pricing, which helped offset flat service revenue.
Net additions decelerated slightly from 26,000 YoY, reflecting the general market slowdown cited in previous quarters. However, the full-year net additions of 100,000 demonstrate solid execution and support the segment’s 1% Adjusted EBITDA growth, primarily driven by cost efficiencies.
Guidance
Accelerating compared to the organic performance of core telecom but in line with the reported FY25 growth of 6% (when considering the full year impact of MLSE). The midpoint of 4% growth suggests management expects the momentum from the fully integrated Media segment, paired with modest core telecom recovery, to sustain strong topline results.
Decelerating relative to the Q4 2025 growth (6%) and flat versus the full-year 2025 growth (2%). This cautious range reflects the continued competitive pressures suppressing ARPU/ARPA gains and higher operating costs associated with the growth of the Media segment.
Decelerating significantly (implied 8.3% reduction at midpoint) from the FY 2025 CapEx of $3.707 billion. This continued emphasis on capital efficiency is fundamental to maintaining free cash flow and reflects confidence in network investments despite a lower spending envelope.
Stable compared to the FY 2025 actual of $3.356 billion. The stability, despite modest EBITDA growth, is directly attributed to the planned CapEx reduction. This projected FCF level provides ample coverage for dividends and supports the intended acquisition of the remaining 25% minority interest in MLSE.
Key Questions
Wireless Churn Reversal
Postpaid churn spiked from 0.99% in Q3 to 1.43% in Q4, reversing a multi-quarter trend of improvement. What specific factors—competitive offerings, promotional intensity, or base management issues—drove this significant deterioration, and what initiatives are underway to restore churn discipline?
Sustaining Flat Core Revenue
With Wireless and Cable service revenue both flat in Q4 and ARPU/ARPA declining, what is the realistic path to organic growth in the core telecom business in 2026, or is the 3-5% revenue guidance entirely dependent on Media consolidation?
Capital Expenditure Strategy
CapEx guidance for 2026 implies a continued substantial reduction in investment. Given ongoing commitments to 5G Advanced, 3800 MHz spectrum deployment, and the DOCSIS 4.0 evolution, how is Rogers assuring that this efficiency does not compromise necessary capacity and network resilience in the medium term?
MLSE Acquisition Financing
Management anticipates the purchase of the remaining 25% minority interest in MLSE in 2026. How will the company finance this acquisition, and how does this potential capital outflow fit into the plan to maintain the 3.9x debt leverage ratio achieved in 2025?