MarketAxess (NasdaqGS:MKTX) Q3 2025 Earnings Call November 07, 2025 11:00 AM ET Company ParticipantsChris Concannon - CEOChris Allen - Managing DirectorRit Roy - Senior Equity Research AssociatePatrick O’Shaughnessy - Managing DirectorChris O'Brien - Equity Research AVP - Brokers, Exchange, and Asset ManagersIlene Fiszel Bieler - CFOStephen Davidson - Head of Investor RelationsSimon Clinch - Managing Director of Financials ResearchConference Call ParticipantsAlex Kramm - Managing Director and Senior Equity ...

MarketAxess (NasdaqGS:MKTX) Q3 2025 Earnings Call November 07, 2025 11:00 AM ET Company ParticipantsChris Concannon - CEOChris Allen - Managing DirectorRit Roy - Senior Equity Research AssociatePatrick O’Shaughnessy - Managing DirectorChris O'Brien - Equity Research AVP - Brokers, Exchange, and Asset ManagersIlene Fiszel Bieler - CFOStephen Davidson - Head of Investor RelationsSimon Clinch - Managing Director of Financials ResearchConference Call ParticipantsAlex Kramm - Managing Director and Senior Equity ...

Financial Data and Key Metrics Changes - The third-quarter RevPAR increased by 2% compared to last year, while total RevPAR grew by 2.4% [14] - Adjusted EBITDA RE for the third quarter was $50 million, and adjusted FFO was $0.17 per diluted share [14] - For the first nine months of the year, comparable portfolio total RevPAR growth was 2.3%, with margins held within 20 basis points of the prior year [15] Business Line Data and Key Metrics Changes - Urban hotels experienced generally flat RevPAR growth, with Marriott Long Beach Downtown showing outsized growth post brand conversion [4] - Convention hotels reported better-than-expected performance with RevPAR growth of 3.5% [5] - San Francisco hotels achieved over 15% RevPAR growth, while Washington, D.C. faced weaker government-related demand [6] Market Data and Key Metrics Changes - The company booked 6% more rooms than the prior year, marking the strongest third-quarter booking volume since before the pandemic [6] - Positive group pace is anticipated for 2026, particularly in Orlando, Boston, Miami Beach, San Francisco, and Wine Country [7] - The resort portfolio faced softer performance due to weaker demand in South Florida and Maui, although there were signs of recovery in Maui [8] Company Strategy and Development Direction - The company aims to close the valuation discount and improve total shareholder returns through purposeful asset recycling [21] - Despite a challenging transaction market, the company disposed of over $600 million in lower-quality assets and acquired approximately $600 million in better real estate [22] - The company is focused on maintaining a strong balance sheet with net leverage of 3.5 times trailing earnings [16] Management's Comments on Operating Environment and Future Outlook - The operating environment remains choppy, with uncertainty from the government shutdown, but the company maintains its full-year earnings outlook [17] - The fourth quarter is projected to be the strongest for RevPAR growth, with total portfolio RevPAR growth expected in the mid-single-digit range [18] - Management is optimistic about benefiting from recent investments and delivering above-market growth in 2026 [10] Other Important Information - The company completed a renovation of the meeting space in San Antonio and is about to begin a similar project in San Diego [12] - The board has authorized a $0.09 per share common dividend for the fourth quarter [20] - The company has repurchased 11.4 million shares year-to-date at an average price of $8.83 per share, totaling $101 million [19] Q&A Session Summary Question: Thoughts on Q4 and mid-single-digit total RevPAR range - Management confirmed that Q4 was expected to be the strongest quarter for RevPAR growth, with Andaz Miami Beach contributing significantly to the growth [30] Question: Changes in the transaction market for 2026 - Management noted slight improvements in the transaction market, with expectations for continued improvement in 2026 [33] Question: Large buyers in the transaction market - Management indicated that while the market is challenging, they continue to look for opportunities to recycle assets [38] Question: EBITDA ramp for Andaz Miami Beach - Management expressed confidence in achieving the EBITDA range of $12 million-$16 million for next year, with strong bookings anticipated [41] Question: Group pace for 2026 - Management reported that they expect to have around 80% of room nights on the books for 2026, consistent with the prior year [45] Question: Ancillary spending and expense control - Management highlighted that out-of-room revenue growth has outpaced room revenue growth, contributing positively to overall performance [70] Question: G&A as a percentage of revenues - Management stated that G&A for the quarter was lower as a percentage, with guidance for the full year set at $20 million-$21 million [72]

