Executive Summary / Key Takeaways

• Strategic Transformation and Deleveraging: Rogers Communications has significantly strengthened its balance sheet, achieving its post-Shaw acquisition leverage target of approximately 3.6x nine months ahead of schedule through a $7 billion structured equity investment and a $4 billion hybrid securities offering.
• Network Leadership and Innovation: The company continues to differentiate through advanced technology, launching Canada's first satellite-to-mobile texting service, rolling out Wi-Fi 7 nationally, and progressing with DOCSIS 4.0 upgrades, enhancing coverage and speed across its wireless and cable networks.
• Robust Operational Performance: Rogers delivered positive revenue and EBITDA growth across all segments in Q2 2025, with Cable returning to growth and Wireless maintaining strong margins despite a competitive market and moderating subscriber additions.
• Unlocking Media Asset Value: With a 75% controlling interest in Maple Leaf Sports & Entertainment (MLSE), Rogers aims to monetize its sports and media assets, which are estimated to exceed $15 billion, to further enhance shareholder value.
• Positive Outlook with Regulatory Headwinds: The company projects 3-5% service revenue growth and $3.0-$3.2 billion in free cash flow for 2025, but faces potential challenges from a CRTC decision on network access that could impact future capital investments.

A Canadian Communications Powerhouse with a Vision for Growth

Rogers Communications Inc. (RCIAF) stands as a cornerstone of Canada's communications and media landscape, a legacy built over 65 years. From its pioneering launch of wireless services in 1985, the company has evolved into a diversified leader, offering extensive wireless, internet, television, and media services under brands like Rogers, Fido, and Chatr. Its strategic ambition centers on disciplined execution, profitable growth, aggressive deleveraging, and the monetization of its world-class sports and media assets.

The Canadian telecom industry operates within a dynamic environment, characterized by intense competition, evolving regulatory frameworks, and shifting macroeconomic factors, including moderating immigration levels that impact subscriber growth. Amidst these trends, Rogers has consistently prioritized network reliability and an integrated ecosystem to deliver superior customer experiences. The company's foundational strength lies in its extensive network infrastructure and a strategic vision to leverage technology for competitive advantage and long-term value creation.

Technological Leadership: Powering Connectivity and Innovation

Rogers' commitment to technological leadership is a core differentiator, underpinning its competitive standing and future growth. The company has made substantial investments in its network infrastructure, ensuring it remains at the forefront of connectivity.

Rogers operates Canada's most reliable 5G Plus network, a distinction recognized by umlaut. This robust wireless foundation is complemented by advancements in its wireline network. Rogers was the first Canadian Internet provider to begin rolling out Wi-Fi 7 nationally, starting in Calgary and Atlantic Canada, offering customers better, more reliable Wi-Fi for an increasing number of devices. Furthermore, the company is making significant progress with its DOCSIS 4.0 roadmap. It has successfully trialed DOCSIS 4.0 modem technology, achieving impressive speeds of 4 gigabit download and 1 gigabit upload. The mid-split deployment, a precursor to DOCSIS 4.0, is complete in Western Canada and is rapidly advancing in the East. This is evidenced by substantial and consistent growth in median upload speeds in Eastern cities like Markham, which saw an increase from 45.91 Mbps to 75.96 Mbps between Q2 2024 and Q2 2025, bringing its capabilities in line with the West. These upgrades are crucial for meeting the growing demand for multi-gigabit symmetrical speeds and enhancing overall internet reliability.

A groundbreaking innovation for Rogers, and indeed for Canada, is the launch of its satellite-to-mobile texting service on July 15, 2025. This service, leveraging SpaceX's Starlink low-earth orbit satellites and Rogers' national wireless spectrum, is the first of its kind in Canada. It extends connectivity to over 5.4 million square kilometers, covering 2.5 times more territory than any other Canadian wireless carrier, enabling text messaging and text-to-911 in vast, previously unserved areas. Currently in a free beta trial until October 2025, the service will subsequently be included in the Rogers Ultimate Plan or available for $15 per month (with a $5 discount for beta participants for one year). Rogers plans to expand this service to support apps, data, and voice services, including 911 voice, with voice and data capabilities estimated to come online later in 2026. This technological leap significantly enhances public safety and connectivity across Canada's expansive geography.

