BCE Q2 2025 slides: revenue up 1.3%, Ziply acquisition reshapes growth strategy

BCE Inc (NYSE:BCE) reported modest revenue growth but slightly declining adjusted EBITDA in its Q2 2025 results presentation, as the Canadian telecommunications giant completed two transformative transactions: the acquisition of Ziply Fiber and the divestiture of its MLSE ownership stake. The company’s stock closed at $23.25 on August 6, down 1.32% ahead of the August 7 earnings call.

Quarterly Performance Highlights

BCE (TSX:BCE) delivered revenue of $6,085 million in Q2 2025, up 1.3% year-over-year, driven primarily by product revenue growth of 17.4% and strong performance in Bell Business Markets. However, service revenue declined 0.8% to $5,267 million. Adjusted EBITDA fell slightly by 0.9% to $2,674 million, with margins contracting 1.0 percentage points to 43.9%.

Net earnings increased 6.6% to $644 million, with statutory EPS up 6.8% to $0.63. However, adjusted EPS declined 19.2% to $0.63. Free cash flow showed positive momentum, rising 5.0% to $1,152 million despite higher capital expenditures.

As shown in the following consolidated financial results:

In the wireless segment, BCE reported 44,547 postpaid mobile phone net additions with all new additions on the premium Bell Mobility brand. Notably, postpaid churn improved 0.12 percentage points to 1.06%, marking the first quarter of year-over-year improvement since Q3 2022. Blended ARPU declined 0.7% year-over-year to $57.61, representing the third consecutive quarter of improvement in the rate of decline.

The wireline business added 26,583 retail FTTH (fiber-to-the-home) internet customers, with 69% of subscribers now on fiber connections, up 6 percentage points year-over-year. Approximately 50% of internet households subscribe to both mobility and internet services, with bundled households up 8% year-over-year.

Bell Media continued its positive trajectory with its fifth consecutive quarter of revenue and adjusted EBITDA growth. Media revenue increased 3.8% to $843 million, while adjusted EBITDA rose 7.8% to $235 million. Digital revenues grew 9% and now represent 43% of total media revenue.

The company’s operating metrics across all segments are detailed below:

Strategic Initiatives

The most significant development in Q2 was the completion of BCE’s acquisition of Ziply Fiber, a leading fiber provider in the U.S. Pacific Northwest. The transaction closed on August 1, several months earlier than expected, after securing all regulatory approvals. This acquisition, along with BCE’s partnership with PSP Investments, creates what the company describes as "a North American fibre broadband leader with potential for 16M combined fibre locations."

As shown in the Ziply Fiber overview:

To fund the Ziply acquisition, BCE completed the sale of its non-core MLSE ownership stake for $4.7 billion in cash (approximately $4.2 billion after-tax) on July 1. The net proceeds were applied to fund the acquisition, which BCE characterized as "a core business growth driver."

Another key strategic initiative was the launch of Bell AI Fabric, which BCE describes as "the largest AI compute infrastructure project in Canada with a national network upwards of 500 MW." The company positions this initiative as leveraging its extensive fiber network, access to secured low-cost power, and strategic customer relationships to lead in full-stack sovereign AI solutions.

BCE also highlighted its customer-first initiatives, including an enhanced Self-Install program with a 90% take rate and over 1 million self-installs performed since 2022. The company’s AI-driven Virtual Repair tool has eliminated 1.2 million technician support calls since 2022, while its Gen AI Virtual Assistant has handled over 7 million customer sessions since launch, with more than 50% of problems solved without requiring a live agent.

The company’s strategic priorities are outlined in this capital allocation framework:

Detailed Financial Analysis

Looking at segment performance, Bell Communication & Technology Services revenue increased 1.0% to $5,334 million, driven by Bell Business Markets, internet, and higher sales of wireless devices. However, adjusted EBITDA declined 1.6% to $2,439 million, reflecting higher costs associated with product revenue growth.

As illustrated in the segment breakdown:

Bell Media continued its strong performance with revenue up 3.8% to $843 million and adjusted EBITDA increasing 7.8% to $235 million. Subscriber revenue grew 8.1% year-over-year, driven by Crave and sports direct-to-consumer streaming growth. However, advertising revenue declined 3.1% due to lower advertiser demand for traditional broadcast TV and radio station divestitures.

The media segment’s performance is detailed here:

BCE’s balance sheet showed available liquidity of $3.8 billion at the end of Q2, including $507 million in cash. The company’s defined benefit pension plans maintained a solvency surplus of $4.1 billion with a solvency ratio comfortably above 105%. The net debt leverage ratio stood at approximately 3.5x at the end of Q2.

Forward-Looking Statements

BCE updated its financial guidance for 2025 to reflect the Ziply Fiber acquisition’s five-month contribution. The company raised its revenue growth guidance to 0-2% (from -3% to 1%) and adjusted EBITDA growth to 0-2% (from -2% to 2%). However, capital intensity guidance increased to approximately 15% (from 14%), and free cash flow growth was revised downward to 6-11% (from 11-19%) to reflect additional capital expenditures required for Ziply Fiber’s expansion.

The updated guidance is presented below:

Looking beyond 2025, BCE is targeting a year-end net debt leverage ratio of approximately 3.8x, reflecting the impact of the MLSE sale and Ziply Fiber acquisition. The company aims to reduce this ratio to approximately 3.5x by the end of 2027 and to 3.0x by 2030 as part of its deleveraging strategy.

BCE maintained its dividend at $1.75 per common share and adjusted its dividend payout policy to 40-55% of free cash flow. The company emphasized that its strategy remains "focused on creating long-term value for shareholders" through optimizing its balance sheet, executing on strategic priorities, and returning capital to shareholders.

Full presentation:

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