Financial Data and Key Metrics Changes - The company generated $4 billion in total revenue in Q3 2025, up from $3.3 billion in Q3 2024, excluding net recognized gains and losses [13] - Net earnings for Q3 2025 were $358 million, compared to $266 million in Q3 2024, with adjusted net earnings of $439 million or $1.63 per diluted share, up from $356 million or $1.30 per share in the prior year [13][14] - Adjusted pre-tax title earnings were $410 million, a 27% increase from $323 million in Q3 2024, with an adjusted pre-tax title margin of 17.8%, up from 15.9% [4][15] Business Line Data and Key Metrics Changes - The title segment generated $2.3 billion in total revenue in Q3 2025, compared to $2 billion in Q3 2024, with direct premiums increasing by 19% and agency premiums by 13% [14][15] - F&G's assets under management reached $71.4 billion, up 14% year-over-year, with adjusted net earnings of $139 million, slightly up from $135 million in Q3 2024 [12][18] Market Data and Key Metrics Changes - Daily purchase orders opened saw an 8% sequential decline, but September's orders were higher than August's due to a modest decrease in mortgage rates [5] - Refinance orders surged to 2,100 per day in September, reflecting a 15% increase over Q3 2024 and a 22% increase over Q2 2025 [6][9] - Total commercial orders opened averaged 5,800 per day in Q3, with a notable 34% increase in commercial revenue compared to Q3 2024 [9][10] Company Strategy and Development Direction - The company plans to distribute approximately 12% of F&G's outstanding shares to FNF shareholders, increasing F&G's public float from 18% to 30% [22][23] - The strategy focuses on balancing growth in spread-based annuities alongside fee-based insurance and distribution strategies to enhance long-term shareholder value [69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the commercial business, noting the potential for 2026 to match peak years of 2021 and 2022 due to strong performance and a growing pipeline [30][32] - The company anticipates a good fourth quarter, although it is typically the weakest for purchase closings, with expectations for modestly better margins next year if the purchase environment improves [43][44] Other Important Information - The company has deployed AI tools across the organization to enhance productivity and margin efficiency, with 85% of residential sales transactions engaged through the inHere digital platform [10][11] - The title claims paid were $58 million, lower than the provision of $70 million, indicating effective claims management [16] Q&A Session Summary Question: Could you have spun the whole piece out tax-free? - Yes, the company could have spun the entire company to FNF shareholders tax-free, but by dropping below 80%, that option is off the table [28] Question: Do you think 2026 could match peak years? - Yes, the company has seen strong growth in commercial activity and believes there is potential for better performance than in 2021 and 2022 [30][32] Question: What are the options regarding F&G distribution? - The company likes F&G and sees continued growth, but other options remain on the table for future distributions [37][38] Question: What was the impact of security and recruiting investments on margins? - There were no significant net impacts on margins from these initiatives this quarter, with a strong overall performance across multiple segments [39][42] Question: What was the daily count for refis in October? - The company opened just over 1,800 refinance orders per day in October, down from 2,100 in September but above the quarterly average [57] Question: What is the engagement level with the inHere platform? - 85% of orders had customer engagement through the inHere platform, indicating a growing trend towards digital interaction [63][64]

Financial Data and Key Metrics Changes - Sales for Q3 2025 were $448 million, an increase of 10.9% compared to $404 million in Q3 2024, driven by higher volumes, pricing, and favorable foreign exchange [9][13] - Adjusted EBITDA was $92 million, or 20.4%, compared to $79 million, or 19.6% in the prior period [15] - Adjusted earnings per share increased to $0.69 from $0.61 year-over-year [15] - Adjusted free cash flow was $72 million, up from $65 million in the prior year [15] - The effective tax rate for Q3 2025 was 23.6%, compared to 18.4% last year, influenced by changes in earnings mix and U.S. tax legislation [15] Business Line Data and Key Metrics Changes - The company experienced a 6% increase in volumes, a 4% increase in pricing, and a 1% contribution from favorable foreign exchange [13][20] - The aftermarket segment is expected to remain flattish year-over-year, with ongoing challenges in freight activity [10][31] Market Data and Key Metrics Changes - The heavy-duty and medium-duty truck markets in the U.S. are expected to decline by 20%-25% [11] - Demand for trucks in India is anticipated to grow, supported by government infrastructure spending [11] - The company raised its total revenue expectations for the year to a range of $1.72-$1.745 billion, reflecting a 3%-4.5% increase compared to the prior year [11] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy: growing share in First Fit, accelerating profitable growth in the aftermarket, transforming the