President and CEO of Quebecor Pierre Karl Péladeau told analysts Thursday that the company is balancing subscriber growth with the dilutive effects of its discounted prepaid brands, Fizz and Freedom.Christopher Katsarov/The Canadian Press
Quebecor Inc. QBR-A-T posted higher revenue, free cash flow and new mobile subscribers in its fourth quarter, beating analyst expectations as the company aims to gain telecom market share from its larger rivals, but it saw losses in its media and legacy telecom businesses.
The Montreal-based telecom and media company posted revenue of $1.5-billion, up 3 per cent year-over-year and slightly above analyst estimates. Free cash flow was $369-million, beating consensus of $153-million and up 21 per cent from the same period last year.
This included a $67-million increase in share-based compensation owing to the company’s higher stock price this year, and a one-time retroactive adjustment of $44-million from television royalties.
In notes to investors Thursday morning, Royal Bank of Canada analyst Drew McReynolds called the results as “a modest positive for shares,” coming in line with or slightly above estimates. Desjardins analyst Jérome Dubreuil called it a “dominant” quarter in wireless for the company, and said he expects a “clear positive reaction” to Quebecor’s share price.
But that growth was tempered by the headwinds faced by the industry as a whole: slower population growth, competition on phone plan prices and lower advertising revenue.
Opinion: Forget BCE and Telus. Quebecor is the best bet in telecom stocks for 2026
“We believe financials should slowly improve going forward, but the rate of growth will likely remain muted until we see general pricing sustainably trend higher,” Bank of Nova Scotia analyst Maher Yaghi said in a note to investors Thursday.
Quebecor’s share price on the Toronto Stock Exchange was down slightly on Thursday in afternoon trading, but up 68 per cent over the same period last year.
The company added 74,000 net new wireless subscribers in the quarter, slightly beating analyst expectations of 72,000. This was ahead of 52,000 for BCE Inc.’s Bell Canada; 50,000 for Telus; and 39,000 for Rogers Communications Inc.
Quebecor’s average revenue per user – an important industry metric used to measure the value of a customer – for wireless subscribers increased 1.4 per cent year-over-year, making it the first company among the country’s four biggest carriers to report positive ARPU growth in almost two years, according to Mr. Dubreuil.
Pierre Karl Péladeau, Quebecor chief executive officer, told analysts Thursday that the company is balancing subscriber growth with the dilutive effects of its discounted prepaid brands, Fizz and Freedom.
“Even in an increasingly competitive and sometimes unpredictable environment, we maintain pricing discipline and resisted industry-wide unsustainable promotional tactics,” he said.
Quebecor announces expansion of mobile network in Manitoba
Quebecor is planning a wireless network buildout in Manitoba, and Mr. Péladeau said the company has yet to reach its full potential in Western provinces, where its market share is still low.
The company added 4,000 net internet subscribers in the quarter, compared with expectations of 3,000. Quebecor recently launched Freedom Internet, a fixed wireless internet service, and Mr. Péladeau said there is still “significant upside” in that service for 2026.
However, Quebecor’s wireless and internet growth was offset by the contraction of its legacy division, though these losses were more modest than analysts’ expectations. The company lost 8,000 television subscribers and 14,000 home-phone subscribers during the quarter.
The company’s media revenue was up $44.1-million in the quarter year-over-year, but this was mainly owing to the one-time royalty adjustment. Advertising and sports revenue fell during the quarter.
The company repeated its calls for Ottawa to eliminate the tax deduction for Canadian companies to advertise on foreign platforms, and to provide an additional tax incentive for advertising in Canadian media.
On Wednesday, Quebecor increased its quarterly dividend by 14.3 per cent to 40 cents a share, representing a current yield of close to 3 per cent. This represents a dividend payout ratio of about 35 per cent, according to the company, which is significantly lower than those of Bell and Telus.
“Healthy capital allocation and structure remain among QBR’s most appreciated aspects for investors,” Mr. Dubreuil said.