Summary of Rogers Communications FY Conference Call Company Overview - **Company**: Rogers Communications (NYSE: RCI) - **Date of Conference**: September 25, 2025 Key Points Industry Insights - The Canadian wireless pricing environment is stabilizing, with flanker and fighter brand pricing increasing by double digits [2] - The market is competitive but more stable compared to previous years, with less heavy discounting observed [2] - Subscriber growth in the sector is projected to be around 3%, translating to nearly 1 million new customers [3] Customer Retention and Churn Management - Rogers is focusing on reducing churn, reporting improvements in churn rates compared to previous years [3] - Initiatives such as add-a-line promotions and bundling services (wireless and broadband) are being employed to enhance customer relationships and reduce churn [7][9] - The Rogers Bank credit card program is contributing to customer loyalty through discounts that exceed competitors' offerings [8] Wireline and Wireless Integration - The acquisition of Shaw has expanded Rogers' wireline market presence, allowing for coast-to-coast bundling of services [4] - Fixed wireless capabilities are being utilized effectively in regions where Rogers lacks a wireline footprint, particularly in Quebec and parts of Ontario [10] Financial Performance and Margins - Cable margins are currently at 58%, with expectations to reach 59% again, while wireless margins are around 64% to 66% [12] - The company is focused on driving growth in subscribers, revenues, and free cash flow while maintaining capital efficiency [12] MLSE Acquisition and Future Plans - Rogers has acquired a 75% stake in MLSE and is in discussions to buy out the remaining 25% stake held by a minority partner [15][17] - The integration of MLSE is expected to create significant cost and revenue synergies, particularly in live entertainment and sponsorship opportunities [20] - The combined value of MLSE and Rogers Sports & Media is estimated to be around CAD 20 billion, with potential for substantial growth [25] Leverage and Debt Management - Current leverage is approximately four times, with efforts to reduce it through capital deployment and asset sales [26] - The company aims to maintain a leverage ratio of around 3.9 to 4 times by year-end [28] Market Conditions and Asset Sales - The real estate market remains soft, and Rogers is not aggressively pursuing asset sales but is open to trimming surplus real estate holdings [30] - The focus remains on the MLSE transaction as the largest opportunity for capital monetization [30] Conclusion - Rogers Communications is strategically positioning itself in a stabilizing Canadian wireless market while focusing on customer retention, financial efficiency, and leveraging its recent acquisitions to drive future growth and profitability [2][3][12][25]

Financial Data and Key Metrics Changes - First quarter revenue reached $113.1 million, reflecting a 22% year-over-year growth driven primarily by increased Medicare enrollments [7][24] - GAAP net income was $2 million, a significant improvement from a net loss of $17 million in the previous year [29] - Adjusted EBITDA was $12.5 million compared to a negative $1.7 million in Q1 of 2024, indicating strong profitability growth [29][30] - Cash, cash equivalents, and short-term marketable securities totaled $155.6 million at the end of the quarter, up from $70.8 million last year [31] Business Line Data and Key Metrics Changes - Medicare segment revenue was $103.7 million, a 26% increase year-over-year, with Medicare submissions across agency and Amplify Fulfillment models growing 22% [24][11] - The agency fulfillment model saw submitted Medicare Advantage (MA) applications increase by 26% year-over-year, driven by effective marketing strategies [12] - Medicare non-commission revenue increased by 20% to $13.9 million, primarily due to greater fee-based revenue from Amplify [24] Market Data and Key Metrics Changes - The company reported a 22% growth in total Medicare submissions across fulfillment models, with hybrid enrollments experiencing the strongest growth at 38% year-over-year [11][13] - The final Medicare Advantage carrier reimbursement rates exceeded market expectations, providing relief to the broader Medicare Advantage industry [10] Company Strategy and Development Direction - The company is focused on enhancing its customer-centric choice model, which has become increasingly relevant in a complex Medicare landscape [6] - EHealth aims to maintain its position as a technological leader by integrating artificial intelligence into its telephonic enrollment processes [14] - The company is committed to expanding its brand identity and enhancing the connection between its trusted brand and online consumer platform [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the regulatory environment, noting that the absence of new regulations is encouraging [42] - The company anticipates challenges in year-over-year comparisons due to regulatory