The company's investment in the Rogers Xfinity suite of services, including the Storm-Ready home internet backup solution and the Xfinity app TV, further solidifies its product differentiation. These technological advancements collectively contribute to Rogers' competitive moat, enabling enhanced customer experiences, driving market share gains, and opening avenues for future revenue streams.

Disciplined Execution Across Core Segments

Rogers' operational strategy emphasizes disciplined execution across its Wireless, Cable, and Media segments, consistently delivering strong financial results.

In the Wireless segment, Rogers continues to demonstrate resilience in a competitive market. For Q2 2025, the segment reported 1% year-over-year growth in both service revenue and adjusted EBITDA, maintaining an adjusted EBITDA margin of just over 65%, a 10 basis point improvement from the prior year. The company added 61,000 net new Wireless subscribers, including 35,000 postpaid, though this was lower than the previous year, reflecting a moderating market size due to reduced immigration. Blended mobile phone ARPU was $55.45, a 3% decline year-over-year, primarily influenced by competitive intensity and lower outbound roaming revenue. However, churn improved to 1%, reflecting effective base management. Rogers is focused on simplifying its value proposition with new tiers and multiline discounts, aiming to strengthen ARPU in the latter half of 2025 and into 2026.

The Cable segment has achieved a significant turnaround, returning to revenue growth in Q2 2025 with a 1% increase in service revenue year-over-year. This marks a notable improvement from a 4% organic revenue decline at the start of 2024. Adjusted EBITDA for Cable grew 3% year-over-year, driven by revenue growth and a 3% decrease in operating costs, resulting in a robust margin of just over 58%—a substantial 150 basis point increase from the prior year. Retail Internet net additions were 26,000, consistent with the prior year, demonstrating solid performance in a highly competitive market. The company's strategy in Cable is bolstered by the growing market of homes passed, strong market share in internet additions, and the expansion of its 5G home internet product to new territories, which has expanded its addressable market by an additional 6.5 million homes.

The Media segment, now rebranded as Rogers Sports & Media, is undergoing a transformative expansion. In Q2 2025, Media revenue increased 10% to just over $800 million, with adjusted EBITDA up $5 million year-over-year. This growth was fueled by expanded media content, strong viewership during the NHL playoffs on Sportsnet, higher Toronto Blue Jays revenue, and the launch of the Warner Bros. Discovery (WBD) suite of channels. A pivotal development was the closing of the $4.7 billion acquisition of Bell's 37.5% stake in Maple Leaf Sports & Entertainment (MLSE) on July 1, 2025, making Rogers the majority owner with a 75% controlling interest. Rogers, together with MLSE, is now positioned as one of the most prestigious sports and media companies globally. The company estimates that for the full calendar year 2025, Media revenue will be $3.9 billion and EBITDA $250 million, with the inclusion of MLSE's financial results. Rogers believes its sports and media assets now exceed $15 billion in value and is actively exploring options to monetize this unrecognized value for shareholders.

Financial Fortification and Capital Allocation

Rogers has made substantial strides in fortifying its financial position and optimizing capital allocation, particularly in its aggressive deleveraging efforts following the Shaw acquisition.

The company successfully completed a $7 billion equity investment for a minority stake in parts of its wireless backhaul network. This, combined with a $4 billion hybrid securities offering, significantly bolstered its equity capital. As a result, Rogers ended Q2 2025 with a leverage ratio of 3.6x, achieving its Shaw deleveraging target approximately nine months ahead of its initial Q2 2026 plan. This rapid deleveraging was further supported by organic free cash flow growth and a bond tender program in July 2025, which saw the repayment of $3.1 billion in debt from the Blackstone (BX) deal proceeds, reducing debt by $0.25 billion.