supply chain, and expanding into industrial filtration markets [6][8] - The operational separation from the former parent company has been completed, allowing the company to focus on growth and redeploy resources [3][4] - The company plans to continue its share repurchase program and has increased its quarterly dividend by 10% [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to challenging market conditions and deliver strong operational performance [11][12] - The outlook for the aftermarket remains cautious, with expectations of continued flat conditions through the first half of 2026 [31] - The company is optimistic about its growth strategy and the potential for share gains, particularly in the aftermarket and First Fit applications [21][22] Other Important Information - The company has completed its separation activities from Cummins and does not anticipate incurring additional one-time costs related to this in Q4 [15][36] - The company has a strong liquidity position with $218 million in cash and a $400 million revolving credit facility, providing operational flexibility [16] Q&A Session Summary Question: Insights on stronger-than-expected performance and share gains - Management noted that the strong quarter was driven by 8% share gains, despite market headwinds of 2% [20][21] Question: Details on volume growth impact from Stellantis - Management indicated that the 44% increase in Ram volumes was significant but not expected to repeat in future quarters [27][28] Question: Clarification on aftermarket pacing and its sustainability - Management expects the flat aftermarket conditions to persist through the first half of 2026, with no signs of improvement yet [31] Question: Opportunities from the operational separation - Management expressed excitement about focusing resources on growth following the completion of the separation [33][36] Question: Impact of Section 232 tariffs on pricing - Management confirmed ongoing evaluation of tariff implications and plans for price-cost neutrality [39] Question: Positioning for growth in data center engine capacity - Management is targeting new business development in both aftermarket and First Fit applications, while acknowledging limited aftermarket benefits from gensets [41][42] Question: Potential benefits from First Brands' bankruptcy - Management is actively seeking to expand aftermarket coverage and gain market share through existing and new partnerships [44][45]

Financial Data and Key Metrics Changes - For Q4 2025, ending AUM reached $1.66 trillion, a 3.1% increase from the prior quarter, while average AUM increased by 4.4% to $1.63 trillion [31] - Adjusted operating revenues increased by 13.9% to $1.82 billion from the prior quarter, driven by elevated performance fees and higher average AUM [31] - Adjusted net income and adjusted diluted earnings per share increased by 35.7% and 36.7% from the prior quarter to $357.5 million and $0.67, respectively [32] Business Line Data and Key Metrics Changes - In public markets, over 50% of mutual funds, ETFs, and composites outperformed peers and benchmarks across all standard time periods, indicating improved investment performance [9] - Private markets saw fundraising of $22.9 billion, contributing to a total of $270 billion in alternative AUM, with expectations to increase fundraising to between $25 billion and $30 billion in fiscal 2026 [11] - The SMA business grew at a 21% compound annual rate since 2023, with AUM of $165 billion across more than 200 strategies [15] Market Data and Key Metrics Changes - Internationally, Franklin Templeton managed nearly $500 billion in assets, achieving $10.7 billion in positive long-term net flows in markets outside the U.S. [26] - Fixed income net inflows were $17.3 billion for the year, with positive net flows for seven consecutive quarters [28] - Alternatives and multi-asset generated $25.7 billion in net flows for the year, reflecting broad-based client demand [29] Company Strategy and Development Direction - The company is focused on deepening client partnerships, broadening investment capabilities, and strengthening its diversified model as part of a five-year plan [7] - Franklin Templeton aims to democratize private assets and expand its wealth management offerings, targeting to double Fiduciary's AUM by 2029 [20] - The company is investing in innovation, particularly in digital assets and AI, to redefine how investors access opportunities and improve operational efficiency [22] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about the strong public equity gains and the overall constructive view of private markets, despite a complex geopolitical backdrop [24] - The company anticipates continued growth in alternatives, particularly in the retail market, driven by partnerships and innovative product offerings [13] - Management highlighted the importance of selectivity and discipline in navigating the current market dynamics, which present opportunities across public and private markets [25] Other Important Information - Franklin Templeton was named 2025 Asset Manager of the Year in the $500 