Rogers (RCI) Q2 2026 earnings review
Paper Losses Mask Core Stability, but Wireless Headwinds Persist
Rogers posted an 8% YoY revenue gain to $5.61B, fueled almost entirely by its Media division and the consolidation of MLSE. However, the headline Net Income swung violently to a $665M loss. This reversal is purely accounting: Rogers recorded a $1.03B non-cash charge to revalue the MLSE put liability as it prepares to buy the final 25% of the sports empire for $4.35B. Strip out the sports accounting, and Adjusted Net Income was perfectly stable at $633M. The real concern isn't the paper loss—it's the core telecom business. Wireless service revenue was entirely flat, ARPU is bleeding, and subscriber additions are decelerating due to slowing Canadian population growth and aggressive promotions.
🐂 Bull Case
Rogers is taking full control of MLSE (Maple Leafs, Raptors) for $4.35B, preparing the combined sports and media assets for a minority stake sale next year. This could surface massive unrecognized value and accelerate deleveraging.
Free Cash Flow rose 6% YoY to $982M. Capital expenditures dropped 16% as network builds normalized, allowing the company to aggressively pay down debt. Leverage is now down to 3.8x from 4.0x at the end of FY25.
🐻 Bear Case
Wireless service revenue was completely flat (0% growth). Mobile phone ARPU fell $1.20 YoY to $54.25, and postpaid net additions plummeted 37% YoY to just 22k. The telecom engine is sputtering.
Management explicitly blamed the 'overall slowing of population growth in Canada' for the drop in subscriber additions. Furthermore, the CRTC is actively probing carriers over switching fees, posing a continuous regulatory risk to ARPU.
⚖️ Verdict: ⚪
Neutral. Management is executing brilliantly on capital allocation—cutting CapEx, generating strong free cash flow, and making bold structural moves with MLSE. But the core operational metrics in Wireless are visibly decelerating. Great financial engineering cannot permanently mask a stagnant telecom top-line.
Key Themes
The $1 Billion Paper Loss and the MLSE Endgame
Rogers reported a massive $665M net loss due to a $1.03B non-cash revaluation of the MLSE put liability. Management reached an agreement on July 6, 2026, to acquire the remaining 25% of MLSE for $4.35B in cash. This consolidates their sports assets (now 100% owned), setting the stage for a strategic sale of a minority interest in 'Rogers Sports' to third-party investors over the next year. While this promises to unlock shareholder value, it introduces significant short-term noise and transaction execution risk.
Wireless ARPU Continues to Decelerate
Wireless service revenue was completely flat year-over-year. The real drag is the underlying per-user economics: Mobile phone ARPU fell to $54.25 (down $1.20 YoY). Postpaid net additions dropped sharply to 22,000 (from 35,000 a year ago). Management cited the 'cumulative impact of competitive intensity' and the broader macroeconomic reality of slowing population growth in Canada.
Media Segment Scaling Rapidly
Media is no longer a side project—it is driving the entire company's consolidated growth. Media revenue surged 53% YoY to $1.15B, accelerating sharply due to the ongoing consolidation of MLSE (which began July 2025) and strong Toronto Blue Jays attendance. More importantly, Media Adjusted EBITDA jumped from $8M a year ago to $69M this quarter, proving the division can contribute meaningful cash flow during the sports season.
Margins Shift Due to Revenue Mix
Consolidated Adjusted EBITDA margin compressed by 180 basis points to 43.5%. However, this is an optical illusion caused by revenue mix, not operational decay. The low-margin Media segment (6.0% margin) grew massively, diluting the corporate average. In the core telecom divisions, efficiency remains excellent: Wireless margins actually expanded 70 bps to 66.0%, and Cable margins ticked up 10 bps to 58.4%.
Network Innovation: Satellite and Cloud-Native 5G
Rogers is leaning heavily into technological differentiation. The company expanded its satellite-to-mobile coverage into the US for roaming customers—securing the largest coverage footprint of any Canadian provider. Furthermore, they successfully deployed a cloud-native network technology layer with Nokia and AWS, touted as a 'global first' for mobile network resilience.
Other KPIs
Accelerating. Up 6% YoY from $925M. This was driven by a deliberate 16% reduction in capital expenditures ($695M vs $831M) alongside slightly higher operating cash generation. This is the financial engine that allows Rogers to organically delever its balance sheet while absorbing heavy sporting investments.
Stable/Improving. Down from 4.0x at the end of FY25. The company maintains $6.1B of available liquidity. The planned $4.35B cash payout for the remaining 25% of MLSE in Q4 will test this leverage temporarily, making the planned spin-off of a minority stake in Rogers Sports critical for long-term balance sheet health.
Stable. Up 1% YoY. Driven entirely by base management activities and modest retail Internet subscriber growth (17k net adds). Had the company not sold its customer-facing data centre business last year, Cable service revenue would have grown 2%.
Guidance
Decelerating. The company updated this guidance in April 2026, cutting it heavily from the original $3.3-$3.5B range. Management noted in the Q2 MD&A that ongoing investments are progressing at a slower pace and some projects are being deferred due to 'heightened competitive intensity and recent regulatory decisions.' Midpoint implies roughly a 30% YoY cut.
Accelerating. Directly benefitting from the massive cut to CapEx. If achieved, the $4.2B midpoint ensures Rogers has the firepower to handle the $4.35B MLSE buyout without breaking its investment-grade profile, supplemented by existing liquidity and future asset sales.
Stable. Management has held the line on this guidance, implying full-year EBITDA will land around $10.0B. With 3% growth delivered in Q2, the company is tracking well against the high end of this target.
Key Questions
Minority Stake Sale Timeline
With the agreement to purchase the remaining 25% of MLSE for $4.35B now finalized, what is the exact timeline and expected valuation range for the spin-out/sale of the minority stake in 'Rogers Sports'?
Wireless ARPU Floor
Mobile phone ARPU contracted another $1.20 this quarter amid competitive intensity. Given the explicit mention of slowing Canadian population growth, where do you see the floor for ARPU, and what pricing levers remain to reverse this trend?
Regulatory Headwinds
The CRTC has issued notices to show cause regarding 'activation or modification fees'. If the CRTC fully prohibits these fees, what is the estimated annual EBITDA impact on the Wireless division?