Rogers maintains a strong liquidity position, ending Q2 2025 with just under $12 billion of available liquidity, including $7 billion in cash and cash equivalents and $4.8 billion in credit facilities. Free cash flow in Q2 2025 surged by 39% year-over-year to $925 million, driven by higher adjusted EBITDA, lower capital intensity, and reduced interest payments. For the full year 2025, free cash flow is anticipated to be between $3.0 billion and $3.2 billion. Capital expenditures in Q2 2025 were $831 million, down 17% from the prior year, reflecting a disciplined approach to investment. The company expects 2025 capital expenditures to be at the very low end of its $3.8 billion to $4.0 billion guidance range, signaling a continued focus on lower capital intensity while still investing in growth.

Competitive Dynamics and Strategic Positioning

Rogers operates in a fiercely competitive Canadian market, positioning itself through network superiority, content differentiation, and a focus on customer value.

Against its primary rivals, BCE Inc. (BCE) and Telus Corporation (TU), Rogers leverages its network leadership. Rogers is recognized as Canada's most reliable 5G Plus network and the most reliable Internet provider. This contrasts with BCE, which recently announced a major dividend cut and faces rising debt and competitive pressure, leading to its stock performance lagging over the past year. Telus, while demonstrating strong revenue growth and healthy profitability, is also contending with increasing capital expenditures for network upgrades. Rogers' satellite-to-mobile service, covering 2.5 times more territory than any other Canadian wireless carrier, provides a unique competitive advantage in a country with vast remote areas.

In the media landscape, Rogers' expanded 75% controlling interest in MLSE, alongside its ownership of the Toronto Blue Jays and national NHL media rights, provides a significant content moat. This integrated sports and entertainment ecosystem differentiates Rogers from competitors like Quebecor Inc. (QBR.B), which has a strong regional presence but more limited national content breadth. While Telus also invests in content, Rogers' direct ownership of major sports franchises and venues offers unparalleled opportunities for cross-promotion and subscriber engagement.

Rogers' strategy to simplify wireless pricing tiers, offer multiline discounts, and focus on its premium 5G brand aims to attract and retain high-value customers. The company's 5G wireless home internet product is also resonating well, expanding its addressable market and offering flexibility. While ARPU has faced pressure from competitive intensity and lower roaming revenue, Rogers is actively adjusting its roaming value proposition to drive increased unique roamers.

Outlook and Key Risks

Rogers Communications has updated its 2025 outlook, reflecting the consolidation of MLSE and the impact of its recent equity investment. Total service revenue is now expected to grow by 3% to 5%, an increase from the prior outlook of 0% to 3%. Adjusted EBITDA guidance remains unchanged at 0% to 3%, with the full calendar year impact of MLSE expected to be accretive to EBITDA in 2026 due to seasonality. Capital expenditures are projected to be at the very low end of the $3.8 billion to $4.0 billion range, and free cash flow is anticipated to be $3.0 billion to $3.2 billion. This updated guidance underscores management's confidence in its strategic initiatives and operational execution.

Despite this positive outlook, Rogers faces pertinent risks. A significant concern is the CRTC's decision allowing major providers to operate as resellers on competitors' networks outside their existing wireline footprint. Rogers argues this policy provides subsidized access to well-capitalized corporations, stifling real competition based on invested capital and potentially forcing the company to cut capital programs and network construction jobs, putting billions in network investment at risk. Furthermore, while direct impact is expected to be minimal, the company remains vigilant regarding macroeconomic factors and potential U.S. administration comments on handset tariffs.

Conclusion

Rogers Communications stands at a pivotal juncture, having successfully executed a strategic transformation that has significantly strengthened its financial foundation and expanded its market reach. The company's relentless pursuit of network leadership, exemplified by its pioneering satellite-to-mobile service and advanced cable upgrades, provides a robust competitive advantage in Canada's dynamic telecom landscape. This technological edge, combined with disciplined operational execution across its Wireless, Cable, and Media segments, positions Rogers for sustained growth.

The strategic acquisition of a controlling interest in MLSE represents a substantial opportunity to unlock unrecognized value from its world-class sports and media assets, further diversifying its revenue streams and enhancing its integrated ecosystem. While the company operates in a competitive environment and faces regulatory headwinds, its proactive deleveraging, strong free cash flow generation, and clear strategic roadmap underscore a compelling investment thesis. Rogers is poised to capitalize on its foundational strengths and innovative spirit to deliver long-long-term value for shareholders, making it a formidable player in the evolving Canadian communications sector.