Rogers Communications (RCI) Q3 2026 earnings review
Rogers cash flow rises, but wireless sales and sign-ups fall
Rogers Communications, the Canadian telecom and media group, generated higher cash flow even as its core wireless business shrank. Total service revenue edged up 1% now that last year's buyout of Maple Leaf Sports & Entertainment sits in both periods, while wireless service revenue fell 1% and new postpaid phone additions dropped to 6,000. Free cash flow rose 65% to $1.4 billion, but by our math the unchanged full-year outlook implies service revenue will fall about 2% in the fourth quarter.
| Total service revenue | $4,780M +0.9% from a year ago |
|---|---|
| Wireless service revenue | $2,033M -1.3% from a year ago |
| Free cash flow | $1,370M +65% from a year ago ($274M from asset sales) |
| Full-year 2026 outlook | Unchanged middle of the range: 4% service revenue growth |
⚖️ Verdict: 🔴 Bearish
The story got worse because wireless service revenue contracted while the promised capital spending cut still leaned heavily on selling assets. Deducting $274 million of network and property sales accounted for more than half of the third-quarter capital spending drop by our math, and borrowing $4.35 billion on October 1 to buy the rest of MLSE pushes debt leverage back above 4 times. The bright spot: Media revenue grew 9% on strong Blue Jays attendance.
The question now is whether Rogers can sell a minority stake in its combined sports empire in the first half of 2027 at a price that pays off its new short-term bank debt. Bulls point to 100% ownership of MLSE and rising sports revenue, while sceptics point to the company's new warning that league approvals and valuation are not guaranteed. A signed sports stake deal by mid-2027 will settle it.
🐂 Bull Case
Media and Sports Grew 9% Without Acquisition Help
Rogers took control of Maple Leaf Sports & Entertainment (MLSE), the owner of the Toronto Maple Leafs and Toronto Raptors, on July 1, 2025. That made the third quarter the first period where the Media division's year-over-year comparison included MLSE in both years. Revenue still rose 9% to $821 million, and Media profit before interest, taxes, depreciation and one-offs (adjusted EBITDA) grew 12% to $84 million.
The Toronto Blue Jays baseball team drew over 3.3 million fans this season, its highest attendance since 2016, while the National Hockey League season started in September this year and Warner Bros. Discovery channels brought in more subscriber money. Because those gains came from operations rather than buying a business, they show the sports portfolio can grow on its own, though higher player salaries and programming costs pushed Media operating expenses up 9% to $737 million.
What to watch: fourth-quarter Media revenue and adjusted EBITDA. That period compares against last year's Blue Jays World Series run, when Media earned $221 million in adjusted EBITDA, so a sharp drop would show that sports earnings remain tied to playoff schedules.
Phone Upgrades and Cost Cuts Lifted Segment Margins
Rogers aims to protect profitability in its Wireless and Cable divisions by avoiding deep price discounts and cutting operating expenses. In the third quarter, Wireless adjusted EBITDA rose 1% to $1,383 million, lifting its margin on service revenue by 1.3 percentage points to 68.0%, while Cable adjusted EBITDA rose 1% to $1,164 million and its margin gained 0.4 percentage points to 58.6%.
Wireless equipment revenue grew 9% to $655 million while the cost of buying those phones rose only 2% to $579 million, because existing customers upgraded to pricier phones and Rogers kept pricing firm. Cable operating costs fell 1% to $823 million as productivity initiatives outweighed higher content licensing costs, though consolidated adjusted EBITDA margin still dipped 0.4 percentage points to 46.6% because the lower-margin Media unit grew fastest and raised Media operating costs by 0.9 percentage points of total revenue by our math.
What to watch: fourth-quarter Wireless equipment margin during the holiday shopping season. If rivals discount phones heavily in November and December, Rogers will have to choose between giving back its hardware margin gains or losing more subscribers.
🐻 Bear Case
Asset Sales Drove Over Half the Capital Spending Cut
Rogers lowered its full-year capital spending target in April 2026 because of "ongoing impacts from heightened competitive intensity and recent regulatory decisions". Reported capital expenditures fell 46% from a year ago to $524 million this quarter, pushing capital intensity — capital spending as a share of revenue — down 8.4 percentage points to 9.6% and lifting free cash flow 65% to $1,370 million.