changes in Dual Special Needs Plans (DSNP) enrollment rules [19] - Management emphasized the importance of new Medicare enrollments as a key consumer segment for the upcoming quarters [19] Other Important Information - The company is facing a Department of Justice complaint but believes the claims are without merit and intends to challenge them vigorously [20][21] - EHealth's commitment to providing free, unbiased expert advice remains a core part of its mission [21] Q&A Session Summary Question: Impact of Elevance's removal of Medicare Advantage plans from online marketing platforms - Management noted that the macro environment is evolving and emphasized their strategy of having diverse carrier relationships to mitigate dependency on any single carrier [36] Question: Thoughts on the regulatory environment and its impact on operations - Management expressed cautious optimism about the regulatory environment, highlighting the lack of new regulations and the potential for less volatility in the upcoming enrollment season [42][43] Question: Changes in carrier discussions due to DOJ focus - Management indicated it is too early to assess any changes in carrier discussions following the DOJ news, noting that support varies among carriers [51] Question: Update on ancillary services and their impact on retention - Management stated that while ancillary services are still in their infancy, they believe providing additional value can enhance retention, although it currently does not significantly impact revenue [55]

Financial Data and Key Metrics Changes - Total revenue grew by 1% year over year in the first quarter, driven by insurance repricing and stronger than expected interest income [21][24] - First quarter GAAP earnings per diluted share was $1.71, and adjusted earnings per diluted share was $1.99, with adjusted EBITDA margin at 12.6% [26] - Operating expenses decreased by 6% year over year, contributing to strong cash generation [25][26] Business Line Data and Key Metrics Changes - Professional services revenue declined by 2% due to reduced volume and the discontinuation of a specific client-level technology fee [23] - Insurance revenue grew by 1% in the first quarter, with insurance costs increasing by 4% [24][25] - Customer hiring was slightly below forecast, with approximately 340,000 total worksite employees (WSCs), down 3% year over year [21] Market Data and Key Metrics Changes - Net customer hiring is expected to remain low throughout 2025, reflecting a decline in SMB business confidence [6][9] - The decline in co-employed worksite employees was driven by reduced new sales compared to the prior year [21][22] - The company is seeing a shift in customer dynamics, with a focus on retaining clients through ASO offerings as it exits the SaaS-only business [34] Company Strategy and Development Direction - The company aims to achieve a compounded annual revenue growth rate of 4% to 6% and expand adjusted EBITDA margins to 10% to 11% [8] - New product innovations, including benefit plan bundles, are expected to simplify offerings and enhance sales processes [11][80] - The company is focusing on scaling its benefits brokerage channel and improving customer experience through proprietary technology [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving annual guidance despite economic uncertainties, citing strong customer retention and execution pace [6][18] - The company anticipates a strong second half of 2025, with expectations for improved sales results as strategic initiatives take effect [14][45] - Management noted that healthcare cost trends have stabilized, which supports pricing adequacy and future margin improvements [16][52] Other Important Information - The company announced a 10% increase in its dividend and repurchased approximately 1.2 million shares, reflecting confidence in its momentum [17][26] - The insurance cost ratio for the first quarter was 88.4%, aligning with expectations and indicating effective management of healthcare costs [25] Q&A Session Summary Question: Demand environment and sales conversions - Management acknowledged that macroeconomic uncertainty impacted sales conversions but expressed confidence in pipeline strength and upcoming initiatives [30][33] Question: Update on ASO offering and client retention - Management reported positive conversion rates into ASO products and maintained original assumptions regarding headwinds for FY 2025 [34][36] Question: Guidance and performance tracking - Management indicated that overall guidance remains on track, with slight adjustments in specific areas like expenses and attrition [41][42] Question: Healthcare utilization trends - Management confirmed that healthcare cost trends have stabilized, with low double-digit increases persisting [52][54] Question: Context of quarter-over-quarter changes - Management noted that the first quarter typically experiences normal churn, with some additional attrition due to healthcare pricing adjustments [62][64] Question: Importance of scaling broker channel - Management emphasized that both scaling the broker channel and maturing the sales force are critical for future growth [66][68] Question: Repricing strategy for healthcare book - Management indicated that the repricing strategy remains on track, with potential for quicker recovery if cost trends improve [74][76] Question: Introduction of benefit bundles - Management outlined plans to introduce simpler benefit bundles to streamline the sales process and enhance customer experience [78][80]

