BCE(BCE) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue increased by 1.3%, driven by the acquisition of Ziply Fiber [14] - Adjusted EBITDA rose by 1.5%, leading to a margin increase of 10 basis points to 45.7%, the strongest result in over 30 years [14] - Net earnings and statutory EPS saw significant increases, largely due to a $5.2 billion gain from the sale of a minority stake in MLSE [15] - Free cash flow increased by $171 million in Q3, supported by lower CapEx and higher cash from working capital [15] Business Line Data and Key Metrics Changes - Internet revenue grew by 2%, with strong performance in fiber driving subscriber growth [16] - Wireless service revenue declined modestly by 0.4%, while post-paid churn improved by 15 basis points [9][16] - AI-powered solutions revenue grew by 34% year-over-year, indicating strong demand and validation of the company's strategy [11][16] Market Data and Key Metrics Changes - In the U.S. market, Ziply Fiber's revenue reached $160 million, with a 15% year-over-year growth in internet revenue [17][18] - The Canadian wireless environment has stabilized, with expectations for continued improvement [9] Company Strategy and Development Direction - The company unveiled a three-year strategic plan focusing on four priorities: customer service, network delivery, AI-powered solutions, and digital media [4][10] - The strategy includes leveraging unique assets in fiber, wireless, media, and enterprise to drive efficiencies and sustainable free cash flow growth [4][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive impact of the federal budget on investment in the Canadian economy [27] - The company is well-positioned for growth amid rising global instability and technological advancements [10] - Management anticipates strong EBITDA growth for Bell CTS U.S. in line with the three-year plan [19] Other Important Information - The company plans to increase product intensity by approximately 25% over the next three years, with a focus on content bundling [8] - The partnership with AST SpaceMobile aims to enhance network reliability and expand service reach [9] Q&A Session Summary Question: Can you help us unpack the federal budget a bit? - Management noted that the budget is positive for investment in the Canadian economy and encourages companies to invest [27] Question: Can you provide an update on the internet competitive landscape? - Management emphasized a twofold approach: protecting retail positions in the east and enhancing services in the west, with a full launch of fiber resale expected in January [35] Question: Do you expect margin growth in the Canadian telecom business between 2026 and 2028? - Management indicated a focus on operating cost reduction and expects relatively flat margins over time [39] Question: Can you provide more details on the AI Fabric and its expected financials? - Management highlighted a strong pipeline of demand and expects significant growth from AI Fabric in the coming months [42] Question: What kind of competition is faced in the enterprise market for AI-powered solutions? - Management stated that the company is unique in its offering, combining network security with AI automation, which sets it apart from competitors [76]