- Reported net capital spending: $524 million, down $440 million from a year ago
- Proceeds from selling network and property assets deducted from capital spending: $274 million, up from $13 million a year ago by our math
- Gross capital spending before asset sales: $798 million, down 18% from $977 million a year ago by our math
- Free cash flow before asset-sale deductions: $1,096 million by our math
Because Rogers defines capital expenditures net of asset disposal proceeds, selling $133 million of wireless network assets, $86 million of cable assets from "under-construction rural fibre network projects we have deprioritized in the current environment", and $55 million of real estate accounted for 62% of the reported spending drop by our math. Gross network spending did fall this quarter after staying flat in the second quarter, but free cash flow is still leaning on one-time property and project sales.
What to watch: fourth-quarter asset-sale proceeds deducted from capital expenditures. If gross spending stays near $800 million without more asset sales, Rogers will miss the $573 million fourth-quarter net spending pace implied by the middle of its full-year outlook.
Wireless Service Revenue and New Subscribers Fell
Wireless is the largest profit engine at Rogers, and its service revenue depends on how many customers it adds and what each pays per month. In the third quarter, Wireless service revenue shrank 1% from a year ago to $2,033 million, worsening from a flat first half as the company cited "promotional discipline and lower overall market activity in Canada".
- Monthly mobile phone revenue per user (ARPU): $55.22, down $1.48 or 2.6% from a year ago
- Postpaid mobile phone net additions (customers on monthly bills): 6,000, down from 62,000 a year ago
- Prepaid mobile phone net additions (pay-in-advance customers): 11,000, down from 49,000 a year ago
- Prepaid monthly customer cancellation rate (churn): 4.77%, up from 2.86% a year ago
Holding back on price promotions protected equipment margins, but it cost Rogers subscriber growth: total mobile net additions dropped by 94,000 from a year ago to just 17,000 by our math, while postpaid monthly churn still ticked up 0.04 percentage points to 1.03%. Because the subscriber base is now growing less than 1% a year while monthly revenue per user falls 2.6%, wireless service revenue cannot grow until one of those trends reverses.
What to watch: fourth-quarter mobile phone ARPU and postpaid net additions. Another drop in ARPU above 2.5% alongside weak subscriber additions would show that regulatory fee bans and past price cuts are still outweighing price discipline.
Buying the Rest of MLSE Pushes Debt Back Up
On October 1, 2026 — one day after the third quarter closed — Rogers paid $4.35 billion in cash to Kilmer Sports Inc. for the remaining 25% of MLSE, giving the telecom group 100% ownership. Management argues that owning all of MLSE lets it sell a minority stake in its combined sports and media business (Rogers Sports) by the first half of 2027 to unlock "significant unrecognized value in our sports assets" and pay down debt.
To pay Kilmer on October 1, the Canadian carrier drew US$3,077 million ($4,367 million) on four new one-year bank credit facilities maturing in September 2027. While reported debt leverage — adjusted net debt divided by trailing 12-month adjusted EBITDA — fell to 3.7 times at September 30 from 4.0 times at the end of 2025, adding the $4.35 billion October 1 borrowing raises debt leverage back to about 4.2 times by our math.
The company also expanded its risk disclosures this quarter, warning there is no guarantee it will complete a Rogers Sports stake sale "whether at the expected investment amount, within the anticipated timing, or at all", and noting that sports leagues must approve any buyer. What to watch: a signed deal to sell a minority stake in Rogers Sports by the second quarter of 2027, because a delay or lower price would leave short-term bank debt maturing with leverage above 4 times.
New Telecom Rules Cut Fees and Add Network Risk
Canada's telecom regulator, the CRTC, banned phone and Internet activation and plan-switching fees starting June 12, 2026. The third quarter was the first full period under that rule, and Rogers said lower fee revenue contributed to the 1% drop in wireless service revenue. On June 30, the CRTC also ordered Rogers and its rivals to justify other remaining fees, and on September 10 it mandated peak-hour Internet speed guarantees starting March 2027.
