TELUS Q4 2025 Earnings Call Analysis: Strong Financial Performance and Strategic Growth Plans

The latest earnings call for TELUS has showcased an impressive financial performance, strong operational execution, and ambitious strategic initiatives aimed at positioning the company for significant growth in the coming years. Key takeaways from the call indicate that TELUS continues to lead in customer growth and revenue generation while focusing on innovation and operational efficiencies. With a robust outlook for 2026, the company aims to leverage its strengths in digital health and AI capabilities to enhance shareholder value.

Financial Performance

TELUS reported a solid financial performance in Q4 2025, highlighting several key metrics:

• Revenue Growth: The company achieved positive network revenue growth in the fourth quarter, a significant turnaround attributed to moderating ARPU declines. The wireline segment saw an addition of 40,000 customers, with 35,000 net additions in Internet services, showcasing the strength of TELUS's pure fiber offerings.
• ARPU Performance: Average Revenue Per User (ARPU) showed signs of stabilization, declining only 1.6% sequentially. This marked the strongest improvement among peers, indicating effective pricing strategies and customer retention initiatives.
• EBITDA Growth: Adjusted EBITDA increased by 2.7%, reflecting disciplined financial management and operational efficiencies. The company reported a consolidated EBITDA margin expansion of 240 basis points, reaching 40.9%.
• Free Cash Flow: The company generated a 7% increase in free cash flow, supported by robust operational performance and cost management efforts.

Overall, TELUS demonstrated resilience in its financial metrics, marking a strong close to 2025 and setting a positive tone for future growth.

Strategic Initiatives

TELUS continues to differentiate itself from competitors through several strategic initiatives:

• Product Innovation: The company is focused on leveraging its superior portfolio of bundled products and services to enhance customer experiences and drive revenue. TELUS has launched various innovative offerings, including AI-powered smart home solutions and cutting-edge healthcare services.
• Expansion in Digital Health: TELUS Health achieved double-digit revenue and adjusted EBITDA growth, driven by strategic investments and continuous product innovation. The acquisition of LifeWorks has exceeded synergy targets, with $431 million in annualized synergies realized, nearly three times the original target.
• AI-Driven Growth: The company is accelerating its enterprise-wide AI capabilities following the privatization of TELUS Digital. Revenue from AI-enabling capabilities surged by 44% in Q4 2025, and TELUS aims to grow this segment from $800 million in 2025 to $2 billion by 2028.
• Operational Efficiencies: TELUS is implementing a comprehensive deleveraging strategy, targeting a net debt to EBITDA ratio of 3.3 times or lower by the end of 2026. The successful issuance of hybrid debt securities and strategic partnerships are expected to further enhance financial stability.

These initiatives reflect TELUS's commitment to innovation, customer service excellence, and long-term growth.

Future Outlook

Looking ahead, TELUS's management has provided encouraging guidance for 2026:

• Revenue Growth: The company anticipates consolidated service revenue growth of 2 to 4%. This growth is expected to be driven by a focus on telecom services, TELUS Digital, and TELUS Health.
• EBITDA Growth: Adjusted EBITDA is expected to grow by 2 to 4%, supported by ongoing efforts to improve customer retention and expand product offerings.
• Free Cash Flow Targets: TELUS aims to generate approximately $2.45 billion in free cash flow, reflecting a 10% growth trajectory.
• Capital Expenditures: The company plans to moderate capital expenditures to around $2.3 billion, maintaining a capex intensity ratio trending from 12% to 10%.

Management expressed confidence in meeting these targets, underscoring the importance of a diversified business portfolio and proven operational excellence. The emphasis on cost efficiencies and innovation is expected to drive sustainable value creation for shareholders.

Conclusion

In summary, TELUS's Q4 2025 earnings call highlighted a strong financial performance, strategic growth initiatives, and a positive outlook for the future. The company is well-positioned to capitalize on its strengths in digital health and AI, while also focusing on operational efficiencies and customer retention. As TELUS moves into 2026, its commitment to innovation and shareholder value will be pivotal in navigating the competitive landscape of the telecommunications industry. Investors should watch for further developments as the company executes its strategic plan and continues to enhance its market positioning.