billion-plus AUM category, reflecting its leadership in innovation and investment advisory solutions [7] - The company has integrated certain corporate functions to drive efficiency and enhance client service, particularly in response to challenges faced by Western Asset Management [29] - The firm is focused on capital management, returning $930 million to shareholders through dividends and share repurchases [36] Q&A Session Summary Question: Fundraising target for fiscal 2026 - The target is between $25 billion and $30 billion, with contributions expected from various funds including Lexington, Clarion, and Alcentra [43] Question: Expense guidance for 2026 - The company expects to achieve $200 million in cost savings for 2026, with a focus on maintaining or reducing total expenses compared to fiscal 2025 [44][46] Question: Infrastructure product pipeline - The company is building a fund around partnerships with DigitalBridge, Copenhagen Infrastructure Partners, and Actis to participate in infrastructure deals [48] Question: AI and tokenization opportunities - The company is leading in tokenization, offering unique features for money market funds and exploring new distribution capabilities through partnerships with exchanges like Binance [51][53] Question: Update on Lexington flagship fund - The target size for the Lexington flagship fund is about $25 billion, with expectations for the first close in the first half of 2026 [54]

Financial Data and Key Metrics Changes - Revenue grew 23% to $66 million, driven by solid performance across all end markets [5][14] - Adjusted EBITDA increased 12% to $6.3 million, with an adjusted EBITDA margin of 10.8%, up 40 basis points year-over-year [5][16] - Book-to-bill ratio was 1.3 times, resulting in a record backlog of $500.1 million, up 23% year-over-year [5][18] Business Line Data and Key Metrics Changes - Defense market sales increased by $9.9 million, or 32%, due to project milestones and growth in new and existing programs [14][16] - Energy and process market sales rose by $2 million, driven by large capital projects [14] - Aftermarket sales for energy and process and defense markets were $9.8 million, reflecting resilient demand [15] Market Data and Key Metrics Changes - Strong momentum in the U.S. Navy programs, including a $25.5 million follow-on order for the MK 48 Mod 7 heavyweight torpedo program [6][14] - Increased sales in the space market, with $22 million in new orders from commercial space launch customers [10][14] Company Strategy and Development Direction - The company is focused on diversifying its portfolio across high-growth, innovation-driven end markets, including defense, energy, and space [11][12] - Recent acquisition of X-Dot Bearing Technologies aims to enhance competitive positioning in high-speed rotating machinery [12][13] - Continued investment in advanced manufacturing technologies and facilities to support growth in defense and space sectors [8][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve fiscal 2027 targets of 8-10% organic revenue growth and low to mid-teen adjusted EBITDA margins [21] - The company remains well-positioned despite potential impacts from government shutdowns, with minimal disruption expected [33][34] Other Important Information - The company ended the quarter with $20.6 million in cash and no debt, providing significant flexibility for future growth investments [19] - Capital expenditures were $4.1 million, focused on capacity expansion and advanced technologies [19] Q&A Session Summary Question: Clarification on $22 million in space and aerospace orders - $15 million of orders were recognized in Q2, while $7 million will be recognized in Q3 [24] Question: Reason for maintaining guidance instead of raising it - Guidance was maintained due to consistent tracking with expectations and timing of project milestones [26] Question: Update on cryogenic facility and customer bookings - The cryogenic facility is on track, with testing expected to begin soon, and customer bookings are healthy [27] Question: Impact of government shutdown on business - Minimal impact is expected, with long-standing programs continuing to progress [33] Question: Customer feedback on X-Dot transaction and technology applications - Positive feedback received, with technology enabling entry into new markets like small modular nuclear [36] Question: Size and timing of investments in the space market - Additional lathes and mills will be purchased, factored into CapEx guidance for the year [38] Question: Momentum in small modular reactors - The company is in early development phases for small modular reactors, with potential for scaling in the future [42] Question: Breakdown of defense revenue growth - A significant portion of the $9.9 million growth was due to unusually high material receipts impacting gross margin [46]