Meanwhile, Rogers has transferred construction of certain government-subsidized rural broadband lots to outside builders as part of its capital spending cuts, but disclosed this quarter that it remains legally responsible to the Canadian and Ontario governments if those builders fail to finish on time. What to watch: the CRTC's ruling on the June 30 fee inquiry, because banning more fees would cut high-margin service revenue directly.
👓 Other Themes
Wildfire Relief Tested the New Satellite Service
Rogers offered its Rogers Satellite service — which connects mobile phones directly to satellites where cell towers do not reach — free to all wireless customers in British Columbia during wildfire emergencies this quarter. While the deployment showcased network reliability, the company still did not disclose how many paying customers use the service, and noted only that satellite operating costs increased Wireless expenses.
💲 Other KPIs
Cable revenue was essentially unchanged from $1,981 million a year ago, or up about 1% by our math after excluding the customer-facing data centre business sold in late 2025. Retail Internet net additions slowed to 10,000 from 29,000 a year ago, and total customer relationships shrank by 2,000 as video and home phone cancellations outweighed Internet gains.
Diluted earnings per share excluding one-offs fell 5.8% from $1.37 a year ago, after rising 0.9% in the second quarter and 2.0% in the first quarter. Higher adjusted EBITDA was outweighed by an 8.9% rise in adjusted finance costs to $585 million and $119 million in cash payouts to the minority investors in its wireless backhaul subsidiary.
Accounts receivable — money owed by customers — fell 4.8% from December 31, 2025 due to seasonal billing patterns, while long-term financing receivables for phone payment plans dropped 9.8% to $1,080 million. Contract liabilities — cash collected upfront for subscriptions and sports tickets — fell 7.5% from year-end to $1,031 million as Rogers recognized revenue across the sports calendar.
🔮 Guidance
Unchanged. The full-year plan still calls for service revenue to grow 4% at the middle of the range over 2025's $19,104 million. Because service revenue grew 6% across the first nine months, by our math the middle of the range implies fourth-quarter service revenue will fall about 2.5% from a year ago as the company compares against last year's Blue Jays World Series run.
Unchanged. The telecom group still expects full-year adjusted EBITDA to rise 2% at the middle of the range from $9,820 million in 2025. After 3% growth in the first nine months, by our math the middle of the range leaves fourth-quarter adjusted EBITDA down about 0.5% from last year's $2,689 million, reflecting flat wireless profit and the tough baseball playoff comparison.
Unchanged. Management kept the full-year capital spending target it lowered by $800 million in April 2026. With $2,027 million spent in the first nine months, by our math the middle of the range leaves $573 million for the fourth quarter, down 39% from $934 million in the fourth quarter of 2025.
Unchanged. The outlook still points to $4,200 million of free cash flow at the middle of the range, up 25% from 2025 after the April raise. Because Rogers generated $3,128 million in the first nine months, by our math the middle of the range requires $1,072 million in the fourth quarter, up 5.5% from $1,016 million a year ago.
❓ Key Questions
How much will fourth-quarter capital spending rely on asset sales?
Proceeds from selling network assets and property reduced reported third-quarter capital spending by $274 million, or 62% of the year-over-year drop by our math. Investors need to know what gross spending level sits behind the $573 million fourth-quarter implied target.
How much revenue did the June CRTC fee ban remove?
Wireless service revenue fell 1% in the first full quarter under the CRTC's ban on activation and plan-switching fees, and the regulator is now challenging other fees. Management has not disclosed the annual dollar drag from these rules.
What did MLSE earn on its own this quarter?
Media revenue grew 9% and adjusted EBITDA rose 12% in the first quarter with MLSE in both periods of the comparison, but Rogers combines MLSE with the Blue Jays and Sportsnet. Standalone figures would show how the $4.35 billion buyout is performing.
How long will credit agencies tolerate 4.2x debt leverage?
Drawing $4.35 billion on short-term bank lines on October 1 to buy the rest of MLSE pushes pro forma debt leverage back to about 4.2 times by our math, while S&P carries a negative outlook on Rogers' BBB- rating ahead of the 2027 sports sale.