TELUS(US:TU)2026-02-12 19:02Financial Data and Key Metrics Changes - TELUS achieved record free cash flow of CAD 2.2 billion for the full year 2025, representing an increase of 11% over 2024, exceeding the annual target [8][9] - Adjusted EBITDA, including health, increased by 3.1% for 2025, demonstrating disciplined execution and focus on cost efficiency [8] - The net debt to EBITDA ratio improved to 3.4x at the end of 2025, with expectations to reach approximately 3.3x or lower by the end of 2026 [19][26] Business Line Data and Key Metrics Changes - In the fourth quarter, TELUS achieved total telecom customer net additions of 377,000, with wireless driving strong net additions of 337,000 [9][10] - The company reported record connected device net additions of 716,000 for the full year, with mobile phone net additions of 207,000 and fixed net additions of 158,000 [6][7] - TELUS Health's operating revenues and adjusted EBITDA grew by 13% and 10% respectively, attributed to the acquisition of Workplace Options and organic growth [24] Market Data and Key Metrics Changes - TELUS led the industry with 1.1 million full mobile and fixed customer net additions in 2025, marking the fourth consecutive year of surpassing 1 million combined customer additions [6][7] - The company reported industry-leading postpaid mobile phone churn of 0.97% for the full year, marking the twelfth consecutive year below the 1% threshold [8] Company Strategy and Development Direction - TELUS is focused on amplifying profitable revenue expansion while maintaining a strong emphasis on cost efficiencies [19][20] - The company plans to leverage its superior portfolio of bundled products and services to differentiate itself from competitors and create shareholder value [11][12] - TELUS aims to achieve double-digit EBITDA growth from TELUS Digital and TELUS Health in 2026, with a focus on new product development and improving churn rates [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering sustained profitable growth, supported by a robust asset mix and diversified business portfolio [28] - The company anticipates consolidated service revenue and adjusted EBITDA growth of up to 4% in 2026, alongside a free cash flow target of approximately CAD 2.45 billion [19][27] - Management highlighted the importance of maintaining healthy industry economics and brand differentiation amidst competitive pressures [34][35] Other Important Information - Darren Entwistle announced his retirement effective June 30, 2026, with Victor Dodig set to succeed him as CEO [3][4] - The company is exploring strategic investment opportunities for TELUS Health and TELUS Agriculture, alongside monetization of real estate and copper assets [18][19] Q&A Session Summary Question: Current wireless environment and TELUS strategy - Management acknowledged the competitive environment and emphasized the importance of maintaining brand differentiation to avoid a detrimental race to the bottom [34][35] Question: ARPU growth expectations - Management indicated that the improvement in ARPU is organic and reflects a reestablishment of premium offerings, with expectations for continued growth [40][41] Question: Guidance for revenue and EBITDA growth - Management outlined three key growth areas: telecom, TELUS Digital, and TELUS Health, with expectations for double-digit EBITDA growth from both digital and health segments [49][50] Question: Changes in CEO and capital allocation - Management assured continuity in growth initiatives and capital allocation strategies despite the leadership transition [67] Question: Sovereign AI strategy and chip ownership - Management confirmed that the chip strategy is included in guidance and emphasized the cost efficiency of leveraging existing data centers for Sovereign AI initiatives [88][94]