Introduction & Market Context
Telus (NYSE:TU) Corporation (TSX:T) shares jumped 5.82% to $22.01 on May 9, 2025, following the release of its first-quarter results, which showed modest revenue growth despite mixed performance across business segments. The telecommunications giant reported consolidated operating revenues of $5.0 billion, up 3% year-over-year, while adjusted EBITDA declined slightly by 1%.
The company’s quarterly investor presentation highlighted strength in its Health segment, which helped offset weakness in the Digital Experience division. Investors appeared to focus on the company’s commitment to dividend growth and network expansion rather than the profitability challenges in certain areas.
Quarterly Performance Highlights
Telus reported consolidated net income of $301 million for Q1 2025, with adjusted net income of $388 million, down 1% compared to the same period last year. The company maintained its focus on customer acquisition, though with varying results across segments.
In the mobility segment, Telus added 20,000 mobile phone customers, down from 45,000 in Q1 2024. However, connected device net additions showed strong growth at 148,000, up 47,000 year-over-year. Mobile phone average revenue per user (ARPU) declined by 3.7% to $57.13, though churn improved by 7 basis points to 1.06%.
As shown in the following mobility operating results:
In the fixed services segment, Telus added 50,000 net new customers, though this represented a decline of 13,000 compared to Q1 2024. Internet net additions totaled 21,000, while TV services showed strength with 27,000 net additions, up 8,000 year-over-year.
The fixed segment performance is illustrated here:
Detailed Financial Analysis
Telus Technology Solutions, which includes the company’s core telecommunications business, reported operating revenues of $3.8 billion, up 2% year-over-year, with adjusted EBITDA of $1.6 billion, representing 3% growth. Mobile network revenue declined slightly by 1% to $1.7 billion, while fixed data services revenue grew by 3% to $1.2 billion.
The financial performance of Telus Technology Solutions is detailed below:
The standout performer in Telus’s portfolio was its Health segment, which delivered external revenues of $471 million, up 12% year-over-year, and adjusted EBITDA of $76 million, representing impressive growth of 30%. The segment also increased its lives covered by 4.8 million to reach 76.5 million.
The strong Health segment results are shown here:
In contrast, Telus Digital Experience faced significant challenges, with external revenues declining by 2% to $709 million and adjusted EBITDA dropping sharply by 38% to $129 million. The adjusted EBITDA margin contracted by 9.0 percentage points to 13.4%. Management noted that the segment is seeing stabilization, with quarterly results in line with expectations.
The Digital Experience segment performance is illustrated in this slide:
Overall consolidated financial results showed modest revenue growth but slight pressure on profitability:
Strategic Initiatives
Telus continues to invest in its network infrastructure, with its PureFibre network now connecting approximately 3.5 million premises and 5G coverage reaching over 87% of Canadians. The company emphasized its focus on bridging digital divides by delivering connectivity to rural and Indigenous communities.
On the capital allocation front, Telus declared a quarterly dividend of $0.4163 per share, payable on July 2, 2025, representing a 7% increase year-over-year. The company also outlined its dividend growth strategy, targeting 3-8% annual growth from 2026 through 2028.
Telus is focusing on balance sheet deleveraging, aiming to reach 3x net debt to EBITDA by 2027. The company plans to gradually reduce its dividend reinvestment plan (DRIP) discount from the current 2% by half a percentage point in each of 2026 and 2027, before eliminating it completely at the end of 2027.
The company completed an inaugural hybrid debt issuance of $1.6 billion across two tranches in April 2025, with $1.1 billion at 6.25% due July 2055 and $500 million at 6.75% due July 2055. Telus reported a weighted average cost of long-term debt of 4.40% and an average term to maturity of 10.5 years, with available liquidity exceeding $1.9 billion.
Forward-Looking Statements
Telus reiterated its 2025 financial targets, projecting Telus Technology Solutions operating revenues to grow by 2-4% and adjusted EBITDA to increase by 3-5%, both including the TELUS Health reportable segment. The company expects consolidated free cash flow of approximately $2.15 billion and capital expenditures of around $2.5 billion.
The company’s 2025 financial targets are outlined here:
Management expressed confidence in generating meaningful free cash flow on a sustained basis, which underpins the dividend growth program while maintaining focus on balance sheet deleveraging. The company’s strategic priorities continue to center on profitable customer growth, operational excellence, and cost efficiency initiatives.
Full presentation:
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