Financial Data and Key Metrics Changes - In Q3, adjusted EBITDA was CAD 2 million, representing an 11.6% margin, with total cash investments ending the quarter at CAD 46 million, providing flexibility for growth [4][19] - Total adjusted revenue grew 2% year-over-year to CAD 17 million, with wealth revenue rising 27% and payments revenue increasing 11% [17][18] - Interest revenue decreased by 5% in the quarter due to a new rate cap, although it showed slight sequential growth [18] Business Line Data and Key Metrics Changes - Assets under management (AUM) reached a record CAD 498 million, up 22% year-over-year, driven by deeper adoption of managed portfolios [4][17] - Payments processing volume grew 12% year-over-year to CAD 2.8 billion, reflecting steady international demand [14][17] - Bitcoin holdings increased over 300% quarter-over-quarter, reaching CAD 4.7 million [15][17] Market Data and Key Metrics Changes - Total members in Canada reached 2.3 million, up 6% [17] - The composition of revenue growth is shifting towards higher quality recurring streams, with adjusted subscription services revenue growing by 7% [17] Company Strategy and Development Direction - The company is transitioning to a unified intelligent investing platform, combining managed and self-directed investing under one brand [5][6] - The strategy focuses on building a behavioral operating system for wealth that emphasizes discipline and long-term investing [8][9] - The company aims to grow its recurring revenue base while maintaining profitability and capital allocation focused on Bitcoin and hard asset value creation [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the rollout of the intelligent investing platform, expecting it to drive growth while maintaining EBITDA positivity [32][36] - The company reaffirmed its 2025 revenue guidance and raised its adjusted EBITDA outlook from CAD 5-6 million to CAD 6-7 million for the full year [19][20] - Management acknowledged the challenges posed by the current regulatory environment but is progressing towards offering crypto trading [44] Other Important Information - The company is sunsetting its legacy apps, MOCA and MogoTrade, as it fully transitions to the intelligent investing platform [6] - The intelligent investing platform includes features designed to enhance investor discipline and performance, such as a performance dashboard and a buy-gate investment memo [24][25] Q&A Session Summary Question: How does the company balance growth and margins? - Management stated the philosophy is to stay EBITDA positive while driving top-line growth, expecting offsetting growth from the rollout of intelligent investing [32] Question: What are the logistics for rolling out intelligent investing? - The rollout will start with the managed solution, transitioning existing users to the new platform, with plans to introduce the self-directed option subsequently [34][36] Question: How does the lending business fit with core wealth and payments? - Management indicated that while lending is not the primary growth focus, it remains a stable cash flow generator and will continue to contribute to overall business cash flow [39][40] Question: Update on regulatory process for crypto trading? - Management confirmed progress on the crypto path and partnership discussions, with announcements expected in 2026 [44]

Financial Data and Key Metrics Changes - Camden reported same-store revenue growth of 0.8% for Q3 2025, up 0.9% year-to-date, and up 0.1% sequentially [9] - Core funds from operations (FFO) for Q3 2025 were $186.8 million, or $1.70 per share, exceeding prior guidance by one cent [13] - The company increased its full-year core FFO guidance by $0.04 per share from $6.81 to $6.85, marking the third consecutive increase for 2025 [15] Business Line Data and Key Metrics Changes - Effective new lease rates decreased by 2.5%, while renewal rates increased by 3.5% in Q3 2025 [9] - The blended rate growth was 0.6%, a decline of 10 basis points from the previous quarter and 40 basis points compared to Q3 2024 [9] - Turnover rates remained 20-30 basis points below last year's levels, with move-outs attributed to home purchases at a record low of 9.1% [10] Market Data and Key Metrics Changes - Strong apartment demand continued, making 2025 one of the best years for apartment absorption in the last 25 years [5] - The company noted that apartment affordability improved, with 33 months of wage growth exceeding rent growth [5] - Private market sales of apartments showed robust activity, with cap rates for high-quality properties landing in the 4.75%-5% range [6] Company Strategy and Development Direction - Camden is focused on maintaining a strong balance sheet with no major dilutive refinances over the next couple of years [6] - The company plans to continue share buybacks, having repurchased $50 million of shares at a significant discount to net asset value [7] - Camden anticipates a stronger growth profile post-2025 as the excess supply from the post-COVID environment diminishes [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing reduced uncertainty compared to 2025 and a significant amount of multifamily supply absorbed in 2025 [19][20] - The company highlighted that demographic and migration trends support new demand going forward [6] - Management noted that the current