Rogers Delivers Margin Gains and Debt Relief Amid Subscriber Growth, Despite Stock Slump

• Rogers’ Q1 earnings show steady service revenue and EBITDA growth, with a notable improvement in margins
• Major deleveraging move with a $7B investment from Blackstone positions the company for balance sheet strength
• Despite operational gains, shares remain down over 20% YTD and near 52-week lows

Disciplined Execution in a Slower Market

Rogers Communications Inc. (TSX: RCI.A) reported modest but steady financial performance for Q1 2025, overcoming a softer economic environment with 2% year-over-year growth in both service revenue and adjusted EBITDA. The company’s consolidated EBITDA margin reached 45%, while wireless operations delivered an industry-leading 65% margin, up 40 basis points.

Net income rose 9% to $280 million, while free cash flow held steady at $586 million. Subscriber growth remained a bright spot, with 57,000 total net additions—34,000 from mobile and 23,000 from Internet.

Media and Network Strategy Bolster Long-Term Outlook

Rogers’ Media segment surged 24% in revenue, buoyed by strong sports content performance and the renewal of national NHL rights through 2038. EBITDA in the segment increased by $36 million, further contributing to margin strength.

Crucially, Rogers announced a transformative $7 billion equity investment from Blackstone, reducing its pro forma debt leverage ratio to 3.6x—down from 5.2x following the Shaw acquisition. The company also removed the discount on shares issued through its dividend reinvestment plan, signaling confidence in future cash flow stability.

Valuation Opportunity for Select Investors

While operational performance remains solid, the stock has fallen over 20% year-to-date and now trades near its 52-week low. This disconnect between fundamentals and market sentiment could represent a compelling entry point for long-term value investors and income-focused buyers seeking a stable dividend and improving balance sheet.