Financial Data and Key Metrics Changes - In Q4 2024, North America Local experienced an 8% growth in billings, recovering from a 19% decline in 2022, indicating a significant turnaround in marketplace health [10][12] - The company generated $69 million in adjusted EBITDA and $41 million in free cash flow for the full year, marking its first positive free cash flow since exiting the pandemic [11][12] - The cash position improved to $229 million compared to the previous year, providing a stronger foundation for growth [14] Business Line Data and Key Metrics Changes - North America Local saw a return to 8% billing growth, while International Local, excluding Italy, grew by 2%, with positive momentum across all major markets [13] - Key verticals such as Things to Do, enterprise brands, and gifting experienced double-digit growth [13] Market Data and Key Metrics Changes - The top five metro areas in North America achieved double-digit growth in Q4, reflecting the effectiveness of the targeted strategy [26][28] - Internationally, Spain showed strong performance, with some areas reaching 2019 levels, and positive trends were noted in the UK, France, and Germany [83] Company Strategy and Development Direction - The 2025 strategy focuses on winning in key markets through a city-by-city approach, prioritizing high-impact categories like Things to Do, beauty and wellness, and gifting [14] - The company aims to enhance customer retention through improved personalization and boost merchant success with enhanced tools [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to sustained growth in 2025, emphasizing the importance of platform stability and curated marketplace strategies [14][19] - The company anticipates slight improvements in customer acquisition and retention, with a focus on increasing transaction frequency [38][40] Other Important Information - The company is investing in platform modernization, including major migrations of its fraud detection platform and cloud infrastructure, which are expected to drive innovation and engagement [11] - Management noted that the impact of recent U.S. tariffs on the business would be minimal, as most revenue comes from local experiences rather than goods [92] Q&A Session Summary Question: What drove the local growth in the U.S.? - Management attributed the turnaround to improved platform stability and a strategic shift towards a curated marketplace focused on quality rather than quantity [19][20] Question: Were any lost loyal customers recovered? - Management indicated that improvements in platform stability led to better results across the board, including the recovery of some lost cohorts [22] Question: What drove the strength in the top five metro areas? - The growth was a result of targeted strategies and market management capabilities developed over the past two years [28][30] Question: Does the guidance include continued customer growth? - Management expects slight improvements in customer acquisition and retention, but does not anticipate significant changes [40] Question: What are the critical investments to drive purchase frequency? - Management highlighted the introduction of "wow deals" and improved communication with customers post-purchase as key strategies to increase purchase frequency [49][50] Question: How is the company attracting higher quality merchants? - The company focuses on a consultative sales approach, emphasizing value over deep discounts to attract quality merchants [66][68] Question: Will the company see counter-cyclical tailwinds if consumers face pressure? - Management believes that Groupon will be an attractive option for merchants with excess capacity and for consumers seeking value [72][73] Question: What metrics indicate improvement in gifting? - Gifting has gained importance, with double-digit shares of orders during peak holiday seasons, showing significant improvement compared to last year [77][78] Question: What are the drivers of growth within international markets? - Positive signals were noted in Spain, the UK, France, and Germany, with a focus on optimizing supply and marketing strategies [83][85] Question: How is the company managing employee turnover in sales? - Management acknowledged high turnover in sales but emphasized a strong performance-based compensation structure to retain top salespeople [88] Question: What is the expected impact of U.S. tariffs? - The impact is expected to be minimal, as the majority of the business is focused on local experiences rather than goods [92]