Q2 2026 Telus Corporation Earnings Call Transcript

Jul 31, 2026 / 04:30 PM GMT

Release Date Price: €8.1 (-10.77%)

Transcript

Key Points

Positve

TELUS Corp (TU) reported its third consecutive quarter of mobile network revenue growth, with signs of a moderating promotional environment and stabilizing ARPU decline of less than 0.5%.
The company is taking decisive action to strengthen its balance sheet, including a dividend reset expected to generate approximately $2.7 billion in cumulative cash savings for debt reduction.
TELUS Corp (TU) is advancing its asset monetization program, with active processes for TELUS Health and real estate assets, and a successful precedent set by the $1.26 billion Terion transaction.
The company is committed to a clear transformation strategy focused on operational discipline, cost control, and investing in core telecom and digital infrastructure, with a target of 10% minimum compounded annual free cash flow growth.
TELUS Corp (TU) maintains a strong competitive position with its pure fiber network, 5G leadership, and growing CXAI engagements at TELUS Digital, which are proving to be an innovative edge.
The company is seeing encouraging growth in TELUS Health (4% service revenue growth) and TELUS Agriculture (6% service revenue growth), with efficiency initiatives expected to improve profitability.
TELUS Corp (TU) is committed to maintaining its investment-grade credit rating and has a strong liquidity position of $2.7 billion.
The new leadership team, including CEO Victor Dodig and CFO Gopi Chande, brings extensive financial and operational experience to drive the transformation.
The company is investing in sovereign AI data centers, which are expected to support Canada's technological independence and drive economic prosperity with healthy margins.
TELUS Corp (TU) is focused on profitable growth, with a strategy to preserve its premium brand while using its flanker brand to compete effectively at the low end of the market.

Negative

TELUS Corp (TU) reported a significant $2.1 billion pre-tax non-cash impairment at TELUS Digital due to accelerated automation of legacy services by hyperscale clients and slower-than-expected AI adoption.
The company revised its 2026 guidance downward, with consolidated service revenue now expected to be flat to down 2% and adjusted EBITDA expected to decline 2% to 4%, compared to prior growth forecasts.
TELUS Corp (TU) is facing macroeconomic headwinds, including lower immigration, which is reducing demand for core products across the industry.
The company's free cash flow for 2026 is now expected to be approximately $1.8 billion, down from the previous outlook of $2.45 billion, due to lower EBITDA, higher CapEx, and restructuring costs.
TELUS Corp (TU) announced a 55% reduction in its quarterly dividend to $0.75 per share annually, which may disappoint income-focused investors.
The company's leverage target of 3 times or lower has been pushed back to the end of 2028 from 2027, reflecting ongoing business headwinds.
TELUS Digital is experiencing more pronounced churn in legacy services, with the second half of 2026 expected to be weaker than the first half.
The company has placed a moratorium on acquisitions, limiting growth opportunities through M&A until leverage targets are met.
TELUS Corp (TU) is facing challenges in its fixed business solutions portfolio, with revenue variability and customer contract changes in the public sector.
The company's 2026 CapEx is expected to increase to approximately $2.6 billion from $2.3 billion, driven by inflation, supply chain dynamics, and strategic investments, which could pressure near-term cash flows.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

T.TO - Telus Corporation
Q2 2026 Telus Corporation Earnings Call
Jul 31, 2026 / 04:30PM GMT

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Presentation
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Unidentified_1 [1]
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Leave my door open just a crack 'Cause I feel like such an insomniac What do I tire of counting sheep? We're not far too tired to fall asleep To 10 million fireflies.

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Unidentified_2 [2]
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The conference is now being recorded. Good day, everyone. Welcome to the TELUS 2026 Q2 earnings conference call. I would like to introduce your speaker, Ian McMillan. Please go ahead.

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Unidentified_3 [3]
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