disconnect between private and public market values for apartments is significant, with a 30% discount to consensus NAV [7][39] Other Important Information - Camden disposed of three older communities for a total of $114 million, using proceeds to repurchase shares [12] - The company expects occupancy for Q4 2025 to be in the range of 95.2%-95.4% [15] - Property expenses are expected to decline slightly, leading to a decrease in the full-year same-store expense midpoint from 2.5% to 1.75% [14] Q&A Session Summary Question: Early thoughts on 2026 earnings - Management indicated that earnings for 2026 are expected to be flat compared to 2025, with a more favorable environment anticipated [19] Question: Current appetite for investment in apartments - There remains robust demand for multifamily assets, with significant capital available, although transaction volumes are below pre-COVID levels [24][25] Question: Fourth quarter expectations relative to normal seasonality - The fourth quarter is expected to reflect typical seasonality, with blended lease tradeouts anticipated to be down approximately 1% [30] Question: Impact of concessions on market rents - In higher supply markets, concessions are averaging around five weeks, approximately 10%, which will need to roll off in 2026 [73][74] Question: Supply impact on 2026 - The company expects a significant decline in new deliveries, which should positively impact demand and absorption rates in 2026 [56][57]

Financial Data and Key Metrics Changes - In Q3 2025, TELUS reported a net income of CAD 431 million, with an EPS of CAD 0.32, reflecting a 68% increase primarily due to a gain on the purchase of long-term debt [18] - Adjusted net income decreased by 10% to CAD 370 million, with an EPS of CAD 0.24, down 14% [18] - Free cash flow increased by 8% to CAD 611 million, driven by TELUS International EBITDA growth and lower capital expenditures [19] - Capital expenditure, excluding real estate, declined by CAD 16 million, or 2%, with capital intensity improving to 12% from 13% in the prior year [18][19] Business Line Data and Key Metrics Changes - TELUS Health achieved revenue and adjusted EBITDA growth of 18% and 24%, respectively, with a significant expansion in its global reach [6] - The mobile segment saw healthy phone net additions of 82,000 and connected device net additions of 169,000, supported by a focus on profitable customer growth [4] - Wireline services delivered an industry-best 40,000 internet net additions, continuing a 15-year track record of positive wireline net additions [5] Market Data and Key Metrics Changes - TELUS reported a total of 288,000 customer additions, reflecting a 5% growth in customer connections year-over-year [3][4] - The company maintained an industry-best post-paid mobile phone churn rate of 0.91%, marking the twelfth consecutive year below 1% [4] Company Strategy and Development Direction - TELUS is focused on operational excellence and the strategic rollout of TELUS Pure Fiber connectivity, enhancing customer experiences through AI-powered solutions [3] - The acquisition of TELUS Digital is expected to generate annualized cash synergies of CAD 150 million to CAD 200 million, enhancing digital and AI capabilities [8] - The company aims to achieve a leverage ratio of approximately three times by the end of 2027 while eliminating its discount dividend reinvestment plan [12][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained success driven by ongoing EBITDA expansion and disciplined capital deployment [11] - The company anticipates continued growth in TELUS Health, supported by strong sales bookings and improved customer experiences [56] - TELUS expects AI-enabling capabilities to drive significant revenue growth, projecting an increase from CAD 800 million in 2025 to approximately CAD 2 billion by 2028 [9][42] Other Important Information - TELUS increased its quarterly dividend by 4% to CAD 0.4184, reflecting a commitment to sustainable shareholder returns [11] - The company completed the acquisition of TELUS Digital, marking a significant milestone in its strategic evolution [8] Q&A Session Summary Question: Overview of ARPU growth and churn outlook - Management indicated that ARPU growth will depend on continued efforts in pricing and customer acquisition, with churn slightly increasing but still low [23][25] Question: Capital needs for Tereon - TELUS is looking to acquire towers and build new co-location towers, with cash flows from Tereon being net of capital expenditures [23][24] Question: Financial implications of partner build model - The partner build model is expected to have a margin profile similar to a wholesale model, with a focus on achieving better economic returns [29][30] Question: Revenue growth from sovereign AI - Revenue from sovereign AI is expected to manifest within TELUS Business Solutions and TELUS Digital, with additional guidance to be provided in February [46][47] Question: Health business outlook - Management sees strong organic growth in the health business, driven by improved sales bookings and customer experiences [55]