Financial Data and Key Metrics Changes - In 2025, consolidated service revenue increased by 0.6%, with adjusted EBITDA rising by 0.7%, leading to a 20 basis point improvement in adjusted EBITDA margin to 43.6%, the strongest annual margin in over 30 years [18] - Adjusted EPS declined by 7.9% in 2025, primarily due to higher depreciation and amortization from network investments and increased interest expense [18] - Free cash flow increased by 10% to CAD 3.2 billion, driven by higher EBITDA, lower capital expenditures, and improved working capital [19] Business Line Data and Key Metrics Changes - Wireless service revenue declined by 0.2% in Q4, an improvement from previous quarters, with consumer wireless service revenue stable year-over-year [20][22] - Fiber-to-the-Home internet net additions reached 43,000 in Q4, contributing to a year-over-year internet revenue growth of 8% [7][21] - AI-powered solutions revenue grew by 31% in the enterprise segment, driven by strong performance from Ateco and Bell Cyber [21] Market Data and Key Metrics Changes - The acquisition of Ziply Fiber contributed positively to revenue, with total revenue for Bell CTS US reaching CAD 232 million in Q4, supported by strong customer penetration [23] - Ziply added over 6,000 net new fiber customers in Q4, with a focus on expanding its fiber footprint [24] Company Strategy and Development Direction - The company has aligned its organization around four strategic priorities: enhancing customer experience, strengthening fiber and wireless network leadership, accelerating enterprise and digital media growth, and positioning for sustainable free cash flow growth [3][4] - The strategy includes a focus on disciplined capital allocation, with a target of approximately CAD 1.5 billion in AI-powered solutions revenue by 2028 [11][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of core segments while managing declines in legacy services, indicating a focus on maintaining momentum in AI-powered solutions and digital media [36] - The company anticipates consolidated revenue growth of 1%-5% and adjusted EBITDA growth of 0%-4% for 2026, reflecting continued momentum in growth engines [26][27] Other Important Information - The company reported a net debt leverage ratio of approximately 3.8 times adjusted EBITDA at the end of 2025, unchanged from the previous year, despite the Ziply Fiber acquisition [30][31] - The company is focused on maintaining a dividend payout ratio within the target range of 40%-55% while generating strong free cash flow [29] Q&A Session Summary Question: Guidance ranges for revenue and EBITDA - Management indicated that the guidance reflects growth in core segments while managing legacy declines, with potential swings from wireless penetration gains and overall market growth [36][38] Question: Wireless pricing environment - Management noted that they are focused on disciplined execution and are not participating in aggressive promotions, aiming for profitable transactions [39][40] Question: Growth and margins for Ziply - Management confirmed that Ziply's performance is in line with expectations, with strong demand for fiber and plans to expand beyond the existing footprint [45][46] Question: Impact of recent wireless discounts - Management stated that recent pricing activity does not change their execution strategy, emphasizing a disciplined approach to subscriber loading [57][58] Question: Convergence opportunities - Management acknowledged the potential for increased wireless market share through their fiber footprint and indicated a belief in significant upside from disciplined execution [60][61]

Financial Data and Key Metrics Changes - In 2025, consolidated service revenue increased by 0.6%, with adjusted EBITDA rising by 0.7%, leading to a 20 basis point improvement in adjusted EBITDA margin to 43.6%, the strongest annual margin in over 30 years [18] - Adjusted EPS declined by 7.9% in 2025, primarily due to higher depreciation and amortization from network investments and increased interest expense [18] - Capital expenditures decreased by CAD 197 million to CAD 3.7 billion, resulting in a capital intensity of 15.1% [19] - Free cash flow increased by 10% to CAD 3.2 billion, driven by higher EBITDA, lower CapEx, and improved working capital [19] Business Line Data and Key Metrics Changes - Wireless service revenue declined by 0.2% in Q4, an improvement from the 0.4% decline in Q3 and significantly better than the 1.5% decline in Q4 of the previous year [22] - Fiber continued to be a key growth driver with approximately 200,000 net new subscriber additions, contributing to an 8% growth in internet revenue [7][19] - AI-powered solutions revenue grew by 31% in the enterprise segment, driven by momentum in Ateco and Bell Cyber [22] Market Data and Key Metrics Changes - Postpaid churn improved by 17 basis points to 1.49%, marking the third consecutive quarter of year-over-year improvement [20] - Consumer wireless service revenue remained stable year-over-year in Q4, indicating a positive trend as the company enters 2026 [22] - Ziply Fiber's total revenue reached CAD 232 million in Q4, with internet revenue growing in double digits [24] Company Strategy and Development Direction - The company has aligned its organization around four strategic priorities: fiber, wireless, enterprise, and media, aiming for sustainable free cash flow growth [3][4] - The acquisition of Ziply Fiber is a key milestone in the fiber growth strategy, with plans to reach approximately 3 million fiber passings by the end of 2028 [9] - The focus remains on delivering premium content through digital platforms and enhancing customer experience across all segments [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth segments while acknowledging the need to manage declines in legacy services carefully [36] - The company expects consolidated revenue growth of 1%-5% and adjusted EBITDA growth of 0%-4% for 2026, reflecting continued momentum in core growth engines [27] - Management highlighted the importance of maintaining disciplined execution and focusing on customer value amidst competitive pressures [40] Other Important Information - The company is targeting a net debt leverage ratio of approximately 3.5x by the end of 2027, with a focus on deleveraging [32] - The company has CAD 2.5 billion of available liquidity and a pension solvency surplus of CAD 4.4 billion, providing financial flexibility [31] Q&A Session Summary Question: Could you talk about your guidance ranges? - Management indicated that the guidance reflects growth in segments while managing legacy declines, with factors such as wireless penetration and overall market growth influencing the ranges [35][36] Question: Any comment on the wireless pricing environment? - Management noted that consumers are receiving significant value from wireless services, with a focus on disciplined execution and premium brand positioning [40][41] Question: What are the expectations for Ziply's growth and margins in 2026? - Management expressed satisfaction with Ziply's performance and indicated strong demand for fiber, with plans to expand beyond the existing footprint [46][47] Question: Any updates on asset sales? - Management confirmed ongoing efforts to optimize the balance sheet through asset sales, with transparency to be provided as agreements are reached [71][72]

Financial Data and Key Metrics Changes - Global sales for the second quarter were $3.2 billion, reflecting a sales growth of 3.3% compared to the previous year, with constant currency sales growing by 2.7% [26][27] - GAAP operating margin decreased to 4.67%, down 42 basis points year-over-year, while non-GAAP operating margin was 6.96%, a decrease of 79 basis points [27] - GAAP net income for the second quarter was $86 million or $0.70 per diluted share, compared to $104 million or $0.80 per diluted share in the prior year [28] - Non-GAAP net income was $135 million or $1.10 per diluted share, down from $158 million or $1.23 per diluted share year-over-year [28] Business Line Data and Key Metrics Changes - U.S. Dental merchandise sales declined by 1.2% due to lower product pricing, while U.S. Dental equipment sales fell by 4.7% due to economic uncertainty [30] - U.S. Medical Distribution business sales grew by 6.3%, driven by increased patient traffic and strong performance in the Home Solutions business [31] - Global Specialty Products Group sales increased by 4.2%, with solid growth in the implant and biomaterial business, including double-digit growth in value implants [32][33] - Global Technology Group sales grew by 7.4%, driven by strong growth in practice management software and revenue cycle management solutions [33] Market Data and Key Metrics Changes - International Dental merchandise sales grew by 1.9%, impacted by the timing of Easter, while international Dental equipment sales grew by 12.1% [31] - Sales growth in Brazil was particularly strong, and international sales growth was also noted in Canada and Europe [14][15] Company Strategy and Development Direction - The company is maintaining its full-year guidance, expecting earnings to be weighted towards the second half of the year, aiming for high single-digit to low double-digit earnings growth [7][8] - The company is partnering with KKR's Capstone and engaging global management consulting firms to enhance distribution gross margins and increase efficiencies [7][9] - The Bold plus One strategy is being expanded to drive superior customer satisfaction and financial goals [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to high single-digit to low double-digit earnings growth, supported by strong July sales and targeted sales initiatives [41][42] - The management noted that patient traffic in dental markets remains stable, with dentists investing in productivity-enhancing devices [50][51] - The company is focused on enhancing gross margins through pricing strategies and improving operational efficiencies [61][62] Other Important Information - The CEO announced plans to retire at the end of the year, transitioning to the role of Chairman of the Board, emphasizing the company's growth and development over the past 45 years [22][24] - The company has initiated restructuring efforts expected to yield annual run rate savings of over $100 million by the end of 2025 [35] Q&A Session Summary Question: Insights on July sales and patient traffic - Management reported positive trends in July sales, with stable patient traffic and a return to normal merchandise pricing [48][50] Question: Current state of consulting engagements - Management highlighted two key areas of focus with consulting firms: driving gross profit and restructuring for efficiency [58][60] Question: EPS cadence in the second half of the year - Management expects EPS growth to be more weighted towards the second half of the year, driven by targeted sales initiatives and backlog improvements [69][70] Question: Updates on orthodontics and aligner integration - Management noted that the orthodontics business is small but stabilizing, with efforts to improve profitability and product offerings [75][78] Question: Impact of targeted sales initiatives - Management indicated that targeted sales initiatives successfully addressed lost sales and improved customer engagement [90][92] Question: Competitive balance and RFPs from larger customers - Management acknowledged that RFPs are normal for larger customers, and the company remains a trusted supplier, working collaboratively to mitigate tariff